NEW YORK (TheStreet) -- The U.S. landscape is dotted with thousands of ginormous large box retail stores. Visit the store locator sections of Target (TGT) and Wal-Mart (WMT) to check out the overviews to get a feel for the sheer volume of square footage devoted to retailing operations. Largely, these destinations for food and general merchandise are a known quantity by the consumer. Walk down an aisle, grab the searched for item, buy it, and head home safe and sound. There will likely be messy shelves, disenchanted store associates, and un-shoveled parking stalls during the winter, all of which are the norm in the thankless world of the retail industry. However, there are huge retailers selling food and toilet paper and then there is Home Depot (HD) and Lowe's (LOW), two companies pitching products that could cause splinters upon lifting (plywood) or an allergic reaction to the touch (insulation). It's these companies that I now take issue with as each have boosted staffing levels in peak hours, so theoretically store safety and customer service should be top-notch.
Over the past two months, I went undercover in the aisles of Home Depot and Lowe's to observe traffic patterns on the weekend and the ratio of employees to customers, and to unearth any interesting new products from fellow publicly-traded companies. What has really struck me on a consistent basis is the nonchalance the companies display towards in-store safety, frequently leaving dangerous forklifts and machines exposed in the middle of non-blockaded aisles. I believe the time has arrived to enclose barbaric-looking machines, such as carpet and chain cutters, in small rooms that only employees can access with a key or by scanning the new smartphone technology they carry to check inventory levels.
Why should investors in either business care about this topic? Well, unsafe store conditions raise accident risk that could negatively impact financial statements. All it takes is a single accident involving a child that blows up on social media and a year into the future there is a charge booked for a litigation settlement. That is money a Home Depot or Lowe's could have invested in their businesses to drive shareholder returns. So in effect, by Home Depot and Lowe's not keeping their store environments safe, their shareholders aren't safe.
Here are two ways that treacherous aisles could backfire on Home Depot and Lowe's:
Texting and walking: According to a recent study by a research group in Australia, individuals that text and walk are less likely to look at their surroundings, keep their balance, or walk in a straight line. A 2013 study conducted by Ohio State University noted that the number of pedestrians treated in U.S. emergency rooms for injuries related to phone use while walking has more than doubled since 2005. Home Depot and Lowe's have been very focused on integrating their stores with online and mobile to capture sales, but apparently have given little thought to implementing the safety precautions to protect how people are now shopping their stores (walking around scrolling and tapping on handheld devices).
An influx of children: Both Home Depot and Lowe's hold workshops in their stores designed to get youth familiar with using their hands to build things. Home Depot offers kids' workshops in its stores on the first Saturday of every month between 9 a.m. and 12 p.m. Lowe's is a little less frequent with its kids' programs. The problem: children are now entering these stores mimicking their parents, holding Apple (AAPL) iPhones or iPads that also distract and put them in direct contact with the aforementioned exposed, barbaric-looking machines.
Question to you, the reader: have you ever thought twice about the harm the machines as pictured here could cause if you should trip into them? Give it a whirl this spring.
Read on for 10 barbaric-looking machines that could disfigure you at Home Depot & Lowe's:
No clue what this device is, but one of the more dangerous exposed machines I came across.
Carpet roller? Carpet cutter? Whatever, one trip over the corner of that while wearing a scarf and...
Spotted in small print at the top: a danger sign.
Randomly sat near an exit. Fumbling with your bag of home improvement goodies? Might not want to do that...this blue machine actually has a large blade (labeled in black magic marker) on it.
One thing seen at each company with disturbing frequency: forklifts left unattended in the middle of aisles.
Same gruesome-looking machine as in Home Depot. In hindsight, I think it's meant to cut wire.
Powered forklift in an open aisle. Your task if you so wish to accept it: navigate this thing without injury.
Not clear if this is standard operating procedure at Lowe's, but it, too, was a theme I saw often. Hand-truck left attached to a pallet of merchandise.
Notice the sharp metal edge of this contraption. Get the band-aids ready.
-- By Brian Sozzi CEO of Belus Capital Advisors, analyst to TheStreet