Home Depot’s huge jump in efficiency and profitability

In retail, efficiency is one critical success factor. Sales per store is a classic measure of efficiency. This metric sheds an interesting perspective on the American retail giants.

With sales per store, Costco is in a league of its own. However, Home Depot made a surprising growth spurt. Its sales per store increased from the bottom in 2009 ($29.4 M) by more than 50% to 2019 (pre-Covid). Curing Covid, naturally, the efficiencies of all the big retailers grew wildly.

Home Depot increased its store-specific sales by 63% from 2009-2019.

The corresponding growth at Walmart increased by only 2.3% and Target by 8%. Home Depot grew its sales wildly by opening only a few stores.

Only Costco could grow efficiency similarly to Home Depot among the big retailers. These efficiency gains have also translated into better profitability for Home Depot (see image below).