Atlanta, Dec. 7--In 1997, Lowe's began to blanket the Atlanta suburbs with new stores, in Alpharetta, Lilburn, Marietta and Stockbridge, according to the Atlanta Journal-Constitution.
In response, Home Depot prepared to protect its home turf. Home Depot co-founder Bernie Marcus vowed to fight what he considered an encroachment by "arrogant" Lowe's during an employee pep rally, according to an account in "Inside Home Depot." Home Depot Television, the company's internal TV network for employees, broke into its normal programming with special reports about "The War in Atlanta."
Six years later, the battle has intensified, and Lowe's is poised to enter the city of Atlanta. The move is both strategic and symbolic.
Strategic in that Lowe's is concentrating its growth in large metropolitan areas, including Atlanta.
Symbolic in that Mooresville, NC-based Lowe's is attempting to grow market share in Home Depot's back yard.
Indeed, Lowe's has no trepidation about expanding in Home Depot's hometown, said Brent Kirby, a Lowe's regional vice president who oversees Atlanta. The goal of Lowe's, he said, is to position itself as the top home improvement retailer in metro Atlanta.
"It certainly is an important market for us," Kirby said. "The Atlanta market has embraced us."
Home Depot's top executives are monitoring Lowe's latest tactical moves in Atlanta.
"We will continue to have a dominant position in Atlanta," said Bob Nardelli, Home Depot's chairman and chief executive. "It's our hometown. It's our headquarters."
Lowe's plans to build two "big-box" stores in Atlanta's core. The stores, part of larger developments on Moreland Avenue near Little Five Points and at the Lindbergh Plaza redevelopment, would be the first large-scale Lowe's locations within the city limits.
At the Lindbergh location, only a parking lot separates the site of the planned Lowe's store and one of the metro area's busiest Home Depots.
Marty Zahm, a former Lowe's executive who is now a partner in the Smith Ace Hardware chain, which has four metro Atlanta stores, said the bold move by Lowe's does not surprise him.
"Without a doubt, that's a big move for Lowe's," he said. "They're not afraid at all."
The quick growth of the two giants, Zahm said, has sucked up many of the best sites available and much of the marketshare in home improvement.
"Between Home Depot and Lowe's, they're storing out America," he said. "They're going into riskier places, and that's going to be in the cities."
Zahm's assessment is backed by several analysts who are concerned that, in Atlanta and throughout the country, the home improvement market is near saturation.
"Atlanta has one of the highest concentrations of (do-it-yourself) stores in the country," said Michael Baker, an analyst at Deutsche Bank Securities. "All of this does point to fewer opportunities for new orange boxes, particularly in Atlanta."
But executives at both Lowe's and Home Depot said last month that plenty of growth opportunity exists.
Adding stores in Atlanta is part of Lowe's strategy to concentrate new growth in metropolitan areas, Kirby said.
Home Depot, which already has stores in most major metro markets, is building stores in spots it skipped during its aggressive growth of the past 24 years. The company also is expanding in Canada, where it recently opened its 100th location, and in Mexico, where it has 18 stores.
Lowe's and Home Depot have been locked in battle for home improvement supremacy since Lowe's switched from mostly lumberyards and smaller stores to the big-box format. Lowe's transition to big boxes occurred after Home Depot replaced Lowe's as the No. 1 home improvement retailer in 1989.
Today, Home Depot is America's largest home improvement retailer with 1,456 stores, in all 50 states. Lowe's has 932 stores in 45 states.
Partly because of its smaller base, Lowe's has been able to maintain a faster growth rate than Home Depot and emerge as a favorite on Wall Street.
