Canadian Tire Corp. reported its fourth-quarter and year-end results last week. Revenue was down 16.8 percent from Q4 2022 to $4.44 billion, falling short of expectations for the company. Not including petroleum, revenue actually decreased by 17.8 percent. Consolidated comparable sales were down 6.8 percent.

Retail sales fell 7.1 percent to $5.32 billion compared to the fourth quarter of 2022, while Retail sales excluding Petroleum were down 6.9 percent. This reflected “continued softening of consumer demand, compounded by weaker sales in winter categories across all banners, due to unseasonable weather across the country in December,” the company reported.

Automotive, however, stood out as CTR’s strongest division during the quarter. CTR’s consolidated comp sales decreased 6.8 percent.

“Our performance last year fell short of our expectations as our team continues to navigate a challenging macroeconomic environment,” said Greg Hicks, president and CEO of Canadian Tire Corp.

For the full year, Canadian Tire’s consolidated retail sales were $18.50 billion, down 3.9 percent. Consolidated retail sales, excluding petroleum, decreased 3.1 percent and consolidated comp sales were down 2.9 percent. Consolidated revenue for the company declined 6.5 percent to $16.66 billion.

Revenue, excluding petroleum, decreased by 6.1 percent compared to the same period last year, with the decline in the Retail segment partially offset by Financial Services growth.

“In the near-term, we are taking a measured and cautious approach to our operating plans. While the pace of our investments has slowed, we remain committed to our strategy as we balance tough short-term decisions with our long-term objectives,” added Hicks.

The industry is watching one of its top players go through several changes in recent years, as it evolves from its dealer-based roots into a national retail-focused entity. In an exclusive interview with Laura Baker, chief marketing officer at Home Hardware Stores Ltd., we dig into how the company is managing those changes while holding onto the values that made Home Hardware the retail powerhouse it is today.

Baker joined Home Hardware in 2021 as vice-president of marketing. Less than a year later, she got her new title as CMO. Looking at how the company goes to market, she shares what Home Hardware’s branding signifies, noting that it’s still built around the dealer network.

“It really is about our dealers and about our team members in the stores providing that amazing, friendly experience and customer advice to help get that project done. And we want to be that one-stop shop for consumers and pros to get everything they need to get those projects completed.”

The company continues to focus on supporting dealers as an integral part of the communities in which they serve: “That is who we are.” That mandate is more important than ever, Baker adds, as the company celebrates its 60th anniversary this year.

A lot of attention has been paid to the pro customer in this industry in recent years, and Home Hardware is no exception. Most recently, it launched a loyalty card especially for contractors and trades. But, says Baker, the DIY customer has not gotten lost in the shuffle. In fact, she calls them “essential to our business.” She and her team think about the retail and contractor sides as both equally important.

“A lot of our advertising really focuses on the DIYer customer. Even if you’re not necessarily going to do it yourself, you are maybe going to get some assistance getting it done. It’s the consumer at the end of the day that’s driving those projects and helping to dictate where those products get bought.” She adds that this approach takes the contractor into account by helping to inspire that contractor’s own customers to take on more projects.

For DIYers, however, there is still a big push on certain types of low-cost projects they can do themselves, especially in light of the high costs surrounding home ownership, including high interest rates and continued inflation. “You’re going to see a huge stress from us on painting, and our BeautiTone paint, on how you can rethink colour and change a space with a low-cost project you can do yourself in a couple of hours or over a weekend.”

Sexton Group has added a modular home builder, Maison Nordique, as its newest member. The family-run business in Abitibi-Témiscamingue, Que., has been manufacturing prefabricated homes in the region for over 50 years. The company specializes in building homes that are designed for the surrounding communities in the northwestern region of the province.

But Maison Nordique is not the first modular home builder in Quebec to join the Winnipeg-based group. It already has members there and farther east in Atlantic Canada.

In fact, Sexton has had a strong representation by modular and pre-fab home builders for years. “Manufactured home builders are not traditional building supply dealers, but they are big consumers of LBM,” says Eric Palmer, president of Sexton Group. He adds that both sides see the opportunities that exist by aligning with the group. “At the end of the day, they’re trying to buy their LBM products at the best position—and that’s where we come in.”

The influx of pre-fab home builders really gained momentum when Suzanne Walsh joined Sexton Group seven years ago. Before her move to Sexton, Walsh had been doing sales of exterior building products for a major supplier. Among her key customers were a number of modular home builders across western Canada. Collectively, those companies were part of a co-operative of modular builders called BNBC. When she became a business development manager for Sexton in 2017, she identified that this group of dealers would be a good fit to add to Sexton’s ranks.

Over time, Walsh, who was promoted last month to director of business development for the entire country, succeeded in bringing most of  the members over to Sexton, as these dealers, she said, recognized they needed more product support and better terms.

However, Sexton’s appeal to modular home builders dates back much further than even this and includes dealers like Nelson Lumber Co. in Lloydminster, Alta., and Champion International. When Champion signed in 2014, it had five Canadian locations and was considered the largest modular home builder in the country.

“We’re a lot less retail-oriented than the other groups,” says Palmer, “which is where we fit in.”

Home sales activity recorded through Canada’s real estate MLS System rose 3.7 percent between December 2023 and January 2024, reports the Canadian Real Estate Association. The latest increase builds on a 7.9 percent month-over-month increase recorded the month prior.

According to CREA, activity is now back on par with 2023’s relatively stronger months recorded over the spring and summer, but 2024 is starting about 9 percent below the 10-year average.

National gains were once again led by the Greater Toronto Area, along with Hamilton-Burlington, Montreal, Greater Vancouver and the Fraser Valley, Calgary, and most markets in Ontario’s Greater Golden Horseshoe and cottage country.

The actual (not seasonally adjusted) number of transactions came in 22 percent above January 2023, the largest year-over-year gain since May 2021. However, this activity is still running at below-average levels. While last month showed a double-digit gain over the same month a year earlier, January 2023’s sales represented the worst start to almost any year in the past two decades, according to CREA.

The number of newly listed homes edged up 1.5 percent on a month-over-month basis in January, although it remains close to the lowest level since last June.

“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,” said Larry Cerqua, chair of CREA. “There’s a consensus that the market will probably look quite a bit different this year compared to 2022 and 2023.”

Recent price declines have been located mainly in Ontario markets, particularly the Greater Golden Horseshoe and, to a lesser extent, in British Columbia. Elsewhere in Canada prices are mostly holding firm or in some cases, such as in Alberta and Newfoundland and Labrador, prices have been continuing to climb.

Martina Pileggi has been promoted to the role of senior director for the North American Business Partners at The Hillman Group. A veteran HR executive, she was previously head of HR for Hillman Canada.

At M-D Building Products, Andrew Gladstone has been promoted to VP of sales, Canada (pro and consumer channels). Gladstone joined the company in June 2022 as VP of sales, retail channel. He is based at M-D’s main sales and marketing location in Milton, Ont.

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... The latest edition of Hardlines Dealer News has hit subscriber inboxes. In this issue, we look at Home Hardware’s outreach to contractors, how changes at RONA reflect its commitment to independents, and the importance of jobsite delivery post-pandemic. Hardlines Dealer News is monthly and it’s free: click here to subscribe now!

RETAILER NEWS

Patrick Morin has doubled the footprint of its distribution centre in order to support the growth of its store network. The addition of 150,000 square feet brings the facility’s total surface to more than 340,000 square feet. It includes 52 loading docks and a 400,000-square-foot lumber yard.

The RONA corporate store in Sainte-Thérèse, Que., has been acquired by a group of RONA’s affiliated dealers. Eddy Calderon and Karl Tremblay, affiliated dealers from the Calderon Group, took over the location, adding it to their other two stores, both in Quebec: RONA Quincaillerie Métro in Laval and RONA Pincourt. Danny Lewis, a former RONA employee, will join Calderon and Tremblay as a shareholder partner in the RONA Sainte-Thérèse project.

Payzant Building Products, a member of Home Hardware, has celebrated the “soft launch” of its 60,000-square-foot fulfilment centre in Fall River, N.S. The location is just north of the Halifax/Dartmouth metro area. On 18 acres of land, the fulfilment centre will serve the nine-outlet regional chain, which has eight stores in Nova Scotia and one in New Brunswick, and allow for potential expansion.

A Whitby, Ont., couple have been arrested and are facing 28 charges of fraud, theft, and possession of stolen property. They had targeted Home Depot stores in Ajax, Pickering, Whitby, and Clarington on numerous occasions since July 2023. Police say the suspects would make a purchase and then return to the store with the receipt and walk out with a similar stolen item. They would also switch price tags on items to defraud the stores.

West Fraser Timber Co. has reported a fourth-quarter net loss of $153 million on sales of $1.51 billion. Full-year sales were $6.45 billion, down from $9.70 billion in 2022. The company had a net loss for the year of $167 million, down from a net profit $1.98 billion in 2022.

Western Forest Products reported a net loss of $14.3 million in the fourth quarter of 2023, compared with losses of $17.4 million in the previous quarter and $21.4 million a year earlier. That was attributed to lower pricing and shipment volumes on a stronger lumber sales mix. The annual net loss of $70.1 million for 2023 followed net income of $61.8 million in 2022.

In its fourth quarter, lumber producer Interfor Corp. recorded a net loss of $169.0 million, compared to a net loss of $42.4 million a year earlier. Sales in the quarter in 2023 were $785.9 million, down from $828.1 million a year earlier. The company said in a release that the results are attributed to a weak lumber market, “continuing to be impacted by the elevated interest rate environment and ongoing economic uncertainty.”

The total level of seasonally-adjusted housing starts in January decreased by 10 percent to 223,589 units, compared with December 2023. Despite these declines, the actual number of housing starts across Canada in centres of 10,000 population and over was up 13 percent to 14,878 units. (CMHC)