There are very few spaces in the world of retailing where one player is overwhelming dominant. In just about every category of product classifications, there are often two big heavyweights and more likely than not, dozens or hundreds of additional retailers going after the business.
It’s why Tractor Supply Company’s significant position in the rural home and supply business is such an anomaly. And it’s why others have to be eyeing it as a great opportunity to enter. Yes, the Ace and True Value independents are in the space and some home improvement chains touch upon it. But it’s still largely TCS’s game.
Which is why what Lowe’s – which itself is in a dogfight with Home Depot in the DIY channel – is doing is quite fascinating. The big chain is rolling out its own rural format to up to 300 of its existing locations by the end of the year that will feature a broader assortment of goods targeting the farm, ranch and outdoor sectors. The stores have always carried some of this but this seems to be a concerted effort to step up its efforts to compete against Tractor Supply for this customer. The stores are located primarily in the South, Midwest and – in a bit of a headscratcher – the Northeast, it says and will offer a “one-stop shop to make it convenient for rural customers to get what they need in one shopping trip.”
TCS is a formidable competitor and Lowe’s will have no easy time grabbing market share in this sector. Tractor Supply does a great job serving this market but still, the Lowe’s move is a smart one. Even if it picks up a few points of business it’s all added volume without the physical investment of new, free-standing stores.
You can bet that if this works, Depot will have its own answer and begin to step up its efforts as well. But in the meantime Lowe’s is ahead of it and that’s been consistent in many things where it has proven to be the scrappier player in home improvement.
Let’s see how this does. TCS shouldn’t be too worried: the rural market seems to be expanding post-pandemic with population shifts out of big urban areas…even though that is not as significant as it first looked as people move back to cities. So there is room for others.
So for right now the rural market is the place you want to be.
WarrensReport 