Atlanta, GA, June 6--Home Depot Inc. is counting on technology upgrades to improve store productivity and customer service, its chief executive said on Thursday.
"We do not have the state-of-the-art retailing systems, but we're spending 12 times what we did in 2000" on information technology, Robert Nardelli told a Sanford Bernstein conference in New York.
Nardelli said that Home Depot, which initially built stores in metropolitan areas, was seeing "some impact" in store productivity as it adds stores in smaller, less lucrative markets.
Nardelli said technology upgrades could enhance store productivity by reducing labor required for some tasks.
For instance, he said, self-service checkouts, which Home Depot is installing in its busiest stores, have decreased customer wait times and allowed stores to redeploy staff to the selling floor, boosting service and sales.
Home Depot had a less-than-expected 1.6 percent decline in sales at stores open at least a year in the first quarter, improving over the fourth quarter's 6 percent drop as merchandise upgrades and a new ad campaign helped results.
But other measures such as sales per square foot and new store productivity weakened, leading analysts to question whether store saturation was hurting performance.
Nardelli also said Home Depot, which has nearly 1,600 stores compared with nearly 900 at rival Lowe's Cos., would use alternative formats such as smaller stores to reach markets that it has not been able to expand to because of size limitations.
"We don't see saturation as an issue as long as we bring diversity and innovation into the store format," Nardelli said.
