After seeing its online sales increase by more than 200 percent in the third quarter of 2020, Canadian Tire has been paying a lot of attention to its digital assets and online branding. That has included increasing online assortments and improving its website to handle increased traffic.

In a call to analysts on the release of Canadian Tire’s Q3 results, CEO Greg Hicks said that part of the retailer’s strategy now includes online-only vendors. It’s part of an effort to expand Canadian Tire’s relevance in key categories. “Baby and furniture are now our top two categories in online-only sales and will serve as a template as we work to accelerate the growth of online-only sales in 2021,” Hicks explained.

By the end of the third quarter, Canadian Tire’s online sales had exceeded $1 billion and showed an increase of 211 percent over the previous year. Triangle, the company’s loyalty program for all its banners—including SportChek, PartSource and Mark’s—acquired approximately 400,000 new members in the quarter. For its Canadian Tire Retail stores, e-commerce was up 178 percent in the quarter.

In creating online-only assortments, the company is considering them as an extension to the categories in which the retailer already competes in-store, as opposed to entirely new categories, “but that certainly would be an option for us as well,” Hicks added.

Under the disruption to both supply and demand under COVID, Hicks and his merchandise teams have been focused on trying to forecast consumer demand for 2021. “That's keeping them pretty busy, as opposed to thinking through net new assortments.”

TORBSA has appointed Simon Gouin as VP, business development, reporting to the buying group’s president and board.

“Eastern Canada is a major market within Canada and one that we haven’t put the necessary focus on, in the past,” said chairman Steve Guglietti, of Pro Con Building Supplies Ltd. in Brampton, Ont. “It deserves a dedicated staff member from our organization and we understand the need for a knowledgeable, experienced and truly bilingual individual.”

Gouin brings with him experience on both the retail and vendor sides of the business. He was most recently a senior sales manager at Swiss-based polymer manufacturer Rehau Group and was also a general manager at Scodesign Distribution. Before that, Gouin owned two Home Hardware locations in Quebec for nine years, before selling in 2016.

The new initiative comes amidst other changes that have been taking place at the Bolton, Ont.-based buying group. Last summer, general manager Bob Holmes stepped back as Paul Williams took the reins as president of the group this past summer. Williams worked alongside Holmes until Holmes retired officially at the end of 2020.

Williams has set his sights on some key initiatives to ensure the prosperity of the buying group. One is to build dealer ranks. Williams believes strongly that the group’s lean, no-frills operating model is ideally suited to commercial yards that wish to increase their purchasing power without added costs from marketing or other supports that may be better suited to dealers with a more DIY-based customer.

TORBSA is a relatively small group compared to the likes of TIMBER MART, Castle, Sexton Group or ILDC. It has 26 member locations that generated sales of $576 million in 2019 (source: the latest Hardlines Retail Report—Editor). Williams says, however, that the group’s appeal is not strictly about purchase volumes. It’s about having the right dealers in the group to support vendor programs. The majority of TORBSA members are contractor or commercial dealers, who find strength in the camaraderie shared by the membership, Williams said in an earlier interview with Hardlines.

Since Williams moved into his new position last summer, TORBSA has added a number of new members: Alberta’s Monarch Centres with locations in Calgary, Edmonton, Lethbridge, Red Deer, and Acheson; Rehill Building Supplies in Peterborough, Ont.; A Line Acoustic Supply in Concord, Ont.; and Matériaux de Construction Létourneau, based in Waterville, Que.

Lowe’s Cos. is introducing a “Total Home” strategy to drive growth in its share of the market. The move has no doubt been accelerated by the ability of big boxes to remain open in many North American markets while smaller independents selling narrow product ranges have been deemed “non-essential” and forced to close their doors.

The latest strategy was unveiled at an investor day event early in December. During the COVID crisis, home improvement retail, in general, has seen huge gains, but Lowe’s is playing catch-up in certain categories versus its biggest competitor, Home Depot. Two areas where investors are looking for growth include the contractor market and online sales.

“At Lowe’s, we will be committed to offering everything a homeowner needs to provide a ‘total home solution’ across every area in the home,” said Marvin Ellison, CEO and president of Lowe’s. “This includes products and services for everything needed to repair and improve the home, for DIY and pro customers alike, across all decor categories including paint, as well as simple and complex installations.”

Lowe’s sales to contractors are estimated to be below those at Home Depot, where total sales to pros account for 46 percent of overall revenues. But in their third quarter, Home Depot reported an 80 percent increase in online sales, while Lowe’s showed it was closing the gap by turning in a 106 percent increase.

“Our Total Home strategy will enhance customer engagement and grow market share by intensifying our focus on the pro customer, expanding our online business, modernizing installation services, improving localization efforts, and elevating our product assortment,” Ellison added.

Lowe’s expects total sales to increase by about 22 percent for fiscal 2020.

Dealers and vendors alike have been watching carefully all the changes within Home Hardware as Marianne Thompson has built up a new merchandising team. And Thompson, Home Hardware's senior vice-president, merchandise, is well aware of that interest.

However, she stresses that the core values of the company remain intact. “The vision has not changed—that is to be Canada’s most trusted home improvement brand.”

She admits that, with more than 1,000 dealers to serve, each of them striving to provide a product mix that suits their respective community, managing that assortment “brings complexity” to her team. “We have to be flexible with that and carry more SKUs in our assortment because we believe in our dealers having that localization of their assortment. It’s what makes them win in their market and makes a customer go to their store in their community.”

And the rise of online selling under the COVID-19 pandemic has added yet another layer of complexity. But Thompson can count on the expertise within her team. Many of the new faces there have been drawn from other large retailers, including Canadian Tire, Lowe’s Canada, and Sobeys.

As a result, Thompson and her team have learned to “double-down” on the e-commerce side of the business. They look for ways to provide a range of products that reflects Home Hardware’s mandate to service all Canadians while staying alert to regional and local needs of the markets Home’s dealers serve.

(This is excerpted from a larger interview with Marianne Thompson that appears in the latest issue of our sister publication, Hardlines Home Improvement Quarterly magazine. HHIQ is being mailed to more than 11,000 dealers across Canada this week.)

The North American Hardware and Paint Association (NHPA) has named its board of directors for the year ahead. The board, which is made up of independent retailers, includes a Canadian: David Dishke, of Grand River Home Hardware in Caledonia, Ont., Dishke’s family started Grand River Home Hardware nearly 50 years ago, and Dishke began working in the store in 1986 at age 15. In 1996, he became manager and part-owner of the business. In 2004, NHPA honoured him as a Young Retailer of the Year. In 2018, he purchased a second store in Hagersville, Ont.

... that our sister publication, Hardlines Dealer News, is designed specifically for dealers and store managers? This monthly e-newsletter has become a valuable tool for stores across the country. You can subscribe at no charge by clicking here. And now you can check out all the back issues here. Happy reading!

Vacuum maker Shop-Vac, which abruptly announced in September it was going out of business, is instead to be acquired by the U.S. subsidiary of a Chinese conglomerate. GreatStar Tools USA, a division of Hangzhou GreatStar Industrial Co. Ltd., plans to retain Shop-Vac’s brand and hire most of the employees laid off from its plant in Williamsport, Penn., to restore production to previous levels. Those workers will however be considered new employees of a company GreatStar is creating to administer the Shop-Vac business.

The Building Supply Industry Association of B.C.’s Wave of the Future Product Expo & PK Sessions take place Jan.19 on Zoom. Talks include keynote addresses from Hardlines’ own Michael McLarney, as well as Marv Franz, author of The Inspired Workplace. Product knowledge sessions will cover categories from outdoor living and construction materials to power and hand tools. Click here for more information and to register.

SUPPLIER NEWS

An Ontario court has agreed with Hudson’s Bay Co. that the “wisdom and efficacy” of Ontario’s retail lockdown rules is “open to question,” but held the province was within its legal rights. Canada’s oldest corporation had complained that Ontario’s definition of essential businesses privileged big boxes like Walmart while encouraging epidemiologically risky behaviour. The pandemic has posed major challenges to HBC, which is currently locked in legal battles with commercial landlords and last month announced its downtown Winnipeg flagship will close in February.

Home Hardware Stores Ltd. has sold off an eight-hectare property in the Waterloo region, near its St. Jacobs, Ont., headquarters, the company confirmed through a spokesperson. The site, which includes the Westhill Meadows Golf Course, was acquired by Home Hardware in 2009 for $3 million. Municipal permissions allow for the property to be used for a building centre.

The U.S. Justice Department and Environmental Protection Agency have reached an agreement with Home Depot that will see the Atlanta-based retail giant pay $20 million in fines. Home Depot is accused of sub-contracting to renovation firms that failed to adhere to required norms when removing lead paint, causing dust and paint chips to spread on work sites. The agreed amount is greater than any other fine paid to date under the U.S. Toxic Substances Control Act.

ECONOMIC INDICATORS

Investment in U.S. construction rose 0.9 percent in November. Spending on residential construction was up 2.7 percent, with the single-family segment logging a 5.1 percent gain. Investment in non-residential declined by 0.8 percent with spending on office building projects taking an 8.1 percent tumble as the work-from-home trend continues. (U.S. Commerce Dept.)

NOTED

Quebec’s manufacturing and construction sectors will avoid a total lockdown during the four-week “shock treatment” announced last week by Premier François Legault. They are however being asked to focus on essential goods and projects. Hardware stores remain on the list of essential businesses, though they may not sell non-essential items and will have to close at 7:30 p.m. to allow employees to respect the new 8 p.m. curfew.

At the same time, the province is loosening restrictions on curbside pickup. Now, even non-essential businesses will be allowed to operate for curbside pickup. The curfew, which extends till 5 a.m. with limited exemptions, will continue until Feb. 8.

OVERHEARD...

“We’re investing in making sure that we have the best assortment online that reflects what our dealers have in their stores.”
—Marianne Thompson, SVP, merchandise for Home Hardware Stores, on how her team is working to meet the challenge of increased online sales over the past several months under COVID.