Higher gas prices, rising labor costs, price increases, and economic uncertainty are causing many hardware store owners to tighten operations and implement practical solutions to save money without sacrificing service to their customers. Start by leaning into products and services that meet your customers’ immediate needs, extend the life of what they already own, and support their do-it-yourself mindset. Independent stores have shown they can remain profitable in unstable times by being more efficient and looking at the business holistically to resolve complex situations.

Focus on Essential Maintenance and Repair Products
According to the Home Improvement Research Institute (HIRI), DIY repair spending increases by 20-30% during economic contractions, while remodeling project spending declines. Increasing the visibility and promoting products with strong margins and high turnover will appeal to DIYers and professionals.

• Hand tools and power tools that support home repairs
• Plumbing repair kits, faucet cartridges, pipe fittings, and leak-fix solutions
• Electrical repair items like outlets, switches, breakers, and wiring
• Fasteners, adhesives, tapes, and sealants—low-cost, high-margin essentials
• HVAC filters, weatherstripping, and insulation to help customers cut utility bills

Industry research indicates that in 2026, most home improvement categories will only grow due to inflation, not through increased unit sales. It’s essential to protect margins with smarter pricing and shifting inventory toward high-demand categories.

When consumers feel squeezed, they are anxious to lower expenses. Since hardware stores are in the community, they are viewed as a “trip-saving” convenience that can save shoppers time and gas. Stores that partner with their customers and help them reduce costs will build trust and position themselves as the local experts.

• Lawn & Garden (creates attractive outdoor spaces for homeowners who prefer staycations)
• Paint (ideal for promoting bundles (paint + rollers + drop cloths, etc.)
• Nursery Supplies (attracts gardeners who prefer to grow their own food)
• Small building materials (for those who are handy and prefer DIY projects)

Mitigating the Effects of Rising Gas and Freight Costs. During periods of rapid increases in gas prices, freight and delivery costs rise, affecting supplier invoices and overall operational costs. While owners can’t control fuel prices, they can take steps to better adapt to an unpredictable environment.

• Consolidate supplier orders to reduce freight frequency.
• Negotiate freight terms—many suppliers will reduce or cap fuel surcharges if you commit to predictable ordering cycles.
• Shift to regional suppliers where possible to shorten delivery routes.
• Offer “pickup incentives” for contractors to reduce your delivery miles.
• Use POS data to forecast demand to avoid emergency shipments.

Reducing freight and shrinkage costs alone can cut the cost of goods sold by up to 15 percent when owners take aggressive measures to accomplish their goals.

Managing Rising Labor Costs
Any conversation about cutting expenses must mention labor, one of the highest controllable costs. Most hardware stores employ small teams—the aim is to improve efficiency, not reduce staff. The following options work in organizations of every size.

• Cross-train employees so fewer people can control more roles.
• Schedule based on traffic patterns, not habit—use POS data to match staffing to real customer flow.
• Automate low-value tasks (price updates, inventory counts, reorders) using modern POS systems.
• Add one “utility player” role who floats between departments to fill gaps.
• Use task boards so staff always know what to do during slow periods.

Stores that monitor their revenue based on the number of employees and their assigned responsibilities maintain profitability even when wages increase.

Raise Prices Strategically
While no one likes raising prices, businesses must survive. Customers understand the link between inflation and price increases. But owners should be strategic to make the process seamless for consumers.

• Use automatic price adjustment tools available in your POS system to keep margins consistent as the cost of goods changes.
• Set minimum margin thresholds by category to avoid any product slipping below profitability.
• Round prices consistently by using .99 or whole dollar pricing to maintain trust
• Raise prices gradually on essential items and more aggressively on specialty merchandise.

It’s challenging to operate a thriving business today. Yet, there are immediate actions you can take to keep it growing and manage disruptions caused by outside factors. The best way to stay connected to customers is to offer affordable solutions for their DIY projects.