HomeRetailersHome Depot Seeing Demand for Innovative Grills, Patio Business

Home Depot Seeing Demand for Innovative Grills, Patio Business

Home Depot reported their Q3 2022 earnings and, spoiler alert, grill sales were bad for the quarter. It wasn’t all bad news though, and they had some information that’s helpful for navigating the sales environment we’re in.

Demand for Innovation

Much like has been talked about on countless calls from grill manufacturers, the belief is there was pull-ahead of grill sales through the pandemic. In other words, everybody bought a grill in the pandemic, so now there is less than normal demand.

- Advertisement -

The only exception to that is Home Depot is still seeing demand for innovative grills.

I think it’s that people have already purchased in the past few years. And when people do purchase, again, they’re buying innovation. Our Traeger business, for example, is incredibly strong, and as they bring out innovation, customers respond.

Ted Decker, Home Depot President and CEO

There are two points to tease out in Ted Decker’s comment. One is that consumers are buying innovation. That’s important for grill companies that have been releasing iterations of the same grills for decades. They’ll have a tougher time in this environment.

The second is that they say their Traeger business is incredibly strong. We just heard from Traeger that their grill sales were down 64.2%. That must mean either that Home Depot is destocking their Traeger grills to lower their inventory levels or that the bulk of the downturn in sales for Traeger are online and at other retailers.

Price Sensitivity

- Advertisement -

Another market condition that Home Depot is seeing with their grills is price sensitivity, which makes it harder to deal with inflation.

…there’s some classic price points on some classic grills. And when we saw those grills get up over $600, we
saw a more dramatic drop off in engagement. And when Jeff (Kinnaird, EVP of Merchandising) and the team work those prices down even to the
low 400s and – or high 400s, low 500s, you saw a response with unit productivity.

Ted Decker, Home Depot President and CEO

The comment about price elasticity combined with the comment about innovation may be trouble for grill companies like Weber. They aren’t known as the most innovative and, as Ted Deck describes, could be more sensitive to price.

Patio Business Strong

Solo Brands also reported earnings this week and turned in a strong quarter. It seems that strength could be category-wide. While grill sales are soft at Home Depot, patio did well.

Two big categories, you might say, are more discretionary, grills and patio. Grills was down. But patio, we had one of the strongest patio quarters that I can remember. So there are definitely some mixed signals.

Ted Decker, Home Depot President and CEO
- Advertisement -

Home Depot isn’t sure why the grill category was down but patio strong, despite them both being discretionary categories. It could be pull-forward, price sensitivity, reaction to inflation, or something else entirely.

Home Depot’s comments and Solo Brands quarter are two telling data points about the consumer. Solo Brands was seeing the same market characteristics in their Solo Stove business, which is 80% direct-to-consumer. They’ve been releasing new, innovative products almost weekly at this point, are squarely in the patio category, and had great revenue.

- Get news like this in your email every Saturday - always free, never spam -

Subscribe to the CookOut News Newsletter - The Weekend Refuel

* indicates required
RELATED ARTICLES

Most Popular

- Advertisment -