Tony Cioffi (left) and and Garry Senecal

Tony Cioffi, president of RONA inc., has been replaced in the top job at the Boucherville, Que.-based retail company. Garry Senecal, a former long-standing C-suite executive with Loblaw Companies Ltd., has taken over as interim CEO.

The interim change in executives at the top of one of the largest retail home improvement firms in Canada, announced March 9, comes just over a month after Lowe’s Companies closed the sale of its Canadian operations to Sycamore Partners, a private equity firm in New York City. It took just 34 days after that deal was made final for RONA to announce a new top gun at the network of some 450 stores under the RONA, Lowe’s Canada (these will be rebranded RONA over time), Réno-Dépôt, and Dick’s Lumber banners.

Cioffi joined RONA in 2016 as senior vice president, finance, and group financial officer. He had held the president’s position at RONA since January 2022 after holding it on an interim basis previously. Senecal, meanwhile, filled senior executive roles at Loblaw for almost 13 years. He was at various times: chief customer officer of the company; former president, market division; and executive vice president, conventional division. He was a past member of the Loblaw management board. Senecal had announced his plans to depart Loblaw in the spring of 2020 and, nevertheless, stayed to help the company with its pandemic response thereafter.

Federated Co-op turns in solid annual results despite drop in construction

Federated Co-operatives Ltd. reported its annual results last month. On the sales side, FCL saw a significant increase, achieving a new sales record in 2022 with $12.5 billion while net income reached $411 million. This growth was due largely to the impact of inflation, which affected every area of our business.

FCL’s overall performance in 2022 was also impacted by the $264 million investment, in November 2021, in the acquisition of the Husky chain of retail fuel sites. This was the largest retail acquisition in Co-op’s history. In August 2022 the Canadian Competition Bureau approved the acquisition of 171 retail fuel sites, which consisted of a mix of corporate- and dealer-owned gas bars as well as car washes and convenience stores.

FCL achieved record sales in the Ag Solutions business lines, including a record year for fertilizer. But a combination of increasingly competitive markets and industry-wide reduction in demand led to a decline in sales volumes in home and building solutions, as well as in the food and crop supplies businesses.

Wholesale sales in FCL’s strategic business unit, Home and Building Solutions, which consists of the purchase and distribution of home and building supplies on a wholesale basis, fell in 2022 from $451 million in 2021 to $412 million in 2022. Sales declined as a result of consumer pullback on projects while they shifted back to pre-pandemic spending activities such as travel and entertainment, says the company.

Top-line sales from the division’s Co-op Home Centre stores reached an estimated $520 million last year. Federated Co-op ranked number 15 in the Hardlines Top 20. FCL added one new Home Centre location during the fiscal year.

On mixed year-end results, Canadian Tire stores see growth of value shoppers

In February, Canadian Tire Corporation (CTC) released its fourth-quarter and full-year results for 2022.

Consolidated retail sales for the year (excluding petroleum) were $19.25 billion—up 5.4 percent, or $984.2 million, in 2021. Including petroleum in a year that included torrid fuel spikes, that year-over-year increase in revenue was nine percent. However, sales by Canadian Tire stores, which were strong during the first half of the year, eased during the last six months. Sales and comps in the fourth quarter were flat compared with the same period a year earlier.

Canadian Tire said it benefited from an “improved omnichannel experience” in which sales to its Triangle Loyalty member were up eight percent. The company reported that it has 11.3 million active members in the program and loyalty penetration came close to 60 percent in 2022.

As the year progressed, Triangle member sales at Canadian Tire stores in particular were driven by customers looking for deals. Shoppers were trading down, especially in essential categories, a trend that is expected to continue. “We are not seeing a meaningful shift in our discount mix, but we grew categories we would deem as essentials, offset by a decline in non-essentials,” said Greg Hicks, president and CEO of CTC, in a call to analysts.

He added that the outlook is more cautious moving through 2023. “Given the macro backdrop combined with what we are seeing in the performance of our business, we are expecting a more constrained demand environment as we look forward, especially in the first six months of this year.”

One of the categories considered essential is pet food and supplies. During the year, Canadian Tire continued to expand its pet categories, including plans to roll out its dedicated PetCo store-within-a-store concept to 90 percent of Canadian Tire stores by the end of this summer.

Customers will continue to look for more value in their spend, Hicks said, “and that's where you can expect us to be laser-focused in 2023.”

RONA will once again host a dealer show for all its affiliated, or independent, RONA-bannered dealers. The second edition of RONA Connexia will take place through the autumn months, represented again by a series of three events.

First, “The Rally” will bring together for the first time all RONA affiliated dealers in Canada. This event will take place on September 13 and 14, 2023, in Mont-Tremblant, Que. The concept was inaugurated last year, following a two-year hiatus for its dealer shows during Covid. Last year’s Rally was held at two locations a week apart, Quebec City and then Vancouver. This year, the Mont-Tremblant location will draw the dealers together in one location to get face-to-face with preferred vendors.

RONA says the event will provide “a great opportunity to hear from the RONA affiliated dealers and to exchange their vision of our network. It will also be an opportunity for selected vendors to present their new products for 2024.”

“The Showcase” will follow in October to present all 2024 season’s products, with an exact date to be announced in the near future. Last year, the in-person event was held at the company’s Planogram Centre in Boucherville, Que., and RONA plans to hold the product showcase there again this year.

FInally, “The Deals” event will take place in November and will allow the dealers to shop for their 2024 spring and summer lines, as well as some core product assortments, via an online buying platform. These events are open to all RONA affiliated dealers.

DID YOU KNOW...?

... that sharing your copy of Hardlines with others violates our Fair Play Policy? That’s right, we work hard to protect our copyright and ask that you, our Faithful Readers, respect that. We have great, affordable ways to add more people at your company to your existing subscription for only a few dollars per year. Contact Jillian at Hardlines to add people to your company’s subscription.

RETAILER NEWS

The founder of Princess Auto died last month, just a few months shy of his 100th birthday. Harvey Tallman founded the company in the early 1940s, according to the Winnipeg Free Press. It was originally called Princess Auto Wrecking. Tallman started by taking apart old cars and selling off the parts. Over the years he added mail order and began selling parts and farm and industrial machinery made from army surplus goods. His sons Bob and Larry Tallman took over the business in 1976. The first Princess Auto retail store opened in 1978. There are now 53 Princess Auto stores in ten provinces in Canada.

A new interactive service for children from The Home Depot is a platform to engage kids remotely in crafts and assembly activities. It’s also the company’s first foray into the metaverse. The Virtual Kids Workshop is an experience in Roblox’s Redcliff City that challenges gamers to play and learn by collecting materials to build projects. Kids’ workshop kits can be ordered through the Home Depot website and provide a certificate of completion, an apron pin, and an orange Kids Workshop apron.

Canadian Tire Corp. has made a multi-million-dollar investment in its Women’s Sport Initiative (WSI), which involves earmarking a minimum of 50 percent of the company’s sponsorship dollars towards women's professional sport by 2026. As part of the program, CTC is a founding partner of Project 8, Canada's first women’s professional soccer league, slated to launch in 2025.

Costco Wholesale Corp. reported Q2 sales of $55.27 billion, an increase of 6.5 percent. Revenue from membership fees rose to $1.03 billion from $967 million in the comparable period last year. Net income for the quarter came to $1.47 billion, up from $1.3 billion.

SUPPLIER NEWS

The Atlantic Building Supply Expo was held last week at the Halifax Convention Centre. Hosted by the Atlantic Building Supply Dealers Association, the show kicked off on March 7 with an industry meet and greet. The event was very busy, marked by a positive vibe as dealers from across Atlantic Canada were able to gather again after interruptions due to Covid.

Goodfellow Inc. has announced Q4 net earnings of $4.4 million, down from $10.1 million a year earlier. Consolidated sales for the quarter rose to $149.3 million from $143 million in the comparable period of 2021. For the full year, net earnings of $32.7 million were down from $37.8 million in 2021. Sales amounted to $631.2 million, up from $615.9 million.

ECONOMIC INDICATORS

The value of building permits in Canada fell by four percent in January to $9.8 billion. Residential permits decreased 6.6 percent to $6.1 billion. Total permit values for single-family homes decreased 4.4 percent in January. The total value of non-residential sector permits was up slightly by 0.7 percent. (StatCan)

NOTED

The latest episode of Hardlines’ podcast series What’s In Store goes live this week. This time, we talk to Eri Mathy, former head of business development and transformation at IKEA Canada. She shares her thoughts on IKEA’s omnichannel strategy, the impact of the pandemic on the meaning of home, and the retailer’s new smaller store concept. Sign up now to get updates about the latest podcasts in your inbox! The What’s In Store podcast is free!