MISSISSAUGA, Ont. — With their combined offer of autonomy and purchasing power, buying groups can be the best of both worlds for independent retailers. One group that has seen its membership swell over the past months is Castle Building Centres.

Since the end of last year, Castle has added dealers across all regions, including as far east as Newfoundland. There, Randy and Phyllis Randell chose to continue a family tradition by affiliating with the buying group last fall. NRO, their store in Roddickton on the island’s Great Northern Peninsula, is their third business.

“We grew up watching family members proudly serve the community as a Castle Building Centre,” the Randells said. “When the opportunity for us to open a hardware and building centre presented itself, we knew it had to be Castle.”

In Moosonee, Mushkegowuk Development Corp. (MDC), which is owned by members of seven nearby First Nations bands, purchased MDC Supply GP. That business operates as Great North Builder’s Supplies. It had served the area’s First Nations communities for almost 40 years when it closed upon the retirement of founder and long-time Castle member Jack Hood in 2018. When MDC reopened the store a year later, General Manager Albalina Metatawabin explained that Great Northern chose to affiliate once again with Castle, “not only for the 35-year history in Moosonee, but because of the outstanding experience and recommendations from the previous owner.”

Farther south, the addition of Niagara Building Centres in Fonthill, Ont., was announced in late March. Partners Chris Baxter and Kevin and Gary Bolibruck are looking forward to a grand opening for the retail store and sprawling lumberyard in the fall.

In Quebec, Lac-St-Jean’s Quincaillerie Tremblay Laroche joined Castle at the end of last year. Marc Tremblay and Dominique Laroche have grown the small LBM store they bought in the late 1980s into a full-service home improvement destination.

Castle’s ongoing commitment to the Quebec market can be seen in the expansion of its recruitment efforts in the province. Richard Hamel, previously of Roland Boulanger & Cie, was named dealer development manager for eastern Quebec and northern New Brunswick. He works with Robert Legault, who has overseen the region as Castle’s manager of business development in Quebec for more than a decade.

Along with its growth in Eastern Canada, Castle has been active in the West. In January, the group announced it was welcoming Ruhr Valley Lumber in the Edmonton-area community of Thorsby, Alta. Matthew Ruhr grew up nearby, learning carpentry in his teens from his grandfather.

And most recently, Calgary’s Remuda Building joined the group. Remuda was founded in 2006 by owner and CEO Steve Schouten. “Our goal has always been to create a sustainable business that will be around for years to come, and one that our local community can trust,” he said. “Castle was the buying group that best shared our vision of growth and longevity.”

Peavey on track to bring Ace stores on board, despite current crisis

RED DEER, Alta. — The acquisition of the Ace Hardware license in Canada by Peavey Industries has offered good news for Ace dealers. The brand and support for the banner has fallen into the hands of a Canadian-owned company, after Lowe’s Canada made a deal to divest the business, which was part of its RONA business, earlier this year.

The entire deal, which was initiated by Peavey, confirms the Red Deer, Alta.-based retailer’s presence as a national entity. Peavey had already bought up London, Ont., based TSC Stores at the end of 2017. That acquisition now gives it added distribution strength to service the Ace deal.

But the onset of the COVID-19 pandemic was an unexpected wrinkle in the planned transition process. Nevertheless, Peavey President and CEO Doug Anderson says the shift to supply Ace dealers from Peavey’s distribution centres remains on track.

That conversion involves changing inventories and SKUs over from the RONA distribution business to Peavey’s own systems. The Peavey distribution centres already supply stores, which operate under the Peavey Mart, TSC and MainStreet Hardware banners.

“We’re starting the conversion process now, with only moderate delays because of COVID,” Anderson says. He notes that the company had to revise its plans, especially in light of the fact that Peavey put a freeze on hiring last month. “But based on our conversations with the dealers we’ve talked to so far, there’s interest and excitement out there.”

About 100 independents in Canada sport the Ace banner, consisting of a mix of hardware stores and building centres. Many of them are in smaller towns, with close ties to their communities, something that Anderson saw as a good fit with Peavey when he first began exploring the possibilities of a takeover.

Despite not being able to interact with dealers face to face, the conversion process is on track according to an internal schedule, and Anderson expects it to be completed by the end of August.

TORONTO — Most home improvement retailers have discontinued their paper flyer programs, including Canadian Tire, whose weekly specials are a Canadian tradition. Advertising on radio is directing customers to look online for weekly specials by retailers including Home Depot Canada and Lowe’s Canada.

Paper flyers have declined in popularity with the advent of digital alternatives. But concerns about the transmission of infection may be hastening their obsolescence.

While some hardware retailers have pulled flyers as a temporary measure to avoid driving up in-person store traffic, other retailers are doing away with the medium altogether. Loblaw Cos. Ltd. announced it is permanently transitioning to digital promotions online and through the PC Optimum app. Meanwhile, Canadian Tire has begun testing the waters, announcing earlier this month it has “temporarily paused” production of flyers in Ontario.

Retailers are weighing the need to move inventory against the possibility that they may be perceived as promoting products that are non-essential. That concern extends to how they position their flyer promotions, without jeopardizing the ability of hardware and home improvement stores to stay open in provinces where they are allowed to.

Home Depot Canada, for example, is taking a socially responsible approach to its messaging. The retailer has replaced its flyers with notices online that reinforce the importance of not just shopping online, but shopping for products needed to get through the current crisis.

However, a look at Canadian Tire’s online flyer, for example, reveals that it looks identical to the paper version, offering specially priced products in a wide range of categories. RONA’s promotional efforts are more in sync with the current situation: a recent flyer was geared to limited seasonal activities, while another flyer is actually a message to customers reminding them to stay home and order online, rather than shop in person, as much as possible.

The use of promotions that are deemed unwarranted also has an impact on retail workers. They must deal with larger volumes of customer traffic, putting them at greater risk. Case in point: the union that represents workers in Loblaw and Superstore grocery outlets in Manitoba issued a press release last week decrying the chain’s implementation of a “No Tax Sale” from April 24 to 30 on non-food items.

These include gardening supplies, clothing, barbecues and patio furniture. According to the release, issued by UFCW Local 832, “These events draw large crowds and potentially put the safety of our members, and the public, at risk.”

SPECIAL REPORT — Dan Tratensek, executive vice president and publisher with the North American Retail Hardware Association (NRHA) has met countless home improvement retailers over his multiple decades with the organization.

Drawing on consumer research and dealer surveys, the NRHA has determined consumers are looking for four things from home improvement shopping experiences: inspiration, discovery, selection and support. Tratensek sees independents as prepared to deliver on these desires—all traits that have come in handy for them amidst the rise of the COVID-19 pandemic.

“The thought that we can dismiss independent retailers and how they could possibly compete in this new paradigm of customers is really off-base,” says Tratensek.

“Independent retailers are really well-suited to address these new consumer needs.” When it comes to building a brand for themselves in today’s retail market, Tratensek says the most important factor for a retailer is to determine what differentiates their business. It’s hard to stand out today and he adds the modern consumer is arguably less brand loyal than they have been at any time in the past.

What is the key to good customer service? Tratensek argues it’s flexibility.

“It’s unsettling to talk to an independent retailer who has very rigid policies,” he says. And flexibility and the capacity to adapt, often daily, to new circumstances, has become the norm in recent weeks as dealers adjust to the current worldwide health crisis.

“As an independent retailer, you’ll say, ‘I know everybody in my community; I’m part of my community’ and then you greet them with a sign above your customer service counter that says ‘Absolutely no returns without a receipt.’ ”

According to NRHA research, the future for independents lies in identifying and serving localized niches. Tratensek says there’s no limit to the opportunities independent home improvement retailers have in that area—and it’s not just products. It can be services as well. Some stores that come to mind for him have invested in candles, birdseed, automotive, pet or even locally grown foods.

“You have to understand that if you’re going to be successful, you have to be different,” he asserts.

(This story is excerpted from a more in-depth article that appears in the latest issue of our sister publication, Hardlines Home Improvement Quarterly. HHIQ is being mailed to dealers and managers across the country this week. If you want to receive your own subscription to HHIQ, please click here for more info! —Editor)

Duncan Wilson, senior director of business development for Home Hardware Stores Ltd., has retired. A veteran of the retail home improvement industry, he got his start at Morgans in Ottawa in 1969, before joining F.W. Woolworth in 1970. From there, he moved to Ace Hardware in 1992 as director of inventory management and merchandise services. At that time, Beaver had adopted Ace as hardlines supplier of choice. There, he eventually earned the title of vice president of merchandising and marketing. Wilson left the company when Beaver was acquired by Home Hardware. In 2002, he joined Groupe BMR, where he led the dealer development team there. In 2008, he moved over to Home Hardware Stores Ltd. Wilson was put in charge of creating a dealer development team at Home Hardware, which resulted in solid growth within the company’s ranks. In 2019, Wilson was given the Lifetime Achievement Award by the Atlantic Building Supply Dealers Association.

DID YOU KNOW...

... that our sister publication, Hardlines Home Improvement Quarterly, is being mailed this week to dealers and managers across the country? But you can also access it online here! Read the latest articles on retail trends and best practices. And if you want to receive your own copy of HHIQ mailed directly to you, click here to subscribe!

RETAILER NEWS

ST. JACOBS, Ont. — Home Hardware hosted its first Virtual Market Presentations earlier this month. The day included presentations from CEO and President Kevin Macnab and CFO Sean MacCormack. Joel Marks, VP of merchandise hardlines, and Marianne Thompson, VP of merchandise LBM, also provided updates. The company will offer a Virtual Market trade show, beginning on April 28, with suppliers and dealers from across the country.

BOUCHERVILLE, Que. — In a new publicity campaign, Lowe’s Canada is telling consumers, “after years of taking care of your home, it’s time to let your home take care of you.” The 30-second spot includes branding from all Lowe’s Canada banners. “The thought was we wanted to deliver and amplify the government’s message in a relevant way,” said Brian Gill, creative director at ad agency Sid Lee, to Strategy magazine. “Being an enabler for helping people take care of their homes, it’s interesting for us to kind of flip that on its side.”

TORONTO — Canadian Tire Corp. has announced that its upcoming annual meeting of shareholders on May 7 will take place electronically, via audio webcast and teleconference. All shareholders of record as of the close of business on March 19 will be able to listen to the proceedings, vote and submit questions.

TORONTO — As online purchases of groceries and other essentials surge, Walmart Canada is accepting PayPal payments on Walmart.ca. A survey commissioned by PayPal in early April shows that 30 percent of Canadians are shopping online for groceries. This marks a 58 percent jump from a comparable survey conducted just four weeks earlier, before the novel coronavirus was declared a global pandemic. This is the first time PayPal has partnered with a Canadian retailer that sells groceries.

SUPPLIER NEWS

WINNIPEG — The Western Retail Lumber Association is soliciting nominations of its members to recognize them for their effective responses to the ongoing pandemic. Members chosen from the nominees will be recognized in the WRLA’s e-news and Yardstick magazine, among other platforms. Click here to submit a nomination.

ST. LOUIS — Energizer Holdings reported preliminary Q2 earnings of $0.20 per share, down from $0.45 a year ago. The company expects to report net sales of approximately $587 million, compared to $556 million in the prior year, driven in part by organic sales growth of approximately 2.7 percent. Final results will be released early in May.

ECONOMIC INDICATORS

Retail sales rose in February for the fourth consecutive month, up 0.3 percent to $52.2 billion. This marked the first time that retail sales grew for four months in a row since October 2018. Approximately 12 percent of retailers reported that both the rail blockades and COVID-19 had negatively affected their sales in February, but 1.6 percent saw sales increase, including many LBM and garden retailers. Overall sales in that sector were flat compared to January and up 6.7 percent from a year prior. (StatCan)

Total investment in building construction increased by 1.3 percent to $15.9 billion in February, the fourth consecutive month-over-month growth. Investment in residential construction rose 1.4 percent, including a 1.9 percent increase in single-unit construction. Multi-unit gains in British Columbia outweighed declines in seven other provinces. (StatCan)

Sales of existing U.S. homes fell by 8.5 percent in March to a seasonally adjusted annual rate of 5.27 million units. The decline was the largest since November 2015. As measures to combat COVID-19 continue, a steeper decline is anticipated in April. Prior to the implementation of those measures, the housing market was moving toward recovery after a soft period in 2018 and the first half of 2019. (National Association of Realtors)

OVERHEARD...

“I have been fortunate to have had a very interesting and satisfying career in retail spanning over 50 years. The last 12 years with Home Hardware have been truly special. They have given me the opportunity to work with wonderful people and companies, including several competitors and industry associations—many of whom have become close, personal friends.”
—Dunc Wilson, senior director of business development at Home Hardware Stores, on the announcement of his retirement.