If lockdowns, supply chain disruptions, and galloping inflation weren’t enough to deal with, Home Hardware’s 1,000-plus stores across Canada have also had their own local, individual challenges. These are just some of the topics we cover in our new Hardlines Podcast with Marianne Thompson, chief merchandising officer at Home Hardware Stores Ltd.

Thompson joined Home Hardware in January 2019 as VP, merchandise, after serving as VP at JELD-WEN and, before that, Alexandria Moulding. She has quickly risen to assume the role of the company’s top merchant, overseeing both the LBM and hardware buying teams. She spoke with Michael McLarney for the forthcoming episode of our podcast series, “What’s In Store.”

Thompson said that the challenges of getting a consistent and reliable supply of product has made it difficult for everyone in our industry. “It’s not immune to the global supply chain challenges, including labour and product shortages, the raw material price increases, and also port congestion.” She added that restrictions and lockdown in parts of China due to a resurgence of COVID “further compounded this situation.”

Dealers have faced—and continue to face—additional challenges, many of them regional in nature, Thompson said. “Here in Canada, we've had environmental and economic challenges that have played a role, including the floods in B.C. last summer, with additional floods a few months later... impacting Nova Scotia, Newfoundland, New Brunswick, and Cape Breton, along with eastern areas of Quebec.

“And then on top of that we also saw forest fires in B.C. Hundreds of rail cars were halted by these wildfires and damaged tracks, creating an additional backlog of exports from the western provinces.”

Managing supply meant moving seasonal ordering times up to accommodate the longer lead times from the Asia, Thompson said. Plus, Home Hardware decided to secure more product than in the past to keep its dealers’ shelves stocked. It also required spending a lot of time working behind the scenes to move product around from region to region and from one DC to another. “That was really so critical so that we didn’t get caught up in that bottleneck to ensure that we could fulfill our dealers’ orders when they came in.”

The full conversation with Marianne Thompson covers more details about how Home Hardware invested directly in its supply chain, how the company is using new technology to track selling cycles, manage product orders, and get closer to its customers. You can hear it in its entirely on the next episode in our Hardlines Podcast Series, “What’s in Store,” being released later this week. To make sure you get access to this podcast as soon as it’s released, sign up here. Hardlines Podcasts are free!

Canadian first-quarter performance of Home Depot and Lowe’s

Both Home Depot and Lowe’s Cos. released their first-quarter earnings results earlier this month. And both showed tremendous gains through the late winter and spring seasons. (They both have fiscal year-ends of Jan. 31, so Q1 results cover the February to April period.)

However, results were a little more complicated for the Canadian side of the business at both Home Depot and Lowe’s.

In an earnings call to analysts, Lowe’s CEO Marvin Ellison commented on his company’s performance north of the border during Q1. “Last year, Canada's results benefited from record-high lumber prices due to the higher lumber mix in our Canadian business.” This year, the Lowe’s Canada business continues to operate in a different fashion than its U.S. parent, as a wholesale distributor to a network of 200-plus independents operating under the RONA banner.

That business got a boost at the beginning of 2022 with the naming of Jean-Sébastien Lamoureux to the position of senior VP for RONA affiliates for the company’s wholesale business, in addition to his role as senior lead for public affairs at Lowe’s Canada.

At Home Depot, executive vice president and CFO Richard McPhail gave analysts some insight about the Home Depot Canada business. Same-store sales for the entire company were up 2.2 percent over the first quarter of 2021, with the U.S. stores showing positive comps of 1.7 percent. McPhail said Canada “posted comps above the company average.”

McPhail also noted the massive size of the contractor market that Home Depot is reaching out to—noteworthy in light of rising interest rates. “I think it's important to remember that our addressable market is the 130 million housing units occupied in the U.S., plus probably… 40 million to 50 million more in Canada and Mexico.”

Regardless of the housing market, the Canadian business remains strong. Ted Decker, Home Depot’s COO, noted that “our Canadian business is in terrific shape,” as year-over-year performance grew following the “significant lockdowns last year,” which restricted store openings, especially in early 2021. “[In] Ontario, in particular, our stores were closed in the first quarter, and we had curbside pickup only. So the business is very, very strong.”

Canadian Tire builds online loyalty with Triangle Rewards program

Canadian Tire Corp. is managing its range of banners and brands by encouraging customers to use its Triangle Rewards program as the focus for all its online shopping possibilities. And based on the company’s first-quarter results, the strategy is working.

“Triangle Rewards members drove our results in the quarter, with loyalty sales up 13 percent compared to last year,” said Canadian Tire president and CEO Greg Hicks in a recent call to analysts.

The company remains focused on both new Triangle Rewards member acquisitions and engaging existing members even more substantially. Canadian Tire added 400,000 new members in the first quarter. “More than 25 percent of these new members now have a credit card and over 40 percent of them have registered for our one-on-one personalization program,” Hicks said. Canadian Tire is seeing more and more Triangle members shopping at the company’s various banners, including Sport Chek, Mark’s, and Party City.

“We remain focused on driving member cross-shop across our ecosystem,” Hicks added. “And in Q1, over one-third of our members shopped at more than one banner, which is significantly higher than last year.”

An innovation for the online shopping experience is the “widget.” It’s a pop-up function that appears for online shoppers to guide them to related offers and encourage add-on sales. Hicks explained: “For example, imagine you're viewing the product details of a trampoline on the CTR website. Just below the add-to-cart button is an ‘activate offer’ widget, showing that if you spend $100, you'll earn 20 times the e-Canadian Tire money, which equates to saving an additional $30 on the trampoline.”

Testing of the offer widgets ended up driving up the average order by 17 percent compared to a control group of CTR shoppers, while a similar test on the Marks website drove a 34 percent increase in average spend per visitor.

“We’re very focused on integrating our existing banners into one enterprise-wide platform,” said Hicks.

When we talk about growth of the green sector we are not only talking about plants and outdoor living. So, what is the green sector in broader terms? According to a new report from the Global Home Improvement Network, the concept is far-reaching, with many arms reaching into the retail home improvement industry.

First, it’s important to take a broader view of what green means. The green sector also relates to products that are future-oriented and sustainable, as well as working in a manner that is committed to the future of the planet and the well-being of the public. Protecting biodiversity and promoting this, as well as improving air quality, are all themes that fall under the green sector.

The retail home improvement sector is in a unique position to be able to influence and promote sustainability in its own operations, in addition to in the lives of its customers. Through the sale of sustainable, energy-saving, and waste-reducing products, the home improvement industry can have a dramatic impact on green living.

One of the key factors to promoting the green sector is to make customers aware of the types of benefits they will personally see when living in a more sustainability-oriented way. Initiatives and changes such as insulation of homes and installing solar panels require an up-front investment, but the savings will be seen in the long term.

Overseas, a number of retailers are promoting the move to sustainable living through personalized and holistic offers. For example, the home improvement retailer Merkur in Slovenia has established the Merkur TEO programme, which offers “complete solutions for your entire home in one place.” These types of complete packages are likely to become more commonplace in the future and are one way of ensuring customers will be able to access green ways to live more sustainably.

The green sector is becoming an essential sector to consider, especially as we move toward a green economy. Governments and international bodies are building expectations in this area, through programs and frameworks that should make the transition more fluid.

In its unique position, the home improvement and garden sector is perfectly positioned to act as a global example for sustainable initiatives and practices. Promoting these both within one’s company and to the customer base will ensure the sector remains relevant.

Stephanie Chan is the new channel marketing manager at DAP Canada, reporting to DAP’s senior marketing manager Renato Oliveira. Chan was most recently with Northern Response.

DID YOU KNOW...?

... that Hardlines is the only national breaking news service for Canada’s retail home improvement industry? Our mission is to connect the industry through information. If you have news to share, whether it’s a new hire, banner change, acquisition, or a new line, let Hardlines know. We are working for you!

First-quarter earnings for Lowe’s Cos. rose to $2.33-billion, or $3.51 per share. The increase came despite a decline in sales as homeowners returned to their offices. Net sales fell three percent to $23.66-billion, with overall comp sales down by four percent.

Groupe A-1 is the newest member of the Sexton Group. The company is a brand-new dealer in the Abitibi area of northern Quebec, a start-up by owner Hervé Leblanc, who has operated a construction company in the region for the past 19 years. The new store is focused on sales to contractors, specifically residential and commercial trades.

The Home Depot earned $4.23-billion in the first quarter. That was up from $4.1-billion a year ago. Total revenues rose by about four percent to $38.9-billion. Same-store sales were up 2.2 percent worldwide and 1.7 percent in the U.S.

IKEA Canada has opened its first location in a downtown core in this country. IKEA Toronto Downtown – Aura occupies the first two floors of the Aura Shopping Centre at the corner of Yonge and Gerrard. The 66,000-square-foot cashless store offers more than 2,000 products available for purchase. It also serves as a showroom for bulkier items like furniture that can be ordered for home delivery.

Dollarama has doubled CEO Neil Rossy’s compensation compared to prior to the pandemic, The Globe and Mail reports. In 2021, Rossy earned $7.83-million, an increase from $6.83-million in 2020 and $3.8-million in 2019. Larger bonuses were a significant contributor to the increase, as Dollarama benefited from a boost in sales during the pandemic.

SUPPLIER NEWS

Michigan-based Shepherd Hardware Products, a division of the Colson Group, has announced the completion of its acquisition of Waxman Consumer Products’ floor care line. With this transaction Waxman’s floor care brands, including SoftTouch, will join Shepherd’s existing lines, which include FeltGard and SlideGlide.

Iowa-based construction tech startup MSuite has been acquired by Stanley Black & Decker. Founded in 2015, MSuite offers a cloud-based suite of tools that connect building teams and allow them to share and manage data. In 2020, the company raised seed money from Stanley Black & Decker’s venture arm. MSuite founder Britton Langdon will continue to oversee the business as VP of construction technology for Stanley Black & Decker.

ECONOMIC INDICATORS

Retail sales were flat in March as lower automotive sales cancelled out gains in the other 10 subsectors. Core retail sales grew by 1.5 percent, led by a 3.7 percent gain in LBM and garden categories. (StatCan)

Sales of newly built homes in the U.S. sank in April to a COVID-era low. They were at a seasonally adjusted annual rate of 591,000 units, down 16.6 percent below the previous month's estimate of 709,000. However, new housing activity remains 14.6 percent above April of 2021. (U.S. Commerce Dept.)

Sales of existing U.S. homes fell in April to their lowest rate since the pandemic outbreak. Sales fell by 2.4 percent from March to an annualized pace of 5.61 million units. Compared to last April, they were down 5.9 percent. (National Association of Realtors)

NOTED

The Retail Council of Canada will hold its Store 22 conference on May 31 and June 1 at the Toronto Congress Centre, North Building. Speakers will include Susan O’Brien, chief brand and customer officer at Canadian Tire Corp.; Rosie Ponzar, COO of Sephora Canada; and Eric Morris, managing director of retail, Google Canada. Click here for more information and for tickets.

OVERHEARD

“Looking back over that time, we’ve had the good fortune to work with successful retailers and their suppliers across Canada, the U.S., and the Caribbean. We’ve added many new retailer and vendor clients along the way and grown the business with the addition of our U.S. office in 2000, continuous investments in technology, web offerings, and mobile recruiting tools.” —Wolf Gugler, president of Wolf Gugler Executive Search and well-known industry recruiter, celebrating a quarter-century recruiting talent for the retail home improvement industry in both Canada and the U.S.