Lowe's 1997 Annual Report Download - page 5

Robert L. Tillman
Chairman of the Board, President
and Chief Executive Officer
North Wilkesboro, NC
Best wishes,
shoppers in Lowe’s stores are female—and many
male shoppers are influenced by women. Women
initiate the majority of home improvement projects.
They decide where to shop, and once inside the store
they make virtually all the home décor decisions.
They are also capable of carrying out projects them-
selves: the “ Honey-Do” lists of yesteryear are simply
“ To-Do” lists today. Yet most of our industry’s stores,
packaging, staffing, advertising, and merchandising
is targeted at—and managed by—men. We see this
as another opportunity.
How (besides salivating) are we responding to
these opportunities? The initiatives that we are
planning and implementing are detailed in the
feature article which follows this letter, but in brief:
we are focused on providing value as defined by our
customers, as well as supplying an unsurpassed
assortment at unbeatable prices in all our product
categories.
Our customers value solutions, and they like us to
make things easy for them. That’s why our strategic
focus for 1998 includes greatly enhanced programs
for special orders and installed sales. We are expand-
ing our home décor offering to help customers
achieve the look they want in every detail. We are
building trust in Lowe’s through high-quality, exclu-
sive brands such as Top ChoiceTM Lumber. We are
paying particular attention to commercial business
customers, that group of professionals to whom the
Baby Boomers are delegating so many home
projects. We are also making our stores more produc-
tive through traffic-sensitive staffing schedules and
improved systems for ordering and delivery.
We have recently added new expertise and
perspective to our board of directors. Dr. Leonard
Berry heads the Center for Retailing Studies at Texas
A&M University and is an authority on services
marketing; Peter Browning is President and COO of
Sonoco, the global packaging company; and Richard
Lochridge is a management consultant with experi-
ence helping companies to identify and seize oppor-
tunities for growth and development. As we wel-
come these talented individuals to our board, we
also express our gratitude and appreciation to two
outstanding board members who retired in 1997.
Pete Kulynych was one of Lowe’s founding direc-
tors and is now a director emeritus; Senator Russell
Long, long-time chairman of the U.S. Senate
Finance Committee, served on Lowe’s board for
ten years.
At the end of January 1998, Bob Strickland
retired as Chairman of the Board of Directors. Bob
was a member of Lowe’s first management team,
joining the company in 1957 and serving on the
Executive Committee and in the Office of the
President before becoming chairman in 1978. We
look forward to his continuing contribution as a
member of the board.
Lowe’s retailing sector is growing. In the past
fifteen years, our industry has grown at a com-
pound annual rate of 6.5%, from $55 billion to
$142 billion. According to the Home Improvement
Research Institute, growth is expected to continue
at roughly 5% per year. We are the second largest
player in our fragmented sector, where in 1997 the
top three competitors still only accounted for
roughly one quarter of total industry sales. We see
a tremendous opportunity to win market share as
the trend toward consolidation continues.
With our sharpened customer focus, we are
confident that Lowe’s is going where our customers
want us to be. And putting customers first is good
news for Lowe’s shareholders, whose stake in
Lowe’s will also be customer driven.
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