| CANADIAN TIRE DEVELOPS NEW RETAIL STRATEGY |
| Toronto, ON — As one of Canada's largest publicly traded retailers, Canadian Tire Corp. has to focus on the corporate realities of its different divisions and how overall performance plays to Bay Street. But the retail division (CTR) has a different mandate.
Leaving concerns about shareholder value to president and CEO Wayne Sales, CTR president Mark Foote has been looking carefully at the stores themselves - and how to build both traffic and purchases. The result of corporate surveys - and a lot of internal reflection - has resulted in a renewed focus on the customer.
Foote is trying to figure out how to increase the customer experience at CTC stores, especially in light of some troubling factors. First of all, same-store sales have been below industry average for years, with growth coming largely from new or expanded stores. But those expansions and refits are coming to an end within the next three years. Also, customers' shopping baskets have gotten smaller even as the frequency of their visits has dropped.
As it turns out, each different business within the store - for example, automotive and sporting goods - serves as a distinct destination for shoppers. So the company wants to encourage more cross-over shopping between these departments. One hurdle, though, has been the emphasis in its flyers on convenience and day-to-day items, such as cleaning products. These products build traffic and repeat customers, something Sales has always believed is important to compete against the likes of Wal-Mart. But the company is faced with the challenge of moving a customer who has come into the store for Comet Cleanser on special to make a more upscale purchase, such as the higher end Persona housewares or Mastercraft Maximum power tools.
According to CTC spokesperson Jennifer Sexton, the new strategy ties in with the company's new store positioning, which will be realized with its "20/20" store concept that rolls out this fall. The initiative is building on the "start" positioning of CTC - as the starting point for repair and renovation projects. "It's just evolving that and going along further from where we've come from."
The solutions, which will be unveiled by Foote at a senior management meeting for the retail division later in July, include more staff training through its e-learning initiative, as well as more boutiquing and cross-merchandising on the retail floor to get people to do more than just convenience shopping. As more space is opened up in the stores under the 20/20 concept, more attention will be given to housewares and home décor, in an effort to attract more female shoppers - and increase the size of the consumer purchase.
After the management team digests the new customer-first mission, the strategy will be delivered to the dealers at their fall market in October. |
| CRHA DEVELOPS CONSUMER INCENTIVE PROGRAM FOR MEMBERS |
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Toronto, ON — The Canadian Retail Hardware Association has launched a new customer loyalty program for its member retailers. Called ToolPoints, the initiative enables customers to collect points at store level and redeem them for prizes during specific promotional events.
Developed with Charles Marketing Group C.M.C., a program is set up with the retailer tailored to that retailer's specific business needs. The promotion-specific program allots points to customers to build return traffic for a retailer over the course of a store relocation, seasonal sale or a grand opening. It's supported by heavy in-store signage, price reductions and a local direct mail campaign.
At the True Value store in Guelph, ON, the program was applied to a four-week summer sale to unload excess inventory. According to Don L'Heureux, owner of Guelph True Value Hardware, the program increased sales by 14 times on the opening day of the event. Humbertown True Value in Toronto also used the program, while the True Value in Schomberg, ON is about to try it, as well.
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| B&D TO ACQUIRE MASCO'S LOCKSET BRANDS |
| Towson, MD — Black & Decker could greatly broaden its market penetration in the security lockset category if it's successful in completing its deal to acquire the Weiser Lock and Baldwin Brass lines from Masco Corp.
On July 1, B&D, based here, and Masco, based in Taylor, MI, announced they had signed a letter of intent calling for B&D to buy Weiser and Baldwin, two businesses that generated US$250 million in revenue in 2002, or about 16% of Masco's sales from its decorative architectural products group (which, by the way, was the company's highest profit margin group last year, at 21.2%.)
Masco, which has owned Baldwin since 1982, and has owned Weiser since 1987, has a well-earned reputation for its aggressive acquisition and disposal of its business properties. It has been telling investors and analysts over the past several weeks that it is evaluating all of its divisions to see which parts of its corporate network are candidates for expansion or for sell-off, according to Samuel Cypert, a Masco spokesman.
"We think this deal makes sense from a logistical, marketing and purchasing standpoint, and will ultimately benefit consumers," he says.
For B&D, Weiser and Baldwin would fill out its price and product assortment in the security hardware category. Barbara Lucas, a spokesperson for B&D, noted that Kwikset, the best-selling lockset brand in the U.S., is sold primarily as an opening price point, although recently that brand has been expanded to include mid-priced models as well as an upper-end line called Society Brass. Weiser is generally marketed as a mid-priced lockset line and Baldwin Brass as a premium line.
There could be manufacturing synergies in this deal, too. Weiser, which is based in Tucson, AZ, makes its products in Nogales, Mexico. B&D is currently making parts for its Kwikset line in Mexicali, Mexico, said Lucas. (Weiser's Canadian distribution is out of Burnaby, BC).
It will be interesting to see, as well, if this deal gives B&D a better shot at regaining shelf space in Home Depot's stores. Last year, Depot reset its door hardware department chain wide, and gave Schlage Lock the dominant position. Kwikset and Baldwin currently command four of the department's 12 sections. Home Depot currently does not carry Weiser. |
| SAFETY AT CALIFORNIA HOME DEPOTS QUESTIONED |
| Sacramento, CA — California's Department of Occupational Safety and Health reportedly has informed Home Depot that it is reviewing the safety records of its 185 stores in the Golden State, where five employees have been injured this year.
The Atlanta Business Chronicle reported last week that Cal/OSHA notified Home Depot in June that its California stores may have safety problems. The publication also reported that Cal/OSHA is reviewing Home Depot's accident records over the past several years.
Home Depot continues to be plagued by news that its warehouse home centres present a safety risk to employees and shoppers. Last May, a six-year-old boy was crushed to death by falling patio doors in Home Depot's store in Pharr, TX. And OSHA records show that, since 1999, twice as many employees - 39 - have been injured in Home Depot's stores nationwide as those injured in Wal-Mart and Lowe's stores combined.
Home Depot officials told the Chronicle they were unaware that OSHA was directing more attention at the chain, saying that the company continued to enforce safety standards in all its stores.
Cal/OSHA operates independently of the federal agency, and many of its rules are more stringent that the national standards.
The Chronicle reported that three employees in Home Depot's stores in California had been injured by falling merchandise over the past six months, despite a law passed in the state last year that requires warehouse stores with racking higher than 12 feet to install safety netting across higher-stocked products and to establish customer-free "safety zones" when forklifts are loading and unloading stock. |
| SEARS LOSES PLACE AS AMERICA'S FOURTH-LARGEST DEALER |
| National Report — Six of the 10 largest retailers in the U.S. sell at least some home improvement products, and among that group, Sears continues to relinquish market share. Stores, the trade publication for the National Retail Federation, recently published its listing of America's 100 largest dealers, whose sales grew by 6% in 2002 to US$1.18 trillion.
Leading the pack, of course, was the world's largest corporation, Wal-Mart, whose revenue jumped more than 12% in 2002 to US$246.5 billion, and whose earnings rose 20.5% to US$8 billion. Home Depot remained the country's second-largest dealer, followed by the supermarket chain Kroger, the discounter Target Stores and the general merchant Sears.
For the second consecutive year, Sears dropped down a spot on Stores' list.
The rest of the Top 10 was comprised of the membership club Costco, the supermarket retailers Albertson's and Safeway, and the mass merchants JC Penney and Kmart.
Other home improvement dealers that made Stores' Top 100 were Lowe's, which finished 12th, Menard's at 43rd, Sherwin-Williams at 60th, and 84 Lumber 93rd. Had it been included, Stock Building Supply would have ranked 69th.
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| INDUSTRY STOCK WATCH |
|
COMPANY |
52-WEEK HIGH |
52-WEEK LOW |
CLOSE FRIDAY |
| Canadian Tire |
37.29 |
26.80 |
33.00 |
| Canfor |
11.49 |
6.83 |
8.75 |
| Costco |
39.55 |
27.00 |
36.11 |
| Goodfellow |
13.99 |
9.75 |
10.00 |
| Home Depot |
38.50 |
20.10 |
33.40 |
| Hudson's Bay |
13.90 |
5.87 |
9.43 |
| Lowe's Cos. |
46.43 |
32.50 |
42.12 |
| Rona Inc. |
19.40 |
11.75 |
18.21 |
| Sears Canada |
23.99 |
13.60 |
16.35 |
| Sodisco-Howden |
1.90 |
1.06 |
1.71 |
| Taiga Forest |
7.55 |
5.85 |
7.55 |
| Wal-Mart |
58.03 |
43.72 |
54.96 |
| West Fraser |
39.46 |
26.27 |
33.50 |
| |
|
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| COMPANIES IN THE NEWS |
| Ottawa — A NAFTA dispute panel has delayed a ruling in Canada's multibillion-dollar softwood lumber dispute with the U.S. The NAFTA panel decision on Canada's, expected late last week, has been put off until July 17.
Toronto, ON — Cameron Ashley Building Products has changed its name to Guardian Building Products Distribution Canada Inc. The name change is in keeping with the company's move to consolidate distribution entities within the Guardian Building Products group under one brand name, says Canadian president Bruce Allen.
Toronto, ON — Canadian Tire began operating a bank on July 1st. The move is expected to streamline the retailer's branded Options MasterCard program, which, until now, has been regulated separately in each province and territory, adding to administrative costs. The launch of Canadian Tire Bank, following federal approval under the Bank Act, will reap CTC an estimated $6-$8 million annually once the implementation costs are covered. Anytime the CTC Options MasterCard is used, even at another store, users will qualify for the company's loyalty building Canadian Tire money.
Atlanta, GA — Home Depot recently purchased an integrated merchandise and assortment planning software solution from Marketmax, which provides retail planning and optimization software. According to Home Channel News, the program will allow Home Depot to analyze and tailor product assortments and fine-tune its inventory forecasting.
London, England — Kingfisher plc reported last Friday that its board of directors has approved the demerger of Kingfisher's electrical business, Kesa Electricals plc, including the consolidation of Kingfisher shares. The demerger should become effective today, and Kesa Electricals will be listed on the London Stock Exchange, with a secondary listing on the Premier Marche in Paris. As a result of the demerger, Jean-Noel Labroue has resigned as a director of Kingfisher to become CEO of Kesa Electrical.
Bentonville, AK — The Arkansas Supreme Court has overturned a decision that barred labour unions from soliciting in Wal-Mart stores. The chain has been the target of a number of unions, most recently the United Food and Commercial Workers. While Wal-Mart says it's still reviewing the court's opinion, the union hailed the court's decision as a clear victory.
Toronto, ON — HGTV and Home Depot Canada have begun auditioning hosts for a one-hour prime-time special that will air on HGTV in fall 2003. Called "the Superstar Challenge," they say they're simply looking for people with a knack for fix-up - and a flair for the camera. |
| PEOPLE ON THE MOVE |
| The member buying groups of the umbrella organization the Reliance Buying Group Inc. have selected its new roster of officers: Terry Elliott of Delroc Industries and Brian Kusisto of Sexton Group has been named co-presidents … Bob Holmes of Torbsa has been elected vice-president … Treasurer is Claude Gingras of Co-operative Fédérée … Pro Wylie of Castle Building Centres Group takes on the role of secretary. (905-564-3307)
Robert Walker has joined CanPly, the Canadian Plywood Association, as Plywood specialist, Ontario and U.S. A 30-year veteran of the building materials distribution industry, his background includes working for AFA, Metric and Canfor. With the new appointment, the Ontario office of CanPly has moved. The new address is: 44 Gretna Drive, Brampton, ON L6X 2E7. (905-457-9519; walker@canply.org) |
| MARKET INDICATORS |
| The Conference Board of Canada is forecasting that the Bank of Canada will lower interest rates by half a percentage point this year. Weighed down by the rise in the dollar, the economy is expected to grow by 1.9% this year, the independent research group said. That's down from the Conference Board's projection of 2.7%, made earlier this year.
The Canadian economy contracted in April as it shrank by 0.2% from March. The April shrinkage was the first monthly decline since Sept. 11, says Statistics Canada. Consumer demand also slowed abruptly in April.
The U.S. economy has defied expectations of a quickening economic recovery. Manufacturing activity continued to shrink in June and construction spending dropped in May by the largest amount in a year. Meanwhile, the U.S. Commerce Department reported that the seasonally adjusted annual value of construction projects under way in May was US$869.8 billion, a 1.7% decline from April. This also surprised analysts, who had on average forecast a 0.3% increase.
The U.S. economy lost more jobs in June as the unemployment rate shot higher, the U.S. Department of Labour reports. Non-farm payrolls were down by 30,000 jobs during the month. Economists had been expecting a decline of about half that size. The unemployment rate, meanwhile, rose sharply to 6.4% in June, from 6.1% the month before. |
| NOTED… |
| The Canadian Professional Sales Association is developing an on-line directory of manufacturers' agents called agentSource. The directory will be available to government trade agencies, particularly in the U.S., that seek to source Canadian manufacturers' agents in a wide variety of industries. A listing in agentSource is free. Profile forms available at www.cpsa.com/PDFFolder/AgencyProfile.pdf. |
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HELP WANTED
SENIOR SALES EXECUTIVE
A leading Canadian supplier of Hand Tools & Power Tool Accessories to North American market, has an opening for a senior position in its Sales & Marketing department The incumbent will be responsible to manage & coordinate the Sales Agents/Agencies in US for devising sales strategies, increase customer base, increase product base to existing customers to ensure that budgeted sales numbers are met or exceeded. In addition, you will be responsible for some of the house accounts in US also.
Experience in the industry, managing sales agencies & willing to travel is essential. Prior experience in US market is desirable. Salary & perks based on experience, qualification & previous achievements.
If you are a self-starter with management skills, able to recognize the market needs & willing to take the challenge, please contact buzz@hardlines.ca ; P.O. Box 211 in subject line or fax to: 416-489-6154 in confidence.
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REPS/AGENTS WANTED
SUPERIOR BRASS LOOKING FOR SALES REPS IN WESTERN CANADA AND ONTARIO
 Superior Brass is an established Australian company and the market leader in brass hardware for the home and office. We are actively seeking sales representatives currently serving the hardware and home décor market to represent our product line.
Please contact us at (416) 712 - 2218 or by e-mail at superiorbrass@adamapt.com. You can view our 4000+ product line at www.superiorbrass.com
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QUEBEC SALES AGENT
TradeMASTER Tools & Machinery Ltd. A national distributor of power tools and accessories is looking to establish a strategic alliance with a Quebec sales agency that is looking to expand their business. Please fax resume to TradeMASTER Tools & Machinery at 519-622-4472 or email; tools@trademasterltd.com
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Contact Al Vanderveen at 519-439-6800, ext. 201, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com
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CANADIAN PATENT CONFIRMED FOR THE DRICORE® SUBFLOOR SYSTEM
The Canadian Intellectual Office of Industry Canada confirmed that, effective May 13, 2003, the DRIcore Division of Longlac Wood Industries has been awarded a patent for its free-floating sub-floor panel.
The DRIcore subfloor system is designed as the first step to a successful finished basement. Since Dricore panels are raised off the porous concrete floor on polyethylene cleats it works to mitigate the transfer of cold and dampness and helps prevent the formation of mold and mildew. The result is a subfloor that installs faster and performs better than conventional subfloors and provides a comfortable, durable platform for most finished floors. For more information visit www.dricore.com or call 1 866-976-6374.
ANNOUNCING THE DRICORE SALES & MARKETING TEAM
Sam Mowat, General Manager, Sales & Marketing, Longlac Wood Industries is pleased to announce the reorganization of the sales and marketing team at the DRIcore Division to better service its customers.
Dave Murray, Director of Marketing, brings to Dricore his versatile marketing experience with Canadian manufacturers of home improvement products, most notably, Premdor Inc. (now Masonite International).
Grant Cowx, Sales Manager - North America joins DRIcore after sales and marketing assignments at Scott Paper Ltd and Duracell Canada Inc.
Kim Laurienzo, Trade Services Marketing Manager, provides DRIcore with her proven skills in trade marketing in the retail box store environment after her tenure at Bailey Metal Products Limited.
Gilles Quirion, Sales Representative, brings his enthusiastic energy to DRIcore as one of the original sales team when Longlac Wood Industries established the DRIcore Division in Mississauga in 1999.
For more information call Sam Mowat at 888-566-4522, ext 224
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John Caulfield, Contributing Editor
vol. ix, #27 July 7, 2003