Big Box: Big Home Centers’ Influence Sways The Broader Materials Market
Even though “big box” stores Home Depot and Lowe’s primarily are the domain of the non-professional do-it-yourself construction consumers, the retailers’ influence on the construction materials market may be more industry-wide than their target audience would imply. The huge amounts of materials that rapidly move through the thousands of stores, and the just-in-time supply chains that feed them, are a recipe for price volatility and materials shortages, some industry sources say.
“The whole industry has shifted to just-in-time production and delivery,” says Carl Cullotta, head of the construction practice group at Chicago-based Frank Lynn Marketing and Consulting. “Home Depot and Lowe’s have been partly responsible for that by making mills and suppliers streamline their production and shipping to keep up with demand.” Mills and suppliers have had to invest in global positioning system (GPS) tracking of shipments, bar coding of materials and leaner production to keep pace in the just-in-time environment the big boxes groom, Cullotta says.