Expansion Fuels Retail Growth in Flat Year
By Craig Webb —
Hardware retailers posted modest sales gains in 2025, as consolidation, installation services and store expansion reshape the competitive landscape.
Hardware store chains and home centers eked out higher sales in 2025 over the year before, but not enough to top inflation and often solely because they added stores, tracking by Webb Analytics indicates.
The firm’s annual Construction Supply 150, published May 1, reported that a selection of the biggest independent home improvement companies grew about 1.7 percent last year. That’s little better than half the 3.2 percent and 3.1 percent growth rates shown by The Home Depot and Lowe’s, respectively. It’s also below the 2.7 percent rise in the Consumer Price Index during 2025.
Among the notable chains, Webb Analytics estimates sales at Great Lakes Ace Hardware grew 13.1 percent and Westlake Ace Hardware swelled by 5.6 percent, while The Aubuchon Company grew 5.5 percent, The Cool Hardware Co. increased 7.5 percent, Rocky’s Ace Hardware inched up 0.2 percent and JC Licht declined 1.3 percent. Among home centers, Friedman’s Home Improvement in Northern California shrank 6.1 percent, Busy Beaver Building Centers went down 3.9 percent and the Central Network Retail Group went back 3.1 percent.
For those companies, sales per branch averaged $3.6 million, while sales per employee averaged $270,502. Add in the big boxes and the per-employee number jumps to $371,269.
Webb Analytics generated these numbers with a combination of reports from or about the companies, SEC filings (for the big boxes) and estimates based on industry data such as Ace Corp.’s reports on member performance nationwide.
Growth Favors Scale, Service Integration
Tepid as those numbers might seem, a lot of pro-oriented building materials retailers would love to have them. Pro-oriented lumberyards on the Construction Supply 150 that don’t do any manufacturing reported their sales declined 0.8 percent. Pro-oriented lumberyards with manufacturing did even worse, dropping 4.9 percent. And specialty dealers such as roofing, drywall and siding firms eked out a mere 0.4 percent gain.
A key driver for all building material suppliers, whether they cater to the DIYer or the pro, was how many stores they had. CS150 members that added locations in 2025 reported a 2.1 percent gain in sales, while dealers that didn’t grow or shed locations saw their collective sales shrink 1.9 percent.
Dealers Expand Into Services as Consolidation Builds
This year’s CS150 focused on two overarching trends in construction supply. The first is the rise in dealers who manufacture and install products as well as sell them. Eighty pro-oriented CS150 members take in $7.7 billion—11 percent of their revenue—from installing windows, doors, cabinets and other items. Meanwhile, The Home Depot and Lowe’s collect $8.2 billion from managing installations. And the CS150 doesn’t count the millions that Ace Handyman Services generates.
The second big trend involves the more than 1,500 pro-oriented locations acquired by The Home Depot, Lowe’s and QXO in four deals this past year, and the nearly 600 more locations that QXO and The Home Depot are making deals to buy this year.
Once The Home Depot’s SRS Distribution subsidiary buys HVAC specialist Mingledorff’s this year, SRS will have pro expertise in roofing, drywall, landscaping, pool supply and now HVAC. Combine that with The Home Depot’s flatbed distribution centers and the fact that it sells more than $11 billion worth of lumber annually, then add its massive quantities of electrical, plumbing, insulation and appliances.
If the typical homebuilder has to work with two dozen subcontractors to erect a house, The Home Depot with SRS is setting itself up as a one-stop shop in a way that no major supply company has ever done.
AI Adoption Surges Across the Channel
The CS150 also explores dealers’ IT activities, challenges finding employees, payroll costs, products sold and services offered. It also asks whether dealers are using artificial intelligence in their work.
In 2024, only 45 percent of that year’s CS150 survey respondents said they were using artificial intelligence for any function at their company. This year, it’s nearly 68 percent. Based on anecdotal responses, dealers are starting with writing-related tasks (emails, ads, presentations) and some rote data analysis. Higher-level work such as estimating, quoting, research and schedule planning also are being tested by a few.
Craig Webb is president of Webb Analytics, a consultancy and information provider for building material dealers. He is also the author of the CS150, available from Webb-Analytics.com.
