Home Depot plans 10 more Canadian stores before year’s end

TORONTO—While the industry awaits the arrival of Lowe’s into Canada next year, Home Depot’s Canadian division is working aggressively to ramp up its presence here and provide as much resistance to the Lowe’s initiative as it can possibly muster. A recent management meeting held in Atlanta was reportedly devoted entirely to strategies for combating Lowe’s in its first foray outside of the U.S. Canada’s largest home improvement retailer intends to ensure its place at the top by opening 10 more stores before its fiscal year end on Jan. 31, 2007. Most recently, Home Depot opened one store in Westbank, B.C., near Kelowna in British Columbia’s interior region, and another in Timmins, Ont. Other stores scheduled for the coming weeks include Midland, Ont., on Nov. 23 and Collingwood, Ont., later in December. These sites represent Home Depot’s efforts to expand into secondary markets, but it is also continuing its efforts to develop urban markets. Hardlines expects to announce further planned openings in coming weeks.

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Ontario creates hardware & LBM apprenticeship program

ST. JACOBS, Ont.—A strong new training initiative is being launched by the Ontario Ministry of Training colleges and Universities. The first program of its kind in the province, the Hardware, Lumber and Building Materials Retailer Apprenticeship program provides significant government funding for comprehensive, industry specific training. Tony Krotz is dealer education manager at Home Hardware Stores Ltd. He has spent the past three years working on this initiative, at various times with input and support from other industry groups, including Castle Building Centres, I.L.D.C., RONA inc., and the Lumber and Building Materials Association of Ontario. Also involved in the project is the Canadian Distance Education Association (CDEA). The initial thrust of the program is to provide upgraded training for existing store staff, he says. "Owners and managers can focus on people already working in the stores. It will be for people that owners see potential in and want to develop further," says Krotz. "Eventually," he adds, "the program will become a way to attract more people to our industry by helping them see it as a career option. The idea is that this is something that will attract people out of high school. By offering some sort of recognized professional certification, this program will give the industry more credibility as a career choice." To start, the program is limited in terms of both numbers and available funding to 600 people in a pilot between now and March 2007. Dealers who wish to get involved are expected to contact their respective dealer organization or buying group for details. Another source of information is Kevin Milne of CDEA: 519-584-0986; or milne@cdei.ca.

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Demands by retailers put pressure on inventories

TORONTO—The liquidator is no longer the grim reaper of the retail world, but an important business partner, according to Jonathan Hill, CEO of Liquidation World. The head of a Calgary-based retail liquidation operation that operates 100 outlets across North America, he spoke at the recent Hardlines Conference. Hill said that merchandise handled by companies like his has historically been considered the shoddy left-overs from failing businesses. But today, he says, more than 85% of the inventory Liquidation World handles comes from healthy businesses. The changing role of the liquidators has several causes. Pressure from shareholders has forced retailers to realize margins on stock quickly or move it out. In turn, retailers pressure suppliers to assume responsibility for product performance on the shelves. As well, the economics of global sourcing mean that off-shore containers are packed as tightly as possible to create the lowest cost per unit, regardless of whether retailers can actually move that much of one item. The increasing complexity of retail forecasting also means that retailers must sometimes liquidate stock quickly, especially in the case of those whose strategy includes providing a fast-turning, highly-differentiated product line. These trends are being further affected by a growing movement among retailers to trim both inventories and their range of suppliers. Companies such as Loblaw, Wal-Mart, Canadian Tire, and CanWel, Hardware Division are all looking to work with fewer, larger vendors.

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Home Depot discontinues two print catalogues

ATLANTA—Home Depot has decided to discontinue selling from two print catalogues that it launched with considerable fanfare only a year ago. The retailer has ceased publication of 10 Crescent Lane and Paces Trading Co., through which it sold high-end furnishings and lighting, respectively. Those monthly catalogues had been mailed to more than one million names. However, both entities will have a presence on Home Depot’s main website. In addition, they will be incorporated into its core print catalogue. Jean Osti Niemi, a company spokesperson, told Multichannel Merchant magazine that Home Depot made this move because it was getting more customer traffic through its website HomeDepot.com and through its Home Depot Direct catalogs. Niemi said that Home Depot did not intend to merge its other upscale catalogue, Outdoor Living, into Home Depot Direct, and would continue to run Home Decorators Collection as a separate entity. Home Depot had been using 10 Crescent Lane and Paces Trading Co. — which went to intersecting mailing lists — to target women with household incomes of more than $225,000.

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True Value posts 19% net gain

CHICAGO—True Value Hardware, the dealer-owned buying group, reported a 19% increase, to $18.3 million, in net margin for the quarter ended Sept. 30, on revenue of $497.9 million that was up 2.3% over the same period a year ago. Through the first nine months of its fiscal year, the co-op’s wholesale sales rose 3.2% to $1.542 billion, and net margin was $55.2 million compared to $25 million in 2005.  Excluding the impact of an arbitration matter, True Value’s net margin rose 15.6% to $6.8 million. Lyle Heidemann, True Value’s CEO, attributed his company’s financial performance to improvements in its product mix, its line-review process, retail support and training.  The company also continues to pay down its debt. Through nine months it had reduced its indebtedness by one third, to $158.7 million.

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Retailers should focus on store experience, not ads

NEW YORK—Retailers should spend less on marketing and advertising, and more on improving the customer experience right in the store, according to a new study from Deloitte & Touche USA LLP. They should also be developing multiple channels for reaching the consumer, especially those who walk into the store, then walk back out. The study, which asked more than 4,400 consumers about their shopping behaviour through an online survey, determined that "non-purchasers" are three times as likely to permanently abandon a retailer as the ones that spend money. That should provide clues as to how retailers should spend their marketing dollars. "Retailers continue to devote substantial resources to traditional marketing vehicles, despite new communication mediums, demographic shifts, and a lack of proven return on investment," said Pat Conroy, national managing principal of Deloitte’s Consumer Business practice. "By looking at what converts a shopper into a buyer — and, conversely, what keeps a shopper from buying — retailers can direct their efforts in a more positive manner." The study determined that one of the most effective ways to turn shoppers into buyers is by enhancing store navigation ("customers can’t buy what they can't find"). Consumers who went to a store intending to buy an item but did not purchase it said that the number-one reason was that they could not find the item (16%), either because they could not locate it, it was out of stock, or help was not available to find it. In fact, of the consumers that said they received service in the store (31%), the majority (55 percent) did so to get help locating an item. The barrage of advertising and marketing through television, radio and online ads, direct mail, coupons, and displays and signs results in information overload. The result is a relatively low impact on consumers, who were more likely to be affected by the environment once inside the store itself. "Brand recognition, past in-store experiences, and consistent fulfillment of the brand promise are driving many more store visits and driving the conversion of shoppers to buyers," said Scott Bearse, leader of Deloitte's Retail Stores practice. "Consistently managing a successful series of customer purchase experiences is what creates a strong retail brand and ultimately increases shareholder value."

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