Popular Hardware Store Going Out Of Business For Good
Ace Hardware, a popular store known nationwide, is going out of business in one area for concerning reasons.
This article is more than 2 years old
Ace Hardware is a well-known American-based hardware store located around the country. Though it’s relatively popular from coast to coast, one shop in the Denver area is about to close down. The owner, Andy Carlson, blames rising costs for living and labor as the prominent factors for his business degradation.
Like many other businesses nationwide, owners are dealing with inflated costs for rent and gas that have made life more difficult. Keeping customer traffic is more complicated now with inflation, leaving many smaller business owners struggling financially. Andy Carlson’s Ace Hardware is located on a strip in Baker, Colorado. The store is adjacent to two other businesses: Sally’s and Dollar Tree. All three businesses will likely be closed by next January as the area begins to be redeveloped for luxury-style apartments.
Other than Carlson being bought out of his property, he attributes financial issues at Ace Hardware to low traffic and skyrocketing prices. The store makes $3.5 million in sales yearly, far less than other retailers nationwide. Carlson noted that other popular hardware stores make 7% pre-tax net profit, while his store was making under 5%. The combination of factors, mainly brought forward by the ongoing pandemic, has made Carlson close his doors to his Denver-located Ace Hardware.
When Carlson was interviewed about the reasoning for Ace Hardware shutting its doors, he adamantly stated that the Denver minimum wage increase hurt his business. Denver’s minimum wage has increased by 43% since 2019, currently at a little over $15 an hour. Though that’s a substantial percentage, $15 an hour is still below the needed wage to afford an average one-bedroom apartment in the US. Raising the minimum wage may stress small business owners, but $15 an hour is still way below what hourly workers should be making.
As salaries went up in Denver, Carlson decided to cut his workforce to alleviate costs. The Ace Hardware in Baker went from 35 employees to 18 throughout the pandemic. As prices increased, Carlson had to lay off his employees to ensure the company was profitable. But even with continuous layoffs, the Denver-located Ace Hardware struggled to accrue necessary funds and customer traffic.
Though Carlson blames the minimum wage increase as the primary catalyst for his business closure, many look to the property cost increases as the most pressing issue. Cities in America all have seen exorbitant rises in living costs, and Denver has not been immune to that increase. Since the area surrounding Carlson’s Ace Hardware has gotten redeveloped, the property taxes have skyrocketed tremendously. By 2022, his store was spending 16% of its budget on property taxes, while the average store spends under 12%.
Carlson believes that it’s tough currently for retailers all over, not just Ace Hardware, due to compounding economic factors. He said he would continue being a businessman, transferring his abilities to an IT support company called Dilse.it. He will join the company as the new CEO since he has a computer science degree and years of computer programming experience.
