Why are Lowes and Home Depot Close to Each Other?

Why are Lowes and Home Depot close to Each Other is one of the most essential question customer across the United State keep asking for a clear understanding due to their operations.

Lowes and Home Depot

Home Depot is a multinational American home improvement retailer that sells tools, construction products, appliances, and services such as fuel and transportation rentals.

Lowe’s is another American retailer that specializes in home improvement. The company operates a retail store chain in the United States and Canada.

Differences Between Lowes and Home Depot

Home Depot and Lowe’s appear to have less in common inside their stores. Home Depot stores have an orange and black color scheme with tall shelves, the highest of which can only be reached by forklifts.

The store’s industrial aesthetic gives the impression that it is aimed at home improvement professionals.

Lowe’s stores have a markedly different appearance. Employing a blue-and-white color scheme, they often feature more elaborate floor displays or themed products such as patio sets or holiday décor items.

Some people travel long distances to get their goods because the selection at these stores is nothing short of extraordinary.

Why are they Close to Each Other?

But why do they want to be so close to each other? Wouldn’t it be better for these stores to be located further apart so that they each have their own dedicated market area?

The Central Place Theory teaches us that people are willing to travel farther to consume higher ordered goods, which is why firms that sell these goods co-locate.

One of the central ideas of Central Place Theory is that goods have a hierarchy – an order, where higher ordered goods are those purchased infrequently, such as cars, and lower ordered goods are those purchased more frequently.

In this case, people are willing to travel farther from their homes to buy a car than to buy breakfast, so rival car dealerships should locate next to each other to take advantage of potential customers who travel long distances to shop.

Skilled business owners carefully consider where they will locate their operations. They consider the local customer base, transportation options, and, yes, competitors’ locations.

Many of these companies are making a deliberate decision to locate near their competitors.

Furthermore, the goal of Lowe’s was to replicate Home Depot stores. People began to notice flaws in Home Depot’s format. Customer service was beginning to deteriorate, at least in comparison to the early years.

Lowe’s would never be able to compete with Home Depot, so they needed to do something. So they imitated Home Depot and built stores similar to them near them.

When people can’t find something at Home Depot, they have an IMMEDIATE way to express their frustration by moving on to the next competitor. Lowe’s is built near Home Depots so that people who dislike Home Depot have a store nearby.

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