As chief executive of Lowe's, Robert Niblock has plenty of numbers to worry about in his battle with The Home Depot: sales and inventory...
CHARLOTTE, N.C. — As chief executive of Lowe’s, Robert Niblock has plenty of numbers to worry about in his battle with The Home Depot: sales and inventory, revenue and earnings, how many stores to open and employees to hire.
But this weekend, Niblock is focused on just one: The points difference in NASCAR’s championship chase between second-place Jimmie Johnson, driver of the No. 48 Lowe’s Chevrolet, and leader Tony Stewart, whose No. 20 Chevy is sponsored by Home Depot.
“We’ve got one race to go and we need to make up 52 points, so it looks like we’ve got our work cut out for us,” Niblock said.
The winner not only gets bragging rights at the track, but also in the arena where they’re worth so much more: the multibillion competition between the home-improvement retailers.
Experts in sports marketing said this week there is no better return on the company’s marketing investment in NASCAR than Stewart and Johnson’s likely 1-2 finish.
“They battle every day for every customer and the sport they spend the most money on is NASCAR,” said sports marketer Marc Ganis, head of Chicago’s Sportscorp. “This tells you this is so much more than just a car race. It tells you how important this is to them.”
Both Lowe’s and Home Depot spend millions to tie themselves to stock-car racing and two of its most successful drivers. Johnson and Stewart are featured on billboards and in television commercials and host promotions all to help pitch products inside the companies’ massive stores.
“The demographics of fans and our employees and customers line up perfectly,” Niblock said.
Neither company reveals how much it spends annually on NASCAR sponsorships. But Bill Chipps, senior editor of the IEG Sponsorship Report, said it costs between $15 million and $20 million per year to sponsor a top Nextel Cup team.
“The smart companies like Lowe’s and Home Depot who want to get the most out of their sponsorships will also spend another one to two times more on top of the primary sponsorship fee,” he said, meaning the companies could be spending as much as $60 million annually on NASCAR-related marketing.
Johnson’s face is all over the company’s advertising; the “When Jimmie Wins You Win Sweepstakes” — with a top prize of $48,000 in store credit — is among the latest promotions tying his success to customers.
It’s no different at Home Depot, which was Stewart’s sponsor when he won his the NASCAR title in 2002.
After his August victory at Indianapolis Motor Speedway — also known as The Brickyard — Home Depot offered customers a 10 percent discount on bricks.
Expect even more tie-ins and advertising featuring Stewart and Johnson should one win the title Sunday in the final race of the season at Homestead-Miami Speedway.
Mooresville, N.C.-based Lowe’s, the nation’s No. 2 home-improvement chain, has grown at a faster pace in the past several years than Atlanta-based Home Depot, but it remains well behind the market leader in both number of stores and sales. Last year, Lowe’s had sales of $36.5 billion and now operates 1,170 stores, trailing the $73 billion in 2004 sales at Home Depot, which now has 1,972 stores.
Both are booming. In earnings announcements this week, both reported strong third-quarter profits. Earnings were up nearly 26 percent at Lowe’s to $649 million, and up 17 percent to $1.54 billion at Home Depot.
The competition between the two is mirrored at the track. Stewart, a past champion, is a heavy favorite to win this year’s Chase, which could leave Johnson, who has never won a title, the runner-up for the third year in a row.
But no matter the odds, Lowe’s employees are excited.
“We’ve always been kind of the second-fiddle so to speak going up against (Home) Depot,” said Cynthia Watson, a commercial-sales specialist at a Lowe’s store in Mooresville. “If we could squeak it out, it would put us over the edge. We’ve always been the underdog.”