Bernie Owens is the president and CEO of TIMBER MART, one of the country’s largest LBM buying groups. He’s held the post for almost eight years and during this time he has gotten close to his dealers—and their concerns on the front lines.

Owens also has some observations about the larger issues facing the retail home improvement industry. We had the opportunity to speak with him recently on a range of topics. That conversation is featured in the latest episode of the Hardlines podcast series, What’s in Store.

The importance of a buying group, and the necessity for size, is greater than ever before, says Owens.

“If I look at the independent dealers today, and the challenges they are facing, an independent dealer should be looking at a buying group that offers critical mass to the vendor community, significant volumes, buying power, and LBM distribution to assist when they have stockouts.”

He says that independents can react to their local markets more quickly than a big chain can. But these same independents have other concerns, and a major one nowadays is the security of supply. Over the past 16 months, maintaining supply has been crucial for all dealers and Owens only expects this situation to worsen in the coming months. But the relationships TIMBER MART has with key vendors ensure that source of supply for its members.

“More than ever, independent dealers truly need to work together to make sure they are looked after and remain competitive against corporate entities.”

Dealers face new challenges as they attempt to manage their inventories in the face of rising prices. Costs have to be weighed against long lead times as supply is squeezed. Another concern for Owens’ dealers—and one that retail is facing more widely—is the importance of attracting people to work in their stores and to be part of this industry.

Another issue Owens has seen his dealers struggle with is cybersecurity. He believes all dealers must stay on the alert. “I encourage all businesses, regardless of who you are, whether you’re a small business or a large business, to keep cybersecurity training top of mind and give your employees the knowledge they need to help protect the business.”

(Our conversation with Bernie Owens is featured in the latest instalment of the Hardlines podcast series, What’s in Store. Click here to listen to the full interview and to sign up for all our podcasts!)

Canada is one of the most buoyant home improvement markets in the world and market conditions under COVID have driven the sector to unprecedented heights. According to the 2021 Hardlines Retail Report, growth in 2020 by hardware and home improvement dealers in Canada set a record.

The latest Hardlines Retail Report examines the industry, and the retail players that make it up, in detail using data and statistics that are not available anywhere else. The proprietary research and strategic insights in the report shed light on how much the industry is growing, where the growth vectors are coming from and which players are leading the way.

The sector faced a year of unprecedented sales activity in this sector under COVID in 2020. The year resulted in an average sales increase from all stores measured in this study of more than 15 percent, a rate of growth not seen since Hardlines began tracking the industry 25 years ago.

Unlike previous years, the increase was seen across the country, even in the Prairies, where a slowed energy sector had impacted those markets. The Maritimes also saw an increase, which in other years has seen only slow or flat growth.

Growth was not consistent across all store types. Hardware stores as a sector saw the slowest growth of all the store formats. However, this reflects the ongoing reduction in the number of these stores in favour of more full-line building centres. They now account for less than seven percent of sales in the industry. Despite this, hardware stores had some of the biggest same-store sales of any sector, many of them reporting sales increases in 2020 of 25 percent and up, and even 40 percent increases.

For vendors trying to understand their customers, or retail groups that want to keep abreast of their competitors, the report identifies and ranks the top 20 retail players in the sector. In addition, the four leading groups are analyzed in-depth to explain strategies, competitive advantages, and expansion plans.

Areas of study include:

• The size of the industry year-over-year
• In-depth analysis of the top players, Home Depot Canada, Lowe’s Canada, Home Hardware, and Canadian Tire Retail
• The winning formats—how the independents are faring against the big boxes
• The hot provinces and how market shares have changed by region year over year
• The newest trends and challenges facing the industry today
• Forecasts for the industry in 2021 and 2022

Designed to help retailers and suppliers alike develop their business plans for the year ahead, the 2021 Hardlines Retail Report provides valuable forecasts for the industry and its top players for 2021 and 2022. It features 190 PowerPoint slides and is packed with dozens of charts, graphs, and photographs.

(Click here for more information and to order your report now!)

Eisenwarenmesse, the International Hardware Fair, is preparing to return to a live event next year. Pre-bookings by vendors for the giant hardware fair in Cologne, Germany, indicate strong support for a return to face-to-face business. Show organizers report that the event already has almost 2,500 registrations through its early-bird booking. These bookings were also a success internationally, as exhibitors from over 40 countries have registered so far.

The show has evolved over the years to become not just a showcase for new products, but a springboard for new ideas and trends. Exhibitors from all over the globe will be presenting their innovations, ranging from tools and fixing and fastening technology to construction and home improvement supplies.

After the time-out in 2020 and 2021 due to the pandemic, the current number of applications received underlines the significance of the leading global trade fair and the need of the market participants for personal contact and the desire to return to an environment that addresses all senses. With this knowledge, the show in 2022 will be a hybrid physical and online event.

Some key trends to watch for in Cologne:

• Healthy products that are becoming more ergonomic. A new, ergonomically shaped generation of tools facilitates handling and operation.
• Safety at work and on the job is another top theme to come out of the pandemic. That includes the show itself. The International Hardware Fair promises the highest level of safety for attendees next year.
• Faster and more efficient tools continue to represent an important trend. The new products of many manufacturers aim to accelerate the work process.
• Focus on design combines function with form as everything from screwdrivers to workshop trolleys strive to be more attractive, some even being issued in limited design editions.

Eisenwarenmesse takes place March 6 to 9, 2022, in Cologne, Germany.

Retailers race to update their IT teams to capture e-commerce sales

The surge in online sales over the past year represented a huge shift in consumer habits—and a huge concern for dealers and managers. Through the pandemic, the shift to online sales has grown exponentially.

Retailers with established platforms, such as Canadian Tire, Lowe’s Canada, and Home Depot Canada, fared well over the past year as their online sales soared. But the move was often a difficult one for independents, especially as this trend continues even after the worst of the pandemic is behind us.

However, the big groups are well-positioned to ramp up their online sales game and an article in ITBusiness.ca provides some details of what two of those groups are doing. According to the article, Rajat Khanna, vice-president of information technology at Lowe’s Canada, saw the retailer’s website traffic increase by 200 percent and digital volume was up 400 percent. Initially, one of the big sellers was paint. In response, Lowe’s Canada introduced an online paint selector, which lets customers transform the room they want to paint virtually.

At Home Hardware Stores Ltd., Chris Parsons, director of e-commerce, was quoted as saying the banner’s website traffic more than doubled during the past year under COVID. Parsons noted that his company rolled out a platform to help its dealers track and process online orders.

Even as more customers moved online, the company’s call centre experienced a huge surge in use as well, rising by 350 percent. At Lowe’s Canada, that number went up by 800 percent, said Khanna.

For both companies, as well as companies like Canadian Tire, the focus has been on hiring more IT staff and beefing up the tech sides of their businesses.

BMR Group has appointed Simon Gouin as senior director, business development, eastern Canada. In his new role, Gouin will oversee the development of the dealer network in Quebec, Ontario, and the Maritimes, as well as BMR’s business relationship with current dealers. A graduate of HEC Montreal in business administration, Gouin has more than 15 years of experience in business development in the construction and renovation industry. He managed hardware stores for almost a decade before holding various management positions in sales and business development, including management roles at Patrick Morin and TORBSA.

DID YOU KNOW...?

... that the annual Hardlines Retail Report is now available? This powerful set of research is a marketer’s dream. If you want to know the sales growth and market shares of all the hardware and home improvement groups in Canada, and the strategic analysis of the top players, this is the report for you. It features more than 185 slides and dozens of photographs and tables. For more info and to pre-order, click here!

The Home Depot Canada Foundation is renewing its major funding of $300,000 over two years to support education and job readiness programs at Dans la rue. Founded by Father Emmett “Pops” Johns, the organization has supported homeless youth in Montreal since 1988. Since 2015, it has received more than $1 million through the foundation’s Orange Door Project. Until Aug. 1, customers at Home Depot’s Boisbriand store will have the option of making a $2 donation to Dans la rue.

The Retail Council of Canada has recognized Lowe’s Canada as a finalist in this year’s Excellence in Retail Awards. The retailer was included in the Environmental Leadership and Omni-Channel categories for its sustainability initiatives. Also among the Environmental Leadership finalists are Federated Co-operatives Ltd. and Walmart Canada. In the Omni-Channel category, Lowe’s Canada was joined by Lee Valley Tools. Canadian Tire Corp. placed in the In-Store Experience and Design, Philanthropic Leadership, and Pop-Up Experience and Design categories. Federated Co-operatives, Lee Valley Tools, and Peavey Industries were recognized for Retail Marketing. Canadian Tire and The Home Depot Canada received the nod for Talent Development.

Groupe LTM has acquired the RONA store in Marieville, Que., now named RONA Matériaux Marieville. The group owns three other Montreal-area RONA hardware stores, under general manager Bruno Paradis. The latest addition is a 5,000-square-foot store offering a range of hardware, paint, tools, and seasonal products. It also sells school and office supplies through its Papetrie ABCD stationery shop.

GMS Inc. has announced the completion of its acquisition of Westside Building Material. The parent of WSB Titan originally announced the $135 million deal in May. The acquisition increases GMS’s reach in several major California markets and marks the commercial dealer’s first foray into the Las Vegas market.

Rockwool North America has begun commercial production of stone wool insulation products at its newest U.S. manufacturing facility, located in Jefferson County, W.Va. The 460,000-square-foot factory produces Rockwool’s residential, commercial, and industrial stone wool insulation.

Trusscore has announced the acquisition of Calgary-based Westech Building Products, a developer of vinyl building materials. Westech was acquired from its parent company, Westlake Chemical Corporation. Westech is a Houston-based manufacturer and supplier of petrochemicals, polymers, and building products.

Intertape Polymer Group has reached an agreement to acquire Nuevopak Global Ltd. for approximately $43.8 million. Nuevopak is a privately held company based in Hong Kong and develops machines to make protective packaging. That segment “continues to be a strategic portion of our product bundle,” said Greg Yull, president and CEO of IPG, in a release. “Nuevopak has been a valued partner of ours for several years and this acquisition was a natural evolution of that relationship.”

ECONOMIC INDICATORS

The value of building permits fell in May by a record $1.6 billion, or 14.8 percent, to $9.5 billion. The decline affected all sectors, with almost three-fifths of it due to multi-family dwellings in Ontario. All provinces except for Newfoundland and Labrador posted a decrease in the value of permits issued for single-family dwellings, which fell 10.6 percent nationally to $3.2 billion. Quebec accounted for almost half of that decline. (StatCanada)

Total U.S. retail sales excluding non-store retailers (not seasonally adjusted) in March were up 31.9 percent from March 2020. All 50 states and the District of Columbia had positive and significant year-over-year percentage changes from March 2020 to March 2021. (U.S. Census Bureau)

NOTED

The latest episode, “The Legacy of J.Pascal Hardware,” of the Hardlines podcast series, The History of Home Improvement, is now available. It looks at the story of J. Pascal Hardware, a family-owned enterprise for almost 90 years. Founded by Jacob Pascal, a Romanian Jewish immigrant to Montreal, it spread to 21 locations throughout Quebec and Ontario. The company pioneered the use of discount and remainder bins to appeal to customers on a tight budget. Click here to subscribe to the Hardlines podcast series for free and to listen to past episodes!

OVERHEARD...

“It’s a challenge. It’s definitely a challenge for the dealers to get people out to work… However, I'm hopeful that as more of the population gets vaccinated, and the COVID cases eventually begin to decline, that we'll see more people entering the workforce.” —Bernie Owens, president and CEO of TIMBER MART, on the need to attract young, talented people to the retail home improvement industry. He is featured on the next  episode of the Hardlines podcast series, What’s in Store.