I just ran a search on the Yahoo! Yellow Pages and found that there are seven Lowe's stores within 15 miles of my house, three of which are within seven miles. For Home Depot, there are nine within 15 miles, and again, three are within seven miles.

It seems to me that they may have over-extended in the good years, trying to saturate an area by building many stores to capture the market. Now that things are tightening up, they're trimming the dead wood.