What unifies and ­divides the giants

Home Depot's sales hit USD 88.5 bn, up 6.4 per cent, while Lowe's lagged behind with USD 59.1 bn. Its sales gained 5.1 per cent. Those sales, however, overshadow the performance of a lot of DIY chains anywhere else in the world. Home Depot now operates 2 274 stores in the U. S., Puerto Rico, US Virgin Islands, Guam, Canada and Mexico. Lowe's, which expanded internationally much later than Depot, now also operates in Canada and Mexico, but has bowed out of its joint venture in Australia with Woolworths because it could not compete with Australia's dominant chain, Bunnings.
Lowe's continues to open new stores, though the store-opening pace is slowing. It plans to open 45 stores in 2016, including some for Orchard Supply Hardware, a small chain of large hardware stores it bought out of bankruptcy in 2013. OSH has been operating only in California and Oregon, but recently announced plans to begin operating stores in Florida. 
What is interesting is that Lowe's, founded in 1946, is the only "pioneer" home center chain that has managed to survive against Depot. All the other regional pioneer home center chains lost that battle.
Depot apparently feels it has saturated its markets and is now concentrating on refurbishing existing units (some of which are 30 years old) and developing an aggressive online presence. It did open four units in Mexico and one in Canada in 2015.
Neither firm is ignoring e-retailing, but Lowe's has not been nearly as successful as Depot in its efforts. Online sales for Depot increased 25 per cent in 2015 to USD 4.7 bn. Perhaps the most interesting facet of its online business is that more than 40 per cent of online orders are being picked up in a local store. The company currently is developing a program enabling online or in-store items to be delivered directly to consumers' homes or to job sites for its professional customers.
During the last several years, Depot has drastically changed how it operates. Instead of relying primarily on shipments directly from vendors, it has, like Lowe's, established a network of distribution centers and now operates 18 in the United States and 2 in Canada, plus 34 solely devoted to bulk merchandise and 22 which serve stores in Canada and Mexico. Lowe's, which has always operated distribution centers, now operates fewer units than Home Depot.