Shoppers can go to Lowe's or Ace Hardware and small hardware stores, but that's about all, analysts say.
On the other hand, Home Depot has fewer competitors. When Target's breach was announced, customers had their pick of plenty of other stores that have the same merchandise that it carries at low prices, from to Wal-Mart. Home Depot customers see the chain as a necessary place to shop. It also has struggled to restore the reputation it's lost among some shoppers that it has cheap chic fashions.įor the nine-month period that ended a little more than a month before Target disclosed the breach, the discounter's sales rose just 1 per cent, while profits fell nearly 29 per cent. Meanwhile, profit rose 13.5 per cent, and the company raised its annual profit forecast.Ĭonversely, Target has had disappointing sales and profit declines during the economic recovery as its middle-income shoppers have remained frugal. Its revenue for the six-month period that ended last month was up 4.4 per cent. Home Depot has been benefiting from a turnaround in the housing market that has enticed shoppers to spend more on their homes. Unlike Target, Home Depot's business was solid before the breach. By nature, they tend to be less loyal to one store. Analysts say that group is loyal to Home Depot, and they often shop there several times a week.īy contrast, Target caters to the middle-income customers, who tend to shop around for the best prices.
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Home Depot's customers are more likely to react differently to the breach because of who they are.Ībout 37 per cent of Home Depot's sales come from professional and contractor services - or commercial customers, Melich estimates. "September is not a peak season for Home Depot, while Christmas at Target is critical," said Greg Melich, a retail analyst at International Strategy & Investment Group LLC. disclosed its breach a week before Christmas, the final critical stretch of the two-month holiday season, the busiest shopping period of the year for retailers like Target.īut Home Depot's disclosure came in September, months after the spring season, which is the busiest time of year for home-improvement chains. In addition to the fact that Home Depot's breach follows a thefts at other retailers, the chain may benefit from timing in another way. But they say there are at least four reasons Home Depot's breach may not matter to shoppers: To be sure, analysts say it's too early to estimate the impact the breach will have on Home Depot's business because there are many details that are unknown. "With Home Depot, it's like here we go again." "With Target, it was more shocking," said Horn, who lives in Wentzville, Missouri. Yet when she heard the news about Home Depot, she wasn't alarmed. She stopped shopping at Target for two months after its breach was disclosed. "Everybody knows that this is not people's first rodeo." "It's simply not a big issue with consumers," said Craig Johnson, president of retail consultancy Customer Growth Partners, noting that shoppers seem to be almost immune to the breaches now.
Industry watchers are betting Home Depot will fare better with its customers. Perhaps the most high-profile of those previous hacks came was at Target, which suffered profit and sales declines after shoppers fled following a breach that compromised 40 million debit and credit card accounts. Home Depot joins a growing list of retailers that have had their data stolen. While the scope of the hack is not yet known, there's speculation that it could be the biggest yet. The nation's largest home-improvement chain on Monday confirmed a theft that could have gone back as far as April and affected customers who used credit and debit cards at nearly 2,200 of its U.S. NEW YORK - Home Depot's data breach could wind up being among the largest ever for a retailer, but that may not matter to its millions of customers.
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