Lowe's Cos. Inc.'s CEO is not just going after the company's main national rival; he is also hoping to capture sales currently taken by regional players.
Together, Lowe's and rival Home Depot Inc. had just under $170 billion in revenue together during their 2018 fiscal years, according to S&P Global Market Intelligence. But speaking at the National Retail Federation's Big Show in New York on Jan. 14, Lowe's CEO Marvin Ellison said that Lowe's estimates there is $900 billion in annual spending at home improvement retailers in the U.S. annually. The approximately $730 billion that is not captured by Lowe's and Home Depot goes mainly to regional chains.
"There's a massive amount of opportunity out there that we have yet to take advantage of," Ellison said.
Ellison took the top executive role at Lowe's in July 2018. A former executive at Home Depot, Ellison is attempting to improve results at the Mooresville, N.C.-based retailer. Same-store sales growth at Lowe's has lagged sales growth at Home Depot since the second quarter of 2016, according to S&P Global.
During a call with analysts in August 2018, Ellison said Lowe's was suffering from "self-inflicted" problems and vowed to make changes at the home improvement retailer. Those changes, such as restocking shelves more quickly and serving contractors better — customers Lowe's serves through its "Pro" segment — are among the fixes the company has to make in order to capture additional market share, Ellison said.
"As the old saying goes, you can't put the icing before the cake," he said Jan. 14.