Home Depot, Lowe’s bank on electric power tools and landscaping

The auto industry isn’t the only one going electric.

In Home Depot and Lowe’s, one of the buzziest aisles features battery-powered leaf blowers, mowers, string trimmers and more. Those electric-powered outdoor tools have started to take hold in neighborhoods and at golf courses around the country.

The transition away from gas power could come at a good time for the two home improvement retailers. Both have looked for a jolt as they see weaker store traffic and brace for declining sales in the year ahead. Home Depot posted its worst revenue miss in 20 years for the fiscal first quarter and lowered its full-year forecast, saying it expects sales to decline by between 2% and 5% this fiscal year. Lowe’s also cut its outlook and projected a drop in sales for the full year.

Outdoor power equipment drives just a small fraction of the retailers’ sales, said Zack Fadem, an analyst for Wells Fargo. But, he added, advancements in battery-powered tools have prompted an upgrade cycle and given do-it-yourself customers and home professionals a reason to come to stores for bigger purchases.

“When you ask ‘What’s been driving the ticket,’ aside from inflation and like-for-like increases in product costs, the biggest driver is innovation,” he said. “And that’s where these new products fit in.”

He said investors will watch whether battery-powered tools, and other new products across stores like higher-quality paint, flooring and appliances, can truly be a “needle mover.”

As the easy sales gains of the pandemic fade, both Home Depot and Lowe’s have pointed to the cordless, battery-powered tools as an opportunity. Home Depot touted the products at an investor day in New York City earlier this month, and it recently set a goal to have more than 85% of its U.S. and Canada sales in outdoor power equipment run on rechargeable batteries instead of gas by late January 2029. It declined to say where the share of sales is today.

Home Depot estimated that the market for electric tools and related battery sales is $32 billion and counting.

Industry wide, battery-powered cordless units accounted for nearly 66% of sales in the outdoor power tools market as of the end of 2022, according to an economic forecast report from the Outdoor Power Equipment Institute.

Lowe’s said battery-powered tools and outdoor equipment are among its fastest growing categories. Bill Boltz, the company’s executive vice president of merchandising, said the company’s sales of cordless power tools and outdoor power equipment more than doubled in the past five years — a rapid clip that the company expects will continue in the next five years.

There are still obstacles to adoption. Battery-powered leaf blowers and mowers can be similar in price to their gas competitors. But when you add in batteries and chargers, upfront…