Lowe’s CEO Marvin Ellison offered a more optimistic outlook for 2023 on Monday, saying he did not believe the economy would slip into a major recession.
At the 2023 National Retail Federation keynote meeting in New York, Ellison said that while “there will be parts of the macro environment that we will see some slowdown,” he doesn’t believe that will happen. “some big massive economic upheaval.”
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“We don’t see anything that we think is going to be a big, massive recession or recession,” Ellison said in an interview with NRF Executive Director Matt Shay.
Ellison, who took over the company in 2018, is also very optimistic about his home improvement business heading into its busiest season.
According to Ellison, the company’s two biggest sales months are April and May. Spring usually sees an increase in the number of consumers starting home improvement projects on the outside of the home, whether it’s updating the garden, painting, or updating patio furniture.
“It’s really our holiday season,” she said.
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In areas of the country that are already experiencing hot weather, Ellison said the company is “starting to see the performance of that business.”
“The demand driver for our home improvement business in particular is still incredibly strong,” he added.
Ellison said the age of homes, rising home prices and consumer balance sheets are driving demand for home improvements. Currently, Ellison says, the average home in the U.S. is 40 years old.
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Ellison said there is still roughly $1.5 trillion in excess savings in the bank accounts of early homeowners compared to pre-pandemic times.
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He also noted that “home construction is largely driven by interest rates and prices, and those things have no negative correlation to housing improvements.”
“Having said all that, we are very optimistic that the home improvement market is going to be very strong for 2023 and we feel we are making the right level of investment to continue with ownership.”