Home Depot Slashing Prices To Increase Traffic

Atlanta, GA, Sept. 17, 2008--Home Depot said it is set to start cutting prices this week on as many as 1,200 items from trash bags to toilets as it kicks off its latest effort to boost slow sales and win back customers.

Prices will be cut between 5 percent and 50 percent -- although the company couldn't say what the average reduction will be -- on about one out of every 25 items found on store shelves.

The discounts will begin showing up in stores this week and will last at least through the next quarter as the chain tries to retain its top spot in the sector by striking back at competitors such as Lowe's Cos. Inc. and Wal-Mart Stores Inc.

The marked-down items also include energy-saving devices such as insulation and thermostats and products deemed "project starters" such as paint and toilets that are the building blocks for do-it-yourself tasks.

But the effort comes as the home improvement industry is besieged by a lackluster economy and an even worse housing market. During the second quarter, Home Depot's same-store sales fell 7.9 percent. Comparable-store sales slid 5 percent at Mooresville, N.C.-based Lowe's.

Home Depot is already working to change its merchandising efforts, eliminating products such as clothing. It's also in some areas eliminating multiple types of the same products that are stocked on shelves.

The company is also trying to revamp its supply chain by creating as many as 20 regional distribution centers. So far, three are open.

And last August, it sold its wholesale distribution business, HD Supply, to a group of private equity firms for $8.5 billion.