CASE STUDY

Home Depot in New York City:

Home depot s first store in Manhattan has the distinction of being the chain s first three story
unit, as well as its first one with a doorman and concierge. The new store caters to multiple
markets: decorators, building contractors and superintendents, brownstone owners, and
households that own or rent individual apartments, as well as suburban commuters. As Home
Depot s astern division president notes, this is !the first time we ve done all this under one
roof .
"efore its Manhattan e#pansion, Home depot successfully opened and managed stores in
downtown Detroit, downtown seattle, and the $incoln %ark neighborhood of &hicago. These
stores are a clear indication that Home Depot is seeking growth opportunities outside suburban
markets and that it is able to tailor its merchandise selections to meet the need of urban
customers.
'ince the new Manhattan store is in a $andmark preservation area, its store e#terior cannot be
modified. 'o instead of large permanent signs, the store s signage consists of orange(color
banners. The store stocks )*,*** different products+ special ordering capability will increase this
number to,**, *** products. The selection in many product categories is unparalleled for both
Home Depot and for Manhattan shoppers. -or e#ample, the store offers ,,*** different varieties
of lighting fi#tures+ .** of these are in stock. And customers can choose among ),*** different
types of flooring, including area rugs priced from /)** to /0,***. $astly, the store offers 1,)**
different paint colours that can be mi#ed from its nine paint mi#ing stations. Despite the large
selection of these items, the store does not have a large department and does not stock
plasterboard, insulation, or plywood. These items re2uire special orders.
The store s &helsea neighbourhood location, which used to be full of independent retailers, now
has such retail category killers as 3ld 4avy, 'taples, "ed "ath 5 "eyond and "est "uy. The
trend of large retailers coming to this area has some independents concerned. 3thers, however,
feel that stores like the new Home Depot will increase sales for all merchants in the
neighbourhood due to the cumulative attraction of chain and independent retailers.
The idea of the doorman for Home Depot stemmed from the need to help get customers a ta#i or
to help load their car. The concierge offers directions to a product s location and sends customers
to the proper aisles. All signs in the store are in nglish, 'panish, and Mandarin to appeal to the
diverse clientele.
Home Depot is committed to pricing its products at this location at this location at the same levels
as other locations in the 4ew 6ork &ity area+ however, prices will be higher than for its typical
suburban locations. According to one retail analyst, !Manhattan is a bit of a different animal.
&osts of occupancy and payroll are greater, and the challenges of the Manhattan landscape
include traffic, the times that people shop, getting it all into the store, and getting it all out to the
customers7.
Questions:
1. Discuss the differences in trading-area size and characteristics for a downtown versus
a suburban location for Home Depot.