Atlanta, July 1--Home Depot Chairman and Chief Executive Bob Nardelli said Monday that the country's largest home improvement retailer will use its increasing size and improving service to fend off the aggressive growth of top rival Lowe's, as reported in the Atlanta Journal-Constitution.
In a TV appearance on CNBC's "Squawk Box," the newspaper reported that Nardelli said Home Depot will continue to increase its "geographic breadth" and open 200 stores this year to better serve its customer base. In Nardelli's first three years as Home Depot CEO and chairman, the Atlanta-based chain will open 600 stores, he said.
The number of stores is important, Nardelli said, because a recent Home Depot survey found that "convenience is one of the most important elements in customer shopping."
"We're twice the size of our nearest competitor," Nardelli said without naming Lowe's directly.
Home Depot, which has 1,588 stores in the United States, Canada, Mexico and Puerto Rico, had $58.2 billion in revenue last year. Lowe's, which operates more than 875 stores in 45 states, had $26.5 billion in revenue in 2002.
Lowe's has emerged as a favorite on Wall Street during the past 18 months because it has been able to grow at a faster clip than Home Depot, due partly to its smaller base.
During that time, Home Depot has undergone a major transformation that included the centralization of its merchandising. This year, Home Depot will spend $250 million to remodel its stores and $360 million on information technology.
Nardelli said "the convergence" of key initiatives has positioned Home Depot to reap the benefits of a better economy, especially as people view their homes as "a sanctuary" they want to put money into.
"We think we're in a real sweet spot right now," Nardelli said. "We're in retail, and we're in home improvement."
Nardelli, a longtime General Electric executive, said he has worked in several different businesses and likes Home Depot's outlook.
"I've never been more optimistic [about a company] than the one I'm in now," Nardelli said. "There are more things we can improve upon and control to grow this business than any other business I've been in."