Home Depot pushes low prices, energy savings

Home Depot Inc is cutting back on special offers while having low prices as the home retailer caters to cost-cutting customers.

"The economy is such that people are putting a greater premium on value that they get from the money they pay," Chief Marketing Officer Frank Bifulco said in an interview.

"When you look at retailers across the board, the emphasis on price and value, I've never seen it as acute as it is now," he added.

During the housing boom, slower housing sales, falling home values and tight credit have changed demand for the big renovation.

Profit at rival Lowe’s Cos Inc has dropped for the past quarters while earnings at Home Depot also declined for eight straight quarters

Home Depot has cut back on promotions after various efforts in the past years failed to provide much of a sales lift.

Now, the focus is on everyday low prices, more items with smaller price tags, and less dramatic discounts.

"We are definitely getting less promotional -- certainly fewer gimmicks, fewer sweepstakes," said Bifulco, who joined the Atlanta-based company in April.

The industry leader has closed 15 underperforming stores.

ENERGY SAVERS IN DEMAND

A bright light on the problem has been the sales of energy-saving products as many consumers try opposing rising fuel prices.

Bifulco said that homeowners are stocking up on weather stripping, pipe insulation, caulk and other products early this year as they face higher costs this winter.
For example, Home Depot said it sold 24,866 tons of pellet fuel in the first half, a year-over-year rise of 3,300 percent, with strong sales in the U.S. Northeast. Wood pellets, which are clean-burning and made of renewable substances, are used as a heating source in stoves and some furnaces.

"We are seeing an increase in traffic, we are seeing an increase in the business we do through our website," he said.

Home Depot shares dropped 5 cents to close at $29.10, while Lowe's fell 42 cents to $25.23, both on the New York Stock Exchange.

Since hitting one-year lows in July, shares of both retailers have risen about 42 percent, helped by easing oil prices and financial results that showed their ability to preserve profit margins amid the housing crisis.