Lowe's doing more with less

With major new store growth on hold in the recession, Lowe's is focusing on getting more out of what it already has - just like the consumers it serves.

In boom times, the Mooresville-based home improvement chain could readily open new stores without damaging sales at existing locations. But the downturn changed that.

The company's average annual sales per store fell to about $28 million to $29 million last year, compared with $38 million before the recession, CEO Robert Niblock said.

Speaking Friday at the company's annual shareholders' meeting at Ballantyne Resort in Charlotte, he and other executives said they're aiming to reverse that trend, with several plans designed to boost business at existing locations.

"It's really about getting more aggressive in areas we weren't pursuing in the past," Niblock said.

One such area: exterior projects such as roofing, siding, fencing and windows. Previously, a Lowe's employee would visit a customer's home to provide a quote for such a service, but the customer would have to go into the store to order, say, a new roof.

Now, a Lowe's store employee in the new position of project specialist-exterior can do it all in the home, streamlining the process, making it convenient and taking away a competitive advantage that smaller roofing and window installers possessed.

So far, Niblock said, the new position-and-ordering process has increased the number of people placing exterior project orders through Lowe's; it has rolled out to about 1,400 stores, with more on the way.

Lowe's is also working on ways to attract more commercial business, from customers such as apartment and hotel maintenance departments, painters, handymen and the like, Niblock said.

The company plans to open 45 new stores this year, compared with 62 last year. It has about 1,700 stores, with more than 166,000 full-time workers and 73,000 part-timers.

The chain has 14 stores in the Triangle.

Value remains important to shoppers right now, as they reorder their priorities and tackle more home projects themselves, Niblock said.

Lowe's has seen continued increases in the use of debit cards and a drop-off in use of its proprietary credit card, due in part to credit card law changes barring introductory offers that involve making no payments for a certain amount of time.

However, he said, relatively improved confidence and optimism has prompted people to spend a bit more on products that aren't strictly necessities, such as mowers, grills and patio furniture.

That helped Lowe's first-quarter results, announced this month: Though sales and profits remain below bubble-influenced peaks, the company reported sales gains at existing stores for the first time in 15 quarters.

Still, Niblock said, consumers will likely seek more clarity from the economy before investing in major projects, and could also be rattled by stock market uncertainty driven by events in Europe.

Also at the meeting Friday, Lowe's raised its dividend to 11 cents a share, up from 9 cents. All directors up for new terms were re-elected, though the board of directors elected former Walgreens CEO David Bernauer as lead independent director, replacing Temple Sloan, who had served in the role since 2008.

Lowe's shares fell 37 cents to close at $24.75 on Friday but are up 30 percent in the past year.