Hardware Retailing

MAY 2018

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

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HARDWARE RETAILING | May 2018 162 Dropping Prices and Internal Manufacturing Menards has built a reputation as the destination for low-priced home improvement goods. The company's rebate program draws customers back to stores, as its policy of giving in-store credit instead of cash pays off. 14 This approach inspires customer loyalty, as they return to use their credit in the store and spend more money in the process. Menards demands low prices from its suppliers to keep its low-price promise to its customers. On top of working with brands to get deals on merchandise, the company also keeps prices low by manufacturing many of its building materials, which include doors, roofing and siding. In July, the company was finalizing plans to open a new manufacturing operation in Holiday City, Ohio. Menards will be manufacturing a variety of materials, such as steel roofing and siding, and concrete blocks. Plus, the facility will act as another distribution center for Menards. 15 In December, the Leader-Telegram in Eau Claire reported on the company's plans for a new warehouse run by machines. Menards "plans to build a 121,700-square-foot warehouse with a 60-foot-tall automated system that will organize merchandise and process orders," the Leader-Telegram reports. The goal for this addition is to get products to customers faster, Jeff Abbott, spokesman for Menards, says in a statement. 16 "The robotic warehouse allows the company not only to speed delivery time but also cut costs and keep prices low," Abbott says in the newspaper article. In addition to manufacturing projects and distribution enhancements, Menards continues to open stores throughout its current service area. In March, John Menard joined Tom Kelley, president of Kelley Automotive Group, in Fort Wayne, Indiana, to announce expansion plans for Kelley's business and Menards. The company plans to invest up to $6 million to expand its stores to upgrade the size, product line and service in two Fort Wayne Menards locations. Kelley plans to invest millions in updates to nearby land. 13 Fines, Lawsuits and Disgruntled Employees While founder John Menard has created a company from the ground up, and in turn has become the wealthiest person in the state of Wisconsin, his rise to success has come with scrutiny for him and his business. The company has faced different legal challenges over the years, and currently is dealing with lawsuits from former employees. For example, in 2015, managers at the company shared that in their employment agreement, they had to agree to a substantial cut in pay should the workers under their supervision form a union. 17 Lawsuits followed, and by April 2016, the National Labor Relations Board found Menards guilty of violating multiple federal labor laws. 18 The violations could impact the company's relationship with all of its employees, the article says. In February, an Ohio law firm sued Menards "on behalf of workers who say they weren't properly paid wages and overtime," the Dayton Daily News reports. 360 Menards in Recent Years One method Menards has for bringing in repeat customers is its strong rebate program, which offers store credit instead of cash.

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