|In This Issue:
“To be persuasive, we must be believable; to be believable,
we must be credible; to be credible, we must be truthful.”
—Edward R. Murrow (American broadcast journalist, 1908–1965)
| Home Hardware presents new initiatives at latest market
|ST. JACOBS, Ont. — Home Hardware Stores Ltd. held its 45th dealer market last week, playing host to some 800-plus dealers, their families and staff.Dealers were generally buoyant in their outlook for the rest of the year, with many of them saying that, despite abysmal weather in January and February, business has begun picking up. Although dealers in Ontario expressed concerns about the economy, especially those affected by layoffs in the auto industry, a number of dealers expected to maintain sales comparable with last year.
“The good thing about the market is that the dealers come from across the country,” said Paul Straus, vice-president and CEO of Home Hardware. “They all said they were getting busy. I didn’t hear any negative comments, even from dealers in Alberta, who weren’t really discouraged, even with the slowdown after years of tremendous growth.”
To support those dealers, Home unveiled a number of marketing programs at this market. The initiatives were building on Home’s new tag line, introduced at the co-op’s last show in September 2008, “Home Owners Helping Homeowners”. The slogan has been identified as a way to reflect the organization’s focus on ownership by independents, differentiating them from other chains and big boxes.
Highlights of the market included:
“While many companies are dialing back their marketing programs, we’ve been busy working with strategic opportunities that position Home for future growth,” said Straus. “We are well-positioned to weather the current economic storm, and this year’s Spring Market is just another example of the size and strength of our network.”
- Expansion of Home’s DIY project planning software, HomeWorks, to include paint matching and colours tied in with Home’s own Beauti-Tone paint range;
- Beauti-Tone has also introduced a new line of VOC-free paint under Home’s eco-friendly private label, Natura;
Two hardware divas: Bev Allen of Hardlines welcomes Home’s celebrity chef Anna Olson.
- Anna Olson, Food Network host, celebrity chef and cookbook author, joined the Home team as the retailer’s new Kitchen Expert back in March. Dealers got to meet Olson at the market on April 21, where her involvement with Home Hardware got its official launch.
- Gardening guru Mark Cullen put his name to a new store accreditation program. The accreditation identifies Home dealers with top-notch garden centres that become Mark Cullen approved;
- a new hand-held ordering system was introduced at the show as part of Home’s own Prism POS system. It replaces the older Palm Pilot technology;
- the HomeInstalls program is also gaining momentum. According to Jack Baillie director of marketing, about half the dealers are already involved in the installed services program. Now, they have support of dedicated software to help guide that business. “The program helps dealers really be in the home renovation business,” he noted.
| Quebec Pro dealers make the switch to Ace
|MONTREAL — Plans to convert Pro dealers in Quebec to the Ace banner are going according to plans laid out last fall, with fully 100 dealers expected to make the switch this year.In November 2008, Ace severed ties with Pro Retail Services, a group managed by TruServ Canada. PRS had been managing the Ace and Pro banners for the independent dealers who carried them. Now, the buying group TIM-BR MART is converting the dealers, beginning with Quebec.
At the time of the announcement, made during the Pro Retail Services dealer market in Montreal in December 2008, Pro dealers were told of the opportunity to convert to Ace, but were given the choice of remaining with Pro. Pro flyers were even guaranteed to continue throughout 2009. However, even by then, plans were in place to implement a wholesale conversion of Pro dealers to Ace.
The conversion of these independents within Quebec to the Ace Hardware banner makes for a good fit in that province, where most of the independents in question are Pro dealers who already belong to TIM-BR MART.
But not all of these independents are TIM-BR MART members. Rival buying group Castle Building Centres has seven members now in Quebec, including its original member there — and a long-time Ace dealer — Hudson Ace. Owner Jack Crombie has high praise for the Ace program. It provides, he says, an important range of products and a well-known brand for his customers in the affluent community of Hudson, near Montreal.
(If you’re trying to figure out how all the buying groups and distributors are interconnected, you need the Amazing Buying Group Org Chart, which appeared in the latest Buying Group Report in our sister publication, HQR. Call us at the World Headquarters for more info. —Michael)
| RONA outlines achievements and initiatives at AGM
|BOUCHERVILLE, Que. — At its annual general meeting last week, RONA, Canada’s number-one home improvement retailer, recounted how productivity is increasing and inventories are being managed, even as the recession takes its toll on Canadian spending habits.RONA management also took advantage of the AGM to commemorate the company’s 70th anniversary.
In the current economic climate, RONA President and CEO Robert Dutton reiterated the importance of maintaining and fostering the company’s values to guarantee its sustainability. He also noted that, over the past 70 years, RONA has reinvented itself repeatedly to adapt its business model to the constantly changing needs of consumers. “RONA will be 70 this year, but you would never know it judging by our extraordinary vigour and energy, not to mention our appetite for growth,” said Dutton. He cited, among the company’s efforts to renew and innovate, everything from responsible procurement policies, optimization of the supply chain, and growth in private-brand sales to accelerated dealer recruitment and new store design.
RONA continues to focus on its PEP program to guide its fortunes through the recession. Phase one of the program, which addresses everything from channel management to training, was introduced at last year’s AGM. As a result of PEP initiatives, RONA increased its adjusted gross margin by more than 100 basis points, at base-weighted distributions, thanks to better management of product categories, increased sales of private brand products, reduction of store losses, and continued improvement of purchasing conditions with suppliers.
Optimization of the supply chain is another essential aspect of the PEP program. Inventory shrank by $118 million, or nearly 14 percent, in 2008, while logistics costs were reduced by $6 million.
The third component of the PEP program is the accelerated recruitment of affiliate dealer-owners. Recruitment is considered so critical to RONA’s continued growth that this function has come under Dutton’s direct responsibility. Last year, the affiliate dealers posted same-store sales growth of 3.8 percent, making them the key source of positive growth for the company.
The company counted among it accomplishments in 2008:
RONA is also counting on its diversified points of sale to help it weather the economic storm. Along with more than 700 retailers, the company has a growing presence in the industrial and commercial markets. To capitalize on this advantage, RONA intends to further diversify its commercial and professional market division.
- a 10 percent increase in private-brand sales, with that category now accounting for 17 percent of sales;
- an increase in sales related to installation services of more than 20 percent;
- a 10 percent increase in purchases by Air Miles customers; and
- the new RONAdvantage program, which tops up government renovation tax credit programs set up by the federal and Quebec governments with additional rebates in the form of RONA gift cards.
| Home Depot offers rebate when replacing old mowers
|TORONTO —Home Depot Canada and Clean Air Foundation are urging Ontario residents with old gas-powered lawn care equipment to through Mow Down Pollution, a national customer-engagement program designed to encourage and reward Canadians for permanently retiring their high-polluting gas-powered lawn care equipment.Consumers who turn in their old gas-powered lawnmowers, trimmers, chainsaws or leaf blowers to any Home Depot Canada store between April 23 and May 3 will receive a rebate of up to $100 on the purchase of an environmentally-preferred lawn care alternative.
The small two-stroke gas engines found in lawnmowers, trimmers, leaf blowers and chainsaws are a significant source of greenhouse gas and smog-forming emissions. Environment Canada estimates emissions from lawn and garden equipment comprise approximately 20 percent of all smog produced by mobile sources in Canada. A standard gas mower can emit the same amount of common air pollutants in one hour as driving a new car almost 500 kilometres.
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