— Interview with Jason Hipskind —
With a retail cooperative model similar to franchising, Ace Hardware is uniquely able to continue its historic expansion with more than 200 new stores planned in 2024.
Globally, Ace Hardware has opened more than 1,100 stores in the last 5 years — quite the impressive feat considering nearly half of that timeframe included a global pandemic. But as an essential business, the more than 100-year-old retail cooperative continued to open new stores, evolve its product offerings, expand its omnichannel presence, and refresh its physical footprint — all in the name of service and stewardship to its customers. In 2024, Ace plans to remodel more than 330 stores and open a brand-new distribution center in the middle of the country to support Ace Hardware’s historic growth. Recently, Retail & Restaurant Facility Business interviewed Jason Hipskind, corporate VP of new business at Ace Hardware, to learn more.
R&R: How many stores does Ace Hardware operate as of mid-February 2024? How many stores were added in 2023, and what is your growth forecast for the rest of 2024?
Jason Hipskind: We currently have 5,927 Ace Hardware locations around the world. We have opened over 1,100 stores in the last 5 years, with 222 new stores opened in 2023. Not only have we seen strong growth in recent years, but we are bullish on continued new store growth. We are forecasting over 200 new stores in 2024 with having already delivered 58 new stores at the start of the year.
R&R: Do you feel like retail is finally rebounding, as we move away from the pandemic years?
Hipskind: In the early stages of the pandemic, Ace Hardware was deemed an essential business. This allowed Ace stores to remain open to serve their neighbors that were in need. Millions of new customers shopped their local Ace Hardware during this time. These new customers enjoyed the service, convenience and quality that they received at their Ace. In large part, these new customers have become loyal Ace fans which has led to several years of historic growth for Ace Hardware.
R&R: Tell me how Ace realizes most of its new store growth.
Hipskind: The majority, over 60%, of Ace new store growth is with our existing Ace owners opening additional locations. With over 2,000 available development areas, Ace owners are aggressively taking advantage of the opportunity to branch out in communities all across the country. Our next largest area of growth is with conversion of competitor stores from their current supplier to Ace Hardware. These are existing hardware store owners that realize that Ace is the best provider of products, services and operating methods to help them grow their business and best serve their community. We also have had historically high interest from new investors. Over 200 new investors joined us in Orlando for our 2023 fall convention, and we have hundreds more registered to join us this spring in Dallas. These entrepreneurs are interested in partnering with us to open their first Ace, and we are excited to have them join us.
R&R: You announced plans last year to bring a new distribution center near Kansas City, to be operational by 2025. How will this impact your supply chain?
Hipskind: The planned 2025 opening of the Kansas City retail service center, along with the recent retail service center openings in Plant City, Florida; Jackson, Georgia; and Visalia, California, are to support the historic growth we have experienced in the last several years. This growth is fueled by our new store openings and increased market share. The additional distribution capacity along with improved technology in the new centers will allow us to best serve our stores and provide them the best brands and quality products their customers expect and demand.
R&R: Since 1924, Ace Hardware Corporation has been owned solely by local Ace retail entrepreneurs. Tell me how your unique operating model keeps Ace Hardware, even though it has more than 5,000 stores, feeling like a locally owned business?
Hipskind: Ace Hardware is a cooperative. As a cooperative, we are 100% owned by the local store owners. This model provides the best alignment between the Ace corporate team and the owners we serve. At Ace, we exist to serve others, from our corporate support team, field operations team and distribution team to the team of red vested heroes in aisles of our stores. We feel like a small, locally owned business because of the cooperative business model and our strong values that guide the organization.
R&R: Ace was founded 100 years ago by a group of Chicago hardware store owners. These individual stores with individual owners were allowed to purchase merchandise in bulk to save money and buy at the lowest possible price, which enabled smaller stores to compete with larger stores in their market. In what ways did this model change retail?
Hipskind: Ace Hardware stores are local, mostly family-owned businesses, focused on serving the needs of their neighbors. However, the cooperative business model provides our stores with the scale needed to compete in today’s ultra-competitive retail business environment. We are David, on the battlefield, facing multiple Goliaths. Just like David, we can compete and win. We win with service, convenience and quality.
R&R: Ace has stores that come in all shapes and sizes, depending on the local neighborhood. Do you have a prototype or average square footage that is more common than others?
Hipskind: We provide our store owners the flexibility they need to best serve their neighborhood. We have convenience, core and super format stores. We encourage our entrepreneurial-minded owners to localize their product mix based on the market. You will find Ace Hardware stores in urban, suburban and rural communities selling hardware, paint, power equipment, barbeques and, from time to time, gifts, jewelry, clothing and kayaks. It all depends on the needs of the local market. You will see Ace Hardware stores in neighborhood shopping centers and freestanding locations. We want to place our stores near the neighborhoods where the customer lives. It is our desire to be a top, preferred retail tenant for all neighborhood shopping centers across the country, whether that be in-line or freestanding.
R&R: Inclusion in Entrepreneur Magazine’s ‘Franchise 500®’ list is one of the most highly regarded and sought-after honors in franchising. Ace continues to move up and rank high on that list. Tell us what this year’s ranking means to you.
Hipskind: While we are a cooperative and not a true franchise, we are deeply honored to be recognized by Entrepreneur Magazine as #5 on this year’s ‘Franchise 500.’ It is our vision to have the best, most helpful hardware stores on the planet. It is this relentless pursuit of excellence, by the entire Ace team, that has led to this recognition.
R&R: How did Ace handle the height of the pandemic and store closures? How did you pivot and adapt? Many retailers’ takeaways from those days was to be more agile, efficient in their store sizes, and better able to serve online and/or curbside customers. What lessons were learned during that time for Ace Hardware? What changes did you make?
Hipskind: For many years prior to the pandemic, we made significant investments in acehardware.com and developing our omnichannel strategy. The pandemic accelerated our omnichannel growth, and we responded by dramatically increasing our investment in technology to deliver 5 years of development in 5 months. This improved our agility, efficiency and efficacy, allowing us to serve our customers how they want to be served, in store, online or delivered right to their door.
R&R: Are you currently remodeling any Ace locations? About how often do you have to remodel your fleet of stores?
Hipskind: We encourage our owners to remodel their stores every 5 years; however, investing in a relevant product mix is a constant. We have an aggressive goal this year to complete over 330 remodel projects in existing Ace stores. Our customers’ expectations are high, and we want to exceed those expectations with a world-class shopping experience that will keep them loyal to their local Ace. Our store remodel projects are focused on being best in class in paint, power, backyards, barbeques and home preservation.
R&R: What do you enjoy most about your job on a daily basis?
Hipskind: My grandfather and dad where entrepreneurs that owned and operated their own hardware store. It was in the aisles of that store where I learned the lessons of hard work, dedication and service. Every day I am blessed with the opportunity to serve owners just like my grandfather and dad by helping them realize their dreams and serve their neighbors.
R&R: What are some of your future goals you’ve set for your team or your stores?
Hipskind: The Ace New Business team is the most talented team in the industry. I’m honored and humbled to work alongside them each and every day. In New Business, we exist to serve others so that ‘Ace helpful’ is given to neighbors in need. We are also stewards of the Ace brand, a brand that has never been more recognized and beloved in the hearts and minds of customers. It is our goal to realize our purpose of service and stewardship while opening the best, most helpful hardware stores on the planet.
— This article originally published as the cover story of the March 2024 issue of Retail & Restaurant Facility Business magazine. If you are interested in having your retail or restaurant company featured on an upcoming cover (it’s FREE!), please email the editor, Katie Lee, at [email protected].