Home Depot c-stores?

Home Depot may be worth a separate blog, with the number of posts about them lately. Now they're talking about getting into the convenience store business.

I don't think I understand this one.

Analyst Bill Sims with Smith Barney said some retailers use gasoline as a loss leader and a way to drive traffic into their stores.

"If Costco's doing it, and Wal-Mart's doing it, why not Home Depot?" Sims said. "I would think it would be a great traffic driver and more of a one-stop-shop."

Excuse me if "Costco's doing it, and Wal-Mart's doing it" doesn't strike me as great logic. Remember your mom saying, "If Billy jumped off a cliff, would you do it?"

Okay – it’s not that bad, but it still sounds strange to me.

I see c-stores as being a great place to pick up a loaf of bread and a gallon of milk, not a loaf of bread and a gallon of paint, which is what the “one-stop shop” part of the argument seems to envision.

Still, in one limited aspect I can see the logic, and that is as a tie-in with their foray into the professional market. I guess I can see builders drinking coffee and buying donuts in the morning as they wait for their orders to be loaded. Still, that seems a weak foundation on which to build a c-store business.

But I could be wrong.