Home Depot & Lowe’s: Who’s Winning the Pro Market?

The two giant home remodeling retail chains have been doubling down their efforts to serve the professional market.

It was Lowe’s that made the latest move in this back-and-forth competition to enhance their contractor sectors with its purchase of Foundation Building Materials last month. The $8.8 billion deal is expected to close in the fourth quarter and gives the number two chain more capabilities in the pro area. FBM is a North American distributor of interior building products like ceiling systems, metal framing, drywall, insulation, commercial doors and hardware.

“With this acquisition, we are advancing our multi-year transformation of the Pro offering,” Lowe’s CEO Marvin Ellison said in a statement in announcing the deal. “It allows us to serve the large Pro planned spend within a $250 billion total addressable market and aligns perfectly with our Total Home strategy.”

The FBM acquisition comes only two months after the completion of Lowe’s purchase of Artisan Design Group, which offers design, distribution and installation services for interior finishes. “FBM’s scalable, multi-trade distribution platform and strong leadership combined with our recent acquisition of ADG will significantly enhance our Pro offering,” Ellison said.

Both moves come in light of its larger competitor’s deals that will expand its pro efforts as well. This past June it bought GMS Inc., a specialty building products distributor, for $5.5 billion, layering it on top of its earlier acquisition of SRS Distribution, a building products supplier, last year. In 2020, it repurchased HD Supply Holdings, a wholesaler that focuses on the pro market and a subsidiary it had previously owned before spinning it off in 2007.

While the bulk of shoppers at both retail chains remain the DIY project customers, softness in the home building market driven by high mortgage rates and inflation has caused each to focus more on pro builders. While they account for only 10 percent of its customer base, contractors and professional builders represent nearly half of Home Depot’s total revenues. At Lowe’s, pros are only about 30 percent of total sales, but that’s up significantly from just 19 percent as recently as 2019.

So, who is winning the battle for the pros? While Home Depot clearly is doing more business with professional builders, Lowe’s has been coming on strong recently. The real winner? The pros.

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