Menards pushes ?bigger is better? approach

Friday, April 8, 2011

While Menards’ $7 billion in annual revenue is a fraction of Home Depot’s $71 billion and Lowe’s $47 billion, it is a big regional player with 258 stores, said David Brennan, co-director for the Institute of Retailing Excellence at the University of St. Thomas.

“I suspect what Menards is doing in this case is one-upmanship in regards to Home Depot and Lowe’s,” Brennan said. “John Menard is showing a disposition that in his desire to compete, he is willing to tear down a store and build a bigger one.”

The mega-Menards also will be twice the size of the two Home Depot stores and the Lowe’s store located within five miles of its Interstate 394 location.

In this market, there may not be any such thing as too much density. Brennan said having so many big-box home improvement stores in the Interstate 394/494 corridor will draw consumers from a larger area, creating an economy of scale.

“People will shop multiple stores to get the best price and to get exactly what they need,” he said.

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Originally published: 04/08/2011, Finance & Commerce