Hardware Retailing The Industry's Source for Insights and Information
The latest data you need to keep your operation on track is now available. For over 100 years, the North American Hardware and Paint Association (NHPA) has surveyed home improvement operators throughout the U.S. to develop the benchmark report known as the Cost of Doing Business Study.
The study presents composite income statements and balance sheets plus averages for key financial performance ratios. The data is segmented for hardware stores, home centers, LBM outlets and paint and decorating outlets. In each segment, data is presented for the typical store, for high-profit stores, for single-unit and multiple-unit companies and for sales volume categories. In addition, there is a five-year historical trend for typical stores. Retailers have continually used this data to measure their own performance against industry averages and to establish financial plans to improve profitability.
Methodology
The annual Cost of Doing Business Study is made possible through the cooperation of operators of hardware stores, home centers, LBM outlets and paint and decorating outlets who provide detailed financial and operational information on their individual companies.
Questionnaires were either mailed or made available online to a sampling of hardware stores, home centers, LBM outlets and paint and decorating outlets in the U.S. to collect detailed financial and operational information for 2023. The analysis in this report is the result of extensive review by NHPA.
All individual company responses are completely confidential. Most of the figures in this report are medians. The median for a particular calculation is the middle number of all values reported when arranged from lowest to highest. The median represents the typical company’s results and is not influenced by extremely high or low reports.
To determine high-profit stores, all participating companies were ranked based on operating profits. The high-profit companies in each segment are those that make up the top 25%. The figures reported for each of the high-profit segments represent the median for that group. It is extremely important to note that each year, the report contains figures from a different sample group of stores. That means overall figures have the potential to vary widely from year to year based on the respondent group of stores participating each year. NHPA uses year-to-year comparisons to illustrate general trends over time, not to draw specific year-over-year conclusions.
In this year’s study, 1,096 stores across the four operation types participated, which represents a 2.9% decrease from the previous year, but is the fourth highest participation overall.
Hardware Store Highlights
- Sales per store, sales per square foot and sales per customer are all-time highs
- Sales per customer has increased 54.2% from pre-pandemic levels
- Profit before taxes was the fourth highest ever recorded
Home Center Highlights
- Sales per employee and gross margin per employee were both the second highest ever for typical operations
- Inventory turnover, sales to inventory and GMROI were all the lowest since 2013
- Profit before taxes was the fourth highest ever recorded
LBM Outlet Highlights
- Sales per employee and gross margin per employee were both the third highest ever recorded
- Inventory turnover was the lowest since 2017
- Profit before taxes was the third highest ever recorded
Paint Outlet Highlights
- Profit before taxes is the lowest on record
- Customer count was up 18.2% with sales per customer down 21%
- Single stores were profitable with the highest ever operating profit
Learn more how the Cost of Doing Business Study has helped retailers be better and more profitable:
