Market Hit: Leveraging CE Data to Understand Lowe’s Growth Among Rural Customers

Following LOW’s revenue miss, management cited a pullback in DIY spending as the driver of the decline. Management did highlight one bright spot, however, with its new one-stop shop concept leading its rural customer base to be the best-performing DIY segment. CE data shows how spend growth among rural customers has outpaced spend growth of urban and suburban customers since the launch of the one-stop shop concept at the beginning of 2Q23.

In addition to helping investors forecast company-reported sales growth, CE data transaction is leveraged by our corporate clients to gain timely insight into the competitive landscape across consumer industries. In today’s report, we highlight the utility of CE data for home improvement retailers.

Lowe’s Sales Growth YoY (LOW)

CE Transaction data was quite predictive of Lowe’s (LOW) sales growth, as the home improvement retailer reported U.S. sales declined -8.1%, close to CE Implied Reported Growth of -8.6%. 

LOW management cited the pullback in discretionary spending among DIY customers as the main driver of the decline, as that group makes up roughly 75% of Lowe’s total, compared to the industry average of 50%.

Lowe’s Customers: Rural vs. Urban

One bright spot, however, was the growth of the rural “one-stop shop” customer base, with management noting that “rural customers are our best-performing DIY segment and these stores are performing significantly above the company average”. Leveraging CE data, we can compare the growth in the rural customer base versus urban/suburban customers.

*Rural customers defined as the “outside CSA” selection with the CE Cohort section, whereas urban/suburban customers are defined as the combination of all other CSAs.

Since the announcement of the one-stop store concept for rural customers on 5/24/23, CE data shows that year-over-year spend growth for rural customers has accelerated at a much greater rate than other customer segments. In the last reported quarter, rural customer spend growth was 240 bps greater than other customer segments.

As Lowe’s (LOW) continues to grow its one-stop shop campaign, clients can utilize CE cohort tools to monitor its effects on rural customers in real-time. 

Consumer Edge is the leading provider of alternative data for consumer spending behavior, and the only provider of global revenue signals. If you’d like to benefit from using Transact US or other products for home improvement, retail, and other industry data year-round to track trends and insights like these, reach out to insights@consumeredge.com.

About the Authors

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.

Harsh Masher is an Insights Analyst for the CEIC. Explore more insights here.