RONA's sales, profits up in 3Q

BOUCHERVILLE, Que.—RONA's profits for the third quarter increased 5.8% to $56.1 million, up 5.8% over the comparable period last year. For the year to date, RONA's net earnings reached $152.5 million, up 10.8% over the same period last year. Sales for the period rose 13.0% to $3.4 billion. This growth reflects the expansion of the corporate and franchised store network, and dealer recruitment. Most importantly, results benefited from the acquisitions during the quarter of Chester Dawe, a key independent in Newfoundland, 51% of Materiaux Coupal Inc., a Montreal-area dealer, and Curtis Lumber in Burnaby, B.C. In total, RONA has added $300 million in annual sales through acquisitions so far this year. In addition, RONA has recruited 23 dealers since the beginning of 2006, increasing annual retail sales another $136 million. "Our development plan is being implemented as planned," said RONA president and CEO Robert Dutton in a release. "We're right on target with our ‘7-07' Program, having achieved 35% of our objective thanks to a combination of same-store sales growth, store construction, acquisitions and recruitment," despite a less-than-favourable market, especially in Quebec and in Ontario. Same-store sales during the third quarter rose 1.2%. Accounting for fluctuating lumber prices, same-store sales advanced by 7.2%.

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Canadian Tire's 3Q earnings rise 13.1%

TORONTO—Canadian Tire Corp. wound up its third quarter with net earnings of $95.4 million, an increase of 13.1% from $84.4 million in 2005. Excluding non-operating gains and losses, net earnings were $94.4 million, an increase of 13.2%. Sales increased 9.0% to $2.43 billion, from $2.23 billion. "Our sales and earnings performance for the third quarter, as with the first half of the year, reflects healthy customer response to our offerings across our network of businesses," said Tom Gauld, Canadian Tire's president and CEO. He added that sales for the fourth quarter are expected to remain strong, but warned that profits may suffer from seasonal promotional expenses and the openings of 34 Canadian Tire Retail Concept 20/20 stores. "Earnings for the fourth quarter will also be impacted by investments in the retail banking pilot, the expansion of the Gas Advantage MasterCard in Ontario and continued margin challenges at Petroleum." For the first nine months, net earnings were $246.3 million, up 16.2%. Sales at Canadian Tire Retail (CTR) in the third quarter grew to $1.8 billion from $1.7 billion, an increase of 7.3%. The growth came partially as a result of strong promotional activity in the quarter. Same-store sales increased 5.6%, led by strong growth in the categories of kitchen and home appliances, car care and accessories and outdoor recreation. CTR's profits for the quarter were up 14.1% to $98.2 million, reflecting higher operating revenue from product shipments and improved operating margins resulting from global sourcing initiatives and favourable exchange rates. Year to date, retail sales for CTR were up 5.8% to $5.1 billion, from $4.8 billion during the same period a year earlier.

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CanWel customers meet in Montreal

MONTREAL—Customers of CanWel, Hardware Division gathered last week in Montreal to meet vendors and sit in on seminars. But the event, and the vendors, were all organized through CanWel's partnership in PRO Retail Services, or PRS, as it is now being called. The event was marked by a general enthusiasm and positive outlook by dealers and exhibitors alike. Business remains good for most independents, and this, combined with a sense that CanWel is getting its house in order, helped boost spirits. CanWel, Hardware Division (formerly Sodisco-Howden Group), has partnered with TruServ Canada to create PRS, creating a banner-management team that oversees purchasing for CanWel, Hardware customers, while CanWel, Hardware supplies the product. "The phone has been ringing off the hook since the show," said Tony DiEmanuele, vice-president, business development and growth for TruServ, and a key member of the PRS team. "All the vendors wrote orders." DiEmanuele saw the success of the event as a sign that the independent served by CanWel is flourishing, despite consolidation pressures. "You can't tell me that the independent is dead," he said.

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Home décor expands in new Wal-Mart Supercentre

UNIONVILLE, Ont.—Wal-Mart's much anticipated grocery-and-hard goods combo store is opening in this community just north of Toronto. It follows stores in London and Ancaster, Ont. The Wal-Mart Supercentre features expanded home décor, electronics and apparel offerings — and fresh meat and produce. Ranging in size from 160,000 square feet to 200,000 square feet, the Wal-Mart Supercentres are about 30% bigger than traditional Wal-Mart stores and stock approximately 120,000 products, compared to 80,000. On the hardlines side of the business, key departments such as home trends and electronics have been broadened and enhanced to offer more selection in a wider range of price points, from entry to higher-end merchandise. At the grand opening last week, Mario Pilozzi, president and CEO of Wal-Mart Canada called the new concept an "evolutionary step" that aims to cater to time-pressed Canadian consumers. "We have grown and enhanced all the areas customers told us we should. The result is the real one-stop shop that Canadians have been waiting for, combining enhanced fashion, home trends, electronics, and a full fresh market," Pilozzi added. "It's not just about getting bigger, it's about getting better." Wal-Mart's home enhancement departments, collectively called "Home", have grown from about 17,000 square feet in a traditional Wal-Mart to 26,000 sq.ft. in this store. The focus here is on four categories: bed and bath, kitchen and entertaining, furniture and organization, and home décor and seasonal accents. Wal-Mart Canada plans an additional four Ontario stores, in Scarborough, Sarnia, Brampton, and Vaughan, in early 2007, plus another five to seven stores by the end of next year. (I'll report more on the impact of the new Wal-Mart Supercentre concept on the retailer's home enhancement categories in the 1Q 2007 edition of our amazing sister publication, Hardlines Quarterly Report. — Michael)

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Aeroplan creates partnership with Home Hardware

MONTREAL & ST JACOBS, Ont.—Aeroplan and Home Hardware Stores Ltd. have forged a national, exclusive multi-year partnership. Starting in early 2007, Aeroplan members can earn one Aeroplan Mile for every $2 spent at the more than 1,000 Home Hardware stores across Canada. Aeroplan members can also redeem Aeroplan Miles for Home Hardware Gift Cards. With locations in major and secondary markets throughout the country, Home Hardware gives Aeroplan a valuable retail presence for its loyalty program. Besides Home Hardware, customers can earn Aeroplan Miles through a network of more than 60 partners, representing more than 100 brands in the financial, retail and travel sectors.  Aeroplan miles can be redeemed toward any available seat across the entire Air Canada and Air Canada Jazz networks, as well as more than 400 specialty, merchandise and experiential outlets.

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