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John Menard is not about to let Home Depot or any other home-improvement chain gain the upper hand with Midwest consumers.

Every day on TV and radio throughout the nine states where 128 Menards home-improvement stores are located, the message is pounded home: "Save big money at Menards." Menards often undersells Home Depot on price. It may only be by a penny or so, but the message is clear: Menards will not be undersold by anyone.

That message seems to have found its mark. Even though Home Depot has opened outlets directly across the street from Menards in several markets, the Midwest chain's sales have grown to $360 per square foot, compared with $290 per square foot at Home Depot's Midwest stores, according to Jack Siebald, managing director of Blackford Securities Corp. Sales for Menards jumped from $2.7 billion in 1995 to $3.1 billion last year.

Founded by the blunt-speaking Mr. Menard, 57, the retailer caters to do-it-yourselfers who are pressed for time and are often put off by Home Depot's cavernous warehouse stores.

Menards stores are more like supermarkets, with wide aisles and goods within easy reach. Stores stock about 50,000 products and maintain the cozy atmosphere by storing inventory off the sales floor in warehouses and replenishing stock as it runs out.

While Home Depot promotes itself with fliers and glitzy TV spots, Menards relies on folksy, low-budget commercials filmed in Menards' flagship Eau Claire, Wis., store. The spots feature 70-year-old Ray Szmanda, a longtime Menards employee, who simply points out the week's featured merchandise in the retailer's ubiquitous 30-second TV spots.

According to Competitive Media Reporting, the chain spent $24.1 million last year in measured media advertising-up 39.3% from in 1995.

The formula appears to work. The chain now trails only Home Depot and Lowe's Cos. in the $140 billion home-improvement industry. But if Mr. Menard, who is a race car driver when not overseeing his chain, has his way, Home Depot will be eating his dust.

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