The world’s number one and number two home improvement retailers both turned in annual sales and profits that confirmed the extraordinary performance of the entire industry during the year of COVID.

The Home Depot saw sales for the fourth quarter climb a whopping 25.1 percent to $32.3 billion over the same quarter in fiscal 2019. Comparable sales for the period increased 24.5 percent, while comp sales in the U.S. increased 25 percent. In Canada, results were slightly better than that, with posted comps above the company average in local currency.

Profits were held as well. Net earnings for the quarter were $2.9 billion, up from $2.5 billion in the same period a year earlier. They would have been up even more if not for Home Depot’s acquisition of HD Supply on Dec. 24, 2020. That deal cost the retailer approximately $110 million.

At Lowe’s Cos., the results were equally dramatic. Fourth-quarter earnings reached $978 million, up about 92 percent, on revenues of $20.31 billion, which were up nearly 27 percent year over year. Comp sales in the U.S. rose by 28.1 percent. Restructuring, related to the closing of some Canadian stores in the fourth quarter of fiscal 2019, ended up costing the company $45 million, but only resulted in “a very modest impact” on the company’s Q4 results.

The business performed comparatively well in Canada, despite tighter restrictions overall in this country under COVID. “We delivered comp growth in the mid-teens despite several COVID-related operating restrictions that went into effect during the quarter,” said Lowe’s Cos. president and CEO, Marvin Ellison, in a call to analysts.

Overall, the Canadian business enjoyed the better-than-anticipated performance in the fourth quarter. “The new Canadian leadership team made tremendous progress in 2020 and remains focused on improving operational efficiency by executing our retail fundamentals playbook to drive greater labour productivity and improve gross margins,” Ellison added.

For the year, Home Depot had net earnings of $12.9 billion on sales of $132.1 billion, which were up 19.9 percent. The company reported comp sales for the year up 19.7 percent, with comparable sales in the U.S. increasing by 20.6 percent.

At Lowe’s, annual sales rose more than 24 percent reached $72 billion, while net earnings climbed 36 percent to $5.84 billion. Online sales were up 111 percent for the year.

It’s winter trade show time—but with a pandemic twist. As physical contact makes in-person events a non-starter, groups are relying on virtual platforms. Take TIMBER MART: the national buying group held its 2021 Virtual Buying Show last month, welcoming more than 1,600 dealer and vendor participants to an online trade show. It used a platform supported by IQ Business Events.

The show featured a virtual Store on the Floor where vendors presented products, planograms, and store-planning ideas for member-dealers to use in their stores. An area was dedicated to the range of offerings and services, from marketing supports like the TIMBER MART Essentials programs to lumber procurement and the group’s distribution network.

“Our virtual show was a great success in terms of attendance, sales, and the high level of engagement we saw from our members and vendor community who fully embraced the virtual environment,” said Bernie Owens, TIMBER MART president and CEO. “Based on the positive feedback we’ve received from our members and vendors, we achieved what we believe was the best virtual trade show our industry has ever seen.”

The dealers could conduct live chats, download brochures, watch promotional videos, and take advantage of vendors’ show specials. Participating suppliers exhibited in the categories of gypsum, insulation, roofing, concrete, doors, windows, plumbing, electrical, paint, hardware, business software, and seasonal and household products.

Over the four days, vendors saw more than 50,000 dealer booth visits.

A challenge of any virtual experience is addressing the importance of networking that is best provided by a face-to-face event. To that end, the TIMBER MART virtual show offered some innovative options. A photo gallery was available for attendees to watch photo slideshows of previous TIMBER MART events, including golf tournaments, conventions and buying shows. In the each evening during the event, a virtual networking lounge enabled attendees to engage in live chats and video conferencing.

(Click here to see the recipients of TIMBER MART’s 2021 Smart Marketing and Vendor Excellence Awards.)

Major retailers have been returning to the practice of penalizing suppliers for late or incomplete orders and vendors are crying foul. While vendors have always bristled at this practice, circumstances related to the worldwide pandemic have left them at a disadvantage, one they say that some national chains are taking advantage of.

Product and material shortages are commonplace around the world, while the means for shipping what products are available has been seriously undermined by the lack of container ships to bring them to market. On top of that, the incredible demand for home improvement products by North American consumers has thrown buyers’ forecasts out of whack.

And there appears to be no letup in sight, at least not for the next several months.

That’s why the Canadian Hardware & Housewares Manufacturers Association sent a letter out last week to senior retail leaders urging them to back off from such policies. The letter was signed by Sam Moncada, president of the CHHMA.

According to Moncada, the purpose of the letter was to point out the circumstances that are aggravating shipment times. “A lot of organizations are returning to fines and we’re trying to help our members by pushing back a little.”

The letter lays out his concerns clearly, saying in part: “It has been brought to our attention by members that some retailers continue to apply or will be re-introducing vendor compliance penalties despite the continuation of the COVID-19 pandemic and significant supply chain challenges that have arisen. Although we understand the requirement for all orders to be shipped on time and complete, it seems reasonable to assume that vendors who continue to experience labour shortages, factory and office shutdowns, raw material and component delays, and major supply chain interruptions due to the shortage of shipping containers and labour issues at shipping ports, combined with purchase orders that are often significantly higher than historical demand, should not be financially penalized due to factors arising from this global pandemic.”

The letter goes on to urge the retailers to “place a temporary hold on all performance-based fines until the COVID-19 pandemic eases and vendors can find a resolution to the above-mentioned factors.”

Moncada says expectations from the merchants have only exacerbated the situation. “Our members are finding it difficult to meet the demand because the forecasts are so high.”

The situation is also creating a challenge for some smaller retail groups, he says. Vendors could find themselves making every effort to divert supply to these large retailers to avoid the penalties, leaving many regional players at a disadvantage. “The smaller customers are important need to be taken care of too.”

Orgill Inc. successfully concluded its Spring Online Buying Event last month, even as it prepares to return to live events in the future.

At the two-week virtual event, the giant hardware wholesaler reports it enjoyed strong participation that set sales records. It also featured enhancements that made participation more intuitive and user-friendly for both exhibitors and retailers.

“We are pleased with customers’ response to our second online buying event, which was highly attended and drove record sales. We learned a lot from our first event last fall and our team and vendors incorporated some great improvements into this event, designed to make ‘working the show’ as easy and efficient as possible,” said Boyden Moore, Orgill president and CEO.

Preliminary results indicate more than 9,200 retailers attended the Spring Online Buying Event. Sales during the buying window topped those posted during the fall show and set another new record for Orgill Markets, the company reports. In all, nearly 1,000 vendors participated.

As with most buying events, attendees were not only looking for ease of use but were also in the market for promotional buys, new products, and special deals. “The vendors we work with know … that our customers expect to be able to take advantage of these events to stock up on products, discover new merchandise, and access industry-leading deals,” said Jeff Curler, Orgill’s senior vice president of purchasing.

Enhancements this time around included the ability for retailers with multiple stores to process orders more easily. Another was the ability to run a buying report that compared their purchase history alongside the show’s programs and specials.

“I think that the success of this event is a reflection of not only the strength of the industry right now but also that retailers are more and more comfortable doing business in this new online environment,” Moore said. Orgill’s next Dealer Market is scheduled to go live and take place in Chicago from Aug. 26 to 28.

(For more information, visit www.orgill.com.)

DID YOU KNOW...?

... that the 25th-anniversary Hardlines Conference will be held Oct. 19 and 20 at Queen’s Landing in Niagara-on-the-Lake, Ont.? Speakers already include Home Hardware president Kevin Macnab, Doug Anderson from Peavey, and Jamal Hamad from Home Depot Canada’s pro-business division. As Canada’s only national event for the entire retail home improvement industry, attendees are guaranteed great insights—and an amazing networking opportunity! Click here for more info.

Walmart says it will invest nearly $14 billion in capital improvements, including enhancements to its omnichannel. The retail giant posted online sales gains of almost 70 percent in Q4 and is trying to position itself as the go-to destination for online shopping in a marketplace where Amazon’s fulfillment capabilities have set the standard. The investment will target Walmart’s supply chains and increased automation.

Tractor Supply Co. will acquire Missouri-based Orscheln Farm & Home in a cash transaction valued at about $297 million. Orscheln’s 167 stores are scattered across 11 states in the Midwest and southern U.S. Its product mix is similar to Tractor Supply’s, with a focus on hardware, tools, lawn, and animal supplies. 

SUPPLIER NEWS

Eisenwarenmesse, the International Hardware Fair in Cologne, Germany, has opened registration for exhibitors. The event, originally scheduled for last March and later postponed to 2021, has been rebooked for March 2022. Its in-person format will be supplemented by digital tools to help exhibitors to reach additional online customers from around the world. (Check out the application here.)

Western Forest Products reported a Q4 net income of $34.4 million, turning around a net loss of $29.2 million from the year prior and up from $11.5 million in Q3. Total revenues soared to $318.9 million, compared to $80.1 million in the previous Q4 and $290.6 million in the previous quarter. Operating income before restructuring and other items was $56 million, following a loss of $29.6 million in the comparable period of 2019.

The Quebec hardware and building supplies association, AQMAT, has agreed on a new contract with its president, Richard Darveau, in tandem with the Bien Fait Ici (Well Made Here) campaign which he founded on a voluntary basis. Darveau will work part-time for each organization through January 2028. In order to respect the division of his roles, Darveau has resigned as AQMAT’s representative on the buy-Canadian campaign’s board. His successor is Jean-Maxim LeBrun, an AQMAT member and a lawyer specializing in franchise law.

ECONOMIC INDICATORS

Retail sales in December posted their largest decline since April’s low, falling by 3.4 percent to $53.4 billion, due to the effects of the pandemic. However, LBM and garden sales countered that trend. Totalling $3.95 billion, this sector was up nearly 20 percent from the previous December, even though it was down by 2.3 percent on a monthly basis. In volume terms, retail sales fell 3.6 percent in December. (StatCan)

NOTED

DX3 Canada, which bills itself as Canada’s largest retail, marketing, and technology event, will hold its 10th edition March 2 to 5, with Hardlines as a media partner. The all-virtual event encompasses a Retail Summit and a Marketing & Innovation Summit. Among the speakers is Cynthia Wong, associate VP, digital product management at Canadian Tire Corp. For more information, including the full lineup, visit the DX3 Canada site. (For a 25% discount, use coupon code HARDLINES25.)

The upcoming Home Improvement eRetailer Summit will be conducted as a virtual event on March 16 and 17, and for the first time will be open to all retailers. The brainchild of industry consultant Sonya Ruff Jarvis, the eRetailer Summit aims to help connect ecommerce sellers with vendors seeking to grow their online business. The summit’s second day will feature the event’s popular and integral networking opportunities. Manufacturers can schedule virtual one-on-one meetings with selected retailers and third-party fulfilment companies. Click here to request your invitation. Hardlines subscribers can take advantage of special rates.

OVERHEARD...

“Our ability to grow the business by over $21 billion in fiscal 2020 is a testament to both the investments we have made in the business as well as our associates’ unwavering commitment to our customers. We continue to lean into these investments because we believe they are critical in enabling market share growth in any economic environment.”
—Craig Menear, chairman and CEO of the Home Depot, on the company’s extraordinary fourth-quarter and year-end results.