Home Depot says the decline of Sears has helped it disrupt delivery

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Home Depot says the decline of Sears has helped it disrupt delivery
home depot delivery truck
  • Sears' loss is Home Depot's game when it comes to delivery and fulfillment services, Home Depot CEO Craig Menear told analysts Tuesday.
  • Menear went on to say that Sears has "been a donor over the years" when it comes to appliance delivery market share.
  • "We've had a disruptive attitude in this space for a long time, and that continues to pay dividends as we take share," Menear said.
  • Home Depot is set to invest $1.2 billion into its supply chain over the next five years.
  • A representative for Sears declined Business Insider's request for comment.
  • Visit Business Insider's homepage for more stories.

Home Depot has snagged greater market share when it comes to delivery services thanks in part to the struggles of one-time rival Sears, CEO Craig Menear told analysts during an earnings call on Tuesday.

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Wells Fargo's Zachary Fadem asked the Home Depot leadership team to discuss the share gains they've seen since taking home delivery services in-house. Fadem also asked the executives to comment on how much of the delivery market share is still up for grabs.

CEO Craig Menear said his company has a lot of competition in the delivery game, including super-regional chains, regional retailers, and even mom-and-pop furniture stores.

"We think there's still lots of share out there," Menear said.

Menear went on to say that Sears has "been a donor over the years" when it comes to appliance delivery market share.

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Sears was long known for its appliance and tool brands - including Kenmore and Craftsman - but by 2016, sales were dropping. The once-dominant retailer filed for bankruptcy in 2018. The company staved off outright liquidation in February 2019, when chairman Eddie Lampert bought the business.

Sears declined Business Insider's request for comment.

"We've had a disruptive attitude in this space for a long time, and that continues to pay dividends as we take share," Menear said.

A Home Depot spokesperson told Business Insider that the company is seeking to eventually reach 90% of the US population with same-day and next-day parcel and bulk delivery, as well as establish "the fastest, most reliable supply chain for home improvement products."

Mark Holifield, Home Depot's EVP of supply chain and product development, said during the earnings call that the team is "pleased with the work we've done on market delivery operations," or fulfillment centers dedicated to large items.

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"Those are staffed with orange apron-ed Home Depot associates who are ensuring that the freight comes into those locations and is dispatched promptly to the customer damage-free," Holifield said. "They're also working to ensure there's a great customer experience there, working with the delivery teams. Really pleased with the progress there."

So far, Home Depot has established about a dozen MDOs and signed leases for about a dozen more. Holifield said that more hubs will open up throughout 2020, and that the company hopes that they will improve on-time performance, reschedule rates, and customer satisfaction when it comes to fulfillment.

A Home Depot spokesperson told Business Insider that the company is looking to "build out approximately 150 new distribution centers over the next few years." These centers will deliver to stores, pro customers, and DIY shoppers alike. Most recently, the retailer opened up an 800,000-square-foot flatbed distribution center in Dallas.

"We believe we are building the lowest cost network by investing in new facilities to drive fast and reliable delivery for our customers," a spokesperson told Business Insider.

Home Depot is set to pour $1.2 billion into its supply chain over the next five years, further boosting such e-commerce and fulfillment initiatives.

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"We believe that the front door of our store is in the customer's pocket," Menear said. "Most of our customers' shopping experience actually starts in the digital world even if it finishes in the physical world."

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