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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Page 180 of 248

HARDWARE RETAILING | May 2018 168 Hardware Retailing (HR): How would you describe the economic role Menards plays in Wisconsin? Thomas Kemp (TK): Menards is the dominant home improvement chain, certainly, here in Eau Claire. They're also the single largest employer in the city employing around 3,000 people, so of course they have a huge economic impact on our local economy because of that. HR: Menards is one of the largest private companies in the U.S. How does that benefit Wisconsin? TK: I think it benefits the state because the control is local. Because Menards is based here in Wisconsin, their interests are—to some extent—in line with the needs of the state, so I think that's helpful locally. Their roots from the very beginning are closely tied to Wisconsin. HR: In your opinion, what are Menards' greatest strengths as a company? TK: I think their greatest strength is being flexible in terms of their business plans. I've grown up with Menards my whole life, and they always seem to be in tune with what a community needs. If they notice that another retailer is doing something that they think they can do better, they go ahead and do that, even if it's not totally central to their core mission of home improvement. For example, they generally carry a line of foodstuffs and that's consistent with their broader business plan of offering relatively high-quality products at low prices. They're very creative with product lines. HR: What are Menards most effective growth strategies? TK: It seems to me that Menards is remarkably in tune with their particular value prospect. That's likely the key to their success in terms of growing or maintaining profitability. That value prospect seems ridiculously simple, but it seems to work: Whatever they can provide at a competitive cost, whatever retail segment that is, they'll pursue it. It's known as a home improvement chain, but my family gets its laundry detergent and other household things from Menards more than any other store. HR: What benefits does Menards derive from being headquartered in Wisconsin? TK: They've been here since the beginning of the company, so they do have deep roots here. But generally in Wisconsin, they have access to a well-educated, low-cost workforce to draw from. Housing is very affordable here compared to other locations in the Midwest, which is likely another benefit. HR: What are some of the biggest challenges Menards has faced in its history? TK: Over the years, their challenges with various regulatory agencies have probably been difficult. Menards is pretty tight-lipped about their internal practices and lots of other things. As a private company, they don't have to disclose much and by and large, they don't. HR: What opportunities and challenges do you see for Menards in the future? TK: I think their willingness to offer products that aren't traditional for a home improvement chain will increasingly serve them well over time. In terms of challenges, I think their industry is likely to continue to be strong. People talk about "the end of brick-and-mortar retail," but I don't think that's super applicable to them. Certainly online competition will pose a challenge to some degree, but customers just aren't going to buy two-by-fours from Amazon. Thomas Kemp Professor and Chairman, University of Wisconsin-Eau Claire Thomas Kemp, Ph.D., is a professor and chairman of the department of economics at the University of Wisconsin-Eau Claire. He has a doctorate in economics from Colorado State University. 360 Menards on Its Home Turf " I think their willingness to offer products that aren't traditional for a home improvement chain will increasingly serve them well over time. "

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