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Focusing on These 2 Key Areas Helped Ace Hardware Capitalize on the Pandemic Sales Spike

The home improvement boom has landed the neighborhood handy store in the Top 10 of our Franchise 500.

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This story appears in the January 2023 issue of Entrepreneur. Subscribe »

Started Franchising: 1976 | Total Units: 5,674 | Cost to Open: $292K-$2.1M

Courtesy of Ace Hardware

At the beginning of 2022, Ace Hardware president and CEO John Venhuizen was determined. His brand saw massive growth during the pandemic, as people stayed home and revamped their living and backyard spaces. But as they finally returned to the office and embarked on long-awaited vacations and leisure activities, he knew there was a question of whether that streak would end. Instead, the opposite happened: Ace saw double-digit growth in the third quarter of 2022, and added about 170 new stores. "As we reach the other side of the pandemic, I'm not sure what the new normal will look like," says Venhuizen, "but if people work from home just one more day a week than they did in 2019, that means they're flushing their toilet 20% more, and spending more time looking at a wall and thinking it's ugly." This trend, plus the rapid rise of residential transactions in 2021, helped land Ace in our Top 10 list for the fourth time.

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But when Venhuizen looks at what drove his company's growth, he sees more than just circumstance. He also sees preparedness: The company's longtime focus on convenience and customer service left it primed to handle the sales spikes. Ace has 4,829 U.S. locations — more stores than The Home Depot and Lowe's combined — which means that more than 75% of U.S. homes and businesses are located within 15 minutes of a store. The company has also invested in its online ordering and delivery services, so that customers can access its products without even entering a brick-and-mortar location. As a result, online orders and delivery saw triple-digit increases in 2020 and 2021 versus 2019 — and to meet that surging demand, Ace revamped its technology and operations. Instead of using a third-party delivery service, Ace also uses its own employees and fleet to deliver products to customers. Venhuizen says that while this has actually increased company costs, it pays off by providing higher quality and efficiency to the customer.

Related: How Ace Handyman Services Capitalized on the 'Do It for Me' Economy to Jumpstart Its Growth

With 2023 here, Venhuizen has reason to worry: Inflation and interest rates could mean a recession is on the horizon. But while other companies might be pulling back, Ace has been steadily increasing its budget for digital marketing, increasing inventory, and hiring more team members to maintain the high level of service the company is known for. "We don't think anyone in Silicon Valley is building an app that's going to make living in a home irrelevant, so the core of our business tends to be recession-resistant," says Venhuizen. "We are hitting the accelerator in every one of our strategic imperatives."

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