Comp Sales Up, Transactions Down, Cleveland Research Forecasts. And Watch How the Big Boxes Are Changing

Matt Leiser of Cleveland Research shows Orgill market attendees on Feb. 5 what The Home Depot and Lowe's are doing this year. (Craig Webb photo)

By Craig Webb

Conflicting trends are likely to make this a "flattish" year for hardware stores and home centers, Cleveland Research Co.'s partner for home improvement told Orgill customers Feb. 5 at the distributor's 2026 Dealer Market. Matt Leiser also urged dealers to pay attention to how The Home Depot and Lowe's are tweaking their store layouts to appeal to increasingly value-conscious shoppers.

Tariff fears, home affordability challenges, and customer frugality all generated headwinds for retail-oriented construction supply companies, Leiser said. Meanwhile, pro dealers were challenged by builders constructing smaller houses, using cheaper materials, and installing fewer windows and garages. None of those changes put much of a dent on housing affordability, Leiser added, noting the significant percentage of public builders who found they had to buy down prospective customers' mortgages in order to win their sales.

Cleveland Research's survey of Orgill dealers suggests those stores raised their prices 5% last year. Those same dealers said in the October survey that they figured on an additional 4% price increase this year, but Leiser thinks the actual rise will be closer to 1% to 2%. One reason why is that tariff increases won't be as much of a factor in 2026 as they were in 2025, Leiser said.

When you compare each calendar quarter in 2026 with what happened a year earlier, Cleveland Research predicts a steady decline in the average ticket price and a steady rise in the number of transactions. The net result is about a 0.5% increase this year in sales at small independent hardware stores, the company says.

The Home Depot and Lowe's both are forecast to rise about 1 percentage point. Those big boxes also have seen 3% to 4% higher tickets but fewer transactions, Leiser said, and they are pushing back by promoting "value, value, value."

For instance, the big boxes are turning to smaller packaging, single-use items, and any other method that helps in “getting a product to lowest potential retail price without sacrificing brand integrity,” Leiser said. Lowe's is promoting bins with grab-and-go items priced at $10 or $5. The Home Depot has changed its paint aisle so that the lower-priced paints are displayed first, with the higher-priced alternatives located further back.

Along with the usual impulse items, Lowe's now features paint brushes and simple tools next to the cash register. “They’re looking for how to sell a small project or do an incremental purchase at checkout,” Leiser said.

There also has been lots of SKU rationalization, Leiser said. Shelves sometimes have been removed to feature bigger numbers of fewer brands. It's a trend Leiser said he's also seeing at independent hardware stores. Based on Cleveland Research's study, 44% of hardware store owners plan to cut inventory in 2026.