Making It Count: 2024 Q3 Independent Retailer Index

Measuring how independent home improvement operations are performing throughout the year helps
the entire channel understand how they compare to the industry at large and how to use that data to make incremental improvements to their operations.

Since 2022, the North American Hardware and Paint Association (NHPA), in partnership with The Farnsworth Group, has fielded the Independent Retailer Index (IRI), which tracks key performance metrics on a quarterly basis.

Every quarter, the index asks independent home improvement retailers to share year-over-year changes in:
• Transaction count and size
• Inventory investment
• Cost of goods
• Profit margin dollars
• Future operational investments

We recently surveyed retailers on their performance in the third quarter of 2024 compared to Q3 2023. See highlights of the data here and download the full report at YourNHPA.org/retailer-index.

Respondent Profiles

A good mix of independent retailers took part in the survey, with over two-thirds having just one
store unit and nearly half operating stores smaller than 10,000 square feet located in a rural area.

• 69% of respondents were one-store operations
• 47% of respondents were small stores (less than 10,000 square feet)
• 47% of respondents were located in a rural area

Change In Cost of Goods: 4.6%

The highest average change since Q3 2023. Cost of Goods continues to be a thorn in retailers side and isn’t
getting any better or worse from 2023. Cost of Goods is the only KPI measured in the IRI in which lower
average change is a positive indicator.

Changes In Transaction Count: -0.5%

The average decline in transaction count from Q2 to Q3 2024. While still a decrease, this represents the smallest decline in transactions since Q4 2022, which saw a 0.1% average reduction.

Changes in Transaction Size: 0.1%

The average size of change from Q2 to Q3 2024. Transaction size is on par with Q3 2023 with an average size of change almost zero (0.1%) compared to Q3 2023 (0.0%).

3 Ways Employees Can Help Increase Transaction Size

Increasing transaction size is one of the easiest ways to increase profits, and one way to do it is to train employees on their role in the sales process.

• Start an item of the month challenge. Set a sales goal for that item and challenge your
  staff to meet it, rewarding the team when you reach the goal. Post regular progress
  updates to build excitement.
• Use POS prompts. Check with your point-of-sales system to see if you can set up prompts to remind
  cashiers to ask about add-on sales for certain items.
• Focus on project training. Employees with a working knowledge of the top projects you can sell will be better equipped to create larger transaction sizes.

Dig Deeper

Take a closer look at the data from the Independent Retailer Index in NHPA’s Market Measure report, which will be featured in the January 2025 issue of Hardware Retailing. Along with helpful data, Market Measure provides retailers and channel partners an annual overview of the state of the independent home improvement industry. Learn more at YourNHPA.org/market-measure.

Access the Index

Be sure you’re on the list to receive the newest data from the Independent Retailer Index every quarter.
Head to YourNHPA.org/research to subscribe today.