Peavey Industries, the Red Deer, Alta.-based retail farm and hardware chain, continues to strengthen its network of Ace dealers in this country. As the licence holder to the brand in Canada, Peavey uses its distribution network to supply some 70 dealers that bear the Ace banner on their stores.

According to Doug Anderson, CEO of Peavey Industries, those stores are about equally broken down into hardware, farm, and building supplies. The hardware and farm lines are supplied from Peavey’s distribution centres in Red Deer and in London, Ont., while LBM is supplied through an agreement with Winnipeg-based Sexton Group.

In an exclusive interview with Hardlines, Anderson shared his concerns for the economy, which is affecting retail in general. In addition, many of the farm communities that his stores serve have been further challenged by droughts and water shortages. He identified some growth in the third quarter of 2023, but inflation and high interest rates are impacting customers everywhere. “But we’ve seen some strength in the new year,” he adds.

While his team works with the Ace dealers, the company’s flagship banner, Peavey Mart continues to see growth, as well. He points to a new Peavey Mart in Steinbach, Man. (shown here), which opened late last month. The 28,800-square-foot building features a 1,440-square-foot greenhouse and even has a dog-washing station, sponsored by Purina.

However, continued growth will be driven at a cautious pace, says Anderson. Based on economic conditions, he says he’s “pretty cautious” about more rollouts, and prefers to wait for consumer confidence to return. Add to that the drought conditions that have affected many markets, especially in the West, and also impacted Peavey’s farm and ranch customers. “We have quite a bit of concern on that front. But you still have to feed and contain your animals, so that part of the business remains strong.”

While he sees further opportunities for new Peavey Mart stores across Canada, he stresses that caution he expressed earlier. “It’s just about us making sure that the timing is right—and recognizing that the timing for aggressive expansion is not now.” Looking ahead, however, he does identify both the Maritimes and British Columbia as opportunities for future strategic growth.

Anderson adds that Peavey Mart’s digital presence has been strong, especially following a series of upgrades implemented over the past six months, including better content and enhanced search capabilities, “and customers are responding nicely.”

Lee Valley Tools has opened its Auto-Store, a “micro-fulfilment centre” in Carp, a community in eastern Ontario that has been part of the city of Ottawa since 2001. The facility has allowed Lee Valley to consolidate 36,000 square feet of picking operations into 6,000 square feet, freeing up space to expand manufacturing.

The facility boasts 18,000 bin locations and 42 shuttles or bots on top of the structure to retrieve products for warehouse pickers. With the new system, the 200-plus operators in the DC can process over 250 orders in an hour. That’s more than double the previous output.

In a release, president and COO Jason Tasse said the DC is “more than a business decision: it’s a commitment to our roots here in Ottawa and prosperity for the Canadian economy.” In 2023, Lee Valley Tools celebrated its 45th year in business.

Through the implementation of technology, the company will work to elevate efficiency and augment job satisfaction and protection for employees. The investment in modernizing operations is expected to enhance business operations and production during peak shopping periods, reducing handling times, and increasing order efficiency.

The automatic picking system has been in the works since the early days of Covid. At that time, the company recognized the critical importance of online sales and began a series of initiatives to strengthen that part of its business. Automating parts of the picking process will free up the company to re-direct employees to more essential, higher-paying functions.

“By investing in manufacturing and automation, we are strengthening our foundation and helping employees with tasks that involve undesirable work, like repetitive lifting and walking all day,” said Tasse.” The more efficient we can make our operations, the more flexibility we have to adapt to disruptions that may occur during seasonal hiring periods and can scale appropriately as needed.”

The National Hardware Show included a series of educational session at its latest edition, held late last month at the Las Vegas Convention Center. Kicking off day two was the NHS Executive Summit, featuring five high-impact sessions in collaboration with the North American Hardware and Paint Association. Participants took away practical insights into consumer behaviour, succession, supply chain, and the state of the industry overall.

In the session entitled “Adapting to Change in the Industry,” Dan Tratensek, COO and publisher for the NHPA (shown left), moderated a panel with Jodi Karroum (centre), director of strategy and business development for Walmart, and Gina Schaefer, co-founder and former CEO of A Few Cool Hardware Stores, a chain of 13 Ace stores in the Washington, D.C. area.

The panel session touched on such topics as attracting good employees by engaging in outside-the-box hiring practices and the importance of having a succession plan in place. Low unemployment rates have “sharpened the pencil” for employers to look beyond relevant work experience and hire based more on an individual’s core values.

“For us, diversity in hiring includes employing those with different genders, races, and cultural backgrounds,” Karroum said. “But it’s also about bringing on people with different career backgrounds and experiences and finding those people who are passionate about the industry.”

Tratensek echoed those sentiments, saying that intentionally seeking out different perspectives strengthens a company overall and can be one route for hiring good employees.

The importance of having women in the workplace—and keeping the door open for women to enter this industry—remains an important issue. In recent years, said the panelists, there has fortunately been lots more growth in diversity in what was once a male-dominated workplace.

Panelists also discussed various ways an independent can tackle the issue of succession. When it comes to succession planning, Tratensek said, one of the biggest mistakes he sees is business owners putting it off until it’s too late. Schaefer offered the strategy of creating an employee-owned business rather than leaving it to one person.

The discussion emphasized that succession planning should be in place from the time a business is acquired. Don’t wait until the owners are approaching retirement. “For anyone who is a business owner, the minute you take on the mantle of running the business, you owe it to your employees to engage in succession planning,” Tratensek said.

The latest edition of the DX3 conference was held last week in Toronto, gathering digital marketing and advertising experts from all aspects of the retailing and retail service industries in Canada. The event featured a full two-day program of keynotes and panels, along with a trade show showcasing service providers in the digital age.

One panel was especially timely. Called “Surviving the Slowdown,” it addressed what has become a common plight for retail in general. The panel featured (from left to right) Jeremiah Curvers, co-founder and CEO of Polysleep, a Montreal-based company selling mattresses online; Vino Jeyapalan, CEO of Kabo, a frozen pet-food provider; and moderator Nadine Hall, a consumer packaged goods consultant.

The past year, along with a slow start to 2024, has posed a challenge to many retailers. For Curvers at Polysleep, the business realities have forced his company to stay focused. “We need to put on a different lens and follow the customer,” he told delegates. That has included a careful evaluation of where the competition is coming from. For Polysleep, said Curvers, that competition has meant the likes of IKEA and Amazon. He added that he expects things to stay slow for another two or three years.

One way to stay ahead is to dig deep into data. “We’ve been using data sets and learnings online.” That means having a strong presence online—and in bricks and mortar—and managing the consumer’s expectations about the brand across all platforms. Polysleep is now in some 120 stores, besides selling online.

“There’s a major discrepancy between what consumers are finding online and what’s in stores.”

Another way Polysleep has managed through the downturn has been through managing costs and maintaining price points, “to make sure product quality is aligned with the cost.” Part of that equation is working closely with suppliers. “That has been a key to our growth in the past.”

Jamal Hamad has started a new position as senior vice-president, professional services at RONA inc. Hamad spent more than 15 years at Home Depot Canada, most recently in the role of senior director of contractor services, pro-tool rental-home services-MRO. But early on, in 1999, he was a store manager in Toronto, then a district manager. In 2008, he got involved in Home Depot Canada’s contractor side of the business, which included the retailer’s tool rental business. He became senior director of contractor services in 2016.

DID YOU KNOW...?

… that the latest edition of Hardlines Dealer News has hit inboxes? In this issue, we look at how one dealer in the Maritimes contended with both flooding and wildfires to support its community. We also look at Orgill’s new loyalty program designed for independents and how robots are being deployed in hardware stores. Hardlines Dealer News is monthly and it’s free: click here to subscribe now!

RETAILER NEWS

Numerous media outlets reported last week that Canadian Tire Corp. gave its top executives no bonuses for its disappointing 2023 performance. Retail (excluding petroleum) same-store sales declined 2.9 percent at CTC in 2023 and total earnings were $604 million, versus $1.01 billion in earnings in 2022. CEO Greg Hicks received a bonus of $983,976 from the company’s annual incentive plan for total compensation of $6.49 million in 2022. In 2023, he received no bonus, according to reports, and his total compensation fell to $6.04 million.

Castle Building Centres has announced that O’Connor Hardware in Oro-Medonte, Ont., is the latest independent retailer to join the group. Founded in 1996, it is under the new ownership of Brent and Sarah Johnston. The general manager is Karen O’Connor.

Home Hardware Stores Ltd. and the Toronto Blue Jays have launched the BeautiTone Balcony at Toronto’s Rogers Centre. Located on the 100 level directly above the BeautiTone Marquee Sign in left field, the BeautiTone Balcony features two tiers of standing room and a reserved group space for up to 40 guests. BeautiTone, Home Hardware’s private label paint brand, is the Jays’ official paint.

Home Depot employees have been hit with a data breach. The breach, which affected the data of company staff, occurred through a slip-up by a third-party software-as-a-service (SaaS) vendor. As a result, that vendor’s database of some of Home Depot’s staff was hacked. About 10,000 employees had their names, work emails, and user names compromised. Home Depot was itself hit by a major data breach in 2014, which exposed the personal details of some 50 million customers.

Marty Young, the owner of Mount Forest Home Hardware Building Centre in Mount Forest, Ont., has acquired another store and adopted the Home Hardware banner. Young’s Home Hardware Building Centre in Walkerton, Ont., re-opened last month under its new name. In 2023, Young’s Mount Forest location was named Best Home Hardware Building Centre in the Central Region by Home Hardware Stores Ltd.

Dollarama reported Q4 net earnings of $323.8 million, or $1.15 a share. That was up from $261.3 million a year earlier. Sales for the quarter rose by 11.3 percent to $1.6 billion. For the full fiscal year, sales jumped 16.1 percent to almost $5.9 billion. Net earnings of $1.0 billion were up from $801.9 million.

The Air Miles loyalty program, which filed for bankruptcy on both sides of the border last year, was acquired by Bank of Montreal last June. With new owners, there are new ideas. According to Maclean’s, a new concept called Air Miles Receipts allows consumers to scan their receipts with an app to earn bonus points and offers, by “layering over” existing retailer programs. This can be done even at stores that offer loyalty programs of their own.

The value of building permits in February increased 9.3 percent month-over-month to $11.8 billion. Residential permits increased 7.4 percent to $7.1 billion. Ontario’s increase, at 14.2 percent to $2.8 billion, contributed the most in both the single- and multi-family sectors. Overall, the value of single-family permits was up 9.6 percent, or $248.2 million. The non-residential sector grew 12.3 percent to $4.7 billion. (StatCan)