July 10, 2017 Volume xxiii, #28

“You may not control all the events that happen to you, but you can decide not to be reduced by them.”
—Maya Angelou (American poet, essayist, and civil rights activist, 1928-2014)

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The big get bigger: Industry’s Top Four keep consolidating the market

WORLD HEADQUARTERS, Toronto ― Canada’s retail home improvement market grew at a healthy pace in 2016, up 2.9% over the previous year, thanks to Canada’s red hot housing market, low interest rates, and ageing housing stock—all factors driving renovation sales. And that momentum is forecast to continue in 2017 and 2018, according to the latest Hardlines Retail Report.

However, while the future looks stable for this industry throughout most of the country, all is not entirely rosy for Canada’s hardware stores and building supply dealers.

Tough competition that includes some of the country’s largest retailers, including Lowe’s and Home Depot, as well as the challenge of selling products that need careful explanation about how to use or install them, give the retail home improvement industry challenges and opportunities all its own.

The toughest competition from within is coming from the industry’s largest players. According to the Hardlines Retail Report, Home Depot Canada, which is number one with sales of almost $8 billion, must contend with its biggest rival from south of the border, Lowe’s, which purchased RONA inc. last year and has been expanding aggressively.

In fact, thanks to this growth by Lowe’s Canada, along with solid same-store sales gains by Home Depot Canada, the market share of these big box retailers is now at a record high, accounting for more than one-quarter of all sales in the sector.

Along with Home Depot Canada and Lowe’s Canada, two other retail groups, Home Hardware Stores Ltd. and Canadian Tire Retail, make up well over half of all sales by hardware stores and building supply dealers in Canada. These “Top Four” retailers collectively grew their sales at a rate that was almost double the industry average last year, driving more consolidation at the top and ensuring that the big players in this industry continued to get bigger in 2016.

(With 200 PowerPoint slides, dozens of charts and graphs, and in-depth analysis available only from HARDLINES, this study provides full details of the size and growth of the Canadian retail home improvement market. Click here for more info and to order this amazing report now!)

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Jim Caldwell departs Lowe’s Canada, Reno-Depot’s Guy Beaumier steps in


BOUCHERVILLE, Que. ― Jim Caldwell, executive vice president of the Lowe’s big box business for Lowe’s Canada, has left the company. In his place, Lowe’s Canada has appointed Guy Beaumier, executive vice-president for the retailer’s Reno-Depot and Pro businesses, as interim head of the Lowe’s banner.

A spokesperson for Lowe’s Canada, Valérie Gonzalo, stressed the contribution Caldwell made to the company during his tenure there. A big part of his mandate was the conversion of certain RONA big box stores to the Lowe’s banner. The first such opening was the Namao store in Edmonton. “We’re very happy with the results there since it opened,” Gonzalo said. “It’s one of his latest achievements.”

Caldwell had been hired almost exactly a year ago, on June 20, 2016. Before joining Lowe’s Canada, he was president of the Brick Group, Canada’s largest furniture retailer. Prior to the Brick, Caldwell had spent 27 years at Wal-Mart in Canada.

Stepping in to replace Caldwell, Beaumier’s expertise is not limited to the RONA side of the business. He has also served as VP, operations at Lowe’s Canada. His background before that was from the grocery side, with stints at both Loblaw and Sobeys. According to the email from Lowe’s, he’s “the right candidate to assume this interim role as we enter a new phase in growing our big box segment.”

The statement went on to reaffirm Lowe’s Canada’s commitment to its other retail formats. “Lowe’s Canada continues to be firmly committed to its multi-business unit and banner strategy in Canada. We are convinced that it provides us with a unique competitive advantage, allowing us to deliver on our long-range growth plan and realize our mission to become Canada’s number-one choice in home improvement.”

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Cologne’s hardware and garden trade fairs: a great opportunity for North Americans

SPECIAL REPORT — For vendors and retailers seeking new products and new merchandising ideas, it’s hard to beat the energy and diversity of the industry trade fairs mounted by Koelnmesse. That organization owns and operates two significant shows for the home improvement industry: spoga+gafa, the lawn and garden show September 3 to 5; and the International Hardware Fair, being held next spring from March 4 to 7.

While these shows attract people from throughout Europe and Asia (spoga+gafa will host 2,039 exhibitors and 39,000 delegates from 59 countries), North Americans are less likely to make the trek across the pond to attend. That’s a shame, because these events are true forums for innovation.

For example, at the lawn and garden show, you can expect the largest display of barbecues in the world, says Stefan Lohrberg, the new project manager for spoga+gafa. Weber alone takes up almost 1,100 square feet of space. An entire hall at the fair is devoted to outdoor furniture, and another is strictly for barbecue accessories—yes, an entire hall for barbecue accessories. Other categories highlighted include sports and games, camping and leisure, and live goods.

“It’s one of our fastest growing shows,” he adds. And it attracts big players from all over the world, including Walmart, OBI, and Costco.

Innovation is also the watchword at the International Hardware Fair. Next year’s show will feature lots of content and learning, much of it generated through a stage in the middle of the show floor. Speakers will feature leading e-commerce sellers including Google, Ali Baba, eBay, Google, and Amazon.

Canadians are encouraged to look farther afield for innovations and new product ideas of their own. These shows offer an effective solution. (For more information about spoga+gafa, click here. To learn more about the International Hardware Fair, click here.)

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Canadian Tire expands customer product testing to enhance online reviews


TORONTO — A recent survey commissioned by Canadian Tire shows that online ratings and reviews influence 80% of Canadians’ purchasing decisions, and the same percentage are looking for truthful product reviews written by real people.

Online product reviews from real customers and users are perceived to be more truthful, creating confidence in the reviews. The survey, conducted by Innovative Research Group and Heartbeat Analytics in late April, also shows that more than three-quarters wish Canadian retailers would be more proactive in ensuring that product reviews, ratings, and testimonials about their products are authentic and truthful.

This research supports a big investment by Canadian Tire in its “Tested for Life in Canada” program, which uses a sample of customers across the country to try out new products at home and give feedback on them. The feedback provided by users creates a pool of online product reviews that enhances the legitimacy of the products themselves.

The company has recently expanded the reach of the testing program, which uses a panel of 15,000 Canadians coast to coast. By the end of this year, the number of products put out for testing will reach 7,000.

Canadian Tire claims that "Tested for Life in Canada" is the country’s largest consumer testing group. Users evaluate products for ease of use, functionality, and durability and assign a star rating out of five. A product is awarded a badge when it is assigned four or more stars by at least eight testers.

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