TORONTO — Not since the worldwide recession more than a decade ago has Canada’s retail home improvement industry slowed down as much as it did in 2019. And as the industry tries to make sense of the impact of the COVID-19 pandemic, 2020 could turn out even worse. These are just some of the insights found in the 2020 Hardlines Retail Report.

According to the 2020 Hardlines Retail Report, sales by the industry overall experienced negative growth for the first time since 2009. However, impacts varied from region to region and by store format.

Big box retailers fared best during the uncertainty of 2019. In fact, these large-surface stores did well last year, growing in real terms and securing a larger portion of the entire market in Canada than ever before. At the other end of the retail spectrum, hardware stores showed great resilience, providing convenience offerings and maintaining their role as an important part of the local communities they serve.

This year’s Hardlines Retail Report analyzes how much the industry grew last year and identifies the best-performing provinces. The Report also ranks the industry’s top retail groups. And the big players get close scrutiny: Home Depot, Lowe’s Canada, Canadian Tire and Home Hardware are all analyzed in depth. It also evaluates the strength of independents, their affiliations with the buying groups, plus leading retail banners such as BMR Group, Canac, Peavey Industries and Windsor Plywood.

Designed to help retailers and suppliers alike develop their business plans for the year ahead, this year’s Report provides valuable forecasts for the industry for 2020 and through to 2021. Forecasts include estimated performance by the industry’s top home improvement retailers, plus growth forecasts for renovation and housing.

The 2020 Hardlines Retail Report fills more than 150 PowerPoint slides and is packed with dozens of charts, graphs and photographs. (For more information about the 2020 Hardlines Retail Report, please click here.)

INDIANAPOLIS — The North American Retail Hardware Association (NRHA) recently deployed a COVID-19 Business Impact Survey. In total, nearly 300 independent home improvement operators representing roughly 1,500 storefronts participated in the survey, shedding light on the obstacles and opportunities the pandemic has brought to the industry.

“Now that everyone has been living in this environment for a few months, we wanted to understand the impact COVID-19 has had on independent home improvement businesses from a performance perspective and an operational perspective,” says Dan Tratensek, executive vice president of NRHA.

Compared to the same period in 2019, nearly 72 percent of retailers say sales have risen at their businesses amid COVID-19. On average, retailers say sales have risen about 17 percent.

Additionally, more than 90 percent of surveyed retailers say COVID-19 has had some impact on their overall sales performance, cementing the pandemic as a major challenge.

Roughly 45 percent of survey respondents say they have employees who opted not to work at the store during the outbreak. More than one-third are running their businesses with fewer employees at their operation. Fewer than 15 percent of respondents have furloughed or laid off employees.

“The number of operators who have furloughed or laid off employees is still relatively small,” Tratensek says. “It looks like most of the reasons for laying off or furloughing employees centre around areas of the businesses that couldn’t function during COVID-19, like remodelling crews or delivery teams.”

The NRHA’s research also found the vast majority of respondents are instituting physical distancing at their stores. Nearly 70 percent of retailers are providing personal protective equipment (PPE) to their employees. Almost 36 percent of retailers are offering incentive pay to employees during the pandemic.

Retailers have adjusted their operations in myriad ways, but one of the clearest developments is the growth in curbside pickup services. More than 71 percent of retailers say they have instituted it in their stores. Supporting that business model is a simultaneous growth in online orders, which almost half of all respondents report.

BARRIE, Ont. — The role of bricks-and-mortar retail as part of the supply chain, rather than the ending point for it, has shifted rapidly under the current COVID-19 pandemic.

So any tools that that will help connect wholesalers with their retail customers more effectively are gaining attention. OrderEase is just such a platform. It connects suppliers with retailers through online product catalogues and a centralized order hub. The aim is to facilitate faster, more accurate ordering.

In a paperless environment, the need for full order data throughout the order process is essential, says Warren Patterson, president and CEO of the Barrie, Ont.-based company. “Our aim is to make the ordering process easier for retailers and buying groups,” he explains.

OrderEase currently processes some $200 million annually in transactions through its platform. While it has specialized mainly in grocery, lawn and garden, cannabis and some LBM sectors, the company has set its sights on the home improvement industry for further expansion. “It’s a natural for us because many of the suppliers to lawn and garden and grocery also supply into home improvement.”

Through its enterprise resource planning system (ERP), OrderEase connects to wholesalers and provides their sales teams with a mobile app. That app in turn can be plugged into each retailer’s own system, where it can align with the store’s inventory—right down to the SKU number—to simplify placing and managing orders. Product information is transmitted directly into the retailer’s system, tying together order management between retailers and wholesalers.

“The retailers and buying groups are really interested in having the wholesalers’ online catalogues connected right to their POS,” says Patterson. “As a retailer, I want a single piece of technology that allows me to connect to all my vendors.”

As retailers seek to beef up their own web presence to accommodate local online orders and curbside pickups, OrderEase can integrate with an individual retailer’s inventory, something many corporate sites can’t do. The platform provides images and inventory for dealers right on their own site.

“COVID has added urgency to dealers’ quest for effective online sales and wholesales, realizing taking orders by paper are not possible during COVID,” Patterson adds.

WORLD HEADQUARTERS, Toronto — Big boxes were the hot retail format 25 years ago. At that time, Home Depot was opening a new store every 36 hours. Yup, every day and a half, another store appeared somewhere in North America.

But other companies were following suit. In Canada, Kent Building Supplies was one home improvement retailer that figured the best defence against the arrival of Home Depot was a good offence. Kent already had two giant Kent Do It Yourself Warehouse stores in its system when it announced, 25 years ago this week, that a third was on its way—this time in Dartmouth, N.S.

Kent, a division of J.D. Irving Ltd., is one of the top retail chains in Canada, according to the 2020 Hardlines Retail Report. It is also a key member of the Independent Lumber Dealers Co-operative (ILDC), whose members consist of some of the largest independent dealers in the country.

Kent’s then-general manager Stew Valcour was famous for keeping a low profile. In the Hardlines fax newsletter of July 17, 1995, he gave what would remain his most extensive interview ever for this publication: when asked for details about the format of the new store, he said, simply, “Stay tuned.”

Also that week in history: we reported that Taiga turned out annual results in 1994 with sales of almost $427 million, up a healthy 15.1 percent. Taiga had been bought up the previous year by a Malaysian conglomerate. Doug Butterworth, who was Taiga’s VP at the time, shared with Hardlines the company’s plans to expand south of the border. He said negotiations were moving slowly, but “Taiga will definitely be down there.”

Butterworth’s predictions were accurate. Today, in addition to a total of 15 DCs across Canada, up from 12 in 1995, Taiga has three DCs in the U.S., along with additional reload centres there.

... that the 2020 Hardlines Retail Report, your definitive guide to the state of the industry, is now available for pre-order? The report includes valuable proprietary information you won’t find anywhere else, including in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent on pricing, so be sure to take advantage of this! Click here now to learn more and order yours!

SASKATOON — Members within Federated Co-operatives are funding 17 projects this year through the Co-op Community Spaces program. The program is providing $1 million for local projects including a greenhouse to increase access to fruits and vegetables for low-income families in Nanaimo, B.C.; an animal therapy program in Lacombe, Alta.; a pump track in Regina, Sask.; and an interactive heritage education centre in Richer, Man. FCL administers the program on behalf of the more than 160 retail co-ops across Western Canada that form the Co-operative Retailing System.

SUPPLIER NEWS

WOODSTOCK, Ont. — Gillfor Distribution Inc. announced that it has entered into a multi-year partnership with LP Building Solutions for the distribution of LP’s SmartSide products and its new ExpertFinish pre-finished siding and trim products for the Manitoba and Eastern Canada markets. The distribution agreement will take effect immediately, with Gillfor supplying the market it services in Q3 for SmartSide products and Q1 of 2021 for ExpertFinish as the product makes its inaugural launch in Canada. Gillfor will supply LP’s product offering for the retail and LBM channels, as well as commercial retailers in the markets it will service.

COLLIERVILLE, Tenn. — Orgill is partnering with Zoom to integrate the video conferencing firm’s meeting technology into the platform for the Orgill e-Volution online buying event. Retailers will be able to see calendar availability for vendors, schedule meetings and initiate Zoom video conferences all within the e-Volution framework. Because the Zoom software will be integrated into the e-Volution platform, participants will be able to use the video conferencing capabilities even if they do not have their own Zoom account.

MONTREAL — ABB Installation Products, formerly Thomas & Betts, announced that, effective this month, it has partnered with LM2 Marketing for sales representation and marketing support to selected retail accounts and distributors. LM2 will represent ABB’s brands, including Iberville, Nutek and Marr in Ontario, Quebec and the Maritimes. ABB designs and manufactures products used to manage the connection, distribution and transmission of electrical power in industrial, construction and utility applications.

MONTREAL — Intertape Polymer Group saw Q2 revenues exceed expectations as consumer activity picked up amidst easing public health measures. In a preliminary estimate, the company reported revenues of $267 million, 6.8 percent above the upper range of its May estimate. In anticipation of the impact of COVID-19 on the overall economy, IPG pulled its full-year guidance in May but estimated it would post Q2 revenues between $235 million and $250 million.

BATHURST, N.B. — ThermalWood Canada is looking to expand after reaching its first North American distribution deal earlier this month. The agreement gives ThermalWood access to the Weston Forest network in Ontario. “They have access to 300 hardware stores and 14 people on the road,” ThermalWood co-owner Bob Lennon told Halifax’s Chronicle Herald.

ECONOMIC INDICATORS

Sales of existing homes in Canada rose by a further 63 percent in June, returning them to normal levels for the month—some 150 percent above where they were in April. Transactions were once again up on a monthly basis across the country. Among Canada’s largest markets, sales rose 83.8 percent in the Greater Toronto Area, 75.1 percent in Montreal, 60.3 percent in Greater Vancouver and 54.9 percent in Calgary. (Canadian Real Estate Association)

NOTED

The electric performance of Shopify’s shares has solidified the e-commerce platform’s position as Canada’s most valuable company, the Globe & Mail reports. Since early May, RBC has gained just $11 billion in market capitalization for a total value of $131 billion. By comparison, Shopify picked up $45 billion for a total of almost $166 billion. Founder Tobias Lutke is inching closer to becoming the richest Canadian, currently coming in at number three.

OVERHEARD...

“The more often the whale comes up for air, the more likely it is to get harpooned.”
—Stew Valcour (attributed), who for years was the general manager of Kent Building Supplies. This proved to be the mantra of the members of Independent Lumber Dealers Co-operative (ILDC), reflecting the low-key profile which many of them prefer to maintain.