• The Wall Street Journal , Wednesday, August 27, 2008 10:15 AM

Facing the worst demand for their products in decades, Home Depot and Lowe's have refocused on offering everyday low prices. They are pulling back on margin-eroding discounts and promotions after flirting with aggressive promotions earlier in the housing downturn.

The moves indicate recognition by the retailers that it will be several quarters before demand picks up -- with or without big discounts -- according to industry experts. Although the approach might cost the retailers some customers in the near term, it's the correct one in the longer term, analysts seem to agree.

Lowe's and Home Depot can pull back on promotions more easily than other retailers, because they don't sell as much merchandise that goes out of fashion like apparel, or that can spoil like groceries. Periodic sales events and special promotions complicate shopping for customers at a time they're looking for a simplified experience, says Craig Menear, Home Depot's executive vice president for merchandising. "It focuses them into periods of time where they need to buy to feel like they've got the best deal," he says

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