FEATURE Story
THE MORE HEAVILY building material dealers focused on lumber, the more likely they were to experience a spike in revenues—due in no small part to escalating lumber prices.
L
Lumberyards’ revenues far outpace big boxes’
umberyards ’ revenues
soared far above gains for specialty dealers and big boxes, according to Webb Analytics’ 2022 Construction Supply 150. High-flying lumber prices helped drive a 19.2% revenue increase by the 150 dealers analyzed, with vast differences in growth depending on how much wood a company sold. The group, which arguably accounts for the lion’s share of construction product sales in America, took in $373.73 billion last year from their U.S. operations. Participants’ operations in Canada and Mexico added another $20.57 billion, pushing the total to $394.30 billion, also a 19.2% gain from 2020. The number of branches in the U.S. run by CS150 members grew 7.6% to 13,711, while there was a 32.1% increase in Canadian and Mexican branches, bringing the non-U.S. total to 847 and pushing the North American count to 14,558. “The increase looks similar to the 18.6% rise in sales during 2020 that was reported by pretty much the same CS150 membership. But top-line appearances deceive,” said Craig Webb, president of Webb Analytics LLC and author of the report. Largely because of softwood lumber’s 116% price increase between January 2020 and January 2022, lumberyards with manufacturing operations saw their revenues shoot up 58.6% in 2021 from the year before. This group—one of five subcategories tracked in the study—gets the majority of its revenue from sales of framing lumber as well as from manufacturing wood-based components like trusses, wall panels, and custom molding. Thus, a huge amount of what these dealers stocked sold for drastically more than it did just a few years ago.
10
n The Merchant Magazine n June 2022
Other subgroups benefited from lumber, too. Lumber sales at Home Depot rose 18% in the year ended Jan. 31, 2022, while at Lowe’s the lumber section’s revenue grew 16.5% and contributed one-fifth of the big box’s total revenue gain. But most other home centers and hardware stores don’t count on lumber as much to keep the doors open. As a result, overall sales for this subgroup increased just 11.1%. That’s half the increase that this group achieved in 2020, when COVID struck and launched a home improvement boom. Meanwhile, specialty building dealers—companies that primarily sell non-lumber products, such as roofing, siding, and drywall—recorded a 26.5% gain in sales. In 2020, CS150 companies that generated less than 70% of their revenues from professional builders and remodelers saw their sales increase nearly twice as much as companies that made over 90% of their sales to pros. But last year, the numbers reversed, with pro-oriented stores of all types seeing a 62% gain in revenue versus a still-not-shabby 28% climb at more retail-oriented outlets. The CS150 is a tale of two cities based on how you measure the group. The list’s 17 home centers and hardware store chains are only 11.3% of the membership but account for 67.9% of the revenue—the result of having Home Depot and Lowe’s in the group’s ranks. In contrast, the 48 lumberyards that don’t have manufacturing operations accounted for 39.3% of the companies on the list, but only 1.7% of the revenue. Among challenges, nearly half the companies rated finding truck drivers a 10 on a 1-to-10 scale of difficulty. Just under 50% said they have started letting some emBuilding-Products.com
