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November 10, 2014 Volume
xx, #42
“Freedom is the right to tell people what they do not want to hear.”
—George Orwell (British essayist, author and journalist, 1903-1950)
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Addition of Unimat dealers gives boost to BMR Show
QUEBEC CITY — BMR’s show for its dealers got an added boost from the merger of the buying group and wholesale distributor with La Coop fédérée almost a year ago. This is the first time La Coop’s hardware and building materials dealers, which operate under the Unimat banner, have attended the BMR show in force and their presence has increased attendance from 167 dealers represented last year to 360 this year.
The show reflected the larger numbers with a heightened buzz of energy and more traffic on the show floor. Vendors exhibiting at the event were also positive about the combined presence of the dealers, hoping to translate that into a higher volume of orders than in past years. The presence of La Coop dealers also gave a number of vendors not already selling to this company a chance to broaden their business even more.
La Coop, which has holdings in farm and feed, fuel, groceries, and home improvement, bought a 20% stake in BMR in a deal that closed at the beginning of this year. Buying teams for hardlines and LBM have been combined into BMR’s own offices, and La Coop will close down its own hardware distribution centre in Trois Rivières, Que., by January 2015.
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BMR launches Agrizone as standalone banner
QUEBEC CITY — The 360 dealers attending the latest BMR show, which wrapped up on Saturday, had a wider range of banner options to choose from than ever before.
Along with the traditional BMR banner, Unimat was added, reflecting the merger of the two groups when La Coop fédérée, which owns the Unimat brand, acquired a stake in BMR at the beginning of this year. But Agrizone, BMR’s farm hardware merchandising concept has also been spun off as a stand-alone banner.
The concept, first introduced as a department inside existing BMR stores (much like its décor concept, “Inspiration”), is now available to dealers who can identify an opportunity in their own market, especially where there’s no room for another BMR or Unimat store.
The Agrizone stand-alone stores will feature farm hardware, décor, paint and coatings, core plumbing and electrical, and farm seasonal.
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Home Depot security breach bigger than originally thought
ATLANTA — Home Depot has released a report indicating that the security breach it suffered in recent months was much worse than originally thought. The findings are the result of weeks of investigation in co-operation with law enforcement and third-party IT security experts.
Not only did Home Depot compromise the payment card histories of 56 million customers, but separate files containing about 53 million email addresses were also taken during the breach. While the files did not contain passwords or other personal security information, they would leave owners of those emails vulnerable to junk mail and phishing scams.
Home Depot is currently implementing tighter security protocols to enhance encryption of payment data in its U.S. stores. However, the rollout to Canadian stores will not be completed until early in 2015.
According to a report in the Wall Street Journal, Home Depot fell victim to the same type of hacking that was used on Target Corp. last year. The point of entry for the hackers’ attack was security information stolen from an outside vendor of Home Depot’s. From there, malware was able to infiltrate Home Depot’s main computer network through a weakness in the Microsoft Windows operating system.
While Microsoft issued a patch to fix that breach, the hackers were already inside Home Depot’s systems, eventually pinpointing the company’s POS systems to obtain the personal data of customers.
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Provincial market shares shift as West regains momentum
SPECIAL REPORT — As Canada’s retail home improvement industry slowly gains strength following the lows of the 2008-2009 worldwide recession, recovery remains very different depending on the region.
British Columbia showed the greatest growth among the provinces in 2013. Alberta also showed strong growth with a 0.5 percentage point increase in market share. Ontario, Canada’s largest province, and the largest market for home improvement retailing, saw its market share shrink from 33.1% in 2012 to 31.5% in 2013. In fact, with the exception of a slight increase in 2012, Ontario’s market share has been steadily decreasing for the last five years.
The Prairies and the Territories held steady market share throughout 2013. With an overall increase of 4.8% that year, growth in the West was stronger in 2013 than the 3% increase it enjoyed in 2012. British Columbia led the way with a 6.7% increase in sales. The market leaders in that province were RONA and TIM-BR MART Group, which both own slightly more than 11% of the market in that province.
Atlantic Canada is perennially resistant to economic highs and lows. In 2012, three provinces saw sales dip. In 2013, Newfoundland’s economic boom continued with Prince Edward Island also having huge increases in sales. In Nova Scotia, Home Hardware was the largest player, with almost 30% market share. Canadian Tire is next with slightly more than 16% of the market, while RONA, Castle, and Kent all had about 9% market share of that province.
(Full analysis of the market shares of each banner and each province is now available in the Hardlines Market Share Report. Click here for more info! —Editor)
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Retailers successfully battle high credit card fees
TORONTO — Two major credit card companies have agreed to lower their fees, making usage more affordable for merchants across Canada. The federal government announced voluntary agreements last week with Visa and MasterCard to reduce their respective credit card fees for consumer cards to an average effective rate of 1.5% for a period of five years. A greater reduction is provided for small and medium sized enterprises. The lower fees are expected to be in place by no later than April 2015.
The move follows years of complaints by retailers and other merchants, in an effort spearheaded by the Retail Council of Canada that has lasted almost a decade.
“For our merchants, this is an important first step towards ending the escalation of credit card fees that have been ballooning in Canada for the past seven years,” said Diane Brisebois, president and CEO of RCC. She added that fees “went completely unchecked” and that providers “were free to charge whatever rates they liked and retailers simply had to bear the increased cost to their business.”
Today, Canadian merchants pay on average between 1.5% and 3% on credit card transactions. With the new agreement, fees have been reduced by an average of 9.3%. However, Brisebois says Canadian retailers still pay some of the highest credit card fees in the world, noting that merchants in France pay 0.28% of the cost of a purchase, while that fee in Canada, even after the reduction, will still average 1.5%.
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