Pending separate public hearings by the city of Springfield’s Planning & Zoning Commission and City Council, plus the vote of council members, home improvement retailer Menard Inc. may soon bring two new stores to Springfield.
But the plans are drawing concern by at least one local competitor.
Officials at Springfield-based Herrman Lumber Co. recall the net effects of Menards opening a new store a couple of years ago in Lake of the Ozarks: The company sold its stores in Camdenton, Eldon and Lebanon.
Chief Operating Officer Danny Burke quickly points out the industry was still in a slump, but he said the big-box competition was too much to bear.
“A new big-box store may initially draw in some out-of-town customers, but it’s not creating new business. It’s taking business away from someone,” Burke said. “What really happens is that big stores are fighting for customers and we get caught in the middle.”
Following an industry slowdown that started in 2007, Burke said Herrman sold five of its 10 stores to Stuanton, Ill.-based R.P. Lumber Co. in 2013, which resulted in the loss of about 60 employees. In addition to the moves in Lake of the Ozarks, he said Herrman also sold stores to R.P. Lumber Co. in Clinton and West Plains.
Menards currently operates nine stores in the Show-Me State among its 280 stores across 14 Midwestern states.
“We are dealing with a company that has greater buying power than ours and a larger footprint than what small dealers have,” Burke said. “They have an advantage in that they can run commodities, like lumber or panels, at a lower price than we can even attempt, and then pick up a higher margin on those retail items.”
Big-box home improvement stores, such as Lowe’s and The Home Depot, typically offer a large selection of general or specialty retail items at reduced prices, in this case tools, building materials, and lawn and garden goods.
Eau Claire Wis.-based Menards, which was founded in 1960, differs in that it also sells groceries and pet products.
At a Feb. 23 public hearing for what’s been dubbed the Menards West project, at 3705 W. Sunshine St., a Menards real estate representative said store construction could start this summer, barring any hang-ups with the city.
“We’re still in the initial planning stages and working through the approval process,” Menards spokesman Jeff Abbott said via email. “We hope to build new Menards stores in Hollister and Springfield, Mo., someday, but no official timeline has been established.”
The first week of March, Menards officials and the West Sunshine property owner requested a tabling of the zoning case and preliminary plat for the west Springfield store. City of Springfield spokeswoman Cora Scott said the Planning & Zoning Commission is expected to reschedule the hearing for April 9, and council would get its first look April 27.
Menards also is planning an East Chestnut Expressway store in Springfield. Plans for its Hollister store were announced in May, according to Springfield Business Journal archives.
Abbott declined to answer additional questions related to the new stores, citing the pending council vote.
Burke said Herrman, which was established in 1917 in Appleton City, continues to go head-to-head with Menards in Sedalia.
“We have a strong customer base in that town, but we still lose business to prices,” he said. “Some but not all of that business comes back due to our service and product knowledge.”
Burke said Herrman’s decision to sell half its stores was influenced by two factors: heavy competition and a projected long road to economic recovery in what he called “challenged markets,” or areas with populations between 9,000 and 11,000 where “a big-box store can insulate itself from competition by taking advantage of the smaller market.”
Herrman Lumber operates stores in Springfield, Branson, Joplin, Sedalia and Parsons, Kan.
While smaller companies may not be able to compete with low prices offered by big-box stores, Burke said personal touch and attention to detail is Herrman’s key to survival.
“About 85 to 90 percent of our customer base is made up of professional contractors. That’s the bread and butter of our business,” he said. “Our strong suit, our one advantage is our service, our expertise. That’s what we have to hang our hat on, being able to provide expert knowledge on products and building.”
Burke also mentioned flexibility as an advantage.
“As an independently owned and operated yard, we can make snap decisions to meet the needs of a customer,” he said, citing an example when the company picked up items in Dallas to have them available for in-store pickup by the customer the next day. “The big boxes can’t do that.”
Springfield’s City Council is scheduled to vote on other bills related to the potential Menards store sites at the March 9 meeting. Council will vote on rezoning 35 acres at 3429 E. Chestnut Expressway to a highway commercial district and on terminating the Hickory Hills Marketplace Community Improvement District, both related to the potential Menards East store.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
