More homeowners staying put and retailers see a market

As more people have decided they’re staying in their houses for the long term — whether by choice, or because they cannot sell their homes — home improvement retailers are noting the change, and mixing up what they sell in order to cater to what people want when they stay in one place.

“Maintenance and repair products have been a focus for us,” said Craig Menear, executive vice president of merchandising for Atlanta-based Home Depot. “People are making sure they protect that investment.”

But shoppers are making simple decor updates instead of involved ones, Menear said, spending on paint or refinishing their cabinets with their own tastes in mind, instead of starting bigger projects that are more geared toward eventual resale value. With home prices continuing to fall, there’s no guarantee that large expenditures will be recouped when a house is sold. That means less space devoted to kitchen renovations, and more given to cleaning supplies and affordable flooring.

That shift started in response to the recession and has picked up in recent years.

In addition to upgrading her lawn, Solomon said she is getting her kitchen counters done and replacing flooring in her home. She is thinking about making an attic playroom and doing work in the basement.

With more people doing work on their own homes, Home Depot also has focused on making projects easier. The company has added plumbing equipment that doesn’t require as many dedicated tools, for example, or a mat to add a new kitchen backsplash that means customers don’t have to deal with both mortar and sealer.

“One of the key shifts is how to make it as simple as possible for a customer to complete a project,” Menear said.

Customers looking for simple projects that can change the look or feel of a home are increasingly seeking inspiration from outside sources, said Mark Malone, vice president of marketing for Lowe’s.

He said the North Carolina chain is seeing more shoppers who are finally giving in to the “can’t take it anymore” mentality and are looking for creative ideas to change up the homes they are spending more time in. The company has a new app, Malone said, to help customers come up with creative ideas for their rooms.

He said in addition to changing the content of the store — expanding the breadth of light fixtures, for example, while carrying fewer varieties of caulk — Lowe’s also has decided to pull some easier-to-complete projects forward in the aisles, such as kits that will help homeowners convert to new light fixtures.

“They may not be doing the $30,000 kitchens at the rate they once were, but they’re putting up a backsplash or changing out hardware,” Malone said.

As the economy improves and more people are again spending money on their homes, the home improvement retailers have seen their profits — which fell off a cliff in the recession — rise. Home Depot, which lost $54 million in the last quarter of 2008, made $774 million in the same quarter of 2011.

Lowe’s made $162 million in the fourth quarter of 2008, a 60 percent decline from the end of 2007. In the fourth quarter of 2011, Lowe’s made $322 million.

During the housing boom, people were buying and selling homes more than ever. The lower turnover level now is closer to historic trends, said Colin McGranahan, a research analyst with Sanford Bernstein.

Since 1968, the average annual turnover of single-family homes has been 6.3 percent, McGranahan said, citing information from the National Association of Realtors and census data. The figure began to rise in the late 1990s, and by 2005, average turnover had topped 9 percent in one quarter before it started to drop again. In the fall of 2010, it had fallen to 4.5 percent before again starting to increase through the beginning of 2011, the last date for which there were figures available.

McGranahan said retailers changed their sales strategies for people who were flipping houses or using their homes’ ever-growing equity to renovate or expand. They have since changed what they allocate space to as a result of the recession.

“They quickly saw what was happening, and catered to that,” McGranahan said of retailers during the house-flipping era. “Now, they’re more back to basics.”

In addition to paint and cleaning supplies, that means retailers are selling more energy-efficient updates and more garden supplies to homeowners like Solomon, who change their mindset when they know they’re going to stay in a place for a long time.

Shoppers at the home improvement stores can see how retailers are changing their offerings if they look at what they are advertising, said Wayne Hood, managing director for equity research at BMO Capital Markets.

Special buys and aggressive pricing around flooring or bathroom vanities encourage shoppers to make investments in those areas, he said. Home Depot has used its seasonal area to highlight some of those sales that are more geared toward home maintenance.

At the Intown Ace Hardware in Decatur where Solomon was buying plants, co-owner Dave Jones said he has added more cleaning supplies and seen an increase in the sale of composting bins, while cutting back on mailboxes and trash cans. He sells fewer pipe fittings, and has become more of a general store as he works to cater to homeowners instead of contractors.

More people are growing vegetable gardens, Jones said, and building coops to keep chickens. He said they likely would not do those things if they planned to be in their homes for only a short while.

Jones has expanded the store’s outdoor section, building a deck where he could display patio furniture and adding fountains and decorative pots. He has been able to stock more varieties of Japanese maples and other plants, and said he has scrambled to keep some of the new patio sets in stock after giving more space to them.

“Instead of spending money to rent a place at the beach, people are going to buy a grill and a patio set and spend time in the yard,” Jones said. “They’re nesting. ... They landscape around it, and want it to be the centerpiece for years.”