As the Coronovirus pandemic forced people to stay take shelter indoors, the home became an even more integral part of society’s daily lives. People’s homes became their workplace, school and main source of entertainment as lockdowns forced businesses to shut. As a result, the Home Improvement sector experienced a strong 2020 as people invested heavily in upgrading their homes. According to data presented by TradingPlatforms.com, Home Depot’s net sales increased by $20B in 2020, a 19.85% YoY increase.
Traditionally, economic downturns such as recessions and economic shocks have resulted in the decline in the home improvement sector. However, with the COVID-19 pandemic home improvement sector became one of the few shining lights of the US economy. Home Depot, America’s largest home improvement retailer, saw its net sales increase by over $20B in 2020 to $132B from $110B the year prior – just under a 20% increase.
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Home Depot’s global operating income also increased respectably at 15% YoY in 2020 to $18.28B. This gives Home Depot’s global operating income a CAGR of 9.2% in the 5-year period from 2015-2020. Despite 2020 being marred by lockdowns, the number of Home Depot’s customer transactions still increased by a respectable 8.7% YoY in 2020.
According to a survey by Hippo.com of 1000 American homeowners, 54% indicated making at least one home improvement in 2020. The largest share of respondents indicated to have made improvements to their backyard, kitchen and home office with 21%, 20.1%, and 18.4% respectively. The share of people who made improvements to their home that amounted to more than $10,000 was 10%, double of what pre-COVID-19 numbers indicated.
Interestingly, 71% indicated that they plan to sustain a similar amount of home improvements in the future, though this number is likely to experience a significant drop.
Home Depot’s Indoor Garden category had the largest share of its net sales with global net sales of over $14B. This amounted to a 10.8% share of Home Depot’s net sales in 2020, and is also a 30% YoY increase from 2019’s Indoor Garden net sales numbers. Only Home Depot’s Lumber category experienced a greater YoY increase, after experiencing a 43.3% YoY growth in 2020.
Appliances had the next biggest share of 2020 global net sales generating an estimated $11.9B.
Rex is an online writer and researcher informed by a global perspective that allows him to uniquely analyse numbers and convey them in a relatable way. He specialises in the area of Sports, Esports and the CBD industry as well as having an eye for the latest financial and technological trends. Well versed in SEO and other aspects of digital marketing, he uses his skills to good use on freelancing platforms while being based in the Netherlands.
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