Ace dealers examine expansion
Four Ace Hardware dealers experienced in the art and science of expanding their store count shared some of their lessons learned and other helpful advice during the most recent Ace Convention in Las Vegas.
The four retailers – Alan Walter with stores in Texas and Oklahoma; Randy West of Savannah, Ga.; Mike Mott of Pennsylvania and Matt Dowdell of Montana – represent a wide geography and tiny slice of the Ace Hardware growth movement. The co-op has added 840 new locations in the last five years, said Jason Hipskind, vice president of new business for Ace Hardware Corp. Ace opened 167 stores in 2020, and increased that number to 182 in 2021.
A couple of quick points made early in the presentation —called “How to Grow Your Business,” one of many delivered at the event’s Retail Training Center stage— include the concepts that every new store opening is different, and they don’t always run smoothly.
“Build contingency plans,” said Dowdell, who has four stores in Montana. He pointed to supply chains issues – including the scarcity of fixtures -- that can affect new store openings. “You have to have a plan B, and plan for the fact that things are not going to go 100 percent perfect.”
Other challenges presented by the panel include data conversions (in the case of a changing relationship with a co-op or distributor) and general cost escalations of construction projects.
“Perseverance is important,” said Mott, with three stores in eastern Pennsylvania. “You have to have that quality when you go to expand your business.”
The challenges are worth it, the panel agreed. And according to Mott, the impact of a store expansion is felt not only in top-line and bottom-line growth, but on its impact on the people in the stores.
“I feel an obligation to grow my business,” Mott said. “A new store creates new positions and new opportunities for our people to advance. Nobody wants to work for a stagnant company.”
Responding to a question from the audience, the panel pointed to synergies of a second, third or fourth location. The ability to share product and people between stores brings benefits. “If you have three of an item in one store, but you need four, there’s a real advantage there to having that additional store,” said Walter, who operates five stores in Texas and Oklahoma.
“When we move folks from one store to another, it allows the culture to move from one store to the next,” he added.
Responding to a question about the relative strengths of building from the ground up or converting an existing building to a hardware store, West shared his experience in the Savannah, Ga. market. “If you take over a grocery store, or a drug store, you’ll find that they were built to be a grocery store or a drug store. When you build from the ground up, you can have all the bells and whistles.”
The panel also addressed the concept of squeezing out maximum sales in any space, a strategy that often includes looking outward to sidewalks and parking lots. Mott says his expansions have included negotiations with landlords for the use of as much outside space as possible. “Sidewalks and parking lots are busting at the seams in the spring,” he said.
“Inventory is the engine that drives your business,” Walter added. “We have space outside, and we just try to push as much inventory as possible.”
In Savannah, West’s unofficial slogan is “merchandise, merchandise and merchandise,” he said. “We use all the sidewalk space we can, and just try to use every square inch in the store.”
