Fueled by strategic growth and ambition, family-owned Costello’s Ace Hardware is building a retail empire
With humble roots and founded on strong family values, Costello’s Ace Hardware (Costello’s) is leading at the heart of the hardware sector. Costello’s was established in the 1970s by founder, Vincent Costello, and its journey is nothing short of a true success story; one defined by determination, passion, and grit.
Having been forced to close his air conditioning business at the height of the recession, Vincent Costello bravely took on a neglected hardware store, with no retail experience, to provide for his wife and ten children. After years of incredible commitment and tenacity, Vincent was able to transform this location into a profitable business and went on to open more and more stores as the company grew from strength to strength.
Today, the Costello family is building a hardware empire, with their heartwarming tale of hard work and perseverance striking a chord with customers and partners alike. The company now owns and operates over 50 locations across New York, Maryland, New Jersey, Virginia, and Pennsylvania, with many more on the horizon, and continues to prove that, with family on your side, anything is possible.
Last year, Retail Merchandiser sat down with Michael Costello, CEO, to discuss the company’s legacy as he and his siblings, Jaime, Tim, Dan, Joey, and Bobby, continued to build upon their father’s successes. Michael detailed Costello’s acquisition of Smith’s Ace Hardware – which was the company’s largest to date – as well as its wider growth plans moving forward. In June 2025, Michael rejoined Retail Merchandiser to provide an update on how this expansion is progressing, along with what lies in store for the company.
“The business continues to focus on growth and expansion, and we’re now up to 52 locations,” he begins. “We’re focused on profitable growth, directing our attention into areas where we think there’s more upside, both geographically and into new business types, which will give us more opportunities to differentiate our company.
“Right now, we are focused on three main store formats. The first is where we’ve always been in traditional Ace Hardware stores. Based on where those stores are situated, we’ve expanded into relevant niches; for instance, our coastal stores may stock more beach wares, some with more patio furniture, and we even have a few stores with a robust lumber department. These niches have really helped to fuel our most core retail format. Our largest niche is hearth and spa, as we sell, install, and service fireplaces, wood and pellet stoves, and hot tubs. We now have 16 showrooms, most in our larger hardware stores, with several stand alone showrooms.
“The other format we’re expanding into is standalone paint and decorating stores,” Michael continues. “We have several Benjamin Moore paint stores that are focused on serving the professional painter and decorator. Our most recent paint store has recently opened in the suburban Baltimore area.”
Organic growth
With a series of strategic expansion plans in place, Costello’s is shooting for the stars. Whilst the company aims to hit 75 stores by the end of 2025, Michael emphasizes the importance of thoughtful, sustainable growth. 
“We’re looking to add lots more stores, but the number itself isn’t as important to us. It’s certainly a goal that represents our thirst for expansion, but our growth is focused in a number of ways,” Michael explains. “We’re always looking to add more capabilities that can differentiate the business, give us the competitive edge and fuel further growth and profitability. For example, we’ve expanded our offering of home services performed by our hearth and spa technicians to include chimney sweeping restoration, and rebuilding, and we’re about to begin installing air purification devices into home HVAC systems. Home services are very much on our radar for expansion. We’ll also be strategically expanding our paint stores so that our outside sales force can reach larger customers, such as large contractors, property managers and municipalities.
“Another key area of focus for us is our online business. We don’t build and manage our own website as we are part of Ace’s network; our priority is to support the Ace model and deliver the most seamless shopping experience for our customers. We’re obsessed with the operational metrics, such as speed to respond, verify orders and deliver, order accuracy, and increasing our product availability, as well as making sure we are emphasizing neighborly spirit and attention to building relationships. Delivery continues to grow in importance, and we continue to expand on our own fleet of trucks and vans delivering orders to our customers. We’re also utilizing third party services like DoorDash to help us fill any gaps. We’ve seen great success this year; our online sales are up over 20 percent.”
In the last couple of months, Costello’s has opened two new stores, both of which were acquisitions, to further enhance its operational capabilities. One of these stores is situated in rural Virginia, which will help to increase the company’s presence within the state, whilst the other store is in Northern Maryland. The new Maryland store will offer a particularly unique feature: a full-scale lumber yard. This store is set to be the first of its kind within the Costello’s’ chain and, with the hardware store and yard fully integrated, will undoubtedly be a retail hotspot for builders and contractors. Increased expansion, however, demands greater efficiency and a much broader product range, so Costello’s is committed to truly understanding the needs of each store’s local customer base.
“Keeping our stores updated with a relevant assortment of products is very important, however it’s also very difficult. Over the last 15 years, we’ve been going through a period where the speed of product innovation, product changes, and new vendors has greatly accelerated. Maintaining a relevant assortment has requires a lot of attention, action, and support,” Michael shares. “We are fortunate to be part of the Ace family. Ace has invested in the resources to deliver products and planograms that are best in class, it will maximize our margin opportunity and operational efficiency. For us, it’s about executing those updates fast and understanding the relevance of our inventory at the local level.”
Diversified business model
With robust growth plans in place and a strong, dedicated workforce to boot, Costello’s Ace Hardware is built for a bright future. 2025 has been another highly successful year for the company thus far, strengthening its foundations for further growth and expansion.
“This year has been a roller coaster. We followed up a strong first quarter with a weaker than expected start to Q2. We are seeing some decline in larger ticket purchases signaling that there is some economic uncertainty. However, we have been encouraged by traffic and our margins are holding up. We’ve been focusing on mitigating the impact of tariffs and creating value for our customers. Our ‘grow the top line’ initiative is focusing on units per transaction. We’ve leaned heavily into our ‘buy more, save more’ program, giving customers better pricing when they buy multiple units. Our other 2025 initiative is to better align business operations with company values. We were founded on some simple and meaningful principles that Vinnie Costello lived every day. He didn’t brag about what he stood for – he let his actions do the talking – and set an example for how to treat customers, fellow employees, business partners, and the community. Emulating his beliefs and actions is our path to future success and growth. We are blessed to have an amazing team. Our focus is to celebrate the folks in our company who are living our values and continue to enhance a culture of service of others, teamwork, growth and empowerment,” Michael affirms.
“We have a number of goals to fulfill over the next five years,” he concludes. “We will continue to add stores, both in new markets and through acquisition. It is important for us to do our part in support of independent, local business; to ‘be the succession plan’ for owners that don’t have a family member to pass their business on to. We will continue to add to our offering of home services. In support of a larger company will come additional investment to technology, including selecting a platform that can support our diversified business model. Finally, working with my siblings, we will provide a road map for the next generation.”