Big boxes exceed 200 locations in Canada
SPECIAL REPORT–Sometime back in the middle of September, Canada’s 200th retail home improvement big box opened in Canada. And nobody seemed to notice (They were all at the Hardlines Conference–your helpful Editor).
On Sept. 13, RONA opened an innovative “urban” concept big box in Richmond, B.C. Two days later, Home Depot opened a store of its own, a small-footprint outlet in Chatham, Ont. They were numbers 199 and 200 respectively.
By year’s end, Canada will have a total of 212 large-surface home improvement outlets–137 from Home Depot, 68 belonging to RONA, and seven Kent Superstores. Loyal readers of our sister publication, Hardlines Quarterly Report, can dig back into their very first collector’s edition, published in February 2001. It featured our very first Big Box Report, in which we predicted 206 big boxes by the end of 2005. But back then, five companies were in the big box game: Réno-Dépôt, Revy, Home Depot, RONA, and Kent. Since then, both Réno-Dépôt and Revy have been purchased by RONA, and Kent is no longer building large-surface stores.
Next year, Home Depot plans at least 20 stores, while RONA expects to open 10-15 big boxes.
For a copy of our new Big Box Report, which appears in the latest issue of HQR, go to hardlines.ca/html/quarterly_report.html or contact Isabel Bisong: email@example.com or 416-489-3396.
RONA, BMR expand private-label tools
MONTREAL & LONGEUEIL, Que.–Stop me if you’ve heard this before: retailers are putting more emphasis than ever on private label. But the latest forays into private label by two Quebec-based retail groups underline how the process is accelerating–and resulting in better quality products.
The increasing quality available offshore is helping companies like Le Groupe BMR and RONA inc. to broaden their private-label offerings. “Our goal is not simply to buy more and more Asian products,” says John Lamarche, RONA’s director of purchasing for hardware and tools. “But we want quality, and Asian suppliers can provide that quality.”
Christian Nadeau, head buyer for BMR, finds himself traveling to the Orient five or six times a year. Quality is a major factor, and the result is that BMR dealers are becoming more open to Chinese products. BMR has introduced its own brand of power tools, called E-Z-E Tool. That brand appeared on some products being introduced at the privately owned wholesaler and buying group’s latest dealer show, held last month.
Like many retailers, RONA relies on private label programs to provide a mid-range alternative to discount brands at one end, and leading national brands at the other. However, pricing enables dealers to make up to 35% margin on the private label, vs. 10% or less on national brands.
Power tools remain a favorite target for private label. Last year, RONA launched a “better” line of its own power tools, sourced from Asia. Next spring, dealers will carry a new line of Concept II Job Mate products, which will round out RONA’s assortments of “good” products. Brands such as Black & Decker, DeWalt and Bosch will continue to represent RONA’s “best” lines. Another line being introduced is called “Spitfire”. Lamarche explains that the line will feature 12 SKUs to start, priced about 25% below national brands.
RONA’s private label now represents 12.5% of its sales, generated by approximately 1,900 SKUs. The company wants to get that up to 15% by the end of 2007, Lamarche says.
BMR has also taken control of its electrical programs, relying less on specialty distributors in favour of putting the products and programs through its own hardware distribution centre in Longueuil. According to BMR’s president, Yves Gagnon, hardlines sales are up considerably for his group’s members, giving BMR the opportunity to leverage its purchasing power and expand its private label in this area, as well.
ILDC membership not limited by latest addition
AJAX, Ont.—The Independent Lumber Dealers Association has traditionally been Canada’s largest LBM buying group, but with the fewest individual members. Currently it has 25 member companies, representing about 150 outlets, and that’s the way ILDC general manager Andrew Battagliotti likes it.
Unlike some other groups, which have their own buying teams to make purchases on behalf of its members, ILDC relies on buying committees comprised of the member companies themselves. So even though the group has historically held steady at about two dozen companies, there’s still room for additional members. “Yes, it is our intent to keep the membership to a manageable number, whether it’s 29, or 28, or 26,” says Battagliotti. “By having the number below 30, it remains manageable around the table.”
The latest addition to ILDC’s ranks is Simcoe Block, a contractor yard in Barrie, Ont., which will join effective Jan. 1, 2006. But Battagliotti says his group will continue to look for new members, especially in Western Canada.
Quebec vendors meet Canada's top buyers
TORONTO–The Board of Trade of Metropolitan Montreal hosted a special one-day seminar last week to educate Quebec vendors on how to do business with leading home improvement retailers. More than a dozen vendors got the opportunity to hear about the trends and changes driving the industry, and to learn more about Canada’s leading home improvement retailers from retailers’ own representatives.
Major buyers from RONA inc., Home Hardware Stores, Canadian Tire Corp., and Home Depot Canada were all on hand. While many vendors were eyeing the big retailers, TruServ’s Tony DiEmanuele explained to them the power of the independent in Canada, represented within TruServ by more than 1,400 dealers across the country under the True Value, Ace and Pro banners. Other retailers present were RONA’s Jeff Kilgour, Andrew Pantelides from Home Hardware, and Laura Mulcaster and Morgan Hill from Canadian Tire.
The event was organized with the assistance of our very own Beverly Allen, who helped the Montreal Board arrange one-on-one buyer meetings for the participants. She also lined up some manufacturer’s reps to meet with the Quebec vendors, giving them a range of ways to enter the greater Canadian market.
Sears tests electronics boutique
TORONTO–Sears Canada Inc. has opened a unique boutique concept in its department store in St-Jerome, north of Montreal. The new Dumoulin Electronics boutique carries a range of computers, TVs, home theatre systems, telephones, digital cameras, etc. The boutique is staffed by Dumoulin representatives, lending a level of expertise to the department.
Dumoulin is part of Groupe Dumoulin Electronic Inc., a Quebec-based retailer with 137 corporate and franchise locations, operating under the Dumoulin and Audiotronic banners, from coast to coast. Dumoulin is also a member of Cantrex Group Inc., a buying group for independents that was acquired by Sears in April, 2005.
“This pilot store-within-a-store project is an example of the benefits that Cantrex members can enjoy, to help their business grow by being associated with Sears Canada,” said Alain Masse, president and general manager, Cantrex Group Inc., in a prepared release. “It maximizes the shopping experience for Sears customers and provides additional revenue for Dumoulin.” If the experiment is successful, Dumoulin boutique locations will be installed at additional Sears locations. The Dumoulin specialty could even be added to the Sears catalogue and Sears online within the coming year.