Monday, August 15, 2011

Lowe's Home Improvement In Kenai, Alaska Abruptly Closes Due To Flat Sales, 79 Jobs Lost

The Anchorage Daily News reports that the Lowe's Home Improvement store in Kenai, Alaska is one of seven stores shut down nationwide because it was "underperforming". The Peninsula Clarion now has its own story. Despite the hard work of employees, the store never met sales expectations, and future sales projections appeared flat. The fact that Lowe's was located directly across the street from Home Depot in a community of approximately 7,000 people was not cited as a problem, but undoubtedly contributed to the store's demise. Seventy-nine employees will be affected in an area already incurring job losses from the mothballing of the Nikiski LNG plant; the company says the laid-off employees will receive benefits for 60 days and are eligible to apply for any openings in the company's other Alaska stores. The remaining stores in Anchorage, Wasilla, and Fairbanks are not expected to close.

According to Forbes, Kenai Mayor Pat Porter blamed the economy and called the situation a huge loss. "The recession is probably what has done this," she said as she headed to meet with the city manager to discuss the closure. "As soon as they built this store the bottom fell out nationally, including the housing market."

The other six stores closing nationwide are located in Elgin, IL; Schaumburg, IL; Meriden, CT; Ticonderoga, NY; Cambridge, MN; and Riverdale, GA. A review of the local media stories indicates some of these stores opened as recently as 2008-2009; the Kenai store opened in November 2008.

Lowe's, which operates a total of 1,725 stores in the U.S., Canada and Mexico, said that its second quarter sales did not meet expectations. Analysts expected second quarter earnings of 66 cents per share on sales of $14.77 billion. The company instead reported earnings of 64 cents per share on sales of $14.54 billion, a $230 million shortfall. You can read Lowe's detailed press release HERE.

One person posted the following comment to the ADN story:

ahclem August 15th 11:02 A.M:
It has a lot to do with attitude toward customers. when you shop at Lowe's you almost have to throttle an employee to get any help, and then half the time they don't have a clue about what they are talking to you about the other half they give you just enough information to be dangerous. Home Depot on the other hand the minute you walk in the door someone is saying good morning and can I help you, and then if they can't help the try to find someone that can... much better experience! Even Spenard Builders could learn a thing or two from Home Depot.

That is not similar to my own experience. I've found Lowe's employees to be helpful, but they don't swarm you like Home Depot employees do. Lowe's believes shoppers are intelligent enough to decide for themselves when they need employee assistance. In addition, the local Home Depots tend to force you to use automated checkout by not opening up normal checkout lanes at times; I despise automated checkout because it steals jobs from prospective employees.

5 comments:

  1. You really know your stuff... Keep up the good work!
    Aledo TX roofing contractor

    ReplyDelete
  2. Wow this is really sad and rough on the economy in Alaska. Hopefully those people will be able to find jobs soon and get back up on their feet.

    ReplyDelete
  3. Thanks for sharing the post here. Keep up the good work. All the best.

    ReplyDelete
  4. This post is great! Very informative.

    ReplyDelete
  5. This is sad news for the people in Kenai, Alaska. When a company closes, so many people will lose jobs.

    ReplyDelete