Home Depot is continuing to see some of the same consumer trends as previous quarters. Their overall sales were impacted negatively by a lack of comparable storm activity year over year, but that’s not relevant to grills or consumer demand overall.
They saw their average ticket size increase on the quarter. Particularly on those transactions that were over $1,000, there was a notable increase.
Turning to our merchandising department comp performance for the third quarter, 9 of our 16 merchandising departments posted positive comps, including kitchen, bath, outdoor garden, storage, electrical, plumbing, millwork, hardware and appliances. During the third quarter, our comp average ticket increased 1.8% and comp transactions decreased 1.6%. The growth in comp average ticket primarily reflects a greater mix of higher ticket items, customers continuing to trade up for new and innovative products, as well as modest price increases.
Big ticket comp transactions, or those over $1,000, were positive 2.3% compared to the third quarter of last year. We were pleased with the performance we saw in categories such as appliances, portable power and gypsum. However, we continue to see softer engagement in larger discretionary projects, where customers typically use financing to fund renovation projects.
Billy Bastek, EVP Merchandising at The Home Depot
They’re also continuing to see consumers buying innovation. That’s been a theme for retailers and manufacturers through the whole grill sales slowdown. You can see that on a micro-level at Solo Stove where they had almost no innovation released in 2024 and it was a major contributor to their revenue decline.
Like we’ve seen with all of the large grill retailers, The Home Depot continues to see success with online sales. Double digit gains have been common in digital across the board.
Turning to total company online comp sales, sales leveraging our digital platforms increased approximately 11% compared to the third quarter of last year. We’re excited about the continued success we’re seeing across our interconnected platforms. Our faster delivery speeds are resonating with customers and driving greater engagement and sales. We know that as we remove friction from the experience, we see incremental customer engagement, leading to greater sales across all points of interaction.
Billy Bastek, EVP Merchandising at The Home Depot
In grills, that will become even more relevant as brands that used to focus on DTC keep moving more towards retail. Traeger comes to mind with their announcement that they’re going to stop selling products through the website, instead directing consumers to retailers for purchase.
Macro Challenges
It’s no secret that there’s a stretched consumer operating in an overall uncertain environment. Dynamics in housing impact The Home Depot across their business, including in grill sales.
And then you talked about the overall economy in housing. We did expect to start seeing some pickup in demand in the second half of the year. And this wasn’t just the calendar dynamic of, oh, things will be better in the second half. We were expecting interest rates and mortgage rates to come down, which they did, that would have been some assistance to housing. But we really just saw ongoing consumer uncertainty and pressure in housing that are disproportionately impacting home improvement demand.
Ted Decker, President and CEO at The Home Depot
My takeaway from the commentary around housing is what’s impacting The Home Depot the most is with overall uncertainty. That would be felt in grill purchases because they’re ultimately discretionary. In uncertain conditions the consumer will be less likely to make a non-essential purchase because they may feel they may need that money for something else.