Lumberyards Locations Highest in Northeast and Midwest
From pre-World War II through the 1960s the majority of home building took place in the Eastern United States population centers. Consequently, the average age of homes are the highest in the Northeast and Midwest and are usually greater than 50 years old. Lumberyards, not surprisingly, were built in close proximity to keep pace with homebuilding resulting in the highest count of lumberyard locations in the East. As indicated in the figure above by the size of the circles the larger the circle the higher number of lumberyards.
Growth Opportunities in New Construction
Looking forward, projections for major centers for home building are located in the South, Southwest and West. Subsequently these regions have fewer lumberyard locations per capita. Opportunities exist for lumberyards in homebuilding growth centers to capture growth from new construction in the Sunbelt regions. However lumberyard operations would be wise to also prepare for the next downturn in the cycle by also serving remodeling. For lumberyards in older housing regions, there will be an increased need to focus more on remodeling to support growth.
In all regions, the use of showrooms to attract homeowners for upscale projects is key to driving both growth and margins. Careful examination of the supplier and product portfolio most often points out the best product lines, suppliers and customer segments to make money. In addition, evaluation also presents opportunity to identify areas where margin sieves exist to be re-evaluated and repositioned.