Ace Hardware's 2006 Annual Report - Home Page
Offering Customers Quality Products

Duracell Batteries
Ace Paint
Mom and kids cleaning up their mess!
Product innovation and new product introductions make Ace stores convenient destinations for hardware and home improvement in their communities.
Ace's extensive product selection has always been a cornerstone of our retailers' success. Time and time again, retailers recount tales of consumers coming to their stores looking for a "thing-a-ma-bob" after having been referred to their local Ace by an associate at a nearby "big box" who was unable to meet their needs.

Ace stocks more than 65,000 SKUs in the retail support centers. It's this depth of product that makes Ace "the place" for consumers who are looking for specific items for their DIY projects.

A key element of Ace's product assortment is the ever-expanding line-up of Ace label products. With more than 10,000 SKUs carrying the Ace name in all buying departments, Ace labeled products are a visible component in growing the overall Ace brand. By ensuring that any product that bears the Ace name is equal to or better than comparable national brands, Ace labeled products continue to provide a fantastic value for consumers. Couple the expansive selection of Ace items with products from the leading names in the home improvement industry, and Ace retailers' product mix is second to none.

In particular, several core departments serve as the foundation of Ace's expansive product selection. The paint department continues to be a key category for the majority of Ace retailers, with consumers turning to their local Ace for paint and sundry products. Overall, this department accounts for nearly 20 percent of an average store's sales.

Ace's paint lineup continued to grow in 2005, with the addition of a satin line to the popular Ace Sensations® product offering. Sensations is the only paint line with Scotchgard® protection. The satin finish provides the same washability and ease of stain removal as the flat paint, providing consumers with two fantastic options.

To further augment the selection of quality Ace Paint products, in late 2005 Ace announced an alliance to offer Benjamin Moore® products in Ace stores. The coupling of these two highly recognizable brands provides another way to help retailers differentiate themselves from the "big boxes". The Benjamin Moore rollout will be done on a market-by- market basis, with qualified retailers in four markets being able to stock the Regal® line in 2006. A nationwide rollout at qualified Ace stores is expected by the end of 2008.

Ace's consumer research shows that providing consumers with a brand choice in paint not only helps to boost Ace Paint sales, but also results in an increase in sales for the entire paint department. Now, by stocking one of two premium paint options - Benjamin Moore and Pratt & Lambert - in Ace stores, retailers have the ability to even more effectively meet the needs of their customers.

Lawn, garden and outdoor living is another core category for Ace retailers, accounting for 16 percent on average of a store's sales. To help retailers continue to capitalize on this key department, the Merchandising team unveiled a point-of-purchase décor package for the barbeque business module. The in-store signage is designed to inform and inspire consumers who are interested in grills.

Lawn and garden chemicals also continue to be a strong seller. In fact, this is the number one merchandise class in average sales dollars for all Ace retailers, generating over $40,000 in sales per store and driving a sales increase of 24 percent over the past two years. To help retailers remain competitive in this important category, a Super Plus category management assortment was unveiled in 2005, which included five regional assortments specific to the varying needs of consumers across the country.

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Offering Customers Quality Products