• by Sarah Mahoney  @mahoney_sarah, September 15, 2010

Faced with a reluctant recovery, Lowe's says it's rethinking the way it forecasts consumer spending -- coming to terms with smaller-scale, DIY projects for people who are staying in their homes longer and longer.

"We're bouncing along the bottom, and while we first thought we'd see an improvement in consumer spending in the first half of the year, we're now pushing that expectation of the housing recovery back a quarter or two into the second half," Robert Niblock, CEO of Lowe's, told investors attending the Goldman Sachs Seventeenth Annual Global Retailing Conference, which was also webcast.

But he also said that the historical assumption that a stronger housing market automatically translates into higher comparable-store sales for chains like Lowe's just isn't holding up in this economy. "In the past, the value of the home was generally being maintained, but now that the value of their home has dropped, that offsets some spending," he says.

"In this environment, people will stay in their homes longer. And they want their home to reflect their style and taste," he says. "They are looking at things like painting and recarpeting to change the look and feel." Instead of major projects, "we're trying to show them what they can do to improve a bathroom in a weekend, for example, and on a limited budget. And we are certainly looking at this move back to DIY -- in painting and lawn care, especially."

In its marketing, he says that while the chain is carrying a full range of price points in most categories, "we are advertising more of the budget items."

Niblock also told investors that beginning next month, Lowe's would take over repairs for all the appliances it sells. "We think that will encourage people to shop more at Lowe's, and to repeat purchases when it's time to buy a new appliance."

The Mooresville, N.C.-based company is also stepping up its efforts to help shoppers save on energy. It announced that it plans to launch its Energy Centers -- begun as a test in 21 stores in California last year -- nationwide. The centers sell products that measure, reduce and generate energy in one convenient location.