A couple of hundred Canadians were among the thousands of attendees at Orgill’s 2024 Spring Dealer Market, held Feb. 22 to 24 at the Orange County Convention Center in Orlando, Fla.

The event brought together retailers from around the world to connect with vendors that were represented in more than 1,200 booths throughout the show floor. The market also included model stores, support services, and special buys, plus a stage that hosted a range of educational sessions.

“Now, more than ever, retailers in this industry need to be proactive about finding ways to compete and succeed, and our market is designed to provide them with the tools they need to do just that,” said Boyden Moore, president and CEO of Orgill. “We are very thankful to all the retailers who are here and all of our vendor partners who step up to make the event the best in the industry.”

One area that drew lots of attention was a brand new one: the Farm and Pet showcase. This area featured products for both household pets and agricultural applications. In addition, an adjacent “Pet Oasis” gave attendees a spot to unwind and interact with rescue dogs—which were all available for adoption.

An important part of the market for Canadians (at least, we’d like to think so—your humble Editor) was the chance for Canadian dealers to gather in one place at Hardlines’ Canada Night reception. Dealers in attendance came from a range of banners and buying groups, including Castle and TIMBER MART, as well as stores from other banners looking for fill-in lines or alternative sources of wholesale supply. They all met at a British-style pub near the Orange County Convention Center, where the Orgill event was held.

Orgill’s Online Buying Event began on Feb. 19 before the Dealer Market and continued until March 3. There, retailers could access promotional buying opportunities, shop for seasonal merchandise, and browse the thousands of new products.

At Orgill’s 2024 Spring Dealer Market, held recently in Orlando, Fla., dealers were largely upbeat, even though the industry in North America is stalled somewhat. Following a less-than-stellar year, the forecast for the next few months remains moderate.

“It’s very similar in both countries,” said Orgill’s EVP of marketing and communications, Greg Stine. “It appears to us that both the U.S. and Canadian markets are in a kind of ‘Covid shadow’ recession.”

Dealers certainly benefited during the restrictions of the pandemic, but the industry is feeling the fallout now. “It’s not horrible, but it’s tight. It’s hurting retailers, or at least making it harder for them to grow in place in the shadow of the Covid bubble.”

For example, he said, people may typically want to paint their homes or purchase a big item such as a barbecue every six or eight years. “Our industry has got this rhythm where we knew what everybody was going to need, which months they needed that kind of stuff in, and then Covid came along and got everyone locked in their houses. And then the buying patterns blew up and changed. Then, after Covid happened, they changed again.”

Stine says that dealers became so used to driving volume on low-margin products over the past couple of years. Now, however, they can change up their assortments, increase the value proposition to their customers, and drive higher margins with more turns out of the front end of their stores.

Against this backdrop of a disrupted market, dealers in attendance were nevertheless busy seeking out special buys, learning about new retail services, and investigating the offerings at the market’s giant new product showcase area.

Lowe’s Cos. presented its fourth-quarter and full-year financial results for 2023 last week. Like rival Home Depot, which reported the previous week, Lowe’s was impacted by slower activity in the housing market in a year marked by high borrowing rates. Still, its annual profits rose even with the loss of sales from RONA, Lowe’s Canada, and Dick’s Lumber, whose acquisition by Sycamore Partners was finalized in February.

DIY customers, too, were “hesitant to spend on big-ticket purchases for their homes,” CEO Marvin Ellison said on an earnings call. “Those that did engage in home improvement activities took on smaller, non-discretionary projects with a heightened focus on value.”

The company said it earned net income in Q4 of $1.02 billion, up from $957 million in the comparable period of 2022. When costs related to the sale of the Canadian business are factored out, earnings came to $2.28 per share. Sales declined to $18.6 billion from $22.45 billion in the previous Q4, which was a week longer and also included sales in Canada.

Revenues for the year came to $86.4 billion down from $97 billion in 2022, while profits rose to $7.7 billion.

Like Home Depot, Lowe’s is continuing an aggressive strategy of outreach to contractors. Ellison noted that, “despite a challenging macro environment and difficult weather in January, our comparable pro sales were flat quarter-to-quarter.”

The company, Ellison said, is “focused on executing our wholistic pro strategy, with more convenient fulfillment options, an enhanced product assortment, creating a best-in-class digital experience, and a rewards program that incentivizes long-term loyalty.”

CFO Brandon Sink told analysts that “pro sales should continue to outpace DIY,” looking ahead.

Lowe’s outlook remains cautious into 2024. It’s predicting that earnings will fall short of estimates, at about $12 per share. Comp sales are likewise expected to come in two to three percent lower than 2023.

There’s lots going on at Home Hardware Stores—on all fronts, from merchandising and store relations to technology and new product development. We recently talked with Laura Baker, chief marketing officer at Home Hardware Stores Ltd., about these and other topics. We continue our report on that exclusive interview here.

One of the big announcements Baker shared was Home Hardware’s pending entry into the tiny homes market, a phenomenon that has been drawing attention in both small-town America and in laneways of major centres like Toronto and Vancouver.

“We’re launching access dwelling units in our Beaver Homes and Cottages and the Backyard Package Projects program,” says Baker. “That’s another big thing that consumers are thinking about with real estate—whether it’s children living at home longer, the need for more secondary spaces in their homes, the idea of creating an Airbnb, or severing real estate to have several real properties on one place.”

Baker says the new lines will be launched “later in the year.” All products in the design packages will be available from local Home Hardware Building Centre dealers. Customers can even source contractors through those dealers as well.

While the tiny homes movement is definitely a growing trend, Baker says the move was made strictly as a response to the needs of Home Hardware customers. “We’ve been in this business for a long time with Beaver Homes and Cottages, and our packaged programs with decks and garages,” so the Beaver Homes architects are updating their plans to match those consumer demands. This will let homeowners “add space in a creative way or to add revenue.”

Despite their size, these dwellings—some as small as 200 square feet according to other websites—provide opportunities not just for smaller communities with lots of space. They are also being squeezed into lanes and garage lots in high-density urban markets.

And talking about urban markets, Baker says Home Hardware recognizes the value of its stores in big cities. She says the company’s commitment, however, is to the dealers and it relies on those dealers to fill in those urban markets.

But she admits this approach has its problems. “Something that has been challenging us a bit is downtown Toronto, in terms of condo development and even in terms of transit. We continue to see amazing traffic into both our building centres and our hardware stores, and we continue to support those customers and those dealers in those markets. Nothing is changing in that regard in terms of how we want to grow.”

Baker emphasizes the importance of having stores in those markets, but Home’s online presence can help too. “I think the biggest thing is what we’re doing on our website to support customers and get products delivered to their closest store—or wherever they are.”

Castle Building Centres Group has a new business development manager for the Newfoundland and Labrador regions. Brian Warr was the fourth-generation operator of George Warr Ltd., in Springdale, Nfld., where he spent 28 years operating Warr’s Castle Building Centre. He left the industry for almost a decade to hold various positions with the provincial government, including serving as the Newfoundland and Labrador MHA for Baie Verte-Green Bay and most recently as deputy Speaker of the House of Assembly. In his new role, Warr’s responsibilities will include the support, development, and growth of the existing member base, while also cultivating new opportunities in the region.

DID YOU KNOW...?

… that the 2024 Hardlines Conference is coming to the province of Quebec for the first time in its history? The event will take place Oct. 22 to 23 at the Fairmont Le Manoir Richelieu, a gorgeous resort in the province’s Charlevoix region, and we will put this one on in collaboration with AQMAT. Save the date—and watch for more info in future issues!

RETAILER NEWS

RONA held its Vendor Forum late last month, welcoming about 350 participants and 150 vendor partner companies to learn about its priorities and strategies for 2024. Attendees also had the opportunity to meet with members of RONA’s executive leadership and merchandising teams, including chief merchandising officer Doug Young, a former VP merchandising from Canadian Tire who joined RONA last autumn.

A Montreal law firm has agreed to a $2.5 million settlement in a class action lawsuit against Dollarama. The lawsuit claimed Dollarama had allegedly mishandled its Environmental Handling Fee pricing. EHF is charged by many retailers on environmentally-hazardous products such as batteries. Under Quebec consumer protection law, the full price of an item must be displayed by a retailer. Dollarama has denied any wrongdoing or illegality. If approved by the courts on April 9, Canadian customers who qualify will be able to apply for a $15 Dollarama gift card.

Trying to cope with “rampant shoplifting,” a long-standing San Francisco hardware store is using a novel technique to cut down on its shrink. It has employees escort customers while they shop. Customers must wait at the entrance of the store until an employee is available. According to CBS News, Fredericksen Hardware has been working to cut shoplifting in the store, which has been operating since 1896.

Amazon is partnering with non-profit Les Produits du Québec to offer a portal through which consumers can order more than 1,000 Quebec-made products, CBC News reports. The province’s government had previously launched Le Panier Bleu, a directory and later a transactional website for purchasing Quebec products. Critics feared the Amazon partnership would undermine Le Panier Bleu. In fact, the four-year-old program was axed last week. Le Panier Bleu managed, during its existence, to register more than 600 retailers from Montreal to the Côte-Nord region and display some 250,000 products.

SUPPLIER NEWS

Taiga Building Products reported Q4 net sales of $367.7 million, down by $33.1 million from $400.8 million a year earlier. Net earnings fell to $9.4 million from $9.7 million. Sales for the year amounted to $1.68 billion, compared with $2.19 billion in 2022, a decline attributed to lower selling prices for commodity products. Annual net earnings of $61.3 million marked a drop from $88.6 million in the prior year.

Sales of existing U.S. homes rose by 3.1 percent in January on an annualized basis. Year-over-year, sales declined by 1.7 percent. Prices increased across all four geographical sectors of the U.S. (National Association of Realtors)

The latest instalment of our podcast series What’s In Store has gone live! In this episode, we talk to workplace specialist Pierre Battah. He shares his insights on how dealers can manage their HR function “on the fly” and work with their teams to increase engagement. Sign up now to get updates about the latest free podcasts in your inbox!