THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, January 26, 1995 TAG: 9501260418
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 77 lines
Up till now, the national fight between Lowe's and HQ has been fairly quiet locally. No more. With the opening of two superstores in South Hampton Roads, Lowe's has fired off a salvo of attack ads.
As the battle between hometown chain HQ and home-improvement challenger Lowe's heats up, it's getting harder for Hampton Roads residents to ignore all the fuss.
Lowe's Companies Inc. is spending hundreds of thousands of dollars on advertising here - everything from videotapes mailed to thousands of potential customers to a 6-foot-by-2-foot glossy of its store tucked in Sunday's newspaper.
The advertising blitz centers on Lowe's two 150,000-square-foot superstores in Virginia Beach and Chesapeake, which were to debut today. Lowe's, which now has seven stores in Hampton Roads, is determined to grab a tasty bite of regional leader HQ's market share.
With a new look and a new aggressive approach, North Wilkesboro, N.C.-based Lowe's says it will dethrone the hometown chain on its own turf.
``I think customers will make that choice, and I think it will be Lowe's,'' said Ron Hubbard, manager of the new Chesapeake store on Battlefield Boulevard.
Hubbard says the new store boasts everything from 40,000 products to company-approved horticulturists in the garden center.
``I think everybody has the right to dream,'' Monty Reese, HQ's senior vice president of marketing, said of Lowe's challenge.
In its own ads, Virginia Beach's HQ Home Quarters Warehouse is reminding Lowe's that Hampton Roads is HQ turf. HQ, owned by Landover, Md.-based Hechinger Co., is firing back with some aggressive advertisements of its own. One shows a picture of Lowe's new location in Virginia Beach with a HQ truck parked out front.
The headline reads: ``THEY DO GET IT . . . from HQ! When supplies were needed for the new Lowe's location in Virginia Beach, they came to HQ for merchandise and delivery.''
After Lowe's advertised that it had the lowest prices, HQ's people crept into Lowe's stores, compared and cried foul. We see all this in HQ's television and radio advertisements, which say HQ has the lowest prices.
Even HQ Chief Executive Frank Doczi comes out in the ads to remind us that his company will treat us with the lowest prices and best service.
Shoppers appear to be the big winners in this home-improvement price war. Each of the competitors guarantee that they will beat the other's prices.
Lowe's move in Hampton Roads has turned analysts' heads, as well as shoppers.
``This is going to be an interesting experiment,'' said Neal Kaplan, an analyst with Scott & Stringfellow Investment Corp. in Richmond. ``I'm curious to see how Lowe's will stack up in HQ's territory.''
Lowe's actually has been in Hampton Roads for decades, but its stores were smaller. Nationally, Lowe's has about 330 stores and ranks second to Home Depot, Kaplan said. HQ, combined with parent company Hechinger Co.'s stores, might be fifth or sixth in the list, he said.
HQ recently announced plans to close 14 stores, which will wipe out its presence in the Carolinas. The company will have 47 stores after the closings.
Some analysts have suggested that HQ succumbed to Home Depot and Lowe's in the Carolinas. But Kaplan isn't so sure. He agrees with HQ's decision, saying the region was overpopulated with home-improvement chains, and HQ's stores were older and smaller.
Kaplan still isn't sure whether it's a good idea for Lowe's to go head-to-head with HQ in this market. It gets expensive because everyone's margins suffer under the heavy advertising and promotions associated with market-share wars, he said.
But Lowe's motive may be different, he said.
``This might be some show of strength or a contest.'' ILLUSTRATION: Color photo of ads
by CNB