Posted Jul 17, 2009, 6:13 PM
Join Date: Nov 2007
(Detroit's) Home Depot becomes region's most profitable by catering to customers
City's Home Depot becomes region's most profitable by catering to customers
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • July 17, 2009
Detroit Three autoworkers haven't received profit-sharing checks for four years, yet the 217 employees at the Home Depot store in Detroit are seeing them every six months for hitting company sales and profit goals.
As other national retailers such as Kmart and Kroger have been pulling out of the city in recent years, Home Depot has been quietly making a tidy profit at its lone Detroit store.
Atlanta-based Home Depot Inc. celebrated its fifth anniversary in the city last March at a former Kmart location at 7 Mile and Meyers.
The 139,000-square-foot store is the most profitable in its 100-store region that includes Michigan, Toledo and parts of Illinois and Indiana, said Jen King, senior manager of public relations for Home Depot's northern division.
"The store has adjusted some of its products to help offset some of the other retailers leaving," King said.
Three months ago, Home Depot started selling toilet paper and paper towels. The store also expanded its section of cleaning products to two aisles, up from the traditional one, in response to customer requests, said Christopher Gilbert, a district manager for the chain who oversees the Detroit store. "We try to be the neighborhood store that people want to come to, and supply what they want," he said.
Gilbert said an article in the Wall Street Journal a few weeks ago about the city's struggle to attract retailers "made it sound like no one wants to be in Detroit, but there is still a huge population that is still a great customer base." Other national retailers operating in the city include Starbucks, Aldi, Family Dollar Stores and Staples.
"Detroit is a major city with a huge future. Why wouldn't we look to be part of that future? There are too many people that are just discounting Detroit, and that is just unfortunate," he said.
When asked to take a stab at why so many national retailers have tried and failed in the city and why so many are skittish now, Gilbert said it comes down to the retailer.
"I think part of it is retailers have tried to fit their normal business model into this environment. You have to make some changes," he said.
The key, he said, is to listen to customers.
Key products doing well in the city include indoor tropical plants, vegetable seeds, steel security doors and paint. The store offers free clinics on weekends where customers can learn about how to safely prime and paint over lead-based paint, how to install a toilet or how to pot a plant. It also donates roughly 5,000 employee hours a year to working on community projects such as painting schools and planting raised-bed gardens.
"We try very hard to become part of the community, not just to say we are here to sell you something," Gilbert said.
James Bieri, president and CEO of the Bieri Co. in Detroit, a retail consultant, said Home Depot's success can be replicated. "There's no question it has been a little difficult, but it is tough all over," Bieri said. "The unfortunate thing in the city is people want to go where it is safe and secure. One of the reasons you have seen a lack of development in the city is it is easier to build it elsewhere."
The store has all the same problems other urban retailers do, including employee theft and shoplifting. Mike Kerrigan, the store manager, said he takes time to get to know the associates and works on the floor alongside them most of the day. That helps keep everyone focused on serving the customers, he said.
"There's a huge opportunity in the city. The population base, even though it's dwindled, is still strong," Kerrigan said. "I just don't understand how retailers don't see the opportunity."