Hardware Retailing The Industry's Source for Insights and Information
With insights from industry experts and data highlighting the performance and projections for the home improvement channel, the North American Hardware and Paint Association’s Market Measure Report is your key data resource for 2026. As part of the Market Measure Report, Hardware Retailing spoke to several wholesaler and distributor execs to get their insights on the past year and what’s next for each company.
Vice President of Retail Operations and New Business
A Conversation With Andy Schmitt From Ace
What are some of the biggest challenges you feel independent retailers faced this past year?
Across store tours and owner discussions, several consistent operational pressures stood out. Many retailers struggled with increased labor costs and the difficulty of finding and keeping qualified employees. Owners also highlighted the ongoing complexity of keeping up with pricing as tariff impacts and rising product costs continued to affect margins.
Retailers also felt growing tension between what customers expect. Shoppers increasingly want fast service, accurate inventory availability, and seamless convenience, whether that’s quick checkout, easy fulfillment of online orders or fast delivery. For many retailers, meeting those expectations meant adopting new processes and adjusting operations. Owners shared that while they see the value in these changes, the pace can feel challenging when layered on top of day-to-day demands.
What were some of the biggest opportunities for independent retailers you saw develop this past year?
At Ace, we launched a new store concept called Elevate, designed to create an experiential shopping environment that makes the customer experience easier and more enjoyable. We’re already seeing strong adoption, with a record number of Ace retailers embracing this format—and it’s driving double-digit sales growth.
In addition, new partnerships with DoorDash and Affirm are giving our Retailers more tools to meet evolving customer expectations, making it easier than ever to offer convenience, speed and flexibility.
What do you see as the challenges and opportunities in the coming year?
The quest for speed in delivery will continue to be both a challenge and an opportunity for our retailers in the year ahead. On one hand, customer expectations for fast, convenient delivery are higher than ever, putting pressure on retailers to adapt their operations, manage inventory efficiently and meet demand without sacrificing in store service. On the other hand, this shift creates a significant opportunity to differentiate their stores, build stronger customer loyalty and drive incremental sales by offering solutions that competitors may not provide.
How would you recommend that retailers budget for 2026?
From a top-line perspective, Ace retailers should plan for modest growth next year. While we remain optimistic about opportunities ahead, winning consumer loyalty and capturing discretionary spend will continue to be a challenge in a competitive retail landscape. To succeed, retailers will need to focus on operational efficiency and smart resource management.
One key area of focus will be labor productivity. Leveraging smart scheduling tools can help our retailers ensure the right team members are in the right place at the right time, reducing labor costs while maintaining excellent customer service.
What were some of the specific highlights from your company in 2025?
From a supply chain perspective, we continue to expand to better serve our retailers. In July, we opened a new 1.5 million–square‑foot retail support center in Kansas City, enhancing our ability to deliver products quickly and reliably across our network.
From a growth perspective, we plan to open 175 new Ace Hardware stores and complete over 500 store projects this year, with many of these locations adopting the new Elevate store concept to create a more engaging and convenient shopping experience for customers.
What are you focusing on in 2026?
In 2026, our focus will continue to be on service, convenience and quality. For quality, we will prioritize a fresh, differentiated assortment with the best brands that drive sales growth, ensuring in-stock and accurate inventory—critical for both in-store and e-commerce fulfillment. Convenience will center on fast, frictionless fulfillment and speed in delivery, leveraging our physical stores, which are already close to most homes, through our Red-Vested-Heroes or partnerships like DoorDash. Deep digital engagement will further strengthen customer loyalty. Finally, service remains key, with in-aisle assistance driving sales. By training associates to actively help customers and fostering a customer-first sales culture, stores that invest in training see higher performance and stronger engagement.
How are you encouraging growth in 2026 and beyond?
The combination of our Higher Ground Retailer growth strategy and the ingenuity of local owners continues to drive success. We focus on equipping Retailers with the right tools—marketing, training, store design, digital convenience and operating methods—to help them compete and grow.
CEO
A Conversation With Dan Starr From Do it Best and True Value
What are some of the biggest challenges you feel independent retailers faced this past year?
Across the industry, retailers undeniably felt the impact of a softer retail environment and the rollercoaster of tariffs. Inflationary pressures, higher borrowing costs and inconsistent consumer confidence created a year of volatility that tested everyone’s ability to adapt. But the real story is how effectively they were able to navigate those challenges with the strength of a united Do it Best and True Value team behind them.
Consumer behavior also shifted significantly. People are still spending, but they’re more discerning—seeking value, trustworthy service and businesses that deliver a strong local connection. That’s where independents have a distinct advantage, and we’ve been intentional about equipping them to win. Our combined merchandising, supply chain and branding teams have worked together to deliver better buying opportunities, stronger assortments and more reliable distribution performance across the network.
At the same time, ongoing supply chain adjustments, vendor consolidation and evolving labor challenges pushed retailers to think more strategically about efficiency and differentiation. Effective inventory management, strong value communication and the right investments in technology weren’t optional; they were essential to staying competitive.
This is where our integration is already making a measurable impact. By aligning systems, consolidating programs and leveraging our expanded vendor relationships, we’re helping independents simplify their operations, improve fill rates and access more competitive pricing and product options than ever before. The challenges were real—but so were the solutions—and we’re making sure our dealers aren’t just keeping up, but moving ahead.
What were some of the biggest opportunities for independent retailers you saw develop this past year?
One of the greatest strengths of independent retailers is their deep connection to their communities and an ability to leverage those connections. Now they have a unified team behind them that amplifies those strengths with better tools, better programs and better buying power. Even in a year of economic uncertainty, retailers partnered with us can make decisive moves to personalize the shopping experience to reflect their unique markets.
The most successful retailers took this period as a chance to evolve. They’ve been refreshing their layouts, upgrading technology and leaning into e-commerce and digital marketing. They found ways to grow market share and strengthen customer loyalty by meeting customers where they are, whether that’s online, in-store or through new fulfillment options.
Our integrated merchandising and supply teams helped them secure key inventory, protect margins and take advantage of strategic buying opportunities through our Spring and Fall Markets. That adaptability is what defines the independent channel. It’s nimble, creative and deeply attuned to its customers.
What do you see as the challenges and opportunities in the coming year?
The broader economic landscape will remain challenging in the short term, from consumer caution to any potential lingering supply and cost pressures in trade.
But the outlook is strong for independents, and I’m optimistic about what lies ahead. Consumers are increasingly choosing to shop local, repair or improve before replacing and invest in quality, service and expertise. Those values align perfectly with what independent home improvement dealers stand for.
For our members and retailers, the opportunity is to lean into that momentum to strengthen customer relationships, communicate the value of expertise and ensure their stores are positioned as trusted community resources. It’s about marrying innovation with the timeless appeal of local service.
How would you recommend that retailers budget for 2026?
This is the time to be strategic. Focus your investments where they’ll make the most impact. I always encourage our store owners to prioritize loyalty: loyalty from your customers and loyalty to your brand.
Invest in programs and services that make it easy for your customers to find your store, connect with you and purchase from you, whether that’s through e-commerce, digital marketing or in-store experiences. The right brand presence can make a huge difference when competition is tight. Our combined strength filters through to our expert teams who are on hand to connect our dealers to the best programs in order to connect more easily and strategically with their customers.
At the same time, I recommend dealers manage costs with discipline, but avoid cuts that undermine long-term growth. The retailers who outperform in their markets are the ones who continue investing wisely in people, technology and customer experience, even during leaner periods.
What were some of the specific highlights from your company in 2025?
2025 was a strong year for Do it Best and True Value. We delivered an industry-leading $132.1 million rebate to our members—another powerful example of how the co-op model directly supports dealer profitability.
We also launched three branding programs designed to meet the needs of any independent dealer, giving them the most comprehensive and flexible brand offering in the industry. This ensures every business can align with the brand strategy that best fits their community and growth goals.
Our Do it Best e-commerce platform saw a 28% increase in digital sales, reflecting our continued investment in technology that drives local traffic and online sales. And the relaunch of Destination True Value has exceeded expectations—with more than 40 implementations and work starts in just the first couple of months.
Together, these achievements show how we’re helping our dealers strengthen their businesses, increase profitability and position themselves for long-term success.
What are you focusing on in 2026?
Our focus is on innovation, optimization and brand strength. These are the three pillars that will define the next phase of our growth.
We’re investing in innovative technology to make doing business easier and more profitable for our dealers. We’re optimizing our distribution network and systems integration to improve efficiency, reduce costs and strengthen service reliability. And we’re doubling down on brand support to help every store, whether Do it Best or True Value, maximize the power of their brand to win in their local market.
We’re guided by a simple principle—keeping our dealers at the forefront of everything we do.
How are you encouraging growth in 2026 and beyond?
Our purpose has never changed. We’re here to serve our members and retailers and help them grow. Every initiative we develop, every system we modernize, every partnership we build is designed to maximize their profit and position them for long-term success.
The “how” of that varies across our network of more than 9,000 independent dealers. For some, it’s expanding into new categories. For others, it’s modernizing store formats, building e-commerce capabilities or leveraging private label brands. But the common themes are clear: meet your customer where they are, understand your local market and manage your inventory smartly.
Looking ahead to the new year, we’re building a stronger foundation for the next decade of independent home improvement. And based on what we’re seeing from our members and retailers, the future is very bright.
A Conversation With Shari Kalbach From Hardlines Distribution Alliance
President
What are some of the biggest challenges you feel independent retailers faced this past year?
Some of the main challenges independent retailers faced in 2025 were navigating price increases and volatile tariff policies. These fluctuations made it difficult to adjust pricing while keeping an eye on rising inflation rates. In addition, inflation and increased costs of doing business made it difficult to retain staff and invest in training and advancement.
What were some of the biggest opportunities for independent retailers you saw develop this past year?
Independent retailers are in unique positions to respond to market changes quickly. Therefore, there are so many opportunities for retailers to invest in and emphasize local niche categories and products. They also have the ability to offer unique or in-demand services that differentiate their store from big box competition.
What do you see as the challenges and opportunities in the coming year?
If lending rates continue on a downward trend, upward pressure on the housing market will create opportunities in both new construction and DIY home projects and remodeling. We remain optimistic that repair and maintenance demands will remain steady as some homeowners choose to tackle urgent projects on their own.
How would you recommend that retailers budget for 2026?
Retailers might look beyond static annual budgets and instead focus on flexible models where spending can be adjusted depending on multiple criteria including demand, ROI, costs and personnel. In a market with persistently high costs, investing in areas that directly impact margins and increase efficiency can be helpful.
What were some of the specific highlights from your company in 2025?
In addition to continuing to enhance our financial resources available to our group, we searched for a strategic acquisition that would create opportunities for growth and broaden collaboration within the independent channel. With that goal in mind, we completed the agreement in November 2025 that unites HDA with North American Tool Suppliers (NATS), a buying group that specializes in the automotive category and compliments the hardware and farm members we serve.
What are you focusing on in 2026?
In 2026, we are looking forward to integrating the merger with NATS and dynamically responding to the needs of our members, vendor partners and independent retailers.
How are you encouraging growth in 2026 and beyond?
The merger with NATS presents us with several opportunities to boost growth including streamlined collaboration, combined conferences and events, and access to a broader range of resources and programs. We are optimistic that with these resources, we can position the HDA network to quickly respond to market fluctuations, implement technology and programs that increase efficiency, and pursue manufacturer partners that allow them and their retailer customers to grow and evolve.
A Conversation With Boyden Moore From Orgill
President
What are some of the biggest challenges you feel independent retailers faced this past year?
I would say the ongoing uncertainty in the economy has been the overarching challenge facing the entire channel for most of this year. Continuing on what we saw in 2024, home improvement in general faced continued headwinds throughout 2025, with interest rates remaining high, disruptive weather patterns and continued inflation all playing a role in restricting consumer spending on their homes. These are obstacles to growth that all businesses in this industry are facing, and we think you see that bearing out in the sales numbers being reported. The industry has had a decline in sales in 2023 and 2024 as well.
At the store level, retailers are still working to drive customer traffic, with transaction counts remaining relatively flat. Meanwhile, wage pressures and increasing cost of goods are making it more challenging for retailers to maintain profit margins.
All of these challenges, however, are prompting retailers to become stronger, more intentional operators. Across our customer base, we’re seeing owners and managers take a more strategic approach—focused on how they buy, what they buy and how they are communicating with their customers.
We’re partnering with more retailers than ever to support these efforts. Whether it’s ensuring they have the right product mix, securing the most competitive pricing, or aligning their inventory and store layout with the specific needs of their markets, our goal is to help retailers make informed decisions that improve performance today and position them for success tomorrow.
Ultimately, the retailers who lean into these operational improvements—who use data, insights, and strategic support to adapt—will be best equipped to thrive when the market strengthens. These times are challenging, but they are also creating opportunities for disciplined, proactive retailers to emerge even stronger.
What were some of the biggest opportunities for independent retailers you saw develop this past year?
While it has been a tough year to find growth, we’ve seen retailers create opportunities. As the industry works through challenges we talked about earlier, many retailers are examining new ways to drive growth and profitability regardless of external market conditions. Right now, we are supporting hundreds of store reset projects, new store openings and conversions. All of this suggests that retailers aren’t waiting for the broader economy to drive their growth, they are creating their own momentum. They are identifying opportunities within their own communities, strengthening the in-store experience and positioning their businesses to capture demand wherever it emerges.
On the operational side, we are also seeing retailers lean into solutions to help maintain margins and profits. Retailers are looking at all aspects of their businesses and evaluating how to do things better. We’re seeing growing interest in technologies to improve sales-floor efficiency, expand their digital presence and gain a better understanding of things like inventory productivity and customer behavior. Challenging times tend to bring out the best in independent retailers. And this year has been no exception. The actions they are taking now will continue to have a positive impact on their businesses in the years to come.
What do you see as the challenges and opportunities in the coming year?
Looking ahead, we don’t expect a sudden shift in the market volatility that we are seeing. We can hope that interest rates continue to moderate and that this moderation will spur some organic growth for home improvement activity.
That being said, retailers will need to continue to be vigilant and aggressive in the way they run their operations. Success will depend on staying hyper focused on assortment planning, buying right and streamlining operations, adopting technology where it makes sense and honing their multi-channel approach to interacting with customers.
The good news is that these efforts are not just defensive—they’re investments. As the market eventually begins to show more consistent signs of growth, retailers who have put in the work now will be positioned to capitalize on that momentum quickly. Their stores will be better aligned with customer needs, their pricing and inventory strategies will be sharper, and their operations will be running with greater precision.
How would you recommend that retailers budget for 2026?
Every retailer’s plan should start with a clear understanding of the realities in their local market. This is an area we work closely with many of our customers— helping them evaluate opportunities in their specific markets, identifying opportunities for growth and then enabling them to make the changes they need to strengthen their businesses.
All that being said, we anticipate modest, single-digit growth in 2026 for the industry. But it’s important to remember that growth can come in many forms. Retailers can grow by refining their assortments to better reflect customer needs, adding high-potential niche categories, enhancing their selling space or opening new locations in underserved markets.
Ultimately, we recommend that retailers balance a realistic view of the market with a proactive mindset. Build a budget that reflects the current environment—but look for specific investments and operational improvements that could generate meaningful growth.
What were some of the specific highlights from your company in 2025?
There is no doubt that, despite the market being relatively flat this year, it has been a big year for Orgill. And as always, the highlights for our company begin with the progress we’ve helped our customers achieve.
One of the clearest indicators of that progress is the record number of store resets and conversion projects we completed in 2025. Our teams have been working around the clock alongside retailers to reinvigorate their businesses, optimize their assortments and position them to prosper over the long term. Beyond physical store improvements, we’ve supported numerous initiatives to strengthen retailers’online presence, enhance their loyalty programs and sharpen their marketing messages. Seeing our customers take these steps—and witnessing the positive results—has been one of the most rewarding aspects over the past 12 months.
Specific to Orgill, we continued to have strong engagement with our restructured approach to buying events. Adding multiple, seasonal online buying events to our annual live Dealer Market, have created a cadence that provides greater flexibility, better timing and more agility for our customers as they make purchasing decisions.
And of course, one of the biggest milestones for us this year was the opening of our new Innovation Center. This one-of-a-kind facility was designed from the ground up to serve retailers—giving them a dedicated space to explore emerging technologies, test new merchandising concepts and see firsthand how innovative tools and strategies can enhance their operations. Since opening, we’ve hosted numerous customers, vendors and industry partners for events—and the response has been overwhelmingly positive. It represents a major investment in the future of our customers, our company and our industry and we believe it will play a pivotal role in helping retailers strengthen their businesses.
What are you focusing on in 2026?
As we look ahead to 2026, our focus remains the same as it has always been: “helping our customers be successful.” That’s not to suggest that we won’t continue to push improvements and innovations but I also think it is important that we don’t lose our focus on aligning the products, programs and services we offer to meet the real-world needs of our customers.
It is so easy to be distracted if you stray from your core mission. Our promise to our customers is that we will not allow this to happen at Orgill. We will remain 100% focused on how we can do a better job of supporting their growth.
We will do this by sharpening our programs, identifying new opportunities within our customers’ markets and engaging in projects that offer them the support and scale they need to better compete. This includes continued investments in improving our already modern supply network, enhancing our integrated eCommerce platform and sharpening our focus on building stronger assortments to meet the needs of our diverse customer base.
We realize that we can’t be distracted or become complacent when it comes to how our own business evolves. Our customers rely on us to help them stay competitive in areas like technology, inventory management, pricing and assortment planning and we will continue to push our teams to offer solutions that address these areas. But rest assured that each and every project we engage in will start with the question, “how does this help our customers grow?”
How are you encouraging growth in 2026 and beyond?
Growth for Orgill starts and ends with our ability to help our customers grow. No matter what the economy brings, our role is to support retailers as they navigate real-world challenges and uncover new opportunities.
To do that, we’re continuing to focus on being the most efficient, cost-effective distribution partner we can be. We’re investing in our distribution network and working closely with our vendor partners to ensure we deliver the products, programs and pricing that is going to help our customers be successful.
