Home Depot Still Evaluating Convenience

Has no plans to open additional c-stores in 2008, but has made no decision on 2009

Greg Lindenberg, Editor, CSP

ATLANTA -- A Home Depot spokesperson said the home-improvement retailer is "definitely pleased" with the performance of its pilot network of six Fuel-branded convenience stores in Tennessee and Georgia. "We are pleased with these stores and continue to monitor their progress," Paula Drake told CSP Daily News.

A Chicago Tribune report earlier this week said that Home Depot had no plans to open additional gasoline/convenience outlets. Drake clarified that report, saying that while the chain does "not have plans to open any additional Fuel stores in 2008, regarding 2009, we have not yet released [image-nocss] our specific new-store plans for next year."

The first Fuel c-stores opened in Brentwood and Hermitage, Tenn., in early 2006. The Acworth, Ga., location—a 2,700-square-foot store with fuel dispensers and a car wash—opened in late September 2006. The sixth and so far last Fuel location opened in June 2007. All of the stores are in the Nashville and Atlanta areas. Drake said that all of the current stores would remain open.

Based on feedback from contractor focus groups, Home Depot built a separate diesel island at the Acworth Fuel location to allow professionals to fill up large vehicles with high-speed dispensers and pay with fleet cards. It built the car wash to handle large pickup trucks and vans, and the store offers large containers for coffee and larger sizes of snacks for contractors to take to their job sites.

Drakedid not share specific numbers about the existing stores' performance, but Home Depot has projected that each location would have revenue of $5 million to $7 million per year. When the concept was unveiled, the company said that it could build 300 Fuel sites by 2010.

"The Home Depot Fuel strategy complements our recently announced plans to reinvest $350 million in our retail stores in the second half of 2006," Jim Stoddart, then senior vice president of growth initiatives, said when the Acworth store opened. "It's another way for us to continue to grow store revenue by delivering innovation, great value and one-stop-shop convenience to our customers. Plus it's no secret that the same contractors who spend a lot of time in our stores are also heavy customers of convenience stores."

Stoddart left Home Depot in May 2007. Eric Peterson, senior vice president of merchandising services, took over leadership of the Fuel stores from Stoddart. Stoddart played a key role in launching the Fuel concept, company spokesperson Tony Wilbert said at the time.

The change in leadership of Fuel was not expected have an impact on the rollout of concept, Wilbert told CSP Daily News in 2007. "However, we are re-evaluating the concept to make sure it fits with our strategy of growing sales in our core big-box stores. While the Fuel locations are doing reasonably well, we need to make sure they are driving traffic into the Home Depot stores themselves."

Atlanta-based Home Depot has more than 2,000 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, 10 Canadian provinces and Mexico.

(Click here to read "Orange Crush," the Home Depot cover story from the April 2006 issue of CSP magazine.)