2023 Hardlines Conference: work and fun combined, but we’re filling up fast

Join us for two days of information, trends, and networking at the 2023 Hardlines Conference on Oct. 17 and 18. This year, we take the show on the road to the Fairmont Chateau Whistler, located at the base of Blackcomb Mountain in Whistler, B.C.

But: we are already signing up a great group of delegates, which means that hotel rooms for the Hardlines Conference are 80 percent booked up. The cut-off date for our special room rates starting at $309 is Sept. 21. (Please book your room directly by phone at 1-800-441-1414 or online here. Cite the Hardlines Conference or use group code 1023HARD_001 for the special rate.)

In Whistler, you’ll have access to some great networking events. On Oct. 16, the evening before the conference starts officially, delegates can gather for the RONA Pub Night at Merlin’s Bar and Grill. It’s guaranteed to be a great way to catch up with colleagues and customers in a relaxed setting. Then, on Oct. 17, at the end of day one of the conference, Home Hardware will host its annual cocktail reception, which precedes the gala dinner to honour the winners of this year’s Outstanding Retailer Awards. All the major banners are signed up for gala dinner, so don’t miss out!

Our host hotel, the Fairmont Chateau Whistler, is a world-class resort. It’s famous for its luxurious spa and health club, which offers full access to indoor and outdoor pools, hot tubs, eucalyptus steam rooms, and fitness facilities.

We want you to make the most out of your time at the conference, and there are endless autumn activities in Whistler. Cozy up by an evening bonfire, breathe in the crisp alpine air on a scenic hike, or indulge in locally inspired seasonal cuisine. There’s yoga, historic walks, wine tours, and tons of nature to enjoy. You can get a full list of the many activities available—besides the Hardlines Conference—by clicking here.

The 27th annual Hardlines Conference (oh yeah, we’ve been doing this for a long time!) takes place Oct. 17 and 18 in Whistler, B.C. Take advantage of a 20 percent discount on your conference registration!

New product trends at Home Hardware’s latest dealer show, again in Toronto

Home Hardware Stores Ltd. held its dealer market in Toronto last week, for the second year in a row. This year’s market, called Homecoming, again drew dealers from across the country to see new products, merchandising ideas, and services.

On an exclusive tour of the show floor before the market opened, led by Home Hardware’s assistant manager of public relations, Alysha Kearney (shown here, centre), Hardlines got a preview of the products and trends being presented.

For decades, the show was held right in Home Hardware’s distribution centre and was part of the fabric of the town of St. Jacobs, Ont., where Home Hardware has its head office facilities. The Kitchener-Waterloo region would fill up with thousands of people: dealers, their families and staff, as well as vendors, twice a year for decades.

During Covid, Home Hardware moved to a virtual show, a typical strategy for much of the world during that time. Then, last year, the retailer returned to an in-person event, relocated it to the Enercare Centre at Exhibition Place in Toronto, and reduced the frequency to once a year.

The move was due to a range of factors, including the need for more space and the heightened level of technological sophistication of the DC’s updated order-picking system, which would be disrupted by mounting the event on the warehouse floor.

As in the past, one of the first categories dealers face walking into the main hall of the Enercare Centre is the outdoor living products. Home Hardware is investing big in new models and styles of patio furniture and outdoor living amenities. That includes the company’s “Basics” program of affordable products, which includes patio chairs and tables. Outdoor power equipment is relying on more battery power—including a riding lawn mower this year—and quieter performance.

The market serves as a platform for Home’s launch of its paint brand’s colour of the year and this event was no exception. BeautiTone’s “Illumina” has been recognized this year. It’s “a soft yellow with notes of red, a nostalgic pop of cheerful colour,” according to a release. Even the name, which is derived from the Latin word for “illuminate,” aims to address the colour’s ability to lighten up a space.

(We’ll have more to report on the Home Hardware Homecoming market in next week’s eye-popping edition of Hardlines Weekly Report.—Editor)

Home Depot’s ESG report leads way as retailers double down on ethical concerns

For many businesses, maximizing returns for shareholders is no longer enough. Corporate social responsibility, or environmental, social, and governance (ESG), reports are increasingly claiming prominence alongside quarterly results. Younger consumers in particular are interested in investing in—and working for—brands that prioritize the ethical impact of their business.

A study by market research firm First Insight found that Gen Z consumers (those born since the mid-’90s) take ecological factors seriously into account, to the point that almost three-quarters will choose to pay more for a sustainably produced product. Meanwhile, Nielsen has found that three-quarters of millennials will adjust their buying habits in relation to ecological concerns.

It’s not surprising, then, that many companies are complementing their financial updates with ESG reports. Take Home Depot. This summer, the retailer published its annual ESG report outlining progress on various environmental and socially aware pillars, ranging from production and supply to packaging and sourcing. In 2022, the company says, it reduced its carbon emissions by some 92,000 metric tons—equivalent to taking more than 20,000 cars off the road for a year.

In the “goals in progress” section, the report stated that all private-brand fibre packaging for new products will be compostable, recyclable, or contain recycled content by 2027. By the end of fiscal 2028, more than 85 percent of U.S. and Canadian sales in outdoor power equipment will run on rechargeable battery technology instead of gas.

A spokesperson for Home Depot Canada told Hardlines that “sustainability is a driving force behind the success of our business.”

RONA inc. and predecessor Lowe’s Canada, for their part, have made battery recycling efforts an anchor of their commitment to greening the economy. Home Hardware introduced the first two electric vehicles to its truck fleet in the spring. Manufacturers like Stanley Black & Decker are providing updates on their corporate responsibility efforts too.

Another front where companies are seeking to act responsibly is Indigenous relations. IKEA Canada has been particularly active in this area. It launched its first Indigenous-designed showroom in Edmonton in 2020; another opened in Calgary early this year. Last year, all IKEA Canada stores hosted art installations created by The Canadian Library in honour of missing and murdered Indigenous women and children.

Hudson’s Bay Co. announced last fall that it would direct gross profits from its iconic wool point blankets to a new fund for Indigenous initiatives.

As new generations of consumers come of age, ethical, environmental, and diversity concerns will only grow in prominence. Savvy retailers will need to be prepared to market to a conscientious clientele.

RONA inc. is celebrating the third anniversary of its VIPpro program this month. As loyalty programs and rewards platforms become a hot strategic tool for retailers, RONA has held on to, and invested in, this program that is aimed at its contractor and builder customers.

Through Sept. 20, RONA is hosting a series of events at most of its stores, which include promotional events, contests, and workshops.

Launched on September 10, 2020, at the time by Lowe’s Canada, the program was unique to the Canadian operations and was implemented in all Lowe’s, RONA, and Réno-Dépôt corporate stores. The VIPpro app was developed by Toronto-based Kinetic Commerce. The program provides discounts and bulk buying for contractors, as well as business supports and digital interaction with RONA stores, all through a dedicated app. Users can view their purchasing data, special offers, and profile information on their mobile device, in addition to their complete purchasing history.

At the stores, contractors have dedicated entrances and parking, early opening hours, and priority curbside pickup available from 7 a.m. to 9 a.m.

Services to contractors through VIPpro are constantly being enhanced with new initiatives. For example, a VIPpro application and an in-store IT platform generating instant quotes for appliances have been developed.

The Canadian Home Products Trade Association has announced its 2023 Industry Hall of Fame inductees. They are Peter Stojanov, retired owner and president of Onward Sales & Marketing, Burlington, Ont.; Al Tulloch, retired owner and president of McDonald Sales, Milton, Ont.; Harry Jacobs, vice-president of sales and marketing, Ideal Security, LaSalle, Que; and Richard Lépine, retired partner and vice-president, LM2 Marketing, Laval, Que. Stojanov and Tulloch will be inducted at a CHPTA reception at Royal Woodbine Golf Club in Toronto on Nov. 2. Jacobs and Lépine will be inducted at an event at the DOCK619 event facility in Longueuil, Que., on Nov. 23.

DID YOU KNOW…?

… that the Hardlines Conference is just weeks away in Whistler, B.C.? Delegates already registered include some of the leading dealers on the west coast, plus representatives from major companies including Taiga, Peavey, Johns Manville, RONA, Home Hardware, Home Depot, BMR, GSW, Castle, Orgill, Sexton Group, Federated Co-op, and more. The conference takes place Oct. 17 and 18. Take advantage of a 20 percent discount on your conference registration!

RETAILER NEWS

Canadian Tire Corp. is introducing new retail destinations exclusively serving customers in the industrial sector. Called Mark’s WorkPro-L’Équipeur Pro, they will sell workwear for the pro market. Four stores are planned for this year: the first location opened last week in Edmonton, with further openings slated for Toronto, Montreal, and St. Catharines, Ont.

RONA inc. has announced it will convert nine more Lowe’s stores to the RONA+ banner. The stores are in British Columbia (Vancouver Grandview, Nanaimo, Victoria Langford, Victoria Tillicum, Abbotsford), Saskatchewan (Regina South, Saskatoon West), and Manitoba (Winnipeg East, Winnipeg South). The stores will remain open during the conversions.

Lee Valley Tools has completed another acquisition of one of its supplier manufacturers. This time, it has added Leigh Tools in Port Coquitlam, B.C., to its roster of specialty tool makers that have been brought in-house. This deal follows two other acquisitions we announced earlier this month: Hock Tools and The Beall Tool Co.

Clarington Home Hardware Building Centre recently celebrated its grand opening following a series of updates and renovations. The store, located in Bowmanville, Ont., east of Toronto, welcomed the local community with a ribbon cutting, special vendors, an ice cream truck, and giveaways.

Tractor Supply Co., the U.S., the farm and ranch hardware retailer (it calls itself a “rural lifestyle retailer”) held its annual week-long “Pet Appreciation Days” last week. It featured special deals on pet food, treats, toys and accessories, a nationwide adoption event, and a pet contest. On Saturday, the retailer hosted a central adoption event which welcomed local shelters and rescue groups. Customers who adopted a pet received a special gift bag including samples and coupons.

Montreal-based discount chain Dollarama reported second-quarter sales of $1.46 billion, up from $1.22 billion a year earlier. Same-store sales for the quarter surged by 15.5 percent. CEO Neil Rossy said the company expects the strong demand from inflation-weary shoppers “to persist through the second half of the year in the current macro-economic context.”

Jeld-Wen Holding has been named to Newsweek’s inaugural list of the World’s Most Trustworthy Companies 2023, making it the only window and door manufacturer on the list. The World’s Most Trustworthy Companies were identified through an independent survey based on a sample of more than 70,000 participants in 23 industries from 21 countries.

West Fraser Timber Co. has entered into an agreement to acquire Spray Lake Sawmills in Cochrane, Alta. The $140 million deal is expected to close later this year following completion of necessary regulatory reviews. Spray Lake Sawmills produces treated wood products, dimensional lumber, and a variety of wood residuals and bi-products. It has an annual lumber capacity of 155 million board feet.

Innovair Solutions has invested in Industrie Orkan inc., a manufacturer of air quality products based in Saint-Hubert, Que. The company manufactures Epurair brand products, which are sold in Canada and the U.S. Industrie Orkan will continue to operate under the leadership of brothers Daniel and Simon Labrecque. Headquartered in L’Islet, Que., Innovair Solutions is owned by the Beaulieu family.

The latest edition of Hardlines Dealer News is now available. In this issue, we look at what makes buyers tick, what the arrival of Scene+ at Home Hardware means to dealers, and the challenge of combatting theft. Hardlines Dealer News is monthly and it’s free: click here to subscribe now!

“Illumina is an inspiring choice for 2024 as Canadians embrace a sense of careful optimism for the future. With Illumina, Canadians can create a space that feels both engaging and relaxing, a combination created in part by introducing a hint of red into the yellow.”
—Kristen Gear, lead design and colour specialist for Home Hardware’s BeautiTone Paint and Home Products division, on the launch of the retailer’s colour of the year.

After more than a year of planning, Home Hardware Stores Ltd. has gone live with its rollout of its new loyalty program, Scene+. Customers can now collect points by using either a Scene+ card or a Scotiabank Scene+ Visa card.

“We are incredibly excited that Scene+ is now available at Home Hardware locations across the country,” said Kevin Macnab, president and CEO of Home Hardware Stores Ltd.

Canadians will earn 50 points for every $50 spent in a single in-store or online purchase at Home Hardware, when using their Scene + Loyalty card. And they will earn twice the points when paying with their Scotiabank Scene+ loyalty card. Every 1,000 Scene+ points can be redeemed for $10 off any purchase at Home Hardware stores or homehardware.ca.

Home Hardware joins a growing roster of retailers aligning themselves with Scene+, which started as a rewards program for Scotiabank customers to access free cinema tickets. Scene+ now boasts 13 million members across the country who access it through dozens of grocery stores, movie theatres, electronics stores, restaurants, play centres, pharmacies, banks, and travel companies.

Scene+ really took off at retail when grocery giant Empire Company Ltd. bought into Scene+ in June 2022. Soon after, it began rolling the program out to its stores, which include Sobeys, Safeway, Foodland, IGA, and FreshCo, as well as liquor stores in western Canada.

In an exclusive interview with Hardlines, Michael Gawtrey, director of marketing, loyalty and CRM, pro and consumer at Home Hardware Stores shared some background on the deal and how it came together.

“We’ve seen the stores respond in amazing fashion. We’ve seen our stores set up in-store displays, they’ve posted on their social network… We’ve really seen our stores embracing Scene+ and that’s exciting for us to see.”

Home Hardware recognizes the value of a good loyalty program for its contractor customers. Will Scene+ fit into that scenario? “We are definitely thinking about our contractors. They are a very important customer base for Home, as you know. So contractors are part of our future loyalty strategy. Some of that has not been brought to market yet,” Gawtrey says, adding that more details will be available in the future.

However, he points out that Home’s existing Top Notch program for contractors is still in place. “Stores do have the option to award Scene+ points to their contractors. And each dealer does make that decision independently.”

Scene+ promises big data for Home Hardware Stores—plus sector exclusivity

Customer data is a big part of retailer loyalty programs, which is why Home Hardware’s adoption of Scene+ is such big news. But will the new rewards program enable Home Hardware to learn more about what their customers want?

“Yes, loyalty programs do offer retailers the opportunity to leverage that data to better serve their customers,” said Home Hardware’s Michael Gawtrey (shown here). “Home Hardware, like other retailers, definitely has plans to be able to use that data to better serve our customers. Whether that’s service offerings, or product assortments, it gives us an understanding of how our customers shop and what they purchase. It’s important for us as a business.”

In addition to its wide usage in grocery stores, Scene + is particularly strong in restaurants, where its partners include Harvey’s, Swiss Chalet, East Side Mario’s, and Montana’s, among many others. In electronics, Scene+ has partnered with two powerhouses: Apple and Best Buy.

Other rewards programs have had the notoriety of being spread too thin. For example, TIMBER MART was an early adaptor of the Air Miles loyalty program and became its exclusive independent retail home improvement group in Canada. But Air Miles was also available in the Maritimes at Irving Oil gas stations. Irving’s own building supply division, Kent, eventually took on Air Miles as well, which cut into TIMBER MART’s segment exclusivity. In the early 1990s, RONA adopted the Air Miles program, but dropped it early in 2021. (TIMBER MART dealers continue to offer Air Miles to their customers.)

However, says Gawtrey, Home Hardware has a hold on the retail home improvement channel for its new points program. “Yes, we are the exclusive home improvement partner of Scene+. So you won’t see a situation where there is ‘co-exclusivity’—as Air Miles called it.”

Retail leaders by region are mapped out in our new Market Share Report

Did you know that Quebec is the province with the most building centres in Canada? Or that Ontario has more hardware stores than Quebec and Alberta combined? Or that Prince Edward Island, despite its small size, has two home improvement big boxes—a Kent and a Home Depot?

These are just some of the facts that are revealed in the latest edition of the Hardlines Market Share Report, which is available now—and exclusive to Hardlines. This report details total sales by store format and individual banner in every province and territory. The store counts and sales volumes, and market shares of every key banner, are listed by province.

For example, TIMBER MART has an estimated 100 stores in British Columbia that represent slightly more than 10 percent of the market in that province by sales volume. It’s close behind Home Hardware, which accounts for more than 12 percent of the market through 108 stores there.

On the other side of the country, Kent is a familiar banner—and competitor—throughout the Maritimes. But despite its home-town advantage, it only holds second place for market share by sales in New Brunswick.

The Hardlines Market Share Report identifies each national retail banner, including RONA, Home Depot, Home Hardware, and Ace Hardware, plus the buying groups like Castle, TIMBER MART, Sexton Group, and Delroc.

But this important research also measures the sales and market shares of the regional players, such as Canac in Quebec, Windsor Plywood in British Columbia, McMunn & Yates in Manitoba, and Fries Tallman Lumber in Saskatchewan.

The Hardlines Market Share Report is now available for purchase. This important research features more than 80 slides in handy PowerPoint format. As a Premium Member-Subscriber, you save more than 20 percent on your order. And save more than 30 percent when you buy the Market Share Report bundled with its companion research, the Hardlines Retail Report. (Click here to order your Reports today!)

With its roots as a mail-order catalogue company since its inception 45 years ago, Lee Valley Tools has traditionally had a strong remote-order capacity. Now, the company is launching a new automatic picking system at its distribution facility in Ottawa.

The system goes live today. It is operational and being tested this week and by Sept. 18 the actual go-live system will be processing orders.

CEO Robin Lee says the new system has been in the works since Covid when Lee Valley recognized the critical importance of online sales. The system uses 42 automated shuttles to speed up order picking and sorting. But Lee sees it as much more than a cost-saving process. With the need for fewer people on the line, “that will let us raise wages for remaining staff and insulate us against the vagaries of casual labour.”

He notes that the ability to focus on higher wages will help Lee Valley maintain its competitive edge. “It allows people to focus on what they do best.”

While the new system will enhance Lee Valley’s ability to fulfill customer orders, the company is not completely insulated from the realities of the bricks-and-mortar marketplace. Its store in Saskatoon has been forced to close, the result of an eviction by a landlord that gave the company just two months to move out. “We closed that one two months ago and scrambled to find a new location,” Lee says.

A new store is being developed in the Lawson Heights Mall in Saskatoon. In the meantime, a pop-up store has been installed in the mall, until the actual store is up and running.

Paul Crawford is changing his role after 25 years as president of his national manufacturers’ agency, King Marketing, and relocating the company’s head office. Crawford will become CEO and continue to provide strategic direction, oversee key initiatives, and cultivate important industry relationships. Mark Travers, who has been King’s general manager for the past 10 years, is taking over as president. He will be responsible for the day-to-day operations of the company, executing strategic plans, and leading the company’s growth. Also at King Marketing, Stephanie Kainz has been promoted to vice president of sales. She brings over 17 years of experience in the company and will lead the sales team. Over the next few months, the company will transition its head office from Richmond, B.C., to its existing Mississauga, Ont., offices and warehouse.

DID YOU KNOW…?

… that the Hardlines Conference is only weeks away? It takes place Oct. 17 and 18, 2023, at the Fairmont Chateau Whistler Resort in Whistler, B.C. The two-day program includes senior execs from Federated Co-op, RONA, and Groupe Gagnon, plus tech and data experts—and amazing networking! As a Premium Member who receives this newsletter every Monday, you can take advantage of a 20 percent discount on your conference registration. And we have special pricing for dealers. (Contact Michelle Porter at the Hardlines World Headquarters for those details!)

RETAILER NEWS

BMR Group has signed a Quebec home improvement retailer, Groupe Anctil, as its newest member. Founded by Joseph Anctil in 1935, the family business began with a general store and today is a major player in Quebec’s Eastern Townships, with stores in St-Denis-de-Brompton and Magog. The company also has a prefabricated wood-structure manufacturing plant in Magog and a water treatment company in Granby.

Montreal-based Stingray, a provider of in-store music and video content, has added Peavey Mart to its network. Up to now a provider of in-store content to pharmacies and groceries, Stingray said in a release that the addition of Peavey Mart expands its reach “to over 90 hardware store locations across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Nova Scotia.”

A Castle dealer in Woodstock, Ont., celebrated the grand opening of its new store over the past weekend. The 10,000-square-foot store, with 4-acre lumberyard and double drive-through pick-up areas, is called Adams Building Supply. It’s really a relocation—and renaming—of the owners’ Allen Building Centre, in downtown Woodstock, to a new industrial and retail area a short drive away. Owners are Jamie Adams and Tasha Birtch, whose family has owned the business since 1963. They also own a building supply store in Shakespeare, Ont.

Also at Castle, Island Home & Garden in Gabriola, B.C., is returning to the group after stints with other banners. The business was founded just under a decade ago by Nick and Robin Hock. The Hocks have a second location in the pipeline in Cumberland, B.C., which they expect to open in the fall.

In anticipation of the pending Christmas holiday season, Hudson’s Bay will add Zellers in all its stores across the country on Sept. 22. Currently, there are 24 store-within-a-store format Zellers locations—with one more on the way at Bramalea City Centre on Sept. 27. Zellers also appears in pop-up form at 22 other locations. These sites, which were opened earlier this year, range in size from 1,000 to 2,800 square feet. With the installation of the latest pop ups, a total of 78 Hudson’s Bay stores in Canada will offer a Zellers location.

Gypsum Management & Supply reported that net earnings for the first quarter of its 2024 fiscal year declined by 3.0 percent to $86.8 million, compared to $89.5 million a year earlier. Net sales grew by 3.7 percent to $1.4 billion from $1.36 billion in the comparable period of fiscal 2023.

For the first 52 weeks of its 53-week fiscal year ended August 27, Costco reported net sales of $232.95 billion, an increase of 4.6 percent from $222.70 billion during the similar period last year. Comp sales for its U.S. stores were up 3.3 percent while Canadian locations were up 1.8 percent. However, excluding the impacts from gasoline prices and foreign exchange, U.S. comps were up 4.2 percent and Canadian comps were up 8.0 percent. Costco has 861 stores, including 107 in Canada.

Ottawa is expanding its efforts to counter U.S. duties on Canadian softwood lumber. According to international trade minister Mary Ng, the government is challenging the tariffs both under the USMCA trade agreement’s dispute process and before the U.S. Court of International Trade. U.S. trade representative Katherine Tai says negotiations would be contingent on Canada’s abandonment of the stumpage fee system at the heart of the dispute.

The Canadian economy shrank at an annualized rate of 0.2 percent in the second quarter, following growth in the first quarter of the year 2.6 percent. (StatCan)

New construction was off 8.2 percent in the second quarter, year-over-year. Renovation spending fell 4.3 percent in the quarter, compared to the same period last year. (StatCan)

Quebec, formerly alone among provinces for having no minimum age for the employment of children, has tightened up its child labour statutes. The province’s Bill 19, in effect since June 1, prohibits the  employment of workers under the age of 14, except in certain cases. Those exemptions include babysitting, newspaper delivery, and work in summer camps, among other types of work by children. It also exempts many of Quebec’s family-run home improvement stores—but only the smaller ones. “Work performed [by a child] in a family enterprise with fewer than 10 employees, when the child is a child of the employer,” is exempted, Bill 19 states.

“You have to evolve. If you don’t, Darwin’s theory kicks in and you’ll die out.” That’s the warning from Romain Mercier, a customer engagement and communication expert with 20 years of sales experience, including 10 years in advertisement and marketing technology sales. “What incremental progress do dealers have, to make growth out of online sales?”

A true digital guru, Mercier will share his insights at this year’s Hardlines Conference with a presentation titled, “The Evolution of Digital Commerce.” And he won’t be alone: the 27th annual conference will feature some of the brightest minds in retail today. They’ll share their stories and insights at the conference’s new location in Whistler, B.C., on Oct. 17 and 18.

We are also proud to present David Ian Gray, of DIG360 Consulting Ltd., a highly respected Canadian retail advisory company headquartered in Vancouver. He is also co-founder and co-host of @TheBusinessOfRetail podcast. Gray is a brilliant big-picture thinker and will talk about some of the top issues facing dealers today: retail staff retention and recruitment, the digital divide, and where Canada’s retail is headed.

Two senior retail home improvement executives will also take to the podium this year.

Cody Smith is director of Home and Building Solutions (HABS), the hardware and LBM division of Federated Co-operatives Ltd. As director of the HABS unit, Smith leads a team that provides strategic partnership and services to over 90 Co-op Home Centres across western Canada. These stores collectively represent more than half a billion dollars in retail sales, making FCL one of the retail giants of western Canada.

Jean-Sébastien Lamoureux is RONA inc.’s senior vice-president, RONA affiliates, wholesale, and public affairs. His presence will be very timely, given all the changes taking place at RONA. Lamoureux will provide valuable insights into the direction of the company, the relationship with its affiliate dealers, and the launch of the RONA+ banner, which is replacing the Lowe’s name in Canada.

The Hardlines Conference is being held in partnership with the Building Supply Industry Association of British Columbia, which is marking its 85th anniversary. The BSIA will host a table-top trade show concurrent with the conference to showcase its supplier members’ products and services. (For information on how to participate as an exhibitor, contact BSIA president Thomas Foreman.)

(The 27th Annual Hardlines Conference will be held at the Fairmont Chateau Whistler resort Oct. 17 and 18, 2023. As a Faithful Hardlines Weekly Report Member-Subscriber, you can use the code HARDLINES23 to get 20 percent off registration! Register here today!)

RONA closes two more stores as it winds down the Lowe’s banner

With Lowe’s departure from Canada and new ownership for RONA inc., that retailer is carefully evaluating its store inventory at its 61 Lowe’s-bannered locations (many of which have been already switched to a new banner: RONA+, see below).

The takeover of RONA/Lowe’s/Réno-Dépôt by new owners, Sycamore Partners, a New York-based private equity firm, has provided new leadership, and returned the company to privately-held status. But more changes were inevitable, including the likelihood that some Lowe’s and RONA stores would be re-evaluated in certain overlapping markets.

RONA has started that evaluation with Ontario. Some 25 Lowe’s locations in that province have been scheduled to switch. But the Lowe’s in Vaughan, Ont., just north of Toronto, is scheduled to close altogether some time over the next month or so.

Now, Hardlines has learned that two Ontario stores under the RONA banner are slated for the same fate. They are RONA Belleville, at 260 Bell Blvd., and the RONA Home & Garden in London, at 820 Blythwood Rd. Both markets have other RONA-owned stores. The Lowe’s in Belleville will be rebranded RONA+ in the coming weeks, while London has two Lowe’s stores that will likewise get renamed RONA+ in the near future. RONA plans to consolidate its retail and contractor business into those stores.

“To improve our impact on the market and be better aligned with customers’ needs, we conducted an in-depth analysis of our network in the Belleville and London areas, and decided to reduce our store footprint in areas where some locations were in close proximity to one another,” a spokesperson from RONA told Hardlines.

“We will be consolidating our retail and pro activities at selected stores in these areas, where the teams will keep serving local homeowners and professionals with renewed passion and dedication,” RONA told us. Liquidation sales began in Belleville on Aug. 24 and at the London stores Aug. 31.

The company added that it will make every effort to relocate employees at surrounding stores where possible, “and all impacted employees will be treated fairly and receive support from the management and HR teams.”

Celebrating 45 years, Lee Valley is still growing—and still having fun

Since its inception in 1978, Lee Valley Tools remains a family business. The company has 18 specialty hardware, tool, garden, and specialty products stores across Canada. And building on its pre-internet roots as a mail-order catalogue seller, it maintains a considerable online presence as well.

The company’s founders, Leonard Lee and his wife Lorraine, launched Lee Valley out of Leonard’s love of hand tools and woodworking. A civil servant before he launched the company, Lee was a brilliant promoter. He told the audience at a Hardlines Conference many years ago that the famous, and somewhat romantic, company name was something he made up because, well, it sounded cool.

Today, the company is led by the Lees’ son, Robin (pictured), as CEO, and president Jason Tasse, who’s been with Lee Valley for 25 years. (Robin took over as CEO in 2002; Leonard passed away in 2016). Coming through the pandemic, a lot has changed, says Robin. “We’ve all faced challenges coming through Covid and had to make a lot of changes to adapt. But we’ve also had a lot of time to consider what’s changed and how to grow.”

Lee Valley does a lot of its own product development and has its own manufacturing, under the Veritas name, right in Ottawa, where its head offices are located. In fact, the company makes 30 percent of the products it sells.

Robin has seen a lot of smaller hardware and tool manufacturers examine their businesses during the pandemic and decided they didn’t want to invest in the massive changes that technology and post-Covid shopping behaviours have demanded of businesses. “A lot of specialty operations are selling out to larger aggregators or just closing their doors,” Robin says. “So we’ve been busy acquiring some of these companies.”

The two latest acquisitions are Hock Tools and The Beall Tool Co., both family-owned and both long-time suppliers of their product lines to Lee Valley. The production of both these suppliers has been absorbed into the Lee Valley operations, “while protecting and preserving the proprietary products that these company had.”

Robin says two more deals are currently in the works, and adds, “We get offers every day.”

The 45th anniversary has provided a chance to have some fun, such as a line of clothing—fleece sweatshirts that are made in Canada and baseball caps assembled domestically. The company is also marking the anniversary by offering in-store workshops for $45 on subjects such as leatherworking and wood carving.

“The 45th is us practicing for our 50th,” Robin quips.

The Home Depot has launched an online portal to target millennials—generally defined as people born between 1981 and 1996 (currently 27 to 42 years old).

The company, referring to this age group as “the next generation of current and future first-time homeowners,” says its hub will provide “valuable resources including DIY guides, product recommendations, design inspiration, and more.”

However, the retailer is pinpointing one of the realities of the millennial generation, namely that they are not as confident doing repairs and renovations as older customers. A survey conducted by Home Depot revealed that more than eight out of 10 millennials and GenZers are interested in doing renovation, repair, design, and décor projects. However, only about 25 percent of them would feel “very confident” about taking on a home improvement project.

The survey further revealed that home ownership “is one of the most stressful milestones young people face today. Around half of millennials (53 percent) report worries about purchasing their first home, along with starting a family (57 percent) and career advancement (52 percent).”

Recognizing that this generation turns to YouTube for how-to advice, the retailer is offering its own alternative with the new hub. From moving checklists to project guides, and from virtual workshops to design inspiration, the online hub brings aims to deliver needed expertise directly to its customers.

Virtual workshops provide step-by-step guidance on projects like how to paint a room, replace light fixtures, and install a faucet. A catalogue of workshops teaches the fundamentals of caring for different areas of the home with both livestream and on-demand options.

Ray Ferris, CEO and president of West Fraser Timber, will retire on Dec. 31. Current COO Sean McLaren, a 35-year veteran of the company, will take the helm on Jan. 1, 2024. Ferris joined the company more than 25 years ago and was named president and COO in 2018, becoming CEO the following year.

Gabriel Farias has been named VP of OSB manufacturing at LP Building Solutions. He brings 25 years of experience in the manufacturing industry to the role, including time at Armstrong Flooring and Armstrong World Industries. Landon Stephens, LP’s new director of OSB sales and marketing, joined the business in 2015 as an OSB account manager. He was promoted to the role of regional sales manager before serving as senior national OSB sales manager.

DID YOU KNOW…?

… that the latest instalment of the Hardlines podcast series, What’s In Store, is now live? In this episode, we talk to Zaida Fazlic, VP of people, culture, and change management at Taiga Building Products. She shares her thoughts on the importance of delegating, the future of AI, and the value of recognizing employees’ differing skill sets. It’s the perfect chance to get to know Zaida before hearing her speak at this year’s Hardlines Conference in Whistler, B.C., this October! (You are registered, aren’t you?) And sign up now for free and get updates about our latest podcasts in your inbox!

RETAILER NEWS

Canac has begun work on its store in Sorel-Tracy, Que., some 75 kilometres from Montreal. Mayor Patrick Péloquin was in attendance as the symbolic first shovel dug into the ground. “The arrival of this major banner will allow us to enhance our offering in the renovation sector and offer competitive prices to our residents,” he said.

IKEA Canada held the grand opening of its new retail touch point in the Scarborough Town Centre in Scarborough, Ont. The 7,489-square-metre store carries 2,500 products in stock. The small-format store will have digital tools throughout, and a complete range of services including assembly, returns, home delivery, and a dedicated Planning Hub. Larger furniture items will be on display and can be ordered onsite for home delivery or pick up at various locations across the city.

Walmart has reported that its Q2 net income soared by about 33 percent to $7.89 billion, or $2.92 per share, from $5.15 billion ($1.88) a year ago. Total revenues of $161.63 billion beat analyst estimates of $160.27 billion. In Canada, net sales rose by 5.1 percent to $6.1 billion, with comp sales up 4.8 percent. Canadian e-commerce sales grew by four percent. The budget retailer has benefited from increased foot traffic as inflation-pinched shoppers look to stretch their dollars.

Lowe’s released its results for the second quarter that ended Aug. 4. Revenue for the quarter was $24.96 billion, down from $27.48 billion. Net income was $2.67 billion. Lowe’s had previously said it expects comparable store sales to drop by two to four percent this fiscal year, with the company’s revenues forecast to be $87 billion, a drop from $89 billion last year. It stuck by that forecast in its Q2 statements.

Ace Hardware, of Oak Brook, Ill., has opened 100 new stores in 2023—and has planned a further 70 by the end of the year. Globally, Ace has opened more than 1,100 stores in the past five years, the company said. There are more than 5,800 locally owned Ace hardware stores around the world. Peavey Industries owns the licence for the Ace banner in Canada, where it supplies more than 100 Ace stores.

Cloverdale Paint has made upgrades to its Surrey, B.C., manufacturing plant and established a distribution facility and warehouse in North Surrey. It’s invested in automated, high-speed paint processing which, says the company, more than doubles its decorative paint production capability. Cloverdale has also moved its finished goods DC and warehouse from Surrey to a new 60,000-square-foot high bay facility with a special area for handling high-performance industrial coatings.

Millwork manufacturer Metrie is planning a new manufacturing facility in Woodbridge, Ont. The mill is set to be fully operational by year-end and houses state-of-the-art technology that will enable Vancouver-based Metrie to improve production of pre-finished moulding and trim, says the company.

Some 500 customers, suppliers, employees, and guests gathered earlier this month at Goodfellow’s Delson, Que., headquarters to celebrate its 125th anniversary.

Cornerstone Building Brands of Cary, N.C., has acquired siding and roofing producer MAC Metal Architectural, of Saint-Hubert, Que. MAC Metal has some 100 employees. “The acquisition of MAC Metal Architectural expands our leading exteriors portfolio with value-added, residential-focused metal siding and roofing products that offer premium aesthetic design and durability solutions for our customers,” said Cornerstone president Rose Lee.

The annualized rate of housing starts fell 10 percent in July to 254,966 units. Despite the monthly drop, the total rate remained 7.4 percent above the five-year average. The rate of urban starts decreased by 11 percent, with 234,857 units recorded in July. The rate of rural starts was estimated at 20,109 units. (CMHC)

Investment in residential construction declined for the fourth straight month, falling 4.5 percent to $12.1 billion in June. Ontario accounted for most of the drop, declining by 5.8 percent to $5.1 billion. Single-family home construction fell 5.7 percent to $6.2 billion, with declines seen in eight provinces. Overall, construction spending fell 3.1 percent to $18.0 billion in June. (StatCan)

Global News Vancouver recently reported on “Project Barcode,” a police crackdown on chronic and violent shoplifters. A three-week operation by the Vancouver police, in February and March, resulted in more than 200 arrests. But the executive director of a Vancouver BIA told Global that his organization is disappointed by the results of the crackdown—including the response of the courts. Police laid 278 charges during Project Barcode. A total of 155 cases, or 56 percent, have been thrown out by the Crown.

We got an email at the World Headquarters last week asking which Lowe’s stores are closing in Canada. We hadn’t heard of any such closings—after all, retailers are not eager to share bad news with us. But our job is to get the facts and help our Faithful Readers, whether retailers or suppliers, to understand this industry better.

So we dug into it. A quick online search confirmed that the Lowe’s in Vaughan, Ont., will close. A call to the store gave us an approximate timeline: “one to two months.” Then we contacted the ever-helpful PR team at RONA inc. for further information and they committed to keep us in the loop. Once we had confirmed the facts, we ran the piece in our Daily News and picked it up here, in Hardlines Weekly Report (see under “Retailer News” in this issue).

This is typical of how the news is found, researched, and reported here at Hardlines. We have many publications now, so once we get the news, we have to decide which newsletter and which audience it is best suited for.

In another case, I made a call to the Home Building Centre in Osoyoos, on the British Columbia border adjacent to Washington state. I had been asked to tell the store manager about our 27th annual Hardlines Conference. It will be held in Whistler Oct. 17 and 18 and we want as many folks as possible on the West Coast to join us.

My conversation with that dealer soon revealed that his store operates in one of the hottest and driest climates in the country. Yeow! Another story possibility.

But as we worked to finalize the story, nature added a new twist. A wildfire crept up from Washington state and came perilously close to Osoyoos, forcing evacuations and alerts that kept the whole town, and the dealer, on alert. We put a call into the other Home Hardware dealer in town, a hardware store on the main street, for further input.

What started out as a courtesy phone call to a dealer became a real human interest story, then morphed into a breaking news item that could have resulted in tragedy. That story became a lead item in our sister publication, Hardlines Dealer News.

And yes, sometimes we share stories among the different titles. But we always try to add a new spin to the stories when we do. Take a recent story about making mental health awareness a part of any company’s health and safety policies.

Our editor, Steve Payne, had attended an HR conference held by the Retail Council of Canada. His coverage of one speaker on this topic was a perfect fit for the July edition of our Hardlines HR Advisor newsletter. But the message, we felt, warranted a wider audience. So we tweaked the story and included a version with additional info two weeks later in Hardlines Weekly Report.

(The news can come fast and furious to Hardlines, and we work hard to sift through the clutter to provide you with the best reading experience in all of our publications. Thanks for reading!—Michael McLarney)

Canadian Tire, Home Depot second-quarter results reflect a softening market

The latest quarterly results from two of North America’s largest hardlines retailers this month bear out the concern that 2023 has become a year of slowdown.

Canadian Tire Corp.’s second-quarter net earnings fell by 28.5 percent to $126.9 million, from $177.6 million a year earlier. Profits were hit by $74.6 million in costs associated with a fire in March at one of CTC’s Brampton, Ont., distribution centre, as well as by lower discretionary spending amid continued high inflation.

The Home Depot reported sales of $42.9 billion for the second quarter of fiscal 2023. That number is down two percent from Q2 2022. Comparable sales for the quarter were likewise down two percent. Net earnings slipped as well, to $4.7 billion from $5.2 billion, a drop of about 10 percent.

Canadian Tire saw revenues for the retail segment, excluding petroleum, dip by 0.5 percent to $3.7 billion. However, one bright spot was comp sales at the company’s eponymous flagship banner: they edged up by 0.1 percent, as higher sales in automotive and living categories offset declines in gardening, seasonal, and hardware.

Home Depot reported that sales of smaller projects continued to grow during the second quarter, but there remained “continued pressure in certain big-ticket, discretionary categories.” The retailer reaffirmed its forecast of an overall sales dip of between two and five percent for fiscal 2023.

Lowe’s Cos., which will issue its second-quarter results tomorrow, had previously forecast that its comp sales for 2023 would be down from two to four percent.

Last year, Canadian Tire issued a long-range forecast for growth of about four percent per year through to 2025. But current conditions have the company setting that forecast aside.

“The cumulative effect of increasing inflationary pressure and higher interest rates on consumer spend and financing costs, along with higher inventory costs, has significantly impacted the company’s ability to deliver against its previous expectations,” says the Q2 results release from Canadian Tire. “Given the slower pacing of growth, and the noticeable slowdown in retail sales during the second quarter of 2023, the company is withdrawing its previously disclosed financial aspirations at this time.”

Wholesalers still face fallout from B.C. port strike, though LBM not as affected

The effects of the recent strike among British Columbia port workers are expected to have repercussions that will last for months to come. For manufacturers awaiting products from Asia, the impacts are vexing. For wholesalers, the port strike does not appear to be as big a concern. But it has certainly caused some hiccups for companies, especially the smaller players.

Russ Permann, CEO of Taiga Building Products, says the situation certainly caused some inconvenience, especially with architectural goods like mouldings, millwork, and flooring. “I suspect you’ll see more impacts in those small-pack items that go on store shelves, rather than large, bulky building materials that we mostly deal with.”

Nevertheless, Permann says, his company had a number of containers stacked up at the ports and more products sitting on ships offshore. “There were a few options to divert to other ports but not many, so we’re really at the mercy of those docks to clear up this backlog as quick as they can.”

Michel Walsh, director of product management and marketing at CanWel Building Materials, said the impact on CanWel has not been as dramatic as it has been for manufacturers. Walsh works out of CanWel’s Montreal-area offices, but the company is based in Vancouver and is a division of Doman Building Materials Group.

“Most containers we bought in the fourth quarter of 2022, we received them in Q1 to Q2. We diverted a few other ones around the world the other way, expecting the strike would last … As the strike is over, CN-CP’s backlog will take months to reabsorb.”

Permann observes that there weren’t too many acute shortages in the market as the strike came to an end, but he expects backlogs to take a few months to clear up. “A good estimate of returning to ‘normal’ supply flows is likely mid-fall. We don’t anticipate anything like what we saw during the pandemic. This will be more temporary in nature and much shorter in duration, if there is any disruption.”

Thomas Foreman, president of the Building Supply Industry Association of B.C., acknowledges that the delays will have a long-lasting effect on many of his organization’s supplier-members. “There are numerous ships and containers on hold and the delay will impact the freight that will arrive in the next months. A number of members have containers scheduled to arrive in August in preparation for the fall buying cycle and they’re uncertain on their ETA.”

The smaller companies will feel the brunt of the delays, he says. “This stoppage has a domino affect, creating more stress on small and medium-sized enterprises that our industry relies on for a multitude of building supply products.” And that will no doubt impact prices. “These types of delays cause unbudgeted expenses that will be pasted on to the consumer in some form or fashion.”

Kent Homes, the sister company of Kent Building Supplies, builds modular housing at its plant in Bouctouche, N.B. This year, production has been ramped up by both the Nova Scotia wildfires and an effort to provide social housing on Prince Edward Island.

Earlier this summer, the province of Nova Scotia bought 25 fully-furnished modular homes from Kent Homes and made them available to rent for people whose houses were destroyed by the Shelburne County and Halifax region wildfires. The project cost the province $7.4 million.

Now Kent Homes is providing modular homes in rural P.E.I. The company is partnering with that province’s division of the Canadian Mental Health Association and a contractor partner, 720 Solutions, to provide housing for vulnerable individuals with mental health and addiction issues. It’s constructing a two-storey, 10-unit modular apartment complex in Alberton, which is in the northwest part of the province.

The modular homes will be about 84 to 93 square metres (900 to 1000 square feet) in area and will include furnishings, appliances, and connection to services such as wells, septic, and telecom.

Orgill invests in growth with expanded field team and new DC

U.S. hardware wholesaler Orgill is making investments to elevate the company’s position in the home improvement industry. To accommodate the strong growth it has experienced through Covid, Orgill will expand its field sales team by as much as 10 percent. It already has more than 400 field service people working with its retailer customers in North America and around the world.

The company has seen a surge in both new customers and needs from existing customers.

“We really put an emphasis on consultative selling,” says David Mobley, Orgill executive vice-president of sales. “We want our team of sales professionals to serve as an extension of our customers’ businesses—an extra set of eyes and ears to help them find ways to grow and improve their operations.”

Earlier this year, Orgill announced plans to expand its retail campus in Collierville, Tenn. A large part of the expansion will include the construction of a 500,000-square-foot “Concept Centre.”

The new facility is expected to be completed in 2024 and will replace Orgill’s existing, 250,000-square-foot Concept Centre in Olive Branch, Miss.

“Having access to a Concept Centre is critical to how we help our customers,” says John Sieggreen, executive vice-president of retail at Orgill. “The Concept Centre is a real-world retail laboratory, where we can build and test retail concepts. We use this facility for everything from building and experimenting with the model stores we set up at our Dealer Markets, to setting up full categories or departments for our customers to see prior to implementing in their stores.”

Meanwhile, construction of a new, 800,000-square-foot distribution facility in Tifton, Ga., has continued through the summer. The DC will replace Orgill’s existing Tifton facility, which opened in 1995.

The new DC promises to include leading-edge distribution technology to streamline the order receiving and fulfillment process, says Randy Williams, Orgill’s EVP of distribution. The DC will use robots and feature a new goods-to-person picking system. “We are taking advantage of every opportunity to build technology and new distribution techniques into this facility that will help us create efficiencies for both our team and our customers,” Williams adds.

Orgill now operates eight distribution centres in North America, including one in Canada in London, Ont., with 6.7 million square feet of total capacity and more than 75,000 SKUs in each DC.

IKEA celebrates 80th anniversary, continues small store expansion

IKEA is 80 years old. The ready-to-assemble furniture business was founded on July 28, 1943, in Almhult, Sweden, by 17-year-old Ingvar Kamprad. His workspace was his uncle’s kitchen table and his first products were pens, wallets, and picture frames, which he delivered by mail. He got into furniture five years later.

There are 460 IKEA stores operating in 61 countries. IKEA’s revenues last year were €44.6 billion ($65 billion). IKEA has 15 full stores across Canada as well as several planning and design studios.

The company is also working on being accessible to more Canadians. That has included developing smaller, showroom-style outlets. The latest such small-format store will open Aug. 23 in Toronto’s eastern suburbs. The 7,489-square-metre store is in the Scarborough Town Centre. It will feature the same one-way flow layout familiar to shoppers at larger IKEA locations, with two entrance-exit points, each with their own check-out lanes.

The Scarborough store builds on the smaller urban model debuted at IKEA’s Downtown Toronto – Aura store (shown here), which opened last year.

Kristyl Lawson, formerly communications director at Orgill, has moved to the company’s HR team as director, talent development. She reports to Laura Freeman, EVP of human resources. Earl Bernard has stepped into the role of communications director. He joined Orgill in 2021, bringing with him prior experience in engineering, technology, and communications.

At Gillfor, Kent Finkbiner has been named to the newly created role of assistant division manager for the Calgary division, effective Aug. 7. He reports to division manager Clay Finkbiner, who was promoted to that position in May. Meanwhile, Bryan Payne has been appointed division manager for the Langley, B.C., division, effective Sept. 5. He joins Gillfor from Woodtone, where worked for the past decade, most recently as Canadian sales manager.

Gabriel Farias has been named VP of OSB manufacturing at LP Building Solutions. He brings 25 years of experience in the manufacturing industry to the role, including time at Armstrong Flooring and Armstrong World Industries. Landon Stephens, LP’s new director of OSB sales and marketing, joined the business in 2015 as an OSB account manager. He was promoted to the role of regional sales manager before serving as senior national OSB sales manager.

DID YOU KNOW…?

… that dealers ranked new products as the most important information Hardlines can provide? That’s why the next issue of our trade magazine, Hardlines Home Improvement Quarterly, will be our first-ever PRODUCTS ISSUE. If you have new products that you want to get out to our audience of 11,000 buyers, dealers, and managers, send their information today to our editor, Steve Payne. (We need print-quality pics and up to 100 words of text.) There is no charge for this! But act fast: we need your product info by this Friday, Aug. 25.

RETAILER NEWS

Sexton Group member Stettler Building Supplies in Stettler, Alta., will take on the Ace banner. Under the terms of a joint supply agreement between Ace Canada and Sexton, Ace dealers have access to Sexton’s LBM offerings while Sexton members are invited to join the Ace banner. Stettler Building Supplies is owned and operated by Ralph Wiebe.

Charlie Donevan turned 98 on July 31. And his entire town, including the mayor, was invited to the celebration, which included an official reopening of Donevan’s Hardware.
The store sits on the main street of Gananoque, Ont., situated alongside the St. Lawrence River. Donevan’s Hardware started as a general store in 1795 and was eventually purchased by James Donevan, Charlie’s grandfather.

RONA inc. is in the middle of changing its Lowe’s stores to the new RONA+ banner. Some 25 locations, all in Ontario, have been scheduled to switch. But one store will not make the cut. The Lowe’s in Vaughan, Ont., just north of Toronto, is scheduled to close sometime over the next couple of months. For its final weeks, it will carry a lot of clearance products as it winds down.

Peavey Mart has started accepting PayPal and Apple Pay for its online shopping platform. The retailer says the move is designed to guarantee “a frictionless and secure online shopping experience” as part of Peavey’s technology advancement strategy.

The Home Building Centre in Waterford, Ont., will host a grand opening of its revamped operations from Aug. 24 to 26. Owned and operated by Cortney and Jesse Buchan, the store was previously known as Riddoch Lumber. It was purchased by the Buchans in January 2022 and they began a full renovation in March of that year.

A Real Canadian Superstore in Red Deer, Alta., is the latest store in the Loblaw Cos. family to add heavy appliances. The program is being rolled out in partnership with Canadian Appliance Source using a store-within-a-store model. Loblaw announced its first foray into appliance sales in May at its store in Milton, Ont., and has since added the program to a store in Richmond, B.C.

Castle Building Centres’ newest member is Everything Exterior, a locally owned building materials store in Edmonton. In business for more than 10 years, it specializes in decking, siding, and stone. Owners Gagan Prince and Harp Thind are investing to move to a new location.

A new home and décor retail brand, “rooms + spaces,” held its first grand openings earlier this month in Woodbridge, Ont., and Vancouver. A further 22 rooms + spaces stores will host openings through September across the country. Canadian entrepreneur Doug Putman, who also owns Toys “R” Us and Sunrise Records in Canada, among other brands, acquired the leases to some of the spaces vacated by bankrupt retailer Bed Bath & Beyond (which had 55 stores in Canada) and Buy Buy Baby (11 stores in Canada).

Gillfor Distribution has partnered with Weyerhaeuser to distribute the manufacturer’s line of Trus Joist engineered wood products in western Canada. The line will be distributed through Gillfor’s six DCs from British Columbia to Manitoba. The two companies are finalizing logistical details and have set a target launch of Jan. 1, 2024.

Canfor Corp. reported a Q2 loss of $67 million, compared to profits of $531.6 million a year earlier. That was the third consecutive quarterly loss for the company, and includes a net $57.4 million reversal of a previously recognized inventory write-down. Sales of $1.45 billion were down from $2.17 billion a year earlier.

Western Forest Products reported a Q2 net loss of $20.7 million, compared to a $17.7 million loss in the previous quarter and net income of $38.6 million in the comparable period of 2022. Lumber sales fell to $212.4 million from $351.8 million. The 40 percent decline was attributed to lower prices and reduced shipment volumes.

Sales of existing homes dipped by 0.7 percent in July from the previous month. Despite sales gains in more than half of all local markets, declines in the Greater Toronto Area and B.C.’s Fraser Valley offset gains in Montreal, Edmonton, and Calgary. The actual (not seasonally adjusted) number of transactions came in 8.7 percent above the previous July—the largest year-over-year national sales increase in more than two years. (Canadian Real Estate Assoc.)

The value of building permits rose 6.1 percent in June to $11.6 billion, but residential permits fell by 1.8 percent to $6.9 billion. Ontario contributed to most of the decline, plunging by 11.4 percent. Across Canada, permits for 22,000 new dwellings were issued in June. (StatCan)

The latest digital edition of Hardlines Home Improvement Quarterly is now online. In this issue, meet the winners of the 2022 Outstanding Retailer Award for Young Retailer of the Year, get the lowdown on the top 20 retail groups in the industry, and read up on the hottest products in outdoor living. The print edition of HHIQ has been mailed to 11,000 dealers and store managers across Canada. If you’re not getting your own copy—it’s free to retailers and retail head offices, so click here!

The Lowe’s banner in Canada will soon be a thing of the past. On July 27, new RONA+ banners went up at 10 Lowe’s stores in southern and southwestern Ontario. The former Lowe’s stores which have converted are located in Ancaster, Brantford, Cambridge, Hamilton, Kitchener, Niagara Falls, Sarnia, Waterloo, and the two stores in Windsor.

RONA inc. developed its RONA+ banner after Lowe’s Cos. sold its Canadian banners to Sycamore Partners, a New York City-based private equity firm, earlier this year. Among the stores they acquired were 61 Lowe’s stores in this country, all of which will eventually be converted to RONA+.

Lowe’s products will continue to be available—and gift cards and warranties will continue to be honoured—in the new-look RONA+ stores.

The 10 stores had grand reopening deals on July 29 and 30 that included “seasonal and stylish home décor essentials and building materials,” according to RONA marketing. The celebrations included food, activities for kids, prizes of RONA gift cards, and music.
RONA inc. has called the conversions “the first step in a wider plan aimed at redefining how Canadians shop for home improvement, creating new opportunities to improve how we serve them.”

Christian Nelson (shown here) is the store manager at the Niagara Falls store. He’s excited by the new look and stresses that all 160 associates at this location have been heavily involved in the conversion. He is quick to point out that the changes are more than simply cosmetic.

“The ‘plus’ in RONA+ means lower prices on thousands of articles in the store. It means a stylish assortment—more stylish than our competitors. It means brands that people know and love, flexible payment options, and our price match plus 10 percent guarantee.”

RONA inc. has also announced the next 15 Lowe’s store that will be converted to the new RONA+ banner in Ontario. They are in Barrie, Belleville, East Gwillimbury, Kanata, Kingston, London North West, London South West, Maple, Nepean, Orleans, Oshawa, Ottawa Gloucester, Pickering, Sudbury, and Whitby. The stores will remain open during the conversion.

The timetable for the conversion or disposition of the remaining 36 Lowe’s stores in Canada has not been revealed.

Including its remaining Lowe’s stores, RONA inc. operates or supplies some 425 corporate and affiliated (independent) home improvement stores under the RONA, RONA+, Réno-Dépôt, and Dick’s Lumber banners.

Vendors are waiting to get product in—and out—because of B.C. port strike

The strike by workers at ports in British Columbia has been dragging on, and off, for almost four weeks. The work stoppage ties in with the approaching busy shipping times for many vendors, especially those trying to get product to their retail customers in time for the Christmas selling season.

Richelieu Hardware, the country’s largest cabinet hardware and fastener company, is feeling the effects of the strike as far east as Montreal, where it has its headquarters. According to Eric Daigneault, general manager of divisions at Richelieu, the strike has had an impact on many levels, “mainly on new product launches and restocking on a few existing products.”

However, Daigneault admits that the disruption will cause big delays, which Richelieu has tried to mitigate. “We believe the strike will have caused delays of three to four days for each day the strike has lasted. This forced us to use some airfreight and rerouting to other ports in our supply chain.”

Erin Wizenberg is the general manager of Holland Imports, a major hardware supplier based in Surrey, B.C. “The strike has definitely affected us,” she says, adding that it poses a two-fold problem—getting ships in to port and getting product out.

Holland Imports carries a wide range of products through five divisions, and Christmas is a big one for them. But those products need to ship as soon as possible.

In-bound containers of goods that are on their way in to port or just came in are not moving. “So we’re looking at a five-day delay, even for ships that are in port. However product that needs to be picked and packed is still sitting on the water. We have 15 containers that are delayed and in the past five days only two of them have been retrieved.” Holland Imports has another 20 to 30 containers still sitting in China, most of them filled with Christmas products.

But ships are like airlines. If there aren’t enough “passengers,” they can cancel a stop, bypass a port, or cancel a ship altogether. This practice is called blank sailing, something companies like Holland Imports must contend with at the best of times.

“Christmas goods should be loaded now—and with blank sailings, that’s being pushed out 20 days. So it will be too late to pick and pack and get it out to our retailers before the end of September, otherwise my customers won’t take that product.”

Wizenberg says the delays aren’t affecting the cost of products directly, but holding costs for products that are stuck keep rising. Even ships that are heading to Vancouver are slowing their arrival times, she notes. “Because of the delays in port, even ships that are out on the water are slowing down, to save gas and decrease the amount of time sitting in port.”

Daigneault at Richelieu agrees that prices haven’t been affected. “Not so far, but it means headaches with our retailers and for our supply chain staff trying to find alternatives.”

Independents’ market share plateaued post-Covid: Hardlines Retail Report

Canada’s retail home improvement industry returned to something like normality in 2022 after seeing exceptional growth in 2020 and 2021 due to the effects of the pandemic, the 2023 Hardlines Retail Report has found.

It’s not only that high borrowing costs have curtailed the appeal of homebuying, leading to fewer reno projects. Household spending has also become more diffuse since the end of pandemic lockdown restrictions opened up more options.

When people were more or less limited to their homes, money that might otherwise have been budgeted for travel or dining out got redirected to improving the home as a multi-purpose space. Now those options are all back on the table.

For many dealers, this slowdown may come with some relief. The boom in sales activity during 2020 and 2021 came at the price of staffing headaches and uncertainties around supply chains.

The 2023 Hardlines Retail Report looks at how all these trends have translated into sales numbers, including breakdowns by banner, province, and store type. Sales at big box stores, for example, remained strong in 2022 even as they dipped slightly from the previous year.

During 2022, the Top Four retail groups further solidified their market dominance. While independent dealers saw sales rise in absolute terms, their growth failed to keep pace with the industry average of growth—after the temporary advantage they gained during Covid restrictions on large retailers.

Our exclusive and proprietary research offers insights on hot trends from private labels and e-commerce penetration to rewards programs and the challenges of consolidation. The Report also presents Hardlines’ calculations of RONA’s and Home Depot’s omnichannel growth, and forecasts for their growth in 2023 and 2024.

(The Hardlines Retail Report is now available for purchase. As a Premium Member-Subscriber, you save more than 20 percent on your order, and more than 30 percent when you buy the Retail Report bundled with its companion, the annual Hardlines Market Share Report. Click here to order!)

In what some dealers are calling the worst storm they’ve seen in their lives, certain parts of Nova Scotia got hit by up to 250 mm of rainfall last week. Roads and bridges in some counties got washed out—and the main rail line through the province was cut. Two children were swept to their deaths by the flooding and a 52-year-old man also lost his life. The province declared a State of Emergency.

Hardlines reached out to dealers in the affected areas for comment. “Bedford, Sackville, and Metro Halifax were hard hit,” said Andrew Payzant, president and CEO of Payzant Building Products Ltd., which has a group of Home Hardware Building Centres in Nova Scotia and New Brunswick.

“Many roads and infrastructure are still closed, and many people have badly damaged homes. Personally, all our nine stores are okay except for our Sackville [Nova Scotia] store. There, we have major flooding of the retail store as well as a warehouse and yard (pictured).

“A huge shoutout to our team that worked overtime to get open again the next morning, ready to serve the community.” Payzant also acknowledged the support from Home Hardware corporate, which opened up its Atlantic distribution centre in Debert, N.S., “so we could send a truck and bring in hundreds of badly-needed sump pumps and dehumidifiers to serve the community.”

Curtis Saulnier, manager of Nova Scotia Building Supplies in Blockhouse, N.S., said that his firm’s sister store in Chester, N.S. (both stores are on the south shore of Nova Scotia) got flooded. “Probably a $100,000 loss. Anything in a box—doors, windows—it acts as our warehouse.” Saulnier said the management hoped to have the losses cover by insurance. “The water shot right up through the floor drains.”

Saulnier said it was his day off on July 22, during the peak of the storm, but he phoned in to say he was coming to help at the Blockhouse store. He made it 15 minutes down the road before he was turned back by authorities. Lunenburg County, home to both stores, got hit really hard. He said the store has provided a large supply of sump pumps for residents. Fortunately, getting more supply was not a problem because the storm was so localized.

At Wolseley Canada, Alex Nahvi has been named general manager for Ontario. A 21-year veteran with the company, he assumes responsibility for various aspects of its operations in the province, including organizational planning, budgeting, cost control, and sales. Most recently Nahvi spent five years as the director of residential trade and counter in the Upper Midwest region, followed by three years as the director of branch management.

Rick Mather has been appointed vice-president of retail operations at Peninsula Co-op. Mather has spent over 30 years in retail management that included leadership roles at Woolco/Walmart Canada, where he held the position of store manager in Whitehorse and later in Victoria. Most recently, he served as the VP of retail operations at a start-up retail company.

DID YOU KNOW…?

… that anyone trying to decide whether to go to the International Hardware Fair in Cologne, Germany, next spring now has even more reasons to do it? We already told you about the incredible Rhine Cruise we are adding to this event. Now, we’ve found a new cruise partner that will let you stay on board during the entire show. That means you don’t have to book a separate hotel to stay while attending the show. The Hardware Fair runs March 3 to 6, 2024. The cruise leaves Cologne March 6 and arrives in Amsterdam March 12. It’s going to be an amazing event. Click here for more info!

RETAILER NEWS

A Home Hardware Building Centre on Tecumseh Road West in Windsor, Ont., sustained $100,000 in damage because of a fire July 21, according to the Windsor Fire Service. There were no injuries and the store reopened for business the next day after the 11 pm fire. Store management told CTV News that they believe the fire started outside the building in a garbage can. Most of the damage is outside the store at the front, with the exterior cladding and signage charred. There was also water damage inside the store.

Canac has a new store in the works in Salaberry-de-Valleyfield, Que. “We already have openings planned in 2024 in Sorel as well as Rivière-du-Loup, which would give us reason to believe we’ll be in a position, if all goes according to plan, to serve the people of Valleyfield in the middle of 2025,” marketing director Patrick Delisle told Le Journal Saint-François. Like most Canac outlets, the store will occupy some 40,000 square feet and employ between 100 and 125 staff.

Loblaw Cos. Ltd. reported Q2 net earnings that reached $508 million, from $387 million a year earlier. The company attributed the 31 percent gain largely to a $111 million tax charge that bit into its Q2 earnings in 2022. Revenues for the quarter rose 6.9 percent to $13.7 billion, while grocery same-store sales were up by 6.1 percent.

Dixon Home Hardware Building Centre in Fergus, Ont., celebrated its 100th anniversary last week. The store has been family-run since 1923. Current dealer-owners Jeff and Jason Dixon joined the business with their father in the 1990s. In 2004, the Dixons brought the store under the Home Hardware banner.

Donna Hansbrough, 68, got her job back as a Lowe’s associate in Rincon, Ga., after she had been fired a month earlier. Attempting to stop three suspected shoplifters, she had grabbed onto a shopping cart in the parking lot and allegedly got punched in the face three times for her trouble. Lowe’s and other big retailers have strict policies that forbid associates from confronting shoplifters. Hansbrough’s case created a social media backlash—with many customers calling for a boycott of Lowe’s. The company reinstated her “after senior managers became aware of the incident,” Lowe’s told the media.

“Sensory-sensitive” shoppers will have their own time to shop at Walmart, as the stores’ physical environments will be toned down. The discount retailer announced a two-hour window, every Saturday from 8 a.m. to 10 a.m. through August, in which stores will dim their lights, radios will be turned off, and switch to static images on TV monitors. The accommodations, the company says, are an attempt to improve the shopping experience for autistic people and those with sensory processing disorders.

U.S. hardware wholesaler Orgill is making investments to keep up with the unprecedented growth it has experienced over the past three years. It will expand its field sales team by as much as 10 percent, in addition to the more than 400 field service people it currently has working with its retailer customers in North America and around the world. Meanwhile, construction of an 800,000-square-foot distribution facility in Tifton, Ga., continues. The new DC will replace Orgill’s existing Tifton facility, which opened in 1995.

RDTS Canada has forged a partnership with Liteline, a company specializing in lighting fixtures for residential and commercial spaces. RDTS will support Liteline with merchandising to the Canadian market of Liteline’s Trenz-branded retail product lines.

Retail sales slid by 0.2 percent to $66 billion in May. Sales increased in five of nine subsectors and were led by hikes at motor vehicle and parts dealers, up 0.8 percent, and food and beverage retailers, which rose by one percent. In LBM and garden categories, sales were down 1.5 percent from April and 8.6 percent from the previous May. (StatCan)

Sales of existing U.S. homes fell by 3.3 percent in June to an annual rate of 4.16 million units. It was the lowest level of sales in five months. On a year-over-year basis, home resales tumbled by 18.9 percent. (National Association of Realtors)

U.S. housing starts declined by eight percent in June after a spike in May. The multi-family segment was hardest hit, but single-family projects were down by seven percent. The value of building permits issued in June was down 3.7 percent. (U.S. Census Bureau)

The latest instalment of the Hardlines podcast series, What’s In Store, has gone live. This episode features a lively discussion about the importance of e-commerce and why getting started needn’t be daunting for independent dealers. You’ll hear Hardlines editor Steve Payne in conversation with tech guru Romain Mercier, partner and co-founder at Vancouver-based PS&Co Data Lab. Sign up now for free and get updates about our latest podcasts in your inbox!

Online sales in Canada dropped by eight percent in the first quarter of 2023. More and more vendors are selling direct to consumers, competing with their own retail base. And 66 percent of customers expect retailers to know what they want and understand their needs—but only 32 percent of retailers have the full ability to turn their data into customer experiences.

These were some of the insights shared by at the Retail Council of Canada’s STORE23 conference, held at the end of May. Rob Graf (pictured), global VP and general manager, retail, for Salesforce, suggested that the solution to this discrepancy is for retailers to offer “unified engagement.” He explained that meant delivering a marketing, digital commerce, and in-store experience that is cohesive.

Retail customer “engagement” has come a long way since the first loyalty program in our industry—the introduction of Canadian Tire “money” in 1958. The idea back then was to have a customer think of Canadian Tire every time they peeked into their wallet and saw the impending “discount” just waiting for them at the store. But Canadian Tire money provided no insight into a customer’s behaviour, spending patterns, shopping habits, or preferred brands.

Now, 65 years later, Canadian Tire money has grown into the Triangle Rewards program, which provides a point of customer engagement for all of Canadian Tire’s banners, including Marks, PartSource, and Party City. Canadian Tire reported that 11.3 million Canadians were members of its Triangle Rewards program by the end of 2022. Sales of Triangle Reward members are outpacing that from non-members.

But the sales angle isn’t really the point. The point, from the Tire’s point of view, is to fully understand what its customers want, where they are spending more, where they are cutting back, and how they respond to promotions. Canadian Tire wants to possess all of the metrics of consumer behaviour in its auto, hardware, and leisure strongholds.

How companies can access federal funding to build their digital offering

A recent Hardlines survey showed that independent home improvement retailers were averaging close to 0.1 percent of sales being conducted via e-commerce.

Meanwhile, Canadian Tire made headlines in March 2022 when it announced that it would invest $3.4 billion in its “omnichannel” experience—in other words, a mix of bricks and mortar and e-commerce. Where can mom and pop stores find comparable money to invest in their digital futures? They can’t.

But one Vancouver-based marketing expert who specializes in customer engagement says that the independent dealers in our industry are “well positioned to catch up” with e-commerce. Partly, he says, this is a function of e-commerce platforms that are plummeting in price. But it’s also because effective investments in technology do not need to be grandiose to be effective.

“Covid highlighted to everybody the need to adopt more digitalization in their business—to survive,” Romain Mercier (pictured), partner and co-founder of Vancouver-based PS&Co Data Lab, told Hardlines in a recent “What’s In Store” podcast. (The podcast will distribute to subscribers next week. To sign up—it’s free—click here.)

“The Canadian Digital Adoption Program (PDAP) is $4 billion of government funding that is available for all Canadian organizations that generated over $500,000 in revenue in one of the previous three years. There are a few other criteria that you can review at the program’s website. But that fund provides each organization $15,000 in funding.”

“These funds could be used for brands to create a digital logo—or create a website. Businesses, Mercier says, can ask themselves “what would we need if we wanted to do a direct-to-consumer sale of a product? Or a distributor could use it to create digitalization in their supply chain. Or maybe put a QR code on their products to better manage their inventory.”

“I would strongly urge your subscribers to look into it because there’s a lot of very talented experts out there certified by the government that can help them, over multiple years, make sense of how we move forward,” Mercier said.

(Romain Mercier is one of the exciting speakers at our Hardlines Conference in Whistler, B.C., this fall! For a full speaker lineup—and to register—click here.)

Quebec chain Canac is cranking up the heat on expansion

Canac is pursuing an aggressive growth strategy, with several new store openings in the works. It’s investing $20 million to open a 40,000-square-foot store in Sorel-Tracy, about 100 km down the Saint Lawrence from Montreal. The family-owned Quebec chain expects to break ground next month in anticipation of an opening next spring.

“We’re currently opening one or sometimes two outlets a year,” CEO Martin Gamache said in an interview with La Presse. “We aim to do at least two and eventually a few more per year.”

Sorel-Tracy is just half an hour from Contrecœur, where Canac opened its 32nd store, including a warehouse, at the beginning of this year following pandemic-related delays. That site anchors the Cité 3000 commercial hub, part of an extension to the Port of Montreal along its south shore.

Meanwhile in Magog, a planned store is starting the process toward regulatory approval from scratch. Residents already approved a plan that would involve Canac assuming responsibility for a neighbouring strip of roadway. The enterprise is now seeking the green light on a revised plan that leaves that strip in municipal hands, but it can still fall back on the original approval if the second vote fails.

At the same time, Canac is pressing patriotic buttons in response to the acquisition of RONA by U.S. private-equity firm Sycamore Partners. Martin Gamache said of the rival that he doesn’t “believe they can go back to those values, family values like ours.”
Rivière-du-Loup is another market where Canac’s entry has faced delays. Work on that store is now expected to begin by early 2024, with an opening to follow in the fall.

All told, Canac has said it is investing $200 million in its expansion efforts over the next five years. In addition to store openings, those include a new fulfilment centre opposite Quebec City, on the south shore of the St. Lawrence River, this coming fall.

By 2025, the chain will have doubled the footprint of its Drummondville warehouse to one million square feet. “We also plan to invest in automatizing that centre because we want in the short term to be transactional online and deliver directly to our customers,” Gamache told Le Journal de Québec.

In an industry where succession is a major concern for many independents, especially family stores, the Moisans of Saint-Raymond, Que., have been lucky. Cousins and co-owners Marianne and Mathieu represent the third generation at the helm of the business, where she is comptroller and operations director and he heads up sales and procurement.

Marianne and Mathieu won the Outstanding Retailer Award last year in the Young Retailer category. Both started working in the family store in their early teens, and both knew by early adulthood it was where they wanted to settle in their careers.

But family policy dictated they fly the nest first and gain experience in another sector. Matthieu spent two months interning in construction estimation for a store customer. “It really clarified for me that my place was in the hardware store,” he reflects.

For her part, Marianne spent nearly a decade working for a Quebec-based aviation firm that contracted with the U.S. military to rent planes for training before qualifying as a Certified Public Accountant. That process required a two-year internship, “and of course my parents didn’t want it to be at the hardware store. So I left precisely to look elsewhere [in order] to follow the family rule.”

Family businesses can be fraught, with the potential to muddle personal and professional conflicts. But the Moisans agree they’re lucky to have complementary gifts and temperaments. The division of labour, Mathieu says, “almost happens by itself”. Marianne notes that she resembles the pair’s grandmother Thérèse, who was “really about numbers”, while Mathieu shares their grandfather Paulin’s “orient[ation] towards human relations” and “connections with vendors and customers.

“We still have the same vision, the same mentality,” says Mathieu. “That helps everything to go well.”

(Marianne and Mathieu are the subjects of an in-depth profile in the latest issue of our print magazine, Hardlines Home Improvement Quarterly. HHIQ is free to dealers. Click here to learn more and get your subscription today!)

J.P. Towner has stepped down as CFO of Dollarama to the take up the same position at RONA inc. His appointment is effective Oct. 16. A graduate of Laval University and Harvard Business School, he has more than 15 years of corporate and financial experience, including time at BMO Capital Markets and Pomerleau Inc.

DID YOU KNOW…?

… that the biggest networking event of the year will be this year’s Hardlines Conference! It takes place Oct. 17 and 18, 2023, at the Fairmont Chateau Whistler Resort, and you don’t want to miss this one. The two-day program includes such speakers as Jean-Sébastien Lamoureux, SVP of affiliates, wholesale, and public affairs at RONA, and Geneviève Gagnon, president of three companies including Gagnon La Grande Quincaillerie. Hardlines Weekly Report member-subscribers can take advantage of a 20 percent discount on registration, while special pricing is available to dealers.

RETAILER NEWS

Lowe’s Cos. will roll out a new department to 300 of its stores south of the border—a “one-stop shop” that will sell farm, ranch and outdoor products, including brands such as Carhatt and Wrangler. The obvious strategy here is to lure rural shoppers from Tractor Supply. “Our penetration of rural stores gives us an opportunity to drive sustainable profit growth due to the much lower expense base that’s required to operate these stores,” Lowe’s CEO Marvin Ellison said during a recent earnings call.

Home Depot is officially kicking off Halloween in July. “Enthusiasts are decorating earlier than ever before,” the company says on its website, which features a full lineup of monsters and ghosts to follow on the success of “Skelly,” its 12-foot skeleton decoration. Besides a 13-foot Jack Skellington figure (from The Nightmare Before Christmas), avid trick-or-treaters can meet Lethal Lily the Witch, a high-tech figure that stands seven feet high and has eight servo motors in her head that replicate facial movements with moving mouth and rolling eyes.

Ottawa’s Carlingwood Shopping Centre, which is anchored by the largest Canadian Tire in the country, is for sale. The “Remarkable Retail” mega store opened last fall. At 135,000 square feet, it is one of two such footprints operated by Canadian Tire—the other being in Welland, Ont. The Canadian Tire store at Carlingwoood has 19 years remaining on its lease. The sale of the mall is being handled by TD Securities and commercial real estate giant Cushman & Wakefield. Other anchors at the mall include a Loblaw grocery store, a Rexall pharmacy, and a Dollarama.

SUPPLIER NEWS

RDTS Canada is celebrating the 10-year milestone of its partnership with French home improvement retailer Bricomarché and marketing agency CPM France. The relationship began with the launch of the Imagine merchandising program in June 2013. RDTS and Bricomarché began working together to develop the program, an idea that had been germinating since 2009, in 2011. Imagine garnered CPM France an award from point-of-purchase trade group POPAI in 2018.

The annualized pace of total housing starts for all areas of Canada increased 41 percent in June (281,373 units) compared to May (200,018 units). This represents the largest month-to-month rate change in the last 10 years. This is mostly due to multi-unit starts which accounted for about 82 percent of total starts. (CMHC)

Sales of existing homes in Canada logged a 1.5 percent increase between May and June, a smaller gain than in April and May. Sales for the month were up in a little over half of all local markets, with gains in British Columbia and Alberta offsetting fewer sales in the Greater Toronto Area. The actual (not seasonally adjusted) number of transactions in June came in 4.7 percent above June 2022. That was the largest year-over-year national sales increase in two years. (CREA)

Amazon, the world’s largest company with US$514 billion in revenue last year, gets 41.5 percent of Canadian e-commerce spending by consumers, data shows. This compares to Amazon’s 37.6 percent e-commerce market share south of the border, 51.1 percent in Germany, and 25.2 percent in the U.K.

Retail brands continue to find ways to focus on projects, initiatives, and causes that tie in with their communities while providing a focus for the philanthropic efforts of both customers and staff.

Take RONA inc. The giant home improvement retailer has recently redefined the mission of its charitable arm, the RONA Foundation. In the past, the foundation had worked to raise funds to contribute to the improvement of the lives of children and their families around the world–especially those living with disease, in poverty, or with disabilities.

Now, the foundation is continuing in a similar vein, but bringing the objectives closer to home. Its new mission is to improve the quality of life of Canadians in need by revitalizing their living environments or making it easier to access housing. In particular, the RONA Foundation aims to help victims of domestic violence and their children, low-income families, and people with disabilities or mental health issues.

The RONA Foundation plays “an essential role in the vision we have for the future of RONA,” says Catherine Laporte, vice-president of marketing at RONA. “Housing is a basic need for individuals and families. We decided to focus our philanthropic efforts on this cause because we believe that by helping people in need to have access to a safe home and a healthy living environment, we can improve their quality of life and offer them a better future,” she adds. Given RONA’s role in the construction and home improvement sector, “It’s a natural choice for us to opt for this mission, which is perfectly aligned with our business operations.”

At The Home Depot Canada, doing good is also an important part of the corporate identity. The Home Depot Canada Foundation, through its Orange Door Project, is committed to battling youth homelessness. It provides funds to organizations working with youth at risk of—or experiencing—homelessness. By 2030, the company intends to have invested $125 million toward this cause.

Recently, Home Depot Canada launched a new summer hat, the sales of which are going to the foundation’s TradeWorx program. TradeWorx offers at-risk youth access to resources and training for a career in the trades.

But a good cause is part of the DNA of most retailers. At Home Hardware, dealer-owners worked with Tree Canada over the past 30 years to plant more than 30,000 trees in communities across the country. That’s in addition to the many causes the retailer takes up both nationally and at the store level.

Timberkids Charitable Foundation gives TIMBER MART dealers a platform to help give back to their local communities. Every year, TIMBER MART members from across Canada make numerous donations to help their local children’s charities and Timberkids matches them. It’s an investment, the company says, in improving the lives of children and the well-being of future generations of Canadians.

Hudson’s Bay Co. has a deep history in Canada, including with Indigenous peoples. So the recent alignment of its Hudson’s Bay Foundation with NIB Trust Fund (NIBTF) makes sense. The fund focuses on the challenges faced by First Nations communities. As part of this partnership, the Hudson’s Bay Foundation has committed $1.2 million to NIBTF over three years to address the impacts of the Indian Residential School system and support Indigenous communities, working toward further reconciliation.

Examples will abound in this industry alone of retailers doing good. At a local level, most stores find ways to give back to their communities and their customers in their own way. These efforts become a way to rally the community, inspire staff, and provide a balance of commerce and caring for store owners.

Cologne Hardware Fair is a compelling draw for Canadians. So why don’t they go?

Eisenwarenmesse – International Hardware Fair, is returning to Cologne, Germany, in 2024. The biennial event will be held from March 3 to 6, 2024, and it has already experienced strong response from the hardware industry, as major companies from Germany and 45 countries around the world have so far confirmed their participation at the world’s largest hardware show, with confidence among exhibitors returning after many took a pause in 2022.

But only a handful of them will be from Canada.

“The high demand confirms the importance of the Eisenwarenmesse – International Hardware Fair as the most important global platform for the presentation of new products, services, and technologies, as well as for maintaining business relationships from the hardware segment,” said Matthias Becker, the show’s director. “We are very optimistic that we will achieve the planned exhibition area of 165,000 square metres [1.8 million square feet] in a total of six exhibition halls.”

Hardlines has attended this show for decades. We are always amazed, and somewhat confounded, by the lack of North American, and especially Canadian, participants. The show has proved an effective springboard for many Canadian vendors to reach foreign markets (not just the U.S.!). While the major retailers send the occasional team, regional retailers and the buying groups consistently overlook this show—at their peril. We encourage Canadians to consider this as part of their search for new products or customers.

This year, dealers and suppliers alike have even more reason to consider Germany next spring. Hardlines, with the Building Supply Industry Association of B.C., has organized a Rhine cruise from Cologne to Amsterdam aboard the Avalon Passion. It departs Cologne on March 6 and arrives in Amsterdam on March 13. (Contact Thomas Foreman, president of the BSIA of B.C., as soon as possible to guarantee your spot.)

Besides the new products on the show floor, the International Hardware Fair continues to build its range of educational services and workshops to make for a more rounded experience. “DIY Boulevard” provides a showcase for dozens of companies to present their products in an environment resembling the checkout setup in stores. Seminars historically have provided platforms for some of the newest ideas and leading retail trends. And networking opportunities can connect delegates with some of Europe’s top DIY retailers.

(For more information on next year’s show, click here.)

We sneak a peak at Home Depot Canada’s latest stylings for the Christmas season

Home Depot Canada held a product preview recently to showcase its assortments and design trends for the Christmas holiday season. Home Depot is growing this category and working on building awareness among its customers that it’s a destination for more than tools and building materials.

The retailer will launch its Christmas collection in the first week of October, as its Halloween push starts to wind down. The majority of the holiday seasonal assortment will be available online only, so Home Depot’s intention is to drive customers to its website as well as to its stores.

While repair and reno projects ensure strong sales through the first half of the year, seasonal sales shore up its business in the second half of the year. “Christmas is very important for us. Christmas and Halloween both drive traffic into our stores,” says Konstance Sevastos (shown here), divisional product merchant for the Christmas and Halloween categories.

She talks about how easy it is to get customers into the store during the first half of the year: spring and early summer are important home improvement times for consumers and contractors alike. But getting people to think of Home Depot as a destination for décor, especially seasonal items and accessories with real design elements, is a newer proposition.

“The back half of the year is different; these products bring people into stores in the back half.” She says people readily consider Home Depot as a destination for products like power tools and lumber. “But we’re trying to get customers the knowledge that we have other collections.”

“People don’t realize it’s all available from Home Depot,” says Cindy Jardim, who oversees trend and design for the retailer. “It’s not what people expect from us.”

EDRA/GHIN, the combined global trade body for home improvement retailers, has launched a collaborative taskforce to help the sector reduce its greenhouse gas emissions.

The initiative specifically targets “Scope 3” emissions, which address the lifecycle impact of retailers’ products on the environment. Factors involved range from the efficiency of the retailers’ supply chains right through to how their customers use—and dispose of—the products they buy for their homes.

The following leading home improvement retailers from across the world have agreed to act as the founder members of the taskforce: Adeo (Europe, South America, South Africa); Bunnings (Australia & New Zealand); Cainz (Japan); The Home Depot (North America); Hornbach (Europe); Kesko (Scandinavia); Kingfisher plc (UK & Europe); OBI (Europe); and Sodimac (South America).

For retailers, Scope 3 greenhouse gas emissions make up more than 90 percent of their overall emissions. Given the scale of their impact, they are the most important, but also the most difficult to address, as they fall outside of retailers’ direct operational control.

A range of methods is used to measure and report on companies’ Scope 3 carbon footprints. This causes confusion and inefficiencies for retailers trying to lower their emissions across their value chains and creates an additional burden on their suppliers.

The EDRA/GHIN Scope 3 taskforce will aim to address this challenge by finding a common ground for consistent methodologies in how carbon data is treated through the supply chain. Best practices can be developed in both the reporting but also the acceleration of the home improvement industry’s efforts to reduce Scope 3 emissions. These learnings will also be shared with a wider learning group for all EDRA/GHIN members to benefit from.

In related news, The Home Depot has announced its intention to cut emissions in its outdoor power equipment lines. The retailer expects that by the end of 2028, more than 85 percent of its sales in both Canada and the U.S. of push lawn mowers and handheld outdoor equipment will run on rechargeable battery technology instead of gas. The company anticipates that this transition will reduce over 2,000,000 metric tons of greenhouse gases annually from the exhaust of residential lawn equipment.

“Climate change is a threat none of us can afford to ignore,” said John Herbert, general secretary of EDRA/GHIN. “For home improvement retailers, this is a positive move where we can help them find ways to come together to address one of the fundamental environmental issues for our planet, while developing their business.”

EDRA/GHIN represents 224 retail companies in 78 countries, and the initiative is seen as an important way to unite the industry around this issue. The program was announced at the recent Global DIY-Summit, held earlier this month in Berlin.

(Any home improvement retailer that would like more information and to join GHIN, the global network, please contact info@edra-ghin.org.)

Dale Elliott has departed from his role as CEO at BSH Home Appliances (Canada). Elliott spent 16 years there. His career includes stints with National Hardware, Dremel, Emerson Electric, and Philips.

DID YOU KNOW…?

…that the Q4 edition of our sister publication, Hardlines Home Improvement Quarterly, will feature a special showcase for new products? HHIQ is a traditional print magazine that is mailed to 11,000 dealers and managers across Canada. If you have up to three new products (print-quality photos and maximum 100-word descriptions), please contact our Editor, Steve Payne by July 21. This is a free service—so tell your marketing manager about this and take advantage of the free exposure you’ll get to the entire dealer community!

RETAILER NEWS

A boa constrictor was found in a shrub last week at a Canadian Tire garden centre. Officials at the store in Richmond Square, Calgary, said the non-venomous snake was spotted by an employee. Store employee Jen Bishop, who is knowledgeable about snakes, the Calgary Herald reports, made a makeshift home for the snake where it could warm up until a proper home can be found for it.

Canac is investing $200 million in its expansion efforts over the next five years, including the opening of two new stores per year. This fall, it will open a fulfilment centre opposite Quebec City, on the south shore of the St. Lawrence River.

A man has been arrested after allegedly stealing a forklift from a Lowe’s store in Waldorf, Md., driving it to a nearby Home Depot parking lot, and fatally running down a woman there. The 20-year-old man faces an array of charges that include first- and second-degree murder. The deceased was 73 years old.

One of the most unusual charity events in the home improvement industry was held this past weekend. The Canadian Tire Welland Floatfest saw more than 1,800 people take to the Welland Recreational Canal in flotation devices. The popular annual event is in support of local charities and food banks. Canadian Tire has an almost 90-year history in Welland, Ont., and established its credit card division, Canadian Tire Acceptance (now Canadian Tire Financial Services), in the city in 1961.

As loyalty programs become a more and more integral part of retailers’ strategies, some customers who are non-members of these programs are complaining of a double standard at supermarket checkouts. “Those who follow the system get one price and those who don’t have the skills for the system get another,” retired civil servant Hélène Manuri told TVA Nouvelles, citing older and less tech-savvy customers in particular.

Affiliated Distributors has added The Baron Group, a U.S. co-operative buying group serving independent groundwater systems distributors, into its network. The deal brings independent distributors with almost 100 locations, including one Canadian member, Winnipeg’s Baker Manufacturing, into AD’s pipe, valves, and fittings division.

SUPPLIER NEWS

The past month has seen a spike in lumber prices, partly driven by uncertainty stemming from wildfires in Canada. At the same time, strong U.S. housing starts have driven up demand. Cash prices are up 22 percent from where they were on June 1. Last week, they reached US$420 per 1,000 board feet of Western spruce, pine, and fir (SPF) two-by-fours, according to a report by Fastmarkets. That was up from $343 on June 1 but 74 percent below May 2021’s record high of $1,630.

Construction spending in the U.S. during May was estimated at a seasonally adjusted annual rate of $1.93 trillion. That’s up 0.9 percent from April. During the first five months of the year, construction spending amounted to $740.8 billion, 2.9 percent above the same period in 2022. (U.S. Commerce Dept.)

NOTED

Canada’s Competition Bureau is calling on the federal government to support new players who could disrupt grocery retail. The market for that segment, it says, is concentrated too heavily among a few huge domestic interests like Loblaw and Empire Co. The report concluded that “more competition” is critical to “help bring grocery prices in check” and proposes encouraging independent and foreign retailers to set up shop in Canada.

Since being sold off by Lowe’s Cos. in a deal that closed early in February, RONA inc. has been developing a strategy to manage the future of its 60-plus Lowe’s-bannered stores in Canada. Now, five months in, the retailer has announced its transition plan.

RONA is beginning the Lowe’s stores’ conversion to the RONA banner, but with a twist. The stores will bear a new RONA designation, RONA+. The conversions will start at the end of July and will take place over several months. The first 10 Lowe’s stores to be converted, all located in Ontario, are in Ancaster, Brantford, Cambridge, Hamilton, Kitchener, Niagara Falls, Sarnia, Waterloo, and the banner’s two stores in Windsor.

“This is an important step in our vision for the future of RONA,” said Catherine Laporte, vice-president of marketing at RONA. “With these conversions, we are making a significant investment and renewing our commitment to the RONA brand.” Laporte called the new signage “the first step in a wider plan aimed at redefining how Canadians shop for home improvement, creating new opportunities to improve how we serve them.”

Once considered the retailer’s lead brand while under the ownership of Lowe’s Cos., the Lowe’s stores made some inroads with Canadian consumers, but never achieved the critical mass of its competitor, Home Depot Canada. Of the roughly 440 stores in RONA’s stable of corporate and dealer-owned locations, 61 are Lowe’s big boxes, although none are in RONA’s home province of Quebec, where RONA’s own big box stores are firmly established.

By comparison, Home Depot has 182 stores in Canada, including 22 in Quebec.

As the Lowe’s stores are converted, they will remain open, while guarantees offered by Lowe’s will be honoured, gift cards will still be accepted, and the Lowe’s private brands will remain in the stores’ offering. RONA says it will also continue to maintain its commitment to Canadian vendors and to its affiliated dealer network, who are a key component of the company’s vision.

Vaughn Crofford, former head of vendors’ association CHHMA, dies at 73

Vaughn Crofford, former president of the Canadian Hardware and Housewares Manufacturers Association, has died. After a brief illness, he succumbed to cancer at Lakeridge Health in Ajax, Ont., on June 25.

Born in 1949 in Craik, Sask., Crofford began his career in the late 1960s working part-time at the Federated Co-op in Salmon Arm, B.C., before becoming a full-time clerk in Calgary in 1968. As he once told a CHHMA gathering, “If you grew up anywhere on the Prairies, you know what co-op is all about.”

Crofford rose through a series of management roles in British Columbia and Alberta over the course of 16 years, then moved to Federated Co-operatives’ Saskatoon head office as part of a management team charged with turning around the hardware department. Crofford served as FCL’s director of marketing until 1994, when he made the leap to Ontario—and to the vendor side of the industry—as president of CHHMA, which would become the Canadian Home Products Trade Association in 2021.

During his tenure, the vendor community had to navigate the rise of the large retailers and the power they bring to the negotiating table. He was also front and centre as the industry confronted changing environmental standards. Crofford was a key player in establishing the Canadian Electrical Stewardship Association, which recycles appliances and power tools in British Columbia. “If the important thing is that we reduce the landfill and leave our world a cleaner place, then focus on that and say, ‘how do we get there?’” he once said. “If it’s by adding 10 cents onto the price of a can of paint, then let’s do it.”

Hardlines editor Steve Payne recalls Crofford as a “very collegial and community-minded individual,” who always took time to share his thoughts with the trade media. “He was one of the first people I met when I started at Hardware Merchandising magazine in 1995. He’d patiently explain the industry to me and never failed, at the same time, to tell me an entertaining story.”

Crofford and his life partner, former CHHMA operations director Maureen Hizaka, retired from the organization in 2018. Prior to his retirement, the CHHMA recognized Crofford’s more than 50 years in the industry by inducting him into its Hall of Fame.

In addition to Hizaka, he is survived by his daughters Susan (Ryan) and Sandra (Jamie) and grandson Austin Vaughn Kerr.

We go behind the scenes of Hardlines’ Retail Report in our latest podcast

The Hardlines Annual Retail Report will be published later this month, giving readers access to an exclusive and comprehensive overview of the state of the industry in Canada. In anticipation of the report’s launch, Hardlines president Michael McLarney has shared a preview of its insights in a new podcast.

The industry has evolved in the years since the first editions of the Retail Report were published. With the consolidation of smaller groups and chains, there are simply fewer players to keep track of in absolute terms.

“We’ve seen so many players come and go,” McLarney says, “but that just means the remaining players are more complex, more multifaceted, and with further reach.” Fewer regional banners, for instance, has translated into more data to crunch at the national level.

Hardware, home improvement, and building materials make up a sizeable—and growing—chunk of retail sales in Canada. The Retail Report puts the annual sales total at more than $61 billion. “That’s almost 10 percent of all retail trade in Canada.”

It’s a figure that “shows tremendous growth through [the pandemic]. That’s something we’ve all known anecdotally but Hardlines is the only organization that actually measures that.”

The report, however, goes beyond the scale of the industry as a whole. “We’re also drilling down to understand a whole series of things about the industry … not just sales in total but how much comes from big boxes” and other formats, McLarney adds. That includes a breakdown of online sales, a new metric for the report.

To get all this data, Hardlines carefully examines the records of publicly traded companies, while a survey of dealers helps to fill out the picture for the independents. “It’s a lot of work: we do a lot of number crunching. We have a spreadsheet the size of a JumboTron scoreboard at a Blue Jays’ game.”

“What we do is completely exclusive; no one else has this information,” the Hardlines founder stresses. When major newspapers report on industry stats, “they’re quoting our numbers.”

(You can sign up now for free and get an email alert when new podcast episodes are released!)

The North American Hardware and Paint Association will host its 2023 NHPA Independents Conference, Aug. 2 and 3 in Dallas. The industry-wide event brings together retailers, wholesaler representatives, vendors, and other channel supporters.

Over the course of two days, the conference will share retailer success stories, provide opportunities to share experiences and best practices, and help members of the independent channel expand their networks.

“We are counting down the days until we can gather with exceptional members of the channel who are committed to the continued growth and evolution of the independent home improvement industry,” says NHPA president and CEO Bob Cutter. “We are honoured to be the place where the industry’s most innovative, progressive minds come together to learn from each other and choose to excel.”

In addition to opportunities to network with peers and partners, the conference also features keynote addresses from former executives of Amazon and Google. Panels of leading retailers will discuss how they have used technology to solve some of their toughest operational challenges.

“We have business problems, and we have to leverage technology to combat those problems because consumers are engaging with businesses through technology,” says keynote speaker Chris Hood, former head of business innovation and strategy for Google. “It’s no longer about trying to adapt. It’s about accelerating your digital outcomes so you can keep up with consumer demands.”

“We are very excited to be supporting the NHPA Independents Conference,” says Boyden Moore, president and CEO of Orgill, a key sponsor of the event. “This conference serves as a hub of innovation and idea generation for independent dealers of all shapes, sizes, and distribution affiliations. We look forward to the opportunity to connect across the channel at this year’s event.”

(A limited number of tickets remain for the industry event of the year. For the best rate, go to www.YourNHPA.org/conference to purchase an individual ticket or a table of six or eight.)

ATTENTION VENDORS: SEND US YOUR NEW PRODUCTS!

“Hardlines and its sister publications are an excellent way to get the word out on new products. While we can’t guarantee we will feature your product releases, we can guarantee one thing: if you don’t send them to us, we can’t choose your products for our editorial content! This fall, we will publish a special 2024 Products Issue of Hardlines Home Improvement Quarterly, our 11,000+ circulation trade magazine for retailers. Send your products to our editors Geoff McLarney or Steve Payne.

DID YOU KNOW…?

… that the latest episode of the Hardlines podcast series, What’s In Store, is now live? In this instalment, Hardlines’ own Michael McLarney discusses the forthcoming edition of our Annual Retail Report. Learn how Hardlines measures the size of the industry, what we count, what trends and challenges dealers are facing, and where their sales are headed. Sign up now for free and get updates about our latest podcasts in your inbox!

RETAILER NEWS

The Home Depot Canada Foundation is releasing a new summer hat, with proceeds going to the foundation’s TradeWorx program. TradeWorx offers youth experiencing, or at risk of, homelessness access to resources and training for a career in the trades. (Order one for this good cause here.)

Home Hardware Stores Ltd. has won the top large fleet award from the Private Motor Truck Council of Canada. Judging is based on each fleet’s overall safety regime and over-the-road safety records. Home Hardware currently runs 148 tractors and 605 trailers. The fleet ran 20.8 million kilometres last year. According to trucknews.com, Home Hardware is a 10-time winner of the award.

IKEA Canada has revealed a new mascot on TikTok and is inviting feedback on its name. Social-media followers are asked to choose from Billy, Vän, Hex, or Blue as the moniker for the cartoon-like builder. Several commenters, however, sought a fifth write-in option: Meatball, after the familiar staple of the chains’ restaurants.

Home Depot will pay US$72.5 million to settle a long-standing class action lawsuit from 272,000 employees in California. The grievances, which date back to 2012, include the company making employees wait, unpaid, while stores were locked at the end of shifts, the suit alleges. Employees were told to be off the clock while they collected and put on aprons, the lawsuit also claims. Home Depot, contrary to state law, also allegedly rounded clock-in and clock-out times to the nearest quarter hour. Home Depot denies the claims but will settle.

Overstock.com is the winning bidder for Bed Bath & Beyond’s intellectual property and digital assets. The bankrupt housewares retailer’s stores are not included in the deal, which is valued at US$21.5 million. Its terms still need to be okayed by a New Jersey bankruptcy court. A separate auction for Bed Bath & Beyond’s Buy Baby Buy franchise was slated for last week.

SUPPLIER NEWS

Gesco Industries LP has completed the sale of its assets to Ironbridge Equity Partners. Gesco consists of floor-covering distributor Shnier; Division9, which supplies commercial flooring products to the architecture and design sectors; and Tierra Sol Ceramic Tile. Ironbridge, a Toronto-based private equity firm, previously owned Gesco from 2007 to 2013.

Chervon has reached an agreement with John Deere that will allow its Ego brand of battery-powered lawn care equipment to be carried by John Deere dealers. The complete Ego range of mowers, blowers, trimmers, edgers, chainsaws, and snow blowers will be available at John Deere dealers in the U.S. and Canada starting in the fall.

Ipex has announced the closure of its acquisition of the Valencia Pipe Co.’s plastic pipe and fittings manufacturing division. This deal brings into the Ipex fold two manufacturing facilities (in Walla Walla, Wash., and Kingman, Ariz.) and a distribution centre, also in Kingman.

ECONOMIC INDICATORS

The Consumer Price Index slowed to 3.4 percent in May. That’s down from a year-over-year inflationary increase of 4.4 percent in April. Gasoline prices were the biggest reason for the slower rate of inflation. If gasoline prices were removed from the basket of goods that the CPI uses for its calculations, inflation would have been running at 4.4 percent, as gas prices have dropped more than 18 percent on a year-over-year basis. (StatCan)

According to studies cited by The Home Depot in its efforts to reduce greenhouse gas emissions from its outdoor power equipment, using a gas-powered lawn mower for an hour creates as much air pollution as driving 483 kilometres in an average car. Running a gas leaf blower for an hour creates the same volume of emissions as a 1,770-kilometre drive, roughly the distance from Toronto to Halifax.

With last week’s announcement of cuts to staff and systems at RONA inc., the company continues to make changes. Following the elimination of 500 positions nationwide, including 200 head office positions in Boucherville, Que., and the planned rebranding of its Lowe’s stores (more on that next week—Editor), RONA has a new boss.

The appointment of Andrew Iacobucci (shown here) to the role of CEO was unveiled just one day after the cuts were announced. Prior to joining RONA, Iacobucci was executive vice-president and chief commercial officer at US Foods, a food distribution company based in Rosemont, Ill. Before that, he spent 10 years at Loblaw Cos. Iacobucci’s appointment takes effect in July.

Iacobucci will live in the Boucherville area, where he will work at the head office alongside the other members of RONA’s senior leadership team. He’s been brushing up on his French and, by the time his nomination becomes effective in July, he will have completed a four-week immersion at a language school in Quebec City to better interact with employees and customers.

Iacobucci will replace Garry Senecal, who had a brief tenure as interim CEO. Senecal started work at RONA in March, one month after Sycamore Partners closed the RONA acquisition. He replaced Tony Cioffi, who had been at the helm since January 2022.

Before joining RONA, Senecal was also at Loblaw. He spent almost a decade with the grocery retailer, most recently as president of its market division. (He didn’t even update his LinkedIn profile with details of his contract at RONA! —your observant Editor.) He will stay on until the end of the year to ensure a smooth transition.

Home Depot warns shareholders to reject offer from Canadian investment firm

Home Depot issued a notice last week advising shareholders to reject a “mini-tender” offer from a Canadian investment firm. TRC Capital has tendered an offer that’s almost five percent below Home Depot’s recent trading price, which the retailer considers unacceptable.

TRC Capital’s bid is for less than five percent of Home Depot’s outstanding common stock, thereby avoiding many disclosure and procedural requirements of the SEC in the U.S. and securities regulators in Canada. Bidders making mini-tender offers don’t have to file any documents with the SEC or provide withdrawal rights to investors who tender their shares.

TRC Capital, based in Toronto, has an ongoing strategy of making offers that are 4.5 percent below current trading prices, and below the SEC threshold of five percent of overall shares. It made a bid for Lowe’s Cos. in 2016. TRC has made similar mini-tender bids in recent months for ScotiaBank, PayPal, BMO, Capital One, Procter & Gamble, and Disney.

The strategy can catch shareholders off guard, driving them in some cases to accede to the bid under the belief that they need to sell off. The mini-tender bids can also allow sellers to avoid brokerage fees, which makes the lower offer price more attractive. The company then hopes to trade the shares on an open market for a high price closer to the actual trading price. In some cases, the very act of making the mini-tender can drive the share price up even more.

In fact, TRC’s strategy is so consistent that the companies it has vied for have issued a standard format press release for warning their investors to reject the offers.

New banners fill home décor and housewares space as retail brands depart

The departure of Bed, Bath & Beyond from Canada is just the latest casualty in an ever-evolving retail shuffle in that category. However, as quickly as they disappear, other retailers move in to fill the void. In BB&B’s case, Canadian Tire stepped in to assume a dozen of the leases at various locations across the country. Soon after, another group announced it is taking over at least 21 former Bed, Bath & Beyond locations—and possibly as many as 30—after that chain entered bankruptcy protection.

Putman Investments—already an operator of multiple retail brands—will launch a new retailer called rooms + spaces. Putman Investments is an Ancaster, Ont.-based company that already owns Toys “R” Us, Sunrise Records, FYE (For Your Entertainment), HMV UK, and T. Kettle (formerly Davids Tea).

Homewares brand Fox Home has made its Canadian debut with a 4,000-square-foot retail space in Toronto’s Eaton Centre. Its offerings include kitchen, tabletop, textiles, bathroom, and decoration categories. Seven more stores in Toronto-area malls are planned by the end of the year. Locations at Yorkdale Shopping Centre, Fairview Mall, Square One Shopping Centre, and Sherway Gardens are slated to open by the end of next month.

Burrow is a relatively new company that is digitally native—and going after the home space in a big way with furniture and accessories. Its head office is in New York and its Canadian office is in Vancouver. Stephen Kuhl (shown here), with business partner Kabeer Chopra, established the company in 2017. Their business plan was to design and package furniture that could be delivered by mail and assembled easily.

“What if we could design all the furniture to ship in the mail?” Kuhl tells Hardlines. While he observed that some companies are already doing something similar, he asks: “Then why not design better?”

Burrow relies on good design that is modular even after assembly, he says. A line of outdoor patio furniture features powder-coated stainless steel and aluminum parts. The components can easily be pulled apart for storage. “It’s about as durable as you can make outdoor furniture.”

Greater Montreal-based BMTC Group is streamlining its previous multi-banner approach, consolidating all its furniture and appliance stores, including former Brault & Martineau and EconoMax outlets, under the Tanguay brand. In making the announcement last month, the company also revealed it is opening 11 new Tanguay stores, including locations in Montreal, Gatineau, and Sherbrooke.

Retail hates a vacuum, and the movement among many players, especially post-Covid, is seeing even more players come forward to provide products for the home renovation and decoration markets.

In the bid to make bricks and mortar stand out amidst growing online sales, retailers will have to be willing to adapt with new strategies, says Retail Prophet Doug Stephens.

Stephens was the keynote speaker at the recent STORE conference held by the Retail Council of Canada. He stressed the importance of capturing a customer’s attention as an ongoing and daily challenge. But capturing that attention then means providing a memorable experience, so that the customer will be able to recall the interaction.

That edict is increasingly important, he notes, as so many retailers are getting into new categories. “Every retailer could sell everything,” he says. “For example, Home Depot sells shoes; Loblaws sells tools.” With so much blurring of the lines, having a convenient location and a reasonable price-value equation are not enough. They are no longer the sole metrics that retailers need to abide by.

What is the retail experience supposed to be today? “Most retailers think only of the ‘look’—but the sense of sight accounts for only 20 percent of a customer’s experience,” Stephens says. By focusing strictly on the visual, “you’re leaving about 80 percent on the table.” The customer experience is actually much more holistic than that, and should include smell, sound (music), taste, and touch.

Stephens addressed another important tool that is becoming a crucial part of every marketer’s kit: delivering a message about a company by telling stories effectively. Know who you are and focus on your story. Retailers that can tell good stories can achieve legitimate “earned” media coverage.

“If we want to extricate ourselves from the daily grind of competition, this is the way to do it.” Experience, he says, equals content. But once you start, don’t be afraid to make a meaningful commitment. “And go all in!”

At Lowe’s Cos., Quonta (Que) Vance has been named EVP, pro and home services. He reports to Lowe’s chairman and CEO Marvin Ellison. Vance most recently served as Lowe’s SVP, transportation and final mile. He has more than 25 years of retail experience and leadership roles with store operations, merchandising, and supply chain working with Lowe’s, Home Depot, and Target.

DID YOU KNOW…?

… that this year’s Hardlines Conference will be held in Whistler, B.C.? And that members of the BSIA of British Columbia have access to special pricing for the conference of almost one-third off regular registration? No, we are not making this up! It’s going to be an amazing combined event, as our friends at the BSIABC will host a table-top trade show for its supplier-members. (Click here for more details or contact Michelle Porter at Hardlines.)

RETAILER NEWS

Beachburg TIMBER MART, a building supply store in the Ottawa Valley region of eastern Ontario, has new owners. Run by the Lumax family since it was founded 55 years ago by the late Russell Lumax, the store has transitioned to dealer-owners Matt and Carrie Gagne, both 33, a local couple with a family of four.

Canac will invest $20 million to open a 40,000-square-foot store in Sorel-Tracy, Que., Le Journal de Montréal reports. An August groundbreaking is planned for the new outlet, with a timeline to open next spring. Canac made it known in March that Sorel-Tracy would be the site of its 34th store. The retailer is also set to open a fulfilment centre on Quebec City’s south shore in September, which will position it to make deliveries to the region with fewer bridge crossings.

EPLS Home Hardware Building Centre in Arviat, Nunavut, has moved into a new home thanks to a financing partnership with Royal Bank of Canada. CEO Ryan St. John’s father Don founded the store some 50 years ago, facilitating the provision of building supplies to the fly-in community.

The Home Depot has made some staff cuts, according to 11alive.com, an Atlanta news service. “Due to changes in our business, we eliminated a very small number of non-store roles,” the retailer said in a statement.

Zak’s Home Hardware in Saskatoon celebrated its grand opening at the end of May. Dealer-owner Wyatt Zacharias purchased the former Reid’s Home Hardware, which dates to 1953, earlier this year.

Michelle Gerard and Allen Chen, dealer-owners of Neepawa Home Hardware Building Centre, celebrated the ribbon-cutting of their new store in Neepawa, Man., on May 24, the Brandon Sun reports. The 24,000-square-foot store includes 15,000 square feet of retail space as well as a drive-through and a warehouse.

IKEA Canada has launched “Kreativ,” an AI-generated experience intended to enable customers “to fully integrate design solutions and visualize their own living spaces.” IKEA Kreativ uses 3D mixed-reality technologies to help customers visualize how home furnishings will look and function in their homes. They can browse and preview IKEA products in 3D showrooms. The core technology was developed by Silicon Valley AI company Geomagical Labs, which IKEA Retail acquired in 2020.

SUPPLIER NEWS

EAB received the Washington State Recycling Association’s 2023 Recycler of the Year Award for business. The award was presented at WRSA’s 43rd Annual Conference and Trade Show at the Yakima Convention Center in Yakima, Wash. The WRSA is a non-profit membership organization dedicated to supporting waste reduction, reuse, recycling, and composting in the state.

ECONOMIC INDICATORS

The annualized pace of housing starts declined 23 percent in May to 202,494 units, from 261,357 units in April. The rate of urban starts fell 24 percent, with 182,842 units recorded in May. The Vancouver (-45 percent), Toronto (-28 percent), and Montreal (-35 percent) areas all recorded declines. All three recorded increases in single-detached starts that were offset by large decreases in multi-unit starts. (CMHC)

U.S. housing starts logged a 21.7 percent surge in May. That followed a 2.9 percent decrease in April. Building permits for the month were up 5.2 percent. (U.S. Commerce Dept.)

U.S. retail sales rose unexpectedly in May. Sales were up by 0.3 percent last month following a 0.4 percent increase in April. LBM and garden categories logged an increase of 2.2 percent, attributed to home renovations. (U.S. Commerce Dept.)

Hardlines will be part of a luxury cruise for Canadians in tandem with next year’s International Hardware Fair in Cologne, Germany. In partnership with the Building Supply Industry Association of British Columbia, we’re organizing a business trip to Cologne to attend the largest hardware show in the world, followed by an industry tour of the Rhine River on our own dedicated ship. The seven-day trip begins March 6, 2024. Space is limited and we need to confirm enough people to make the trip work by the end of June, so please contact Thomas Foreman, president of the BSIA of B.C., as soon as possible to guarantee your spot!