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| BIG BOX MARKET SHARE GROWS AS INDEPENDENTS LOSE GROUND |
| Toronto, ON — Independent building centre retailers are losing market share and, according to a new study by Hardlines Quarterly Report, that share is being grabbed up by the big box stores.
In 2001, sales of hardware and building materials products by all hardware stores, building centres, department stores and co-ops in Canada grew from 26.2 billion to $28 billion. During that time, big box market share grew from 17.4% of the market to 18.6%. but sales by Canada's home improvement buying groups, which represent the lion's share of sales by independents in this country, actually fell from 35.1% of the market to 31.9%.
Over the past five years, big box market share has almost doubled in size, from $2.6 billion in 1997 to $5.2 billion in 2001. During the same period, market share by Canada's buying groups has fallen to less than one-third.
Sales by all building centre dealers, including the buying groups, still comprise the largest single sector of the retail home improvement industry, however.
(A more complete analysis of buying groups in Canada appears in the 3Q edition of Hardlines Quarterly Report, available soon. - MM) |
| HOME DEPOT EXPANDS PRO PACKAGE,
TIES IN WITH INSURANCE WORK |
| Toronto, ON - A major growth initiative of Home Depot in the U.S. is now taking off in Canada. With Home Depot's pro initiative in 55 of its 83 Canadian stores so far, the company expects this segment to be a major growth opportunity.
The pro initiative consists of a number of programs to boost Home Depot's appeal to the trades. They include adding up to seven sales people to each store, and offering services such as enhanced credit terms and accelerated order picking and delivery.
Home Depot has also tested a program in its Ontario stores carrying the pro initiative that makes those stores points for filing insurance claims and getting the repair work executed. The program, in conjunction with State Farm Insurance, enables Home Depot to facilitate the claims process and provide the necessary contractors to perform the work to repair and restore the damaged property.
Spurred by a strong economy and brisk sales, Verschuren expects sales to contractors to continue, despite the bad weather in the Spring. "Business is great. I'm amazed," she says. "The economy is strong - the strongest I've seen it for a long time." |
| CANWEL GEARS UP SALES TEAM, TRAINING |
 Brampton, ON - With an eye to increased sales growth, CanWel is beefing up its inside sales forces across the country. The wholesale distributor of building materials keeps adding new products, requiring more customer service from the inside. Those products include an expanded range of proprietary brands, especially in the growing sector of specialty flooring.
However, says Mike Piggott, inside sales manager for CanWel, the addition of new products is selective, with the emphasis on a few better quality products that will set the two-stepper apart - and give its dealers better margins.
Expansion of the sales team has meant more time spent on training. But that training extends to the end users, as well. For example, contractor appreciation nights organized by CanWel are held at the dealer level, to educate the installers about the latest technologies in flooring and siding.
CanWel, which is owned by Doman Industries and headquartered in Vancouver, BC, has 13 distribution centres and sales teams across Canada and annual sales in excess of $600 million. |
| NOTED |
| At Roblynn Home Hardware Building Centre in Oromocto, NB, customers can get 10% off their purchase on St. Valentine's Day just by singing a love song over the PA system. This is only one of the many promotions that made store manager Tanya Hanson the only Canadian to win the National Retail Hardware Association's 2002 Young Retailer of the Year Award.
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| COMPANY |
52-WEEK HIGH |
52-WEEK LOW |
CLOSE (FRI.) |
| Canadian Tire |
33.15 |
18.50 |
32.95 |
| Canfor |
11.70 |
8.08 |
11.09 |
| Emco |
12.77 |
3.71 |
12.24 |
| Goodfellow |
11.90 |
8.00 |
11.75 |
| Home Depot |
52.60 |
30.30 |
37.24 |
| Hudson's Bay |
20.10 |
12.50 |
13.58 |
| Lowe's Cos. |
49.99 |
24.99 |
44.89 |
| Sears Canada |
25.10 |
12.50 |
23.85 |
| Sodisco-Howden |
2.20 |
0.75 |
1.45 |
| Taiga Forest |
12.75 |
7.49 |
13.40 |
| West Fraser |
44.42 |
26.13 |
41.06 |
|
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| COMPANIES IN THE NEWS |
| Tanya Hanson, manager of Roblynn Home Hardware Building Centre in Oromocto, NB, was one of seven retailers to win the 2002 Young Retailer of the Year Award, and the only Canadian so named. She won in the over $2 million sales category, for increasing sales in the store by 70% since taking over from her father in 1997. The awards are co-ordinated by the National Retail Hardware Association in the U.S. and sponsored by the American Hardware Manufacturers Association, 3M Co. and American Tool.
Goodfellow recorded its best quarterly results ever for the third quarter ended May 31. Net earnings rose to $4.3 million from $1.7 million a year earlier and included a reversal of a provision for softwood lumber duties of approximately $620,000 after tax. 3Q sales increased 14% to $144.7 million, from $126.6 million. Year to date, sales totalled $355.6 million versus $325.5 million, an increase of almost 10%. Net profit jumped 95%, from $2.8 million to $5.6 million.
Hudson's Bay Co. will expand its Home Outfitters format into British Columbia with the addition of five new Outfitters locations across the province, bringing the total number of these specialty kitchen, bed and bath décor stores in Canada to 38 by the end of 2002.
In its first quarter ended May 31, MAAX Inc. saw sales increase 20.2% to $161.9 million, compared with $134.7 million in the first quarter of last year. Income before amortization of goodwill rose 44.1% to $10.8 million, up from $7.5 million. Net profit margin reached 6.7%, up from 5.6% a year earlier.
Home Depot Inc. has become the number-two retailer in the U.S., according to a new tally by Stores magazine. With US$53.55 billion in sales, Home Depot edges ahead of grocer Kroger Co., which had US$50.1 billion in sales. Wal-Mart Stores stays firmly ensconced in first place, with nearly US$220 billion in sales, according to the rankings for 2002.
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| MARKET INDICATORS |
| The value of building permits issued by municipalities reached $3.6 billion in May, down 7.6% from April, according to Stats Canada. Despite this decline, construction intentions remained high, with the value of permits surpassing $3.5 billion for the fifth consecutive month. The value of residential permits dropped 12.6% to $2.3 billion, largely the result of a marked decline in multi-family permits. However, after three consecutive monthly declines, the non-residential sector recorded a 3.3% gain in May to $1.3 billion. This advance was fuelled by a marked increase in the institutional component. From January to May, municipalities issued $18.7 billion in permits, up 13.6% from the same period of 2001. A tremendous advance in the residential sector (+37.0%) explained this increase.
Department store sales in May declined 2.5% from April to $1.73 billion seasonally adjusted, says Stats Canada. Even with this decline, department store sales for the first five months of 2002 were up 7.8% over the same period in 2001. Unadjusted for seasonality, department store sales advanced 6.3% in May from May 2001. During the same period, sales rose in all provinces. The largest increases were in Nova Scotia (+14.6%) and Newfoundland/Prince Edward Island (+11.6%). Alberta, Québec, and British Columbia and the territories followed, each posting a year-over-year increase of at least 7.0%.
Canada's rate of unemployment fell to 7.5% in June from 7.7% in May, thanks to the addition of 66,000 new jobs, says Stats Canada. Since the job rebound began in January, employment has increased by 2% to 303,000. Full-time employment is up 199,000, or 1.6%, while part-time employment is up 104,000, a 3.8% increase.
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| OVERHEARD |
| "Having a variety of formats has always been the strength of Rona and Home Hardware," said Beverly Allen, head of marketing at the industry publication, Hardlines. "Home Depot is now coming in to challenge them." - Our very own Bev quoted in the Financial Post on Friday, after the Post picked up the story that we ran in last week's edition of Hardlines. |
|
****HARDLINES MARKETPLACE****
Check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp
HELP WANTED
EXECUTIVE DIRECTOR, WRLA
Simpson McGrath Inc. has been commissioned by the Western Retail Lumber Association (WRLA) to assist in the appointment of a new Executive Director as the incumbent moves to retirement in early 2003. The effective date of the appointment will be November 1, 2002.
The WRLA is a Not-for-Profit Association whose mission is to serve the needs and promote the common interests of the Canadian Lumber Building Materials and Hard Goods Industry on the Prairies (See www.wrla.org for additional detail). Founded in 1890, and now with 472 Retail Members and 431 Associate Members, WRLA is poised for a new era of growth. It is expected that the Annual Prairie Showcase, Trade Show and WRLA Convention will continue to be dynamic cornerstones of the Association’s future along with its scholarship and educational initiatives.
The Executive Director is the Chief Operating Officer of the Association and is expected to provide leadership and direction while nurturing and serving Association interests. Major responsibilities include the following:
· Direction and management of all WRLA major functions including internal affairs, the Annual Prairie Showcase and Trade Show, special events, services to members and the uniquely important educational and training programs
· Management of external communications and support of WRLA Board functions.
The successful candidate for this position will be able to demonstrate a combination of the following qualities and characteristics:
· Demonstrated ability to lead and manage a dynamic organization
· Personal and professional integrity of the highest order
· A sense of urgency and orientation to the task at hand, and a proven team player.
Resumes should be forwarded to Simpson McGrath Inc, 1780 Wellington Avenue, Suite 99, Winnipeg, Manitoba, Canada, R3H 1B3 Telephone direct line (204) 940 - 3420 confidential facsimile (204) 940-3429; E-Mail smi@mim.ca Confidential enquiries are welcome and should be directed to Mr. Leslie A. Johnson, CMC.
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CUSTOMER SERVICE SUPERVISOR
Position available for a Customer Service Supervisor, 5-7 years supervisory experience in a corporate customer service environment, familiar with SAP, JD Edwards or Oracle, bilingual French an asset. team environment with a
world leading brand manufacturer located on the Mississauga/Oakville border.
Please email resume with salary requirements to tmedeiro@mlock.com
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AGENT WANTED:
Kempston Canada Ltd., a router bit supplier, is looking for an agent with pioneering spirit to build B.C. and Alberta territory. Please reply to national sales manager by fax: 905-513-7924 or email: sales@kempston.ca
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GENERAL MANAGER - ATLANTIC:
Come Build with Our Team!
Every great venture begins with great leadership and with great leadership, a winning team sets records. CanWel, one of Canada's leading national distributors of building materials and related products, seeks an individual with outstanding leadership skills and drive to spearhead their Atlantic Business Unit as General Manager. Based in Dartmouth, NS you will lead a seasoned team and direct the strategic/business initiatives critical for success in this market place.
To further investigate, please contact Chris Schulz at 902-423-1657, cschulz@StaffingStrategists.com
www.canwel.com
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REGIONAL SALES MANAGER:
We are a Canadian company in the decorative accessories business with established customers in Canada and the USA; searching for a seasoned bilingual professional to help manage and grow the business in Canada with a focus on the Quebec market. This candidate will build upon strong relationships with major and national retail accounts — developing and implementing; sales development, category management, promotions, and forecast/budget planning.
This position offers an attractive salary and sales incentives, a benefits package; based on experience, knowledge, and ability to succeed in sales. Please forward your interests c/o bev@hardlines.ca (Put “Box 400” in subject line).
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BUSINESS OPPORTUNITY
Where Manufacturing & Retailing…Deal Direct"™
STRATEGIC INVESTOR WANTED
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For more information call Eric Smith at 1-866-844-2212 or go to http://www.mfg2d.com
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SERVICES OFFERED
NORAL INSTORE:
Don’t leave your products’ display management
to chance! Let Noral Instore take care
of your instore merchandising.
Visit http://www.noralmarketing.com
or call Al Vanderveen at 519-439-6800 ext. 201
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SELL YOUR COMPANY - OR BUY ONE - WITH HARDLINES CLASSIFIEDS!
DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE.
ONLY $18 PER LINE FOR THREE WEEKS!
TO PLACE YOUR AD, CALL US AT 416-489-3396 OR EMAIL: bev@hardlines.ca
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vol. viii, #27 July 8, 2002