Ace Hardware is celebrating 100 years of service in the home improvement industry. The company has morphed from four small stores in Chicago to the fifth largest franchise in the world. The name of the company was inspired by the superior WWI fighter jets known as Flying Aces.
John Venhuizen, president and CEO, explains how the company continues to grow despite external headwinds. “We are operating in a distorted market and an uncertain world. In the face of that, we plan to continue our consistent, determined, relentless march up our differentiated mountain with a strong focus on a few strategic imperatives.”
The company is hyper focused on three pillars of growth; service, convenience, and quality.“ The company has a strong geographic proximity to its customer base, with 75% of the U.S. population living within 15 minutes of an Ace store. “Quality is our fanatical devotion to high quality and locally relevant, differentiated merchandise,” said Venhuizen.
Ace Hardware Rises Above The Industry Trend
While Ace Hardware revenue was down slightly (less than half a percent) for the 2023 fiscal year, the home improvement category in the U.S. market experienced declines of 3%. Furthermore, Ace Hardware showed a nearly 6% increase in operating income. In the mid-mid-year report for 2024, the company reported a 35% return for Ace shareholders (all of which are store owners of the business).
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New Store Concept Focused On Home Preservation
Celebrating its 100th year in business, the company is unveiling its new store format, ELEVATE3 Ace, at the Ace convention in Chicago, the biggest convention in the hardware industry history with over 17,600 attendees. The design of the store includes high quality products with enhanced customer service and an elevated presentation.
The new store concept will be likened to a brand of showrooms which will be both experiential and exclusive. “It's our ambition to become famous for four things in the neighborhoods we serve; Paint, Power, Backyards & Barbeque, and Home Preservation,” said Venhuizen. The new store concept furthers Ace’s value of believing in the power of the local community. “Our neighbors will benefit from locally relevant, premium products, expert advice, and immersive retail innovation. The team has set a new industry standard as we aspire to truly be the best, most helpful store on the planet,” explains Venhuizen.
Holiday Strategy for Ace
When asked how Ace will tackle the holiday season, Venhuizen discusses three major ways it plans to serve its customer base, starting with Trim-a-tree assortments, a industry term used to describe Christmas lights, trees and holiday decorations, and is a massive business in a small timeframe. The second opportunity for Ace is Christmas gifts.
“We have been working mightily to position Ace as the place for gifts with our proposition of most convenient shopping experience (in-store or on-line), best service, and the highest quality selection of gifts from suppliers like Yeti, EGO, Stihl, Milwaukee, DeWalt, Craftsman, Weber, Traeger, Blackstone, and Big Green Egg. The Christmas or Hannukah season should never be about “stuff. But, gift giving remains a wonderful tradition to celebrate with those you love. I may be slightly biased, but we think distinctive gifts from your locally owned Ace fit the bill,” exclaimed Venhuizen. The third holiday opportunity for Ace is to be there when the weather turns hard and harsh, especially in cold weather states.
Weather Impacts Business
Holiday season in 2023 was one of the warmest on record, leaving many retailers with disappointing performance in cold-weather categories. Retailers that are not adjusting this year’s assortment to better reflect the impact of last year’s weather may end up with too many goods in the wrong categories.
For decades, retailers have blamed weather for unexpected declines in business and Venhuizen explains how the company (internally) jokes that when business is difficult, they blame the weather. And when business is booming, they believe it’s great management. However, for the home improvement category and more specifically for local communities that rely on Ace stores to supply them with the needed supplies during inclement weather, it is a responsibility that is taken seriously.
Planning for weather based businesses can also lead to disappointing sales if the weather pattern does not hold to the predictions. “For example, Ace is incredibly relevant to our neighbors (which is what we call our customers) in the cold, snow, and ice. Products like ice melt, shovels, snow blowers, and windshield scrapers are suddenly essential. Absent these weather events, a month like January can be a business challenge in cold weather states,” said Venhuizen.
Ace Fosters Community With Local Customers
The local Ace stores provide an opportunity for the store owners to build a sense a community with the local customers. “These independent owners have been integral to creating connections between our consumers and the brand, particularly in our early days,” explains Matt Reintjes, president and CEO of YETI. “That network remains essential to our broader omnichannel strategy today as they continue to reinforce critical local and community ties.”
Ace has differentiated itself through its robust and comprehensive product assortment that is customized to its local communities. It one of the few retailers in the world with Weber, Big Green Egg, Blackstone and Traeger and is well known destination for grilling. Building on the brand reputation, Ace has introduced its very first private label food line – Loud Mouth Barbeque. “These rubs, sauces, and seasonings deliver two material benefits, one for our retailers – via improved margins and exclusive offerings, and one for our neighbors – via outstanding taste at a terrific value vs. competitive offerings,” said Venhuizen.
The company has also launched Vintage Thread, a new apparel offering that is capitalizing on the convergence the company’s 100th Anniversary and the trend toward vintage clothing. “We believe the Ace brand has meaning and value that goes beyond the products we sell to help preserve your home,” said Venhuizen. The company has focused the past 100 years and plans to showcase the next 100 years to advancing small, locally owned, entrepreneurs and businesses.
Ace Invests In The Next 100 Years
Over the next five years Ace will invest over $1 billion in opening new stores and remodeling existing stores to better serve customers. The ELEVATE3 Ace store model will be at the heart of this investment. The company also plans to spend over $120 million on digital advertising. “The efficacy of this spend produces a wonderful return on investment, but also generates an additional treasure trove of insights upon which future decisions can be made. All of this data, and the teams’ analytics thereof, has been a driver of a 16% increase in our digital business and a 67% increase within the Ace App during our second quarter,” said, Venhuizen.
The Ace Rewards program includes over 54 million homes in the U.S. market and the company generates about $20 billion of revenue across 5,085 stores. “Our loyalty program is about 60% of a typical stores business. So you can understand why we believe there is ‘gold in those hills,” explains Venhuizen.
Ace operates in all 50 states and 65 countries around the world with total revenue exceeding $23 billion. “We are the fifth largest franchise in the world and, according to Entrepreneur Magazine, the fifth best,” said Venhuizen. The company’s expansive supply chain network with 15 distribution centers, 6 cross docks, 6 bulk distribution centers, 2 re-import distribution facilities, and assets in Taiwan, China, and Mexico have made Ace a global brand.
