The Atlantic Building Supply Dealers Association (ABSDA) held its annual Building Supply Expo trade show recently at the Halifax Convention Centre. “Our trade show floor space was totally sold out for the first time at the Halifax venue,” said Denis Melanson, ABSDA president.

The meet and greet opening night on March 5 drew a crowd of about 565 people. Live music was supplied by The Kiln Dried Studs (pictured). “They decided to forgo their fee and play music for us in exchange for a donation to the IWK Heath Centre’s children’s hospital in Halifax,” Melanson told Hardlines. The ABSDA committed $3,000 to the cause—and real estate entrepreneur Adam Barrett, who has just purchased three RONA stores in the Halifax area, matched the $3,000 donation.

A third, anonymous donation of $2,500 to IWK children’s hospital soon followed. Kiln Dried Studs’ drummer, Steve Foran, sold band T-shirts through the night to supplement the donation. All told, over $12,000 was raised for IWK at the ABSDA Expo.

At the awards gala on March 6, 720 attendees saw Ryan Buck of Buck’s Home Building Centre, Bridgewater, N.S., win the award for Young Leader of the Year. Retailer of the Year went to Yvon Godin, a TIMBER MART dealer from Neguac, N.B. The Salesperson of the Year award went to Sheldon Atkinson, Gentek. ABSDA’s Industry Achievement award went to Kevin Pelley from Kohltech Windows.

“Expo 2024 will go on record as one of our best shows in the past decades,” said Melanson. Next year’s ABSDA Building Supply Expo will return to Halifax for the industry association’s 70th anniversary. The 2025 dates will be announced in the weeks ahead.

Canada represents a small but very important market for Orgill. And even though sales here were off for the giant U.S. hardware wholesaler last year, the company remains committed to serving dealers in every part of the country.

Boyden Moore, Orgill’s president and CEO, spoke with Hardlines during the company’s Spring Dealer Market, held in Orlando, Fla., last month. He reflected on the performance of Canadian dealers and the outlook for the industry overall.

He started out by being up front about Orgill’s performance post-Covid. Sales in Canada were actually down around five or six percent in 2023, even as Orgill’s business in the U.S. market was up about one percent.

Canada’s dealers weren’t necessarily doing any worse than their U.S. counterparts, but Orgill picked up more new customers south of the border. “I think we kind of went about the same with the Canadian market as with our customers here. We probably grew more new business in the U.S. market than we did in the Canadian market.”

Orgill overall saw sales up two percent last year; that includes the U.S., Canadian, and international business. He notes that, given conditions overall, his company fared well, noting “that’s against a backdrop of an industry that was down about three percent.” (Both Home Depot and Lowe’s reported negative sales of around four percent last year.)

“We continue to outperform the industry, which is really what our goal is. And we’ve been really pleased, over the past three years in particular, with the efficiencies that we’ve picked up in the Canadian market. Weve been getting better and better at what we’re doing there.” Orgill has made “incremental improvements” to its two distribution centres that serve this country, one in Post Falls, Idaho, and a DC in London, Ont. The latter delivers to stores in central and eastern Canada.

And those improvements have been achieved even as the miles per delivery continue to go up in Canada, adding more cost. “But we’ve found our way to do what we want to do in Canada.”

Looking ahead, Moore shares an outlook that is cautious in the near term, in anticipation of Canada’s commitment to increase housing, which will impact dealers positively.

“We expect the first half of the year in both the U.S. and Canada to be a little soft as the Fed and the Bank of Canada keep interest rates higher for a little bit longer. But as they start to come down, we’re going to see the opportunity for housing to pick up. When people come off the sidelines and aren’t afraid to get a mortgage, that’s going to make a lot of difference.”

As a result, dealers are showing excitement. “They’re not afraid of the future. They see a kind of slow period that they’re going to work through. But everyone is very optimistic and very enthusiastic about the future.”

While walking the aisles of the Orgill Spring Market last month, we caught up with Ken Jenkins, president and CEO of Castle Building Centres Group. As a major group with more than 300 member locations, Castle and its dealers represent major customers for Orgill’s hardware distribution services in this country.

We asked Jenkins about Orgill’s role in Canada and its efforts over the years to establish itself with independent dealers here as a source for their hardware products. “The success of Orgill’s penetration is not that they made a big grab at the market all at once,” Jenkins told Hardlines. “They’ve been infusing themselves gradually into the market over time.”

That gradual, incremental approach appears to be paying off, despite an industry-wide dip in hardware sales overall.

Jenkins was asked to comment on an observation made by one of Orgill’s executives. Canadian dealers are not as used to buying through distribution as their counterparts in the U.S., Greg Stine, EVP marketing and communications at Orgill, told Hardlines earlier at the show. As a result, one of the things Orgill does with its Canuck customers is try and educate them on the value of better managed inventory, which, Stine noted, can result in higher turns.

Jenkins concurred. “Canadians buy direct more.” Dealing with a market that is thinly spread across a large geography has historically hampered most independent Canadian hardware distributors. In addition, the buying groups here have tremendous power to help dealers buy direct.

While hardlines represent a smaller portion of the sales for most building centres, having the right assortments is critical. “About 14 to 17 percent of our Castle dealers’ sales come from the front end,” Jenkins said. “I don’t expect that to change much. But Orgill is good at satisfying that need with their large assortments and big buying power that comes from its base of U.S. customers.”

“Over time, Orgill will become a more and more important part of the Canadian market.”

Canadians can expect to see measures in the upcoming federal budget aimed at boosting housing affordability, CIBC economist Benjamin Tal told the Financial Post. “The government realizes that housing is a major issue and the next elections will be all about housing,” he said.

The federal government says some 5.8 million new homes must be built within the decade, necessitating a doubling of housing starts, according to Kevin Lee, CEO of the Canadian Home Builders’ Association. His organization is calling on the government to aid first-time buyers by bringing back 30-year amortization on insured mortgages.

Meanwhile, eyes are on the direction that interest rates will take. The Bank of Canada announced that it is keeping its policy rate at five percent, which it has maintained since July 2023.

“We don’t want to keep monetary policy this restrictive for longer than we have to. But nor do we want to jeopardize the progress we’ve made in bringing inflation down,” said bank governor Tiff Macklem. Canada’s inflation rate settled to 2.9 percent in January. The Bank of Canada’s target inflation rate is two percent.

DID YOU KNOW...?

… that Hardlines is now receiving entries for the 2024 Outstanding Retailer Awards? All Canadian hardware and home improvement retailers and managers who have operated under their current ownership for at least two years are eligible. To enter, please visit www.oras.ca; or contact our Editor-in-Chief, Steve Payne, for further information. (Le formulaire est également disponible en français.)

RETAILER NEWS

BMR Group has announced that BMR Brae-Con Building Supplies has acquired a new store in Wasaga Beach, Ont. The location joins owner George Begley’s existing outlet in neighbouring Elmvale. The 13,500-square-foot Wasaga Beach store has been in operation for nearly 40 years. It converted to the BMR banner on March 8.

A 30-year-old Chatham-Kent, Ont., man has been charged with assault with a weapon and theft of $120 in merchandise from a Home Hardware store. Police say that the store manager and employees confronted the man as he was leaving, and that he then assaulted the staff. He was arrested shortly after.

RONA inc. has been named, for the fourth consecutive year, one of Montreal’s Top Employers. The annual list is published by Mediacorp, which also publishes Canada’s Top 100 Employers.

Costco Wholesale Corp. had net income of $1.74 billion, up from $1.47 billion, in the second quarter of its 2024 fiscal year. Revenues of $58.44 billion were up by 5.7 percent. The Canadian market logged an increase of nine percent in same-store sales, better than 4.8 percent in the U.S. and 8.2 percent in other countries.

Lowe’s has partnered with consulting firm Accenture and tech firm Relex to bring artificial intelligence (AI) into its seasonal inventory planning. The article says that Relex provides the AI, while Accenture is providing its delivery and industry experience to advise Lowe's on the initiative.

Eisenwarenmesse, the International Hardware Fair, held in Cologne, Germany, from March 3 to 6, attracted more than 3,200 exhibitors from 54 countries. They presented the current trends and new products in these categories: tools and accessories, industrial supply, fixing and fastening technology, and building supplies and home improvement. In spite of various public transport strikes, 38,000 trade visitors from 133 countries made their way to Cologne. The next edition of the show is scheduled to take place March 3 to 6, 2026.

CORRECTION: In our excitement to share the addition of Alain Menard of RONA inc. to our lineup of speakers at this year’s Hardlines Conference, we got his title wrong. He is in fact senior vice-president, RONA dealers and affiliates.

The value of building permits in Canada rose 13.5 percent month-over-month in January to $10.8 billion, rebounding after a decrease of 11.5 percent in December. The value of residential permits increased 12.6 percent to $6.5 billion. Gains were led by a strong rebound in multi-unit construction intentions. Single-family dwelling permits were down 10.3 percent to $2.6 billion, with declines occurring in nine provinces. (StatCan)

Retailers are expected to lean into discounts or other targeted promotions to capture the selective spending and move product. Retailers going out of business are also forecast to create more vacancies in markets where they have previously been scarce. (2024 Canada Real Estate Market Outlook)