Home Depot 2005 Annual Report Download - page 15

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Products. A typical The Home Depot store stocks 35,000 to 45,000 products during the year, including
both national brand name and proprietary items. The following table shows the percentage of revenues
of each major product group (and related services) for each of the last three fiscal years:
Percentage of Revenues for
Fiscal Year Ended
January 29, January 30, February 1,
Product Group 2006 2005 2004
Building materials, lumber and millwork 24.2% 24.4% 23.2%
Plumbing, electrical and kitchen 29.4 29.0 28.9
Hardware and seasonal 27.1 26.9 27.6
Paint, flooring and wall covering 19.3 19.7 20.3
Total 100.0% 100.0% 100.0%
We buy our store merchandise from suppliers located throughout the world and are not dependent on
any single supplier. Most of our merchandise is purchased directly from manufacturers, which
eliminates ‘‘middleman’’ costs. We believe that competitive sources of supply are readily available for
substantially all of the products we sell in The Home Depot stores.
To complement and enhance our product selection, we have formed strategic alliances and exclusive
relationships with selected suppliers to market products under a variety of well-recognized brand
names. During fiscal 2005, we offered a number of proprietary and exclusive brands across a wide
range of departments including, but not limited to, Behr Premium Plus↦ paint, Charmglow↦ gas grills,
Hampton Bay↦ lighting, Mills Pride↦ cabinets, Vigoro↦ lawn care products, Husky↦ hand tools,
RIDGID↦ and Ryobi↦ power tools, Pegasus↦ faucets, Traffic Master↦ carpet, Glacier Bay↦ bath
fixtures and Veranda↦ decking products. We may consider additional strategic alliances and
relationships with other suppliers and will continue to assess opportunities to expand the range of
products available under brand names that are exclusive to The Home Depot.
In 2005, innovative and distinctive products continued to be a growth driver supporting our
merchandising strategy. The following successes helped differentiate The Home Depot in the
marketplace:
• An enhanced grill lineup led by our proprietary Charmglow↦ brand and the exclusive Ducane
Stainless Steel Grills;
• Flooring innovation through our DuPont RealTouch Elite Laminate Flooring;
• Introduction of LG appliances and a broadened assortment of Maytag and GE products;
• Expanded patio lineup led by our proprietary Hampton Bay↦ set;
• Broadened assortment of paint, including Colores Origenes, Bellagio faux paint, and the Ralph
Lauren metallic and suede paint;
• Innovative products from Ryobi↦, including the Ryobi One+ System↩, Ryobi Multitaskit↩ and
Ryobi Gas Pressure Washer; and
• Growing power tool lineup, including the introduction of exclusive Makita and Milwaukee
lithium-ion power tools for professional and D-I-Y customers.
We maintain a global sourcing merchandise program to source high-quality products directly from
manufacturers. This gives our customers a broader selection of innovative products and better value,
while enhancing our gross margin. Our product development merchants travel internationally to identify
opportunities to purchase items directly for our stores. Additionally, we have two sourcing offices
located in Shanghai and Shenzhen, China, and have a quality assurance engineer located in Milan,
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