Home Depot To Single Source?

According to industry sources, the long-anticipated single-vendor system for specific live goods categories that The Home Depot has been talking about for years may come to pass sooner rather than later. These sources say that the retailer has invited selected merchants to be the single vendors for certain live goods in some of its stores on the East Coast for the spring 2004 season.

In a call to confirm information about suppliers, Dean Chaloupka, president of Floral Plant Growers of Denmark, Wisc., said that his company will be responsible for supplying the annuals, vegetables and perennials to 39 Home Depot stores in northern Wisconsin and Minnesota. He said this means that if Floral Plant Growers does not have the product, it will be responsible for finding the product from another grower. If the company cannot find the product, Chaloupka added, it will be responsible for notifying the buyer so the buyer can source the business elsewhere, implying a single-vendor relationship.

In a call to The Home Depot about this story, a representative who declined to be quoted said that the information from industry sources was incorrect. The Home Depot might experiment with limited vendors, but would not use just one, the representative explained.

If mass merchant retailing were to shift to single-supplier stores, there could be far-reaching consequences for the industry. A majority of large growers now sells at least some product to The Home Depot. If the retailer does indeed move to single-vendor arrangements, many growers stand to lose a significant source of business, though the selected vendors would benefit greatly from increased, focused merchandising efforts.