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Corporate Clash: Home Depot vs. Lowe's

Tag:home depot stores products home improvement Improvement | 14 Viewers| disciplineforjustice 2008-01-17 10:14:37 Publish:

Today, it's the battle of the giant home improvement warehouses. Let's get to the facts:

Home Depot

Annual Revenue (2006): $81.5 billion

CEO Compensation (2005): $37.8 million

Brands and Affiliates: Behr, Glacier Bay, Global Union, Hampton Bay, Home Depot, Husky, Mill's Pride, Pegasus, Ralph Lauren paint, RIDGID, Ryobi, Thomasville Cabinetry, Vigoro Fertilizer, Workforce

Lowe's

Annual Revenue (2006): $43.2 billion

CEO Compensation (2006) $8.45 million

Brands and Affiliates: None

This one is really close. Home Depot and Lowe's have very similar records. Here are some problems that are shared between the two:

- Nearly all lawn care products available at both of their stores are toxic to animals as well as people.

- In November 2001, both were called upon to stop selling arsenic-treated lumber to the public because of the wood's cancer-causing capabilities.

- Consumers filed a class-action lawsuit against both companies for misleading consumers with interest-free credit promotions. They were alleged to have cheated customers by applying store credit payments to interest-free balances following major promotions, leaving customers’ interest-accruing balances untouched.

And then Home Depot has a couple of issues all its own:

- In July 2001 a supervisor at California Home Depot filed a class-action lawsuit against the company alleging that it denied workers in its California stores millions of dollars in overtime by misclassifying some employees as exempt.

- Home Depot CEO, Robert Nardelli, resigned in January 2007. His severance package was valued at $210 million, including stock options, despite the fact that in his six years at the helm, Home Depot’s stock declined as the country was seeing it’s largest-ever real estate boom.

But Lowe's has it's own problems, too.

- In September 2005, a federal judge certified a class-action lawsuit against Lowe’s for failing to pay workers due overtime wages. The case could represent as many as 75,000 current and former Lowe’s employees who allege that the company used a number of tactics to avoid paying full overtime compensation.

But just as it looks like Lowe's is going to squeak out a victory, Home Depot evens things up with this positive step in its environmental policy:

- In April 2007, Home Depot introduced Eco Options, a line of products that they're promoting as environmentally friendly, including energy efficient lightbulbs and natural insect repellants. The line currently includes 3,000 products but Home Depot hopes to increase it to 6,000 products by 2009, which would represent 12 percent of the company's sales.

So it seems we have a tie. Two very similar companies that operate in similar ways. (They even tend to place stores rught next to one another!) As a tiebreaker, we'll use a new Discipline that I intoduced recently: Shopping Small.

Shopping Small means that all else being equal, chose the smaller company. It's a simple way to help prevent corporations from getting too large and too powerful. Since Home Depot has twice the annual revenue of Lowe's, Lowe's is the winner. As usual, I will send each company a letter telling them why I will be shopping at Lowe's and not at Home Depot.

Here's the overall "Corporate Clash" scoreboard:

In: BP, Pepsi, Campbell's, McDonald's, Wendy's, Taco Bell, Lowe's
Out: Wal-Mart, ExxonMobil, Coca-Cola, ConAgra, Burger King, Home Depot
Comments:

The class actions of lowes have nearly been settled (granted probably 3 cents on the dollar)

In terms of having no brands they do...kobalt, taskforce, gatehouse, harbor breeze, bright effects etc.

I'd just shop at smaller chains...ace/ tru value/ do it best...it just makes more sense.


Comments:

Pretty worthless post....you've done nearly no research on either company. Lowe's has a ton of brand 'affiliations' as you call them. They aren't affiliations (nor are Depot's), they are brands owned/produced by each. For example, Behr paint. Depot owns that brand. Kobalt tools, Lowe's owns that one. The information you have on the litigation is dated and frankly irrelevant.

Find some meaningful way to compare. And don't think Ace or True Value are any better - they're similar to franchises, but large nevertheless.


Comments:

I do these "Corporate Clashes" fully aware that my research is incomplete. Admittedly, it's a handful of websites that I have found through web surfing. I would be grateful if you could point me to some resources to get more complete information.

The main point, though, is to start the process of gathering information. For the average consumer like me, it is very difficult to get good information. But working on incomplete info is better than working on nothing.

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