As the housing market climbs out of the cellar, home improvement sales are through the roof.
Online purchases of home-related goods took priority over back-to-school-spending for families this summer, according to a study released Tuesday from IBM Smarter Commerce.
It's a trend that's also driving sales in brick-and-mortar home improvement stores from mom-and-pop hardware shops to Home Depot, which hammered out its highest quarterly earnings report last month in five years at $1.5 billion. The home improvement market was big enough in Uniontown, Ohio, for Wayne and Howard Miller to open what they call the largest independently owned hardware store, Hartville Hardware, in July, with a seven-acre retail space.
Outdoor furniture producer Lane Venture has seen its best sales in years, due to the growing popularity of "outdoor rooms," entertaining spaces furnished with patio recliners and swivel rockers, says President Gary McCray.
More people are buying items for their homes online. The IBM report showed sales were up 30% in July from last year and 25.5% in August for home-related items, a category which includes anything from house paint to appliances to furniture. The report analyzes online shopping trends from more than 500 leading retailers.
The home-related sales stand out in an otherwise underwhelming shopping season, says IBM global strategy program director Jay Henderson. He says consumers are "hunkering down" in the still-struggling housing market.
"People are choosing not to move into a new house, and instead re-invest in their homes," says Henderson.
For Jamie Saunders, 38, it wasn't a choice. She and her husband wanted to put their house in Alpharetta, Ga., on the market and take advantage of low mortgage interest rates, but found they didn't qualify for the loan they wanted.
"Despite having never missed a mortgage payment in 11 years, never having been out of employment since of working age, we would not qualify for a loan to upgrade our current living situation," she says. Instead, she opted to buy new siding and windows, as well as a washer and dryer, in the past year.
How some home improvement businesses are doing:
* Home Depot. Giles Bowerman, Home Depot's senior vice president of merchandising, says sales are up in almost every area. Customers are changing, too, he says. Many people who used to be builders are now remodelers.
* Lane Venture. Some home furnishings are more popular than others.The sister company to cedar-chest producer Lane Furniture, it has overhauled its product assortment to predominantly offer patio furniture in the past few years. As a result, this year's sales have been "up significantly over recent years," McCray says. He attributes the success to the growing popularity of "outdoor rooms" furnished with patio recliners and swivel rockers for an entertaining space more like a den than a picnic area.
* Hartville Hardware.The nation's largest independent hardware store based in Uniontown, Ohio opened doors to its new seven-acre retail space in July, says Wayne Miller, who owns the store with his brother Howard. The store is so big, there are two houses inside of it: a seven-room house made and furnished with American-made products; and an 1860 historic log cabin.
While home improvement may be hot for some consumers, others say the state of the economy still restricts their purchases. Dana Remaley, of New Stanton, Pa., says her husband was recently laid off from his job as a plumber, "Even if we wanted or even needed a new large-purchase item, we could not afford it."