The retail hardware and home improvement industry performed strongly during COVID, up by more than 15 percent in 2020 over 2019. Many dealers reported being up by 20 to 30 percent, thanks to huge demand by consumers and contractors alike. This represents a huge turnaround from 2019 when overall home improvement retail sales dipped slightly—for the first time in more than a decade.

These are just some of the statistics and findings in the 2021 Hardlines Retail Report. The report is our annual in-depth look at the size of the retail market for hardware and home improvement sales in Canada.

The report looks at growth within the industry from several angles: based on store type (hardware, building centre, big box) and regionally. Breakdowns of the number of stores by type, according to province, are also found in the 2021 Retail Report. It’s filled with proprietary research on the industry’s biggest retail groups that is not available anywhere else.

The report identifies and ranks the top 20 retail players in the sector. The four leading groups each 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, this year’s report provides valuable forecasts for the industry for 2021 and through to 2022. Forecasts include the estimated performance of the industry’s top four home improvement retailers.

The 2020 Hardlines Retail Report fills more than 185 PowerPoint slides and is packed with dozens of charts, graphs, and photographs. (For more information and to pre-order the 2021 Hardlines Retail Report, click here.)

Home Depot has done an end-run around the global supply chain headaches that continue to plague retail supply. The giant retailer has secured its own ship.

“We have a ship that’s solely going to be ours and it’s just going to go back and forth 100 percent dedicated to Home Depot,” COO Ted Decker told NBC News.

The contracted ship will make its first runs next month. It’s just one of the extraordinary steps the company has taken to mitigate disruptions to supply caused by the pandemic. And it should have no trouble filling the ship. According to the Journal of Commerce, Home Depot is the third-largest U.S. importer by volume of ocean containers. (Lowe’s is number four.)

The move was made as the flow of raw materials—and the goods they are made into—remains sporadic and backlogs are daily occurrences. Nor is the problem exclusive to home improvement: furniture, consumer goods, electronics, and shoes are just some of the other areas affected.

Now, a new outbreak of COVID-19 is spreading through Southern China, creating concerns that factory production in that country will get disrupted even further. Meanwhile, shipping rates are climbing, with the cost of a 40-foot container up more than 150 percent in North American ports.

Orgill continues to beef up its distribution network and the latest addition to its network is a new distribution centre in Rome, N.Y. That facility is now fully operational and will begin servicing customers in an eight-state region as it ramps up operations over the next 10 weeks. Orgill is touting it as the fastest start-to-finish completion of a ground-up DC in the hardware wholesaler’s modern history.

The Rome site is Orgill’s eighth DC, joining existing facilities throughout the U.S. and Canada, including two, in Post Falls, Idaho, and London, Ont., that serve Orgill customers in this country.

“We are extremely pleased that our Rome distribution centre is now online to provide even better service, speed, and responsiveness to our customers,” said Boyden Moore, Orgill’s president and CEO, in a release.

The newest facility will serve Orgill customers throughout New York, Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, and northeastern Pennsylvania. It effectively doubles Orgill’s distribution capacity in the region.

Plans for the 780,000-square-foot facility were first announced in the spring of 2019 as a way to better accommodate Orgill’s growth throughout the Northeast and Mid-Atlantic regions. However, according to Randy Williams, Orgill’s executive vice president of distribution, the impact of the new DC will be felt beyond its immediate service area, creating a “ripple effect” on its other distribution centres. “In reality, Rome will create greater capacity at almost all of our DCs and allow us to better service our growing customer base across much of our service areas.”

But the new DC will not impact distribution to Orgill’s Canadian customers, who will continue to be served out of Post Falls and London.

Williams also says the state-of-the-art Rome facility will serve as a proving ground for new distribution and logistics best practices that Orgill can learn from and roll out to other DCs in the future.

For example, the Rome distribution centre was designed using what’s known as a very narrow-aisle (VNA) layout. True to its name, this format uses aisles that are more narrowly spaced and special equipment to navigate those aisles. The narrower aisle spacing allows for more merchandise to be stocked in less space.

“In addition to the VNA layout, the Rome facility also takes advantage of features such as utilizing a multi-tiered conveyor system instead of the traditional spiral conveyor. The multi-tiered system is more efficient and helps reduce any unwanted slowdowns if there are any issues with the conveyor,” says Mark Scanlon, Orgill’s vice president of northeast distribution.

Sexton Group is going ahead with a series of virtual events, dubbed the Spark Series, to stay in touch with its member dealers and to keep them informed of current issues and trends. The virtual aspect got support based on feedback from Sexton’s first virtual AGM, held in January. It’s further supported by the advances in digital communications that Sexton has made under COVID to keep members informed.

Under the series, three virtual learning events have been held so far. The kick-off was a day-long event with key vendor partners sharing new products and market information. “This is another way we offer exceptional value to our members by presenting timely topics that affect their business,” Eric Palmer, VP and general manager, said in a release. “It’s a great channel to reach members across Canada and provide updates on the market, product information, and much more.”

The second event featured critical information on cybersecurity awareness, a growing concern for businesses of all sizes. The most recent Spark event, held last week, was on wood commodity, hosted by Don Humphrey, Sexton’s national commodity wood manager.

The move by Sexton reflects the hesitancy of Canadian companies to go live prematurely, even as shows in the U.S. are opening up. For example, the National Hardware Show will be held in Las Vegas in October. But back home, BMR confirmed that its dealer show in November will be virtual again this year. Lowe’s Canada has just announced that it, too, will hold its RONA Buying Show virtually in September.

The Spark Series will pause during the summer months, but it will return in the fall with a new series of topics to help members’ businesses.

DID YOU KNOW...?

… that the newest episode in the Hardlines Podcast Series features part two of our interview with Lowe’s Canada president and CEO Tony Hurst? In this latest instalment, you’ll hear about the strategies for leveraging Lowes Canada‘s unique multi-banner approach and the advantages of the affiliated dealer program under the RONA banner. Hurst also shares his thoughts on leading the company during his first year and a half during the pandemic. Listen here—and join our mailing list so you don’t miss out on future podcasts!

RETAILER NEWS

Federated Co-operatives Ltd. is funding 15 local projects in Western Canada through its Co-op Community Spaces initiative. This year, the organization is providing $1 million in funding for local projects like restoring a natural green roof on an interpretive centre in Stonewall, Man.; building a multi-use trail network along the North Saskatchewan River near Langham, Sask.; a covered outdoor pavilion in Camrose, Alta.; and a community garden and learning space to provide food education in Langley, B.C.

TIMBER MART’s newest member is K.G. TIMBER MART Ltd. in Prince George, B.C. Owner Bruce Kidd has been in the construction business for over 30 years. The new retail business will fall under the Kidd Group of companies, which owns other businesses in Prince George related to construction, real estate, fuel, convenience stores, and car washes. K.G. TIMBER MART will serve contractors and residential builders out of its 3,000-square-foot retail space and storage buildings.

Lowe’s Canada says its RONA Buying Show will return this year as an online event only. It will run from October 18 to December 3. The event is an opportunity for RONA dealers to meet with various suppliers, benefit from expert advice, and get a sneak preview of the spring and summer 2022 product lineup.

TORBSA has announced that Peridot Supply in Brampton, Ont., is its newest shareholder member. Peridot was founded in 2020 by Douglas Brown Jr., after more than a decade of working within the building materials distribution business. The business will focus on servicing the commercial and residential roofing markets across the Greater Toronto Area.

SUPPLIER NEWS

Reed Exhibitions, organizer of the National Hardware Show, has been renamed RX and taken on a new visual identity. “The opportunities to combine both digital and face-to-face interactions have a significant part to play in the global economy,” CEO Hugh Jones said in a release.

Jeld-Wen of Canada is making a multi-million-dollar investment in its Quebec manufacturing facilities. Jeld-Wen’s 150,000-square-foot door factory in Saint-Henri sits on 12 acres of land. The expansion project will add 50,000 square feet to the facility and will be completed toward the end of 2021. In addition, its Saint-Apollinaire, Que., window plant will receive a new automated manufacturing and packaging line, which will help the company meet growing demand.

Vinyl Window Designs (VWD), a Toronto-based manufacturer of vinyl windows, entry doors, and patio doors, has acquired Vinylbilt Windows & Doors. The terms of the deal were not disclosed. Incoming Vinylbilt president Anthony Spatafora will oversee the transition and all employees and management will be retained.

ECONOMIC INDICATORS

Sales of existing Canadian homes fell by 7.4 percent month-over-month in May. That decline follows April’s 11 percent drop. Month-over-month declines in sales activity were observed in close to 80 percent of all local markets. However, on a year-over-year basis, the number of transactions this year represented a 103.6 percent increase. (Canadian Real Estate Association)

U.S. housing starts in May were at a seasonally adjusted annual rate of 1,572,000, 3.6 percent above the previous month and 50.3 percent above May 2020. Building permits were at a SAAR of 1,681,000, down three percent from April but 34.9 percent above a year ago. (U.S. Census Bureau)

U.S. retail sales fell by 1.3 percent in May as Americans began to travel again and to shift spending from goods to services. LBM and garden sales activity were up 21.1 percent from a year ago but down 5.9 percent from April. (U.S. Census Bureau)

OVERHEARD...

“Effective and efficient distribution of products is at the heart of what we do and it is core to how we ensure that our customers can manage and run their businesses profitably. Just because we have one of the most modern distribution networks in the industry doesn’t mean we are going to shy away from making investments and incremental improvements wherever possible.”
—Boyden Moore, president and CEO of hardware distributor Orgill, on the completion of a new DC in the U.S. Northeast.

“The last 15 months have been a challenging time for people across Western Canada. As communities begin to safely re-open, Co-op is providing spaces for residents to rebuild their community connections.”
—Pam Skotnitsky, VP of strategy at Federated Co-operatives Ltd., on the company’s Community Spaces initiative, which provides funding for local projects.