The large number of responses we received to my story Home Depot management should stock shelves & help some customers tells me I touched an important subject in the minds of our readers. Almost all the comments supported my contention that the first step toward improvement of The Home Depot (NYSE: HD) must come from management creating a deeper dialog with employees, customers and shareholders. This means management must roll up their sleeves and get personally involved with customers and staff.
Not surprisingly Home Depot executive management had nothing to say and no comments were received from Home Depot, not even a public relations person. It would have been spectacular if there was a dialog. I have been a supporter of giving management time and have viewed the stock as a value proposition this year. I might change my mind if Home Depot does not radically improve the level of dialog. If any Home Depot Executives read this I hope they will add their voice. I think I will send this post to Home Depot and see what happens.
Meanwhile Home Depot also announced the sale of its HD supply to private equity group for $10.3 billion as well as a $22.5 billion Increase in its share buyback plan. This jump started the stock for a day or two, and maybe the reduction in the number of shares will have the desired effect in raising shareholder value, but if you get the cash from borrowing or by selling assets the value may be dubious since each share is part of a smaller company. Prettier picture, less substance.
Earlier in the week Home Depot's chief financial officer, Carol Tome, said in an interview this week that the world's largest home improvement store chain is doing more than just buying back stock to improve shareholder value. It's also reinvesting and has plans to improve its supply chain, store environment, employee morale and customer service. The return on investment from these actions is critical to the long term value of the company. It does make it seem they are aware of the points of dissatisfaction and perhaps are reading what you all have to say!
The following excerpts from the comments we received cover most of the sentiment expressed and I invite additional comments that might add further to the discussion. The most important thing that is missing, partially because managements views are absent, is how Home Depot can implement corrective action with diminishing capital?
Customers:
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John Katica: This suggestion is right on the money....literally. Anytime any business puts customer service below #1 on their formula for success plan, they're destined for problems. Management should definitely teach by "on the floor" example. Put on an orange smock over a tee shirt and levis and show your staff you care. Perspiration will improve the bottom line more than another report.
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haveittodayray: "Lowes is still the growth company for the future of Home Improvement, they will continue to take market share and a greater slice of the pie awasy from Home Depot."
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TEE: "My local HD is a pig pen! I feel dirty just shopping there, whether I buy or not."
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Schatzie Caldwell: "HD had a sale for Thanksgiving so we waited in line at 5:AM and the sale items were still in their boxes not cut open and salesperson stood there and refused to help we, each one of us that were there for the drills, picked up an entire box of 6 battery operated drills and took them to the cash register. There is no need to tell you other customers were furious. WE bought ours and never went back to that store."
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K: "Amen - they need to put their heads down and get to work. They cannot manage what they do not understand and with their recent push to hire from outside they need to change their management philosophy so that their outside hires can get a taste of the business."
Employees:
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Marlys: "I'm the wife of a HD employee. I have to live with my husband's schedule. The lack of HD's ability to give someone a regular schedule means you cannot plan and always have to trade days or bother the scheduler because you have doctor's appointment. This is ridiculous along with their pay schedule. My husband does his best for the client and will bend over backwards in the name of customer service. He sometimes brings his work home with him because he's so frustrated over store policy and the limitations that management puts on their ability to provide what the customer needs."
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John: "I think that a lot of the problems at HD are caused because of low salary and inexperience help...Just as others have stated you can't expect a pro to work for what the store is willing to pay....I work at a store where there are times you have one associate for three or four departments...It doesn't matter if you know anything about the departments that you cver, just get over there and do it..If you say that you are not comfotable in the department , because you are not skilled , you are told,LEARN IT... "
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Elie M: I think the pionts are valid, and there is alot of things that we are working on to improve. As you may guess i am a current employee of THD. More than an employee i am a manager for the Totowa,NJ store. For those of you folks that believe that we do not take your comments or concerns seriously, your sadly mistaken. I challenge you folks to gear your comments to your local store managers; contrary to your beliefs, many of us are "down in the treches" to make sure service and safety are priorities.
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Skidoo: "-Frank Blake has been in position for less than a year, give him a break people, you aren't going to see changes overnight.
-During his time in the company though, there have been more changes for the good in that one year than I have seen in my 3.5 years with the company.
-Yes, he is consulting the founders Arthur & Bernie. Arthur & Bernie's take on the Nardelli regime: "What the hell did you do to my stores?"
It seems to me that The Home Depot is suffering from ailments that remind me of a losing sports team. When the team is winning all is forgiven and when it's losing, the locker room gets nasty, the seats are not filled, and everything is put under a magnifying glass. In particular things like Ex-CEO's Bob Nardelli's pay and severance package resemble the outlandishness of doubling ticket prices for an unwatchable losing team.
All this said customers must recognize that management is struggling to find the dollars to make the kind of improvements we would all like to see. Home Depot has very large fixed costs in their "physical plant" (buildings) employee costs, and everything else. When things get tight, be it at your home or The Home Depot, things can become ragged around the edges. You decide to re-stripe the parking lot every four years, instead of every three; you decide to extend roof repair cycles, and slow down or reduce employee costs and more. While Nardelli was the poster boy for many of the companies ills, his ridiculous compensation is only a drop in a very large bucket.
From my perspective as an architect I would be addressing energy consumption as a major line item, but they may have been doing this all along and not made it known. Maybe a more dramatic approach is needed. It's your turn now...what do you think? Lets talk about financially viable solutions. In the original story I asked management to come back down to earth. Now I am extending the conversation to put customers and employees in management's role. Where would you find the money for the corrective action you would implement? We have heard the problems, what are the potential solutions?
Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.
Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.











Reader Comments (Page 1 of 2)
6-22-2007 @ 7:06PM
Inge Guggenheimer said...
What happened to my delivery? I ordered
paint (large
quantity) and didn't receive it causing a delay in
work to be started.
No call either to tell me what caused the delay.
6-22-2007 @ 7:15PM
richard said...
I cannot quite put my finger on what Home DePots problem is. Here in Wilmington, NC we have (1) large HD, and (1) under construction. We also have (2) LOWE'S stores.
For the record, both stores have very similar pricing, sales promotions, materials. But, as a contractor I find myself in LOWE'S far more often than HD. It has nothing to do with the staffing, pricing, etc. It has something to do with the layout of the stores themselves.
LOWE'S stores seem to have far better lighting, wider isles, and the supplies are stacked and shelved in such a way to be "open," and in a logical manner. The HD store is dark, shelves tightly stacked, and there seems to be "no logic" in how materials are placed.
Anyone get that "feeling?"
6-22-2007 @ 7:33PM
walkout said...
I'm a pretty big DIY'er and I'm at a hardware shop several times a week. I find that the best time to hit HD is NEVER. There is never anyone around to help. Ever have someone paged and try to meet them somewhere in the store? uh,huh. I bet they are still paging someone for me from last week. And when they do show up it's quite apparent that training and customer service are not emphasized. I had a forklift driver drop a pallet of 2x8's about 6 feet from me. Why did they fall - because he rammed something. Yes, I still go to HD because they often have materials I need - but I always pray that I never need to call for help. I've walked out of there many times and for several recurring reasons - if they invested 2 nickels in customer service and training, they'd get back 10 nickels in revenue.
6-22-2007 @ 7:37PM
silvaah said...
Dress code,Cell phones,Showing up late,Treating people like dirt.
First Dress code get back to polo's and jeans the new dress code for managers and asst: are a joke they dont wont to get dirty they will stand there and page someone to come and pick up trash just so they wont have to.
Cell phones take them all away all they do is walk around talking on them and its not about work.
Showing up late for work we have managers that show up sometimes three hours late and nothing happens they just sit in the office and laugh about how there date went last night.
Treating people like dirt when you put people in place that are barely 24 all they do is talk down to you and treat you like dirt they dont want to hear how to fix something they wont you to do there way witch is usually wrong and if you dont they are quick to write you up.
these are the things we need to fix.
6-22-2007 @ 8:08PM
silvaah said...
cutting hours
so much for putting more hours in the stores.that was a lie! if fact they are cutting hours left and right.all part time people work 20 hours or less per week. and full time people are forced to cut there hours as well. how do you pay your bills when you are sent home early with no say in it.
6-22-2007 @ 9:29PM
stephgriff said...
In our Tucson, Az Home Depot store you are always hard pressed to find anyone to help you and when and if I do, many times they seem annoyed, irritated that I need help and just plain not very friendly. On the other hand, Lowes is always staffed, friendly and willing to help. Seems pretty simple to me.......
6-24-2007 @ 3:39PM
joseph a. cepielik said...
I was recently injured at a Home Depot store.
I was told that customer injuries caused by carelessness happen quite often at Home Depot. Can you provide me with any fact concerning this matter.
Thank you
6-23-2007 @ 11:42AM
joseph a. cepielik said...
I was recently Injured at a Home Depot store. I was informed that this happens with regularity at Home Depot stores. Can you prpvide me with any information on this matter.
Thank You
6-22-2007 @ 10:41PM
George said...
So when you go to checkout how about having someone at the register?? Unbelivable only the Self-Checkouts are open in Plano and Garland stores most of the weekday. Staff the stores, train your people, stock your shelfs. No giftcard for Dad at Home Depot, I did not want to put him through the terriable shopping experience. My recommendation is to shop at Lowes or your local hardware store (if you can find one).
6-22-2007 @ 10:45PM
S. Roberts said...
I live in Key West, and we only have HD, I have always found them to be very helpful, actually taking me to the item I'm looking for. So it seems we are very lucky..keep up the good work in Key West. Also the store is well stocked and clean.
6-22-2007 @ 11:09PM
kristy amjad said...
Well, I have had same bad times as everyone else. I cut myself on a broken ceramic planter. I went to the cashier in lawn and garden, asked for a paper towel (he was standing and doing nothing, by the way)and he waved his hand at me and said, "oh, just got to the service desk for a band-aid. So, I go dripping blood all the way and the lady at the service desk sprays a little cleaner, gives me the band-aid, and states maybe she should take that pot off the shelf. You would think they might take my name down at least. They were more in a hurry to get me out of there. Returned the next day curious about the planter she removed while I was there and wouldn't you know, it was back on the shelf! This is the Columbia Sandhill SC location.
6-22-2007 @ 11:21PM
bobby said...
i live here in queens,new york.and the home depot is located at 112st and rockaway blvd.its the worst i have ever seen, most of the times they are always out of stock on building materials and if that is not worse enough and if you actually find something you need then its hell to pay for it because there is about 10 registers but only 2 cashiers.
p/s.management please do something about this.
6-23-2007 @ 12:27AM
Rob said...
I "USE TO" be a very big fan of the Home Depot-it was like a toy store to me. No more. I agree withother bloggers that Lowe's just seems to get it better, with cleaner, wider, better stocked stores. Also, I DO NOT work for you, Home Depot, and if there is one thing that irritates more than anything is the self-serv checkouts you try and force everbody into--hire some damn cashiers already! It is nearly impossible to finally purchase something in your stores once you get up front. Also, although there are enough people returning items that should not be allowed, I can't stand how you treat the average customer on the return lines-you make us feel like criminals even if we have legitimate, and unopened returns. It is, all in all, a horrible shopping experience-i am shopping at places like ACE Hardware again, more and more--goodbye HD/Titanic-jump off while you can.
6-23-2007 @ 8:26AM
Mr. noitall said...
I also think that one of Home Depot's biggest problems is the SELF-SERVE CHECK OUTS!!! They just don't work!
Sheldon, stop recommending this stock, it should be obvious by now that their management just doesn't care.
6-23-2007 @ 10:23AM
eliseo gomez said...
I have worked for home depot for 8 years and I have heard the good and the bad(ceo pay). I believe we as employees should give the new regime at least a year and put fowarth OUR effort to make it work. I do not work in a store but a distribution center where we do not deal with customers. The recent changes look positive and incentives for good work are slowly returning. I start with the person in the mirror.
6-23-2007 @ 1:13PM
Sam said...
Sheldon,
Why this obsession about Home Depot ? Do you carry a huge position ?
6-23-2007 @ 9:32PM
allen l said...
RE Home depo policys..a little before xmas I bought
a 50.00 gift certificate..It got lost in the mail
went to HD to have it cancelled(PAID CASH) and
had the rcpt and card #..they checked and it
had not been used..but refused to issue another
one.said co. policy not to reissue or refund for
lost cards even though they could easily cancell
the unused card. I wrote corperate ,including Nardelli and got a response from one of managements
employees that co policy says no reissue or refunds
on lost cards..They lost a customer..bgt my 750.00
snowblower from lowes and myself and my grown
(all homeowners) children now shop at lowes where
they give better service and sometimes even a better price..Lowes has since gotten 3-4000 of
my business since then...SMART MOVE HD..
Allen L
6-24-2007 @ 1:21AM
Sheldon L said...
Sam,
I have no position in HD, not now or ever. I would always disclose. I did recommend it as one of my seven picks for the 2007. If it hits my limit price I will buy it. These articles are to bring important issues in business to the table. I have no interest in Crocs ar Paris Hilton. I have continued the stories because there is deep interest and I am able to give people a voice that do not have my giant soapbox. I will be communicating with HD with this saga to see if I can wake them up....we will see. I also think I will post again on the subject, if there is more to say.
6-24-2007 @ 10:57AM
Bart said...
I worked at HD for 7 years. I was the one who could show you where everything is and how to do alot of things like put in a formica counter, change a p-trap,cut moulding,design a kitchen. I also am a stockholder and beleive the problems can be turned around. Put more people on the floor. Put more people on the floor. In my store which when I left was doing a million in sales a week we had 2 to 3 people committed to stocking our dept every night. They put most in overhead and leave the rest for the people in the day who were supposed to be freed up by the stock being put out in the night. The main asst manager would have the whole night crew do a thing called slocking. that means they would go around and anything they beleived should not go there they dumped in a cart. They were told they had to fill carts so they would just empty peg hooks to do it. We would see them and tell a manager and we would be wrong.So every dept would have between 2 and 6 carts of crap to put away each night or morning.This was the great idea of a guy who had failed as a GM. You may ask why I did not move up? I asked too. Well, the GM at the time said that my ASM said I needed to..... I had stopped listioning because my ASM had been fired 2 weeks before for running a credit card scam and I could not beleive that my future was being decided by the word of a thief. I was put in for a dollar merit raise, but after being OK'ed by my mngr and district mngr , it was dropped by a VP somewhere becuase they were limiting merit raises to 2 a month in our district. Somewhere over 2000 people. Their excuse to me. I should not have known about it anyway. Do you know why the raises were bad. Because they had brought so many people in at so little , that they had to make it up to them. This is truly what they said to us at a store meeting. I could go on and on with some of what most people would beleive cannot be true. But it is. HD's problem is its lower mgmt. Managers who have no people skills. The I got mine mentality. Who give no thought to what their saying. They do not take the time to sit back and say to themselves, is this in any way reasonable what I am about to say or do. I will end with a meeting where they had a new ASM from a military to mgmt program would speak about the opportuities at HD. NOw ,sitting in front were the Dept Head's. Some had been 10 years in their positions, some were retired military. Because they already were in the HD they did not qualify for the program which made him a automatic ASM looking at running his own store within a year. Now they had some guy(nice guy, and better mgr then the ones we had) who had stepped right over them to mgnt, telling them what opportunities they had at HD.All the employees could see what was wrong with this picture, but our store mgmt I guess, could not.Start giving better raise then the MCdonalds across the street. Give the better opportunities in house. Make mgr's responable for turnover in stores. Make all mgr's read THE ONE MINUTE MANAGER and work it. It is a great book. Bring back merit badges, the old ESPP, RESPECT for all employees.
6-25-2007 @ 7:16PM
Garry C. said...
I have worked for HD for 5 years now and the company is always telling us what is important and how to do things etc. etc.
They are so paranoid that they are going to get sued for something. One day while looking at a poster ( one of many, on a monthly basis in the lunch room ) I noticed something that really says it all. For I am a believer in the old saying that actions speak louder than words.
Here is the poster.!
" Our Core Values "
Building Strong Relationships
Creating Shareholder Value
Doing the Right Thing
Entrepreneurial Spirit
Excellent Customer Service
Giving Back Respect For All People
Taking Care of Our People
What ! Wait a minute, we are always told that the companies biggest asset is its people. It doesn't seem like it here. It looks to me, that the most important thing is building a strong relationship with shareholders and trying to do the right thing, whatever that is. Yet there is a big problem with the doling out of " Stock Options " that make top management millions and millions of dollars, while skirting the the provisions of a shareholder approved plan, which is in clear breach of fiduciary duty.
Even all the yap... about customer service is far down the list after" Entrepreneurial Spirit " What is this got to do with anything, you try to get anything done that is not by book, it gets ignored and or bundled up in red tape and forgotten. And last on the list, " Taking care of our people ", did I miss something here. I thought we the people were the biggest asset to the company.....
I guess not !
Well since I first saw that poster it has been taken down and I believe the wording has changed. But, as I read about the selling of HD Supply, there were many comments of building better shareholder value.
I agree with Bart, over the 5 years I have been with this company I have seen some things that happen with people who are supposed to be mangers, who couldn't manage a heart attack. When you first apply at HD, you present your resume( just like at any other interview )and that I think is the last time anybody sees it. I have talked to people at my store who have qualifications that far above and beyond anyone in the store, yet none of this talent pool is ever used or appreciated. I have never in my working live seen so many people leave a company as I have with this one. This company could be so good and strong, if only they would remember who and why the company was started and that the biggest asset any company can REALLY have is its employees, because they are the first & last impression. Do something HD, to make it a place where you really want to come to work. The employees at the store are made up of 3 types of people.
1. Young people who are going to school and are looking for a job to carry them through. They are leaving anyway and know not much at all about the business and couldn't care less.
2. We have people who are semi-retired and are looking for a part time job, to earn some so that can play more golf, they to could really care less.
Well that leaves the third group, the ones who want to make a career of this business and have the expertise in the building trades and possible some sales background also, theses are the people who we need more of, but, your not going to get or keep them, when a basic labour in the construction industry can make more then a DS.