Last week, Sexton Group has announced that it had signed its first international member. While that member is on French soil, it’s located just 19 kilometres off the coast of Newfoundland and Labrador. Habitat Confort SPM has been serving the residents of Saint-Pierre and Miquelon, a self-governing French overseas “territorial collectivity”, since 2003.

Most buying groups that can claim an international presence are on the same cluster of islands. BMR Group is represented by Ets Max Girardin, while Home Hardware has one location, Centre de Rénovation Marcel Dagort S.A.R.L. RONA has also had a dealer there for many years, RONA Derrible. These stores are all located in the community of Saint-Pierre, which represents the bulk of the territory’s 6,000-strong population.

One outlier is an Ace store, Quincaillerie François Detcheverry & Fils (shown here). It’s located on the larger but more sparsely populated island of Grand Miquelon.

Despite its geographic proximity, Saint-Pierre and Miquelon poses real international challenges. It shares a culture—and infrastructure—with France. Even telephoning there requires an international call.

Electricity is all based on European standards, using 220 amp service, complete with different plugs, instead of the North American standard of 120 amps. That means Canadian suppliers can’t ship any electrical products, including everything from small appliances to power tools. For dealers in Saint-Pierre, those products still come from France. This restricts the sales potential to these stores for any group or distributor. Prices tend to be much higher, while staffing costs are higher as well. Dealers operate providing higher wages along with big markups on their products.

Other groups that cross borders include Windsor Plywood, which has had five locations in the U.S. for many years. And there are plans for more, but those plans have been stalled.

Under the pandemic, Windsor Plywood has fared well, along with the industry in general, says president Curt Crego, adding that “results have been well above expectations.” However, those same conditions have hampered U.S. growth.

“We currently have four locations in Washington and one in Montana, two of which are franchised,” Crego says. “Had the pandemic not intervened I expect we would have opened additional locations by now. Unfortunately COVID, and in particular the cross-border travel restrictions, have and continue to pose an obstacle to our growth in the U.S.”

Orgill reorganizes its buying departments, now with two divisions

Orgill has announced the restructuring of its purchasing department. It’s been divided into separate merchandising and replenishment divisions.

The merchandising division, with a mandate to drive revenue, will focus on vendor relationships, promotions, pricing, sales, and reviews. The replenishment division will be responsible for managing inventory, service levels, inventory turnover, and supply chain.

“This division of merchandising and replenishment within the purchasing department is a change that we have seen coming for some time now,” Jeff Curler, the department’s EVP, said in a release. “This change helps us better address the distinctly different, yet connected, functions our purchasing department deals with on a daily basis.”

At Orgill’s head office in Memphis, the purchasing leadership lines up as follows:

1. Jeff Curler was promoted to executive vice president of purchasing
2. Jim Wilson will continue as vice president of Exclusively Orgill (formerly known as Worldwide Sourcing).
3. Lisa Pirtle was promoted to vice president of replenishment and vendor support.
4. Alan Shore was promoted to director of merchandising, seasonal.
5. Heath Kennedy was promoted to director of merchandising, hardlines.
6. Karen Meredith will continue as director of LBM Sales.

The purchasing team has been responsible for purchasing products for Orgill’s Canadian customers for several years, so these changes will directly benefit Canadian customers as well, the company told Hardlines.

According to company president and CEO Boyden Moore, this realignment will position Orgill’s teams to better serve its customers while improving efficiency and vendor relations. “We know how critical it is that we evolve as a company and constantly look for ways to respond to market changes and create efficiencies within our own operation,” he said.

“These changes will position Orgill and its customers for even greater success in the coming years.”

Housing market heat continues into 2022, with scarcity expected until spring

Canada’s stock of available housing is getting squeezed going into 2022, slowing home building and driving up prices. The Canadian Real Estate Association (CREA) said last week that the House Price Index rose 26.6 percent in the twelve months leading into December 2021.

That month, the average price of a resale home hit $713,500. Sales edged down 0.2 percent from November but buyers’ enthusiasm remains undimmed.

“With the housing supply issues facing the country having only gotten worse to start 2022, take any decline in sales early in the year with a grain of salt because the demand hasn't gone away,” CREA chair Cliff Stevenson said in a release. “There just won't be much to buy until a little later this spring.”

At the same time, the number of listings hit their record low, so “the housing affordability problem facing the country is likely to get worse before it gets better,” said Shaun Cathcart, CREA’s senior economist.

Demand is expected to cool off later this year, as the Bank of Canada is poised to raise interest rates. “When the central bank turns its eye to inflation again, I do think that will trigger a flattening in the market,” Royal LePage CEO Phil Soper told Financial Post.

Last week, the Canada Mortgage and Housing Corp. reported that the annual pace of housing starts took a 22 percent plunge between November and December.

There’s good news looking further out, however. New StatCan data shows that $11.2 billion worth of building permits were issued in November, with a 12 percent increase in the residential sector—a good indicator of what lies ahead in the coming months. Permits for single-family houses rallied by 20.2 percent after an 8.5 percent decline in October.

Activity remains hot south of the border too. The U.S. Commerce Department noted last week that housing starts rose by 1.4 percent in December to an annual pace of 1.7 million units. Building permits for the month surged by 9.1 percent to a rate of 1.87 million units.

The pandemic has been kind to Ikea Canada, a fact that’s reflected in its sales, both in-store and online.  The latter increased by 161.5 percent to $969.5 million, while sales overall climbed to $2.6 billion for the company’s financial year ending August 31, 2021, an increase of 11.8 percent.

While store visits dropped by 7.4 percent, online traffic saw a 32 percent increase from last year. Those online sales translated into 1.8 million orders delivered, up 63 percent from the previous year. Online sales picked up in-store were up a whopping 550 percent over pre-COVID numbers.

The company made a number of advances during the year. One was the introduction of its Design Studio concept. New to Canadian stores, it allows customers to design and order a new kitchen, bath, or bedroom by scheduling one-on-one planning sessions with an Ikea design expert (shown here). It also introduced a small-format showroom outlet in the heart of downtown Toronto.

The company continues to focus on its environmental action plan, an effort to reduce waste both in its store operations and with its products and services to customers.

Of those products, the pandemic has affected what sells at Ikea. This past year saw a trend toward making things more comfortable and flexible, as people continued to spend more hours in their homes. A list of some of the most popular Ikea products in 2021 shows how its shoppers stressed creature comforts over the practical and utilitarian:

• Pillows – sales increased 16 percent
• Candles – Canadians bought more than four million candles last year, a 123 percent increase
• Runnen patio tiles – a 135 percent increase in sales
• Applaro outdoor tables – sales doubled from last year
• Plants – especially Ficus, were up more than 233 percent
• Artificial plants like hanging eucalyptus saw sales increase sixfold

Other in-store favourites continued to be popular. Ikea sold 20 million meatballs and 1.8 million hot dogs last year.

At Sexton Group, Frank Bayuk, the group’s business development manager for British Columbia, has retired after 15 years with the group. Succeeding him is Dean Toews, who joined Sexton’s business development team last August.

DID YOU KNOW...?

...  that we are always looking for new products to feature in our publications? Our magazine, Hardlines Home Improvement Quarterly, is mailed to 11,000 dealers and managers four times a year. The Hardlines Dealer News email newsletter, gets emailed to thousands of people every month. We include a new product section in both HHIQ and Dealer News. If you have new products, send them to our product editor, Geoff McLarney!

Home Hardware Stores Ltd. has joined Fortinet’s Secure Software-Defined Wide Area Network. The retailer’s dealer-owners have been using a variety of platforms across some 1,100 locations, making network and security management a challenge as their business grows. The Secure SD-WAN will simplify and secure Home’s networks by replacing those products with one centrally managed digital system.

Giant Tiger Stores Ltd. has forged a partnership with TV interior designer Debbie Travis to promote a new home décor collection. The Debbie Travis Collection will be available in stores and online beginning Wednesday. It will include decorative pillows and throws, quilts and bedding sets, bath linens, shower curtains, and window curtains.

Canac has completed construction on a second building at its Drummondville, Que., distribution centre. The 432,000 square-foot structure will be geared toward seasonal products and building materials. It sits on a million-square-foot lot Canac purchased in 2019, situated in an industrial park opposite Canac’s current DC.

Canadian Tire Corp. has been listed as one of Corporate Knights’ Global 100 Most Sustainable Corporations, for the third time. CTC ranked as the top general merchandiser in the country and placed first among its peers headquartered in Canada. The honour reflects the company’s activity in environmental, social, and governance practices.

Lee Valley Tools shuttered its last Toronto store, located in Scarborough, on Christmas Eve, due to increased lease costs that “made keeping the store open unsustainable,” according to an explanation on the retailer’s website. Lee Valley continues to offer same-day delivery in the Greater Toronto Area from its Vaughan and Burlington locations.

Sleep Country Canada has launched its Sleep Country store on Loblaw Marketplace, the grocery retailer's digital offering, which sells products not available in its stores. Launched online in 2019, Loblaw Marketplace carries a wide variety of products including home, baby, pet, and toy. Sleep Country will be the exclusive provider of traditional mattresses on Loblaw Marketplace.

SUPPLIER NEWS

Hardware stores were considered essential businesses under Quebec’s first round of lockdowns. With the vaccine pass expanded to large-surface retailers last week, however, the industry hasn’t made the cut. Quebec trade group AQMAT says that needs to change, and that it has the support of all three opposition parties in Quebec’s National Assembly.

ECONOMIC INDICATORS

Sales of existing homes edged down 0.2 percent between November and December 2021. Small gains in November and again in December followed on the heels of a nine-percent jump in activity in October, placing sales in the final quarter of 2021 between the highs and lows seen earlier in the year. (Canadian Real Estate Association)

Housing starts in December were at an annualized rate of 236,106 units in December. That was a decrease of 22 percent from 303,813 units in November. The pace of urban starts decreased by 24 percent to 212,918 units, with single-detached urban starts down four percent to 55,231 units. (CMHC)

Retail sales in the U.S. declined by 1.9 percent in December, the biggest decrease in 10 months. That figure follows a revised 0.2 percent increase in November. (U.S. Commerce Dept.)

NOTED

Industry observers are warning supply chain woes may worsen with the extension of vaccine mandates to American truck drivers. Under the new rules, Canadian truckers who aren’t fully vaccinated must quarantine on entering the country, though they can complete their deliveries first. The U.S. was planning a similar mandate on its side for Jan. 22.

OVERHEARD...

“If you have a burst pipe, you need supplies.”
—Vincent Marissal, who represents a Montreal riding for the left-wing Quebec Solidaire, challenged the Quebec government’s ruling that excluded hardware stores from essential status.