Home Improvement Retail News 2026: What’s Changing and Why It Matters

The home improvement world is busy this year. Big stores are testing new ideas. Shoppers are changing how they spend. And prices keep shifting because of tariffs and other costs.

This post breaks down the biggest home improvement retail news in 2026. We use plain words and short sentences. No jargon. No fluff. Just the facts you need.

Whether you run a hardware store, work as a contractor, or just want to save money on your next project, this guide will help you understand what’s happening in the industry right now.

A Quick Snapshot of the Industry in 2026

Let’s start with the big picture.

The home improvement stores industry in the U.S. will bring in about $298.4 billion in 2026. That’s a huge number. But growth has slowed down. This year, the industry will only grow by 0.3%. Compare that to the past five years, when it grew by 2.2% each year on average.

So what changed? Higher interest rates made big renovations more expensive. Fewer people are gutting their kitchens or adding new rooms. Instead, they’re fixing what’s broken. They’re doing smaller jobs. They’re being smart with their money.

Even so, the industry isn’t shrinking. It’s just growing slower. And two companies still control most of the market.

Home Depot holds 51% of the home improvement retail market. Lowe’s holds 28.8%. Menards holds 4.6%. These three companies dominate the space. But smaller players like True Value and Harbor Freight are quietly gaining ground too.

Let’s look at each of these stories in more detail.

Homeowners Are Choosing Repairs Over Renovations

Here’s one of the biggest shifts in 2026: people want to fix things, not remodel them.

Data from the Home Improvement Research Institute (HIRI) shows that renovation activity has stayed strong this year. But the type of renovation has changed. Homeowners are picking smaller, needed projects instead of big, fancy upgrades.

HIRI splits homeowners into four types:

1. Content Homeowners – They sit back and wait. They don’t feel urgency to change anything.
2. Repair First Homeowners – They fix things only when something breaks.
3. Maintenance First Homeowners – They take care of their home like a long-term investment.
4. Renovation Ready Homeowners – They plan ahead and look for new upgrades.

Each group spends money differently. Retailers now study these groups closely. They want to know who is ready to spend and who is holding back.

This matters for the whole industry. Stores that once pushed big kitchen remodels now need to sell smaller items too. Think caulk, paint, and replacement parts. These items don’t have big price tags, but they add up. And they keep customers coming back.

Why This Shift Happened

A few things drove this change:

• Higher interest rates made big loans for renovations more expensive.
• Rising costs made large projects harder to justify.
• Economic uncertainty made people want to save, not spend big.

So instead of a $50,000 kitchen remodel, more people are spending $500 on a new faucet or a fresh coat of paint. It’s a smaller purchase, but it’s a safer one.

DIY Shoppers Still Drive the Industry

Do-it-yourself shoppers remain the backbone of this industry. In fact, 42% of Americans either do all their home projects alone or do part of the work and call in a pro for the rest.

This is a huge chunk of the market. And it explains why stores keep foot traffic steady even when big remodels slow down.

Retailers know this. That’s why they’ve added more tools for beginners. You’ll now find:

• Easy-to-follow project guides
• In-store workshops
• Project calculators that estimate cost and materials

These tools help nervous first-timers feel confident. A person who has never used a drill can walk into a store, take a class, and leave ready to build a shelf.

At the same time, online shopping keeps growing fast. Big chains report that online sales are growing faster than total sales. People want to browse products online, then either pick them up in-store or get them delivered.

This mix of DIY confidence-building and strong online tools is shaping how these stores compete for customers.

Home Depot Is Chasing the Pro Market

Home Depot has traditionally served everyday shoppers. But in 2026, the company has a new mantra: “Win the pro.”

This means Home Depot wants more business from professional contractors and builders, not just weekend DIYers. Why? Because the broader home improvement market has been flat. Interest rates are high. Remodeling costs have jumped 45% since 2019. Growth from regular shoppers has slowed.

So Home Depot is turning to professionals to find new growth. Contractors buy in bulk. They shop often. And they’re less likely to skip a purchase just because rates are high—they need supplies to finish their jobs no matter what.

Home Depot’s pro-focused efforts include faster fulfillment, dedicated pro desks, and stronger loyalty perks for repeat business customers. The company also announced a partnership with Hertz in 2026 to support military personnel, a move that builds goodwill and strengthens its brand image.

Lowe’s Is Fighting Back with AI Tools

While Home Depot chases pros, Lowe’s is doing the same thing—but with a twist: artificial intelligence.

Lowe’s first-quarter 2026 sales rose 10%. Much of that growth came from new efforts to attract contractor customers. The company is now rolling out an AI-assisted tool built just for pros.

Here’s how it works. A contractor can upload almost anything: a PDF, a photo, even a handwritten note. The AI reads it and figures out what materials or products the contractor needs. This saves time. No more guessing or manually searching for parts.

Lowe’s also wants to speed up order fulfillment. The goal is to shift pro order times from days down to hours. That’s a big deal for contractors on tight deadlines. When a job stalls because materials are late, contractors lose money. Lowe’s wants to fix that problem.

This AI push shows how retailers are using new technology, not just bigger stores or lower prices, to win customer loyalty in a tight market.

Customer Satisfaction: Who’s Winning in 2026?

Every year, JD Power studies how happy shoppers are with home improvement retailers. The 2026 results are in, and they tell an interesting story.

Overall satisfaction went up slightly this year. It rose from 671 to 672 points on a 1,000-point scale. Shoppers say they’ve noticed real improvements: better product availability, smarter digital tools, and services like rental options, delivery, and installation help.

But there’s a catch. Prices are rising. And shoppers are noticing.

The average shopper spent $1,617 at home improvement retailers in 2026. That’s $278 more than they spent in 2025. As spending goes up, so does sensitivity to value. People want to know they’re getting their money’s worth.

According to JD Power’s senior managing director, this sensitivity to price is hurting trust in retailers. Both trust and value scores dropped this year, even though other areas improved.

So who ranked highest in customer satisfaction?

1. Menards – Score of 690
2. Home Depot – Score of 679
3. Ace Hardware – Score of 673

Menards, a smaller regional chain, beat the two biggest players in overall customer happiness. That’s worth noting. Bigger isn’t always better in the eyes of shoppers.

One more insight from the study: shoppers still want real human help. Even with new apps and AI tools, people like talking to a real person in the store. Retailers who train knowledgeable staff will likely build more trust and keep customers coming back.

Foot Traffic Is Finally Stabilizing

For the past few years, home improvement stores struggled with dropping foot traffic. Home Depot saw a 4.3% drop in visits in 2023. It saw almost a 2% drop again in 2025.

But in 2026, that trend appears to be ending.

Home Depot’s foot traffic is now nearly flat, down just 0.08% year-over-year in the first quarter of 2026. That’s basically no change. After years of decline, this stability is good news for the retailer.

Lowe’s, on the other hand, is doing even better. It’s the only major home improvement retailer with real positive momentum this spring. Visits are up 2.5% year-over-year in early 2026. That’s a strong turnaround, especially after Lowe’s saw bigger drops than Home Depot in both 2024 and 2025.

Smaller chains are seeing gains too. True Value had a rough 2025, with foot traffic dropping 6.2%. But in 2026, the brand is bouncing back. Harbor Freight is also picking up steam, quietly building a loyal customer base.

This traffic data matters because it shows real behavior, not just sales numbers. When people are walking into stores again, it usually means confidence is coming back.

Earnings and Stock Performance

Wall Street is watching Home Depot and Lowe’s closely in 2026.

Home Depot’s stock became more attractive after the company reported strong first-quarter results for the period ending May 3, 2026. Its price-to-sales ratio dropped below 2 for the first time in a year, which caught investors’ attention. That number later moved back above 2 as investors bought in.

Lowe’s stock still trades at a lower valuation, with a price-to-sales ratio around 1.3. That’s near its lowest point in the past year. The company also raised its dividend by 4%, bringing it to $1.25 per share. Investors who bought shares before July 22 qualified for the payout on August 5.

Both companies remain leaders in the space, but they’re taking different paths. Home Depot leans on its size and its deep relationships with professional contractors. Lowe’s leans on value pricing and its strong reputation among everyday homeowners, while working hard to catch up in the pro market.

Tariffs Are Shaping Purchase Timing

Tariffs are another big story for 2026, especially for tool buyers.

Section 301 tariffs are set to return in August 2026. These tariffs affect tools made in China. Brands like DeWalt, Craftsman, and BLACK+DECKER could see price increases of 10% to 25%, depending on the product category.

This is why many shoppers rushed to buy tools during Home Depot’s 4th of July sale, which ran from June 20 through July 4. It was seen as one of the last chances to buy tools before prices go up. Retailers timed their sales carefully, knowing shoppers wanted to beat the tariff deadline.

If you’re planning to buy power tools or other imported hardware, it may be smart to buy before new tariffs take effect. Prices are likely to climb once the new rules kick in.

What This Means for Small Hardware Stores

Big-box stores get most of the headlines. But small, independent hardware stores are part of this story too.

These stores can’t compete with Home Depot or Lowe’s on price or size. But they can win in other ways:

• Personal service: Shoppers still value real advice from real people.
• Local trust: Small stores often know their communities better.
• Niche products: Independent stores can stock items big chains skip.

The JD Power study found that people still want in-store advice, even with better apps and websites. This is good news for smaller stores that focus on customer relationships. If a small store trains its staff well and builds trust with regulars, it can hold its own against giant competitors.

What Shoppers Should Expect Going Forward

If you’re a homeowner or a DIYer, here’s what these trends mean for you:

• Expect more small-project deals: Retailers know big remodels have slowed, so they’re pushing sales on smaller items like paint, tools, and repair parts.
• Expect more AI tools: Lowe’s isn’t the only company experimenting with AI. More retailers will likely follow with tools that make shopping and project planning easier.
• Expect prices to keep rising: Tariffs and inflation mean prices probably won’t drop soon. If you need tools or materials, buying earlier rather than later may save you money.
• Expect better service: Because trust and value scores dropped in 2026, retailers will likely invest more in staff training and loyalty perks to win back customer confidence.

What This Means for Contractors and Pros

If you work in the trades, this year’s retail shifts affect you directly.

Both Home Depot and Lowe’s want your business more than ever. That means you may see:

• Faster fulfillment times for bulk orders
• New loyalty programs built just for pros
• AI tools that speed up how you find and order materials
• Dedicated service desks and pro-only sections in stores

This competition between retailers is good news for contractors. When two giants fight for your loyalty, you often end up with better prices, faster service, and more perks.

Why Digital Tools Are Becoming So Important

A few years ago, most people walked into a store, grabbed what they needed, and left. That’s changing fast.

Now, shoppers research products online first. They check reviews. They compare prices. And They watch videos on how to install something before they even step into a store. This shift means retailers can’t just focus on their physical shelves anymore. They need strong websites, helpful apps, and clear product information online.

Major chains have noticed this shift. Online sales are growing faster than total sales at big retailers. This tells us something important: people still like stores, but they want the buying process to start online.

Here’s what this looks like in practice:

• Product finders: Shoppers type in their problem, like “leaky faucet,” and the website suggests parts and tools.
• Video guides: Short videos show how to install or fix something step by step.
• Live chat support: Shoppers can ask questions before they even leave home.
• Buy online, pick up in store: This lets people skip shipping wait times.

These tools save time for busy shoppers. They also help nervous DIYers feel more confident before they start a project. A shopper who watches a two-minute video on installing a faucet is far more likely to buy the parts and try it themselves.

For retailers, digital tools are not optional anymore. They are now a core part of doing business. Companies that fall behind in this area risk losing customers to competitors with smoother online experiences.

The Role of Loyalty Programs

Another growing trend in 2026 is the loyalty program push.

Retailers know that keeping an existing customer is cheaper than finding a new one. So they’re rolling out programs that reward repeat shoppers with discounts, early sale access, and special perks.

For homeowners, loyalty programs often include:

• Birthday discounts
• Early access to seasonal sales
• Extra savings on big purchases like appliances

For professional contractors, loyalty programs go even further. Pros can get:

• Bulk pricing on materials
• Dedicated account managers
• Faster checkout lines
• Priority access to new tools and products

These programs help build long-term relationships. A contractor who signs up for a pro loyalty program is less likely to shop around at a competitor, especially if the perks save them real money and time.

Given how tight the market has become, expect these loyalty programs to keep expanding throughout the rest of 2026. Retailers see them as one of the best tools for keeping customers close, especially when overall spending growth has slowed down.

How Seasonal Sales Events Shape Buying Habits

Sales events are a huge part of the home improvement shopping calendar. Shoppers plan their purchases around these dates, and retailers use them to move inventory and attract new customers.

In 2026, some of the biggest sales events included:

• Memorial Day Sales – A kickoff to the summer project season.
• Father’s Day Sales – A mix of tools and gifts for dads who love DIY work.
• 4th of July Sales – One of the biggest sales of the summer, with deep discounts on appliances, tools, and outdoor gear.
• Labor Day Sales – Historically the next major event after July, often marking the end of summer project season.

These events matter because they create urgency. Shoppers who might put off a purchase for weeks often act quickly when they see a limited-time discount.

This year, the 4th of July sale carried extra weight because of the looming tariff changes in August. Shoppers who needed new tools felt pressure to buy before prices increased. Retailers leaned into this urgency with strong marketing messages about beating the tariff deadline.

Understanding this sales calendar can help shoppers plan smarter. If you know a big sale is coming, it often pays to wait. But if tariffs or price hikes are approaching, it may make sense to buy sooner rather than later.

The Bigger Economic Picture

It helps to understand the wider economy when looking at home improvement retail news. A few outside forces are shaping this industry in 2026.

• Interest rates remain a major factor. When rates are high, it costs more to borrow money for home projects. This pushes people away from big renovations and toward smaller repairs.
• Corporate earnings have been strong overall. Many S&P 500 companies posted solid first-quarter results in 2026, with earnings up significantly compared to the year before. This broader economic strength gives some confidence that consumer spending, including on home projects, will hold steady.
• Trade policy is also playing a role. Companies are pursuing refunds on tariffs charged under federal trade powers, and any refunds could help boost earnings in the second half of 2026. At the same time, new tariffs set to return in August could raise prices on many home improvement products, especially tools.
• Global events, including geopolitical tensions, add uncertainty to markets. While these events don’t always affect home improvement shopping directly, they can shake investor confidence and shift how companies plan for the future.

Together, these forces explain why retailers are being so careful and creative this year. They can’t just rely on old strategies. They need new tools, smarter loyalty programs, and stronger pro-focused services to keep growing in a market that isn’t expanding as fast as it used to.

Tips for Shoppers Navigating 2026’s Home Improvement Market

Given everything happening this year, here are some simple tips to help you shop smarter:

1. Watch for tariff-driven price hikes: If you need tools, especially from brands like DeWalt or Craftsman, consider buying before new tariffs take effect in August.
2. Take advantage of workshops: Many stores offer free classes for beginners. These can save you money by helping you avoid costly mistakes.
3. Compare online before you buy: Prices and promotions can vary between stores, so a quick search before shopping can save you money.
4. Sign up for loyalty programs: Even casual DIYers can benefit from birthday discounts and early sale access.
5. Ask in-store staff for advice: Despite all the new technology, real advice from experienced staff remains valuable and often free.
6. Time big purchases around sales events: Appliances and tools are often deeply discounted during major sales like the 4th of July or Labor Day.

These small strategies can add up to real savings, especially as prices continue to rise across the industry.

Final Thoughts

The home improvement retail industry in 2026 is not standing still. Growth has slowed, but demand hasn’t disappeared. Homeowners are choosing smart, smaller projects instead of big remodels. DIY shoppers remain loyal, and stores are working hard to keep them engaged with tools, workshops, and easy online options.

Home Depot and Lowe’s are both chasing the same prize: professional contractors. Home Depot leans on its scale and reputation with pros. Lowe’s leans on smart AI tools and fast fulfillment to catch up. Meanwhile, smaller chains like Menards and True Value are proving that size isn’t everything. Menards even topped the customer satisfaction rankings this year.

Tariffs remain a wild card. Shoppers rushed to buy tools before new tariffs hit in August, and prices may keep climbing through the rest of the year.