The Alberta forest fires have had a big impact on our industry, especially the forest products companies involved in logging and milling. One such firm is Weyerhaeuser Co. Ltd., which had to take emergency measures at three of its worker communities, in Drayton Valley, Edson, and Grande Prairie, Alta.

When multiple wildfires broke out at the beginning of May, the company completely evacuated about 300 employees plus their families from Drayton Valley and Edson. These employees were among an estimated 16,000 people in the two towns, most of whom were evacuated under an emergency order issued on May 4. By that time, there were 89 active wildfires in the province.

In Drayton Valley, the fires breached the perimeter of town, said David Graham, president of Weyerhaeuser’s Canadian subsidiary. “Our top priority was in protecting our people and the communities.” Houses were destroyed in both Drayton Valley and Edson. Grande Prairie, meanwhile, was threatened by multiple active wildfires during this time—although it was not under an evacuation order.

A core group of Weyerhaeuser employees stayed behind to help make the community safer, “under the protection and orders of the local authorities in command,” Graham told Hardlines. They engaged in creating more firebreaks, clearing land, and supporting the first responder crews.

At time of writing, the citizens of these towns are back home, the fires around these areas are no longer an immediate danger—rain the week before last helped—and the communities are safe again. But Graham is not breathing easier yet. “Fires in our timberlands are being monitored and some are still out of control,” he said.

“Our business is throughout North America. We’ve got fires, hurricanes, floods. We have to respond with vigour. It’s part of what we do. This [the successful evacuations] was a good news story but it’s going to be a long summer.”

With higher Q1 inventory, Canadian Tire waits out Q2 uncertainty

After a tough first quarter, where comp sales for its Canadian Tire stores dropped 4.8 percent, Canadian Tire Corp. moved into the second quarter with slightly better results. By the end of April, those same-store sales were up three percent, even though higher Q1 inventory levels had yet to ease. And given the fluctuations in weather through the spring, reducing inventory levels remained a challenge.

Weather-related factors were responsible for the vast majority of the sales decline, with sales of items like toboggans, heaters, humidifiers, and snow blowers down in the quarter.

Greg Hicks, president and CEO of Canadian Tire Corp., told analysts on the company’s first-quarter earnings call that there have been some high points, including an uptick in Alberta and elsewhere on the Prairies. But between the weather and the slowdown in consumer confidence, Hicks and his team expected a turnaround in Q2 could be elusive.

“Q1 was such a complex quarter to unpack, with all of the weather impacts, and then we do see some consumer softening signals as well, so I think once we get through Q2, we'll be in much better shape to kind of really understand the consumer landscape,” he said.

One response has been to increase promotional activity, particularly in discretionary categories, which have softened in comparison to essential lines. TJ Flood, president of Canadian Tire Retail, noted that the company was still “heavy on the spring-summer side of inventory”—a concern, he said, shared by other retailers selling seasonal products, “so I think we are going to expect some promotional activity to heat up here.”

He echoed Hicks’s concern that the company’s outlook will be clearer as products move through the system in the spring-summer season. “Once we get through Q2, we'll probably have a better ability to tease out weather versus consumer sentiment at this point.”

While Canadian Tire’s distribution centres face excess inventory, with the rate of growth in Q1 down from the previous quarter, a lot of the higher cost of that inventory is due to inflation, said Flood. “Forty percent of that on the corporate side of things can be attributed to inflation, so we’re heading in the right direction in terms of the rate of growth and we’re going to be continuing to manage our inventory very surgically.”

On the dealer side, he notes, the situation is even more positive, as “they’re only up slightly [on] year-over-year in inventory, and that’s entirely attributable to inflation, so they’re in much cleaner shape.”

Home Depot in the U.S. now selling tiny homes online and through its stores

Houses that can be erected in as short a time as one day are being sold by Home Depot. The homes, as small as 140 square feet in size (for the “Sedona” model), are sold without extras like windows. Home Depot offers a link to a preferred partner that will build the house for the customer.

The tiny home trend is catching on in Canadian cities as a solution for both decreased housing affordability and increasing density. For example, Ontario has provincial regulations that allow the development of smaller-footprint residences with a minimum of 188 square feet in lanes, backyards, and on cottage properties. There are even several tiny home communities springing up throughout the province.

However, the tiny homes are not available at Home Depot stores in Canada, nor can they be purchased through Homedepot.ca. In the U.S., the tiny home trend offers an alternative to the affordable mobile or trailer home option.

While the price includes delivery, the package consists only of the steel structure and the necessary components to assemble it. It doesn't include windows, doors, floors, walls, or siding. But Home Depot has its own construction and build team, which helps to determine the materials necessary to build each project, including wiring and plumbing.

In addition, all orders are checked by a certified engineer to ensure each complies with the purchaser’s local building codes. The services allow customers to work with the retailer directly to customize and adapt their tiny home package.

Hudson’s Bay Co. intends to keep expanding its Zellers brand across Canada—through both bricks and mortar and online presences. That will include increasing the store-within-a-store’s footprint in cities across the country. The retailer has significant liquidity to enhance its offerings and has raised additional capital to support that investment.

Now, Zellers is setting its sights on additional locations. The Zellers rebirth started as a series of pop-up boutiques within Hudson’s Bay stores—and more are to come. A pop-up Zellers section will launch this month at The Bay’s flagship Queen Street store in Toronto. An additional 20 pop-ups are expected to open in August.

The pop-ups will effectively measure customer response in each market to determine the best fits for the Zellers store experience. “We have always said that we will listen to Canadians, and they will tell us where to grow,” says HBC president Sophia Hwang-Judiesch. “With these pop-ups, our expansion strategy will be fueled by the interest and feedback from our customers across the country.”

The department store is a retail format that has had difficulty reinventing itself in the e-commerce age. Nor has Covid been kind to the all-in-one retail format. Yet discount mass merchants and dollar stores have flourished during the pandemic. For Hudson’s Bay, reviving the Zellers brand gives the retailer a conduit for low-priced assortments that could well be a strategy to compete with the discounters.

Zellers’ price philosophy is built on everyday low prices for product assortments that are built on three pillars, says the company: quality, design, and value. Those assortments cross a range of key lifestyle categories, including kitchen and bath, accent furniture and home décor, organization and storage, baby and kids’ toys and apparel, pets, and clothing basics.

HBC, the holding company whose holdings include Hudson’s Bay and Zellers, as well as Saks Fifth Avenue and Saks Off 5th, has raised $240 million of additional liquidity to further invest in and grow its operating businesses. The company says it sees “an immense opportunity for growth in its retail markets,” especially as other retailers exit the Canadian market.

IKEA veteran Selwyn Crittendon will take over as CEO and chief sustainability officer of IKEA Canada, effective Aug. 1. Previously country business development and transformation manager at IKEA U.S., he has been with the retailer for more than 20 years, starting out as customer service manager at a Washington, D.C.-area store. In the top job at IKEA Canada, he will oversee its continued efforts to expand its omnichannel strategy. Executive recruiter DMC Recruitment has promoted Karine Gagnon to the role of manager of lumber and building materials recruitment. She will oversee the development of the team of LBM recruiters. Gagnon was recently named Recruiter of the Year for Quebec by the Association of Canadian Search, Employment, and Staffing Services (ACSESS).  

DID YOU KNOW...?

... that Hardlines will be part of a luxury cruise for Canadians in tandem with next year’s International Hardware Fair in Cologne, Germany? In partnership with the Building Supply Industry Association of British Columbia, we’re organizing a business trip to Cologne to attend the largest hardware show in the world, followed by an industry tour of the Rhine River on our own dedicated ship. The seven-day trip begins March 6, 2024. Space is limited and we need to confirm enough people to make the trip work by the end of June, so please contact Thomas Foreman, president of the BSIA of B.C., as soon as possible to guarantee your spot!

RETAILER NEWS

Kingdon TIMBER MART in central Ontario held a grand opening for its store in Lakefield, about 20 minutes outside Peterborough. The 50,000-square-foot store replaces an older site nearby and the parking lot had lots of activities for customers and their families. Local food vendors served up treats, while other activities included chainsaw sculpture, product demonstrations, and axe-throwing contests.

BMR Group last week formally launched the BMR Amqui hardware store, which has been under the banner for almost a year. The hardware store was acquired in 2022 by BMR member Unoria Cooperative, owner of a network of 13 hardware stores in the Bas-Saint-Laurent and Gaspésie regions.

TIMBER MART has named the four finalists eligible to win grants for community projects through its Local Leaders Initiative. Dealers can nominate individuals who show leadership and make a positive impact through projects, programs, or initiatives in their communities. Each finalist wins $8,000 for a cause of their choice and the winner, to be announced July 10, will get an additional $10,000 for the cause of their choosing. The finalists are: Frank King of Charlottetown, P.E.I.; Pierre Côté of Sherbrooke, Que.; Karen Watson of Havelock, Ont.; and Joy Neufeld of Steinbach, Man.

Al Tsuchyia and Michael Trentalance, owners of the T & T Hardware Group, have joined RONA’s affiliated dealer network. The pair are former RONA employees. They have announced a 2,200-square-foot expansion of their hardware store, located in a shopping centre in Walnut Grove, B.C. It’s RONA’s first urban store in western Canada.

Retailers across Canada gathered last week in Toronto for the Excellence in Retailing Awards. They were presented during a gala dinner at the end of day one of the Retail Council of Canada’s conference, STORE23. Notable winners were: Canadian Tire Corp. for Environmental Leadership and for In-Store Experience & Design; Giant Tiger Stores for Philanthropic Leadership; Calgary Co-op for Philanthropic Leadership; and Staples Canada for Talent Development. The winner of the RCC’s Award of Distinction went to Greg Hicks, president and CEO of Canadian Tire Corp.

Matériaux Pont-Masson has marked the grand opening of its ninth store, in Val-Morin, Que. The new outlet includes a 13,000-square-foot sales area and a covered warehouse area of 30,000 square feet. The store will offer a range of dedicated services for pro customers, including extended contractor hours and financing.

Giant Tiger will hold a grand opening for its newest location on June 10 in Huntsville, Ont. The 18,600-square-foot store is located at 70 King William St. in the Central Ontario community.

SUPPLIER NEWS

Barbecue maker Napoleon is commissioning newly expanded warehouse operations in Crittenden, Ky. Driven by strong demand in the U.S. market, the added warehouse investment enables better fulfillment and customer service to Napoleon’s customers there, says the company, and marks the beginning of a larger U.S. supply network expansion. In addition, Napoleon was awarded for the 11th consecutive year as one of Canada’s Best Managed Companies by financial consulting firm Deloitte. The annual review recognizes Canadian-owned businesses for their strength in strategy, commitment, capability, financial performance, and leading practices in ESG.

Quebec kitchen and bathroom cabinet maker Ébénisterie St-Urbain (EBSU) is facing the threat of bankruptcy, Le Journal de Montréal reports, thanks to its 2021 acquisition of Woodlore. At the time of the deal, Ontario-based Woodlore concealed from EBSU that it was being sued for breach of contract by a customer accounting for 40 percent of its sales. It lost that customer three months after the acquisition. Compounding EBSU’s woes, RONA, BMR, and Patrick Morin have all reduced their orders from the manufacturer. A RONA spokesperson however told Le Journal that fluctuations in orders are normal and not attributable to EBSU’s situation and RONA’s current order volume with EBSU remains very high.

Ryobi Tools has launched a new merchandising concept at the Home Depot store in Barrie, Ont. The store-within-a-store concept, called the Ryobi Power Centre, has been designed to offer a wide range of power tools, power tool accessories, and outdoor power equipment in an immersive setting to encourage deeper engagement with customers. The concept offers information and education, interactive video displays, and live interactive demos, as well as exclusive in-store events every weekend.