This year’s Hardlines Conference featured the inaugural round of the Hardlines Debates. The new event took the form of a dialogue between Hardlines president Michael McLarney and Bill Morrison, a veteran retail consultant who formerly oversaw the Ace banner for Lowe’s Canada.

The conference was held on Oct. 19 and 20 in Niagara-on-the-Lake, Ont. More than 150 people attended, both in person and virtually, for the conference’s 25th edition.

The Hardlines Debates were created to provide a forum for open discussion about some of the key issues confronting home improvement retailing. Morrison and McLarney found much common ground in their forecasts for the industry over the coming years, but Morrison expressed more pessimism about the trials to be endured in the medium term on the road to recovery.

Three questions were considered during the debate. The first was, “Is green growth good for our industry?” Speaking in favour, McLarney noted that this trend was cutting across all industries. “Big corporations are on board” with green renewal, he said, noting that major auto manufacturers have set cut-off dates for the sale of gas-powered cars even as they invest heavily in electric technologies.

Morrison agreed that “our planet needs to be protected: the last time I checked, we only have one.” At the same time, he argued “we need to understand what governments are actually trying to do to us.”

Allowing that there is “tremendous opportunity” for such innovations as solar panels, Morrison expressed his concern that green growth “will be very expensive, very difficult, and may accomplish very little.”

Next, the debaters discussed whether an uptick in inflation was on the horizon. Both McLarney and Morrison agreed that a major hike in interest rates was out of the question politically. As Morrison put it, “you would see mortgages go underwater.”
“Canada has a unique economy that’s somewhat disconnected from the rest of the world and that’s going to have to absorb some inflation.”

The final question was, “Are we entering the roaring ’20s?” McLarney took the “pro” side. “No matter what the macro issues are, people love their homes. They live in their homes—it seems obvious to say—and they want to make them better.”

“I think our industry is going to grow,” Morrison said, “but there is going to be more turbulence.” He pointed to “huge price increases and shortages” continuing in the medium term. “People are stressed, and our business is not immune,” he added.

“I am tremendously confident in our industry, but there are bills coming due.”

Gibson Building Supplies has joined Sexton Group, effective Nov. 1. The independently owned Canadian company offers roofing and exterior building supplies through its seven locations in central and southwestern Ontario.

Gibson has its roots in Chouinard Bros., a roofing company based in Aurora, Ont., that was established in 1972. In 2001, Gibson Building Supplies was created. It specializes in roofing and related materials but also carries some hardware and safety products, including nail guns, hoists, and ladders. To this day, Chouinard Bros. remains a key account for Gibson.

Chouinard and Gibson joined Independent Lumber Dealers Co-operative in 2004, where they remained members for only a few years. A brief stint with TIMBER MART followed, but Gibson has been on its own for roughly the past decade. CEO Michelle Chouinard-Kenney explains why the company hooked up with a buying group after so many years flying solo.

With the company expanding to seven locations, she’s found the customer base has grown beyond the core roofing installer. Some of the stores are serving more general contractors, she says. As a result, “we’re looking to expand our product line and we were looking at who we could align with.” As Gibson looks to diversify, she wanted a partner that aligned with her company’s ethics and philosophy. She found many parallels with Sexton Group, whose values and roots she respects. “It was a good fit.”

Chouinard-Kenney, who grew up in the business at Chouinard Bros., has held the CEO role for the past seven years. She says Gibson Building Supplies will continue to add locations, with one—and maybe two—slated to open in 2022. These will expand the current market area that the stores serve, which stretches from Peterborough to Brantford in central and southern Ontario.

In the middle of negotiation season now, Chouinard-Kenney admits that the shortages facing the industry since 2020 have complicated the process, even as her company is adding new lines. “It’s a moving target for us.” But, she says, the alignment with Sexton is helping with these negotiations.

BMR Group has forged a sponsorship with the Ottawa Senators hockey team for the 2021-22 season. Now the green BMR logo appears right in the ice at the Canadian Tire Centre in Kanata, a suburb on the west side of Ottawa.

Canadian Tire Corp. took over the naming sponsorship of the arena from Scotiabank in 2013.

According to Julie Crevier, a spokesperson for BMR, the partnership with the Ottawa Senators is for the entire 2021-22 regular season, which concludes at the end of April 2022. During that time, the BMR logo will remain on the ice at Canadian Tire Centre, close to the net.

“So when the Sens play locally, the logo will be seen on TV on all main sports channels broadcasting the matches. It is a great way for us to have our brand visible to Ontario communities,” Crevier said.

The promo is the latest move by BMR to build its presence outside its home province of Quebec. In July of this year, Simon Gouin joined the group as senior director, business development, eastern Canada. He oversees the development of the dealer network in Quebec, Ontario, and the Maritimes.

Peavey Industries is coming out of COVID, like so many retailers, looking for a new normal. That includes how it handles its flyer program.

In a new podcast from the Retail Council of Canada, Jest Sidloski, vice president of marketing, customer experience, and e-commerce, shared how the Red Deer-based retailer has re-evaluated paper flyers for its Peavey Mart stores. The new approach reflects the company’s attempt to return to some kind of normalcy with its customers, as well as a new level of digital expertise it has gained through the acquisition of the TSC Stores chain.

To determine the importance of paper flyers post lockdowns, Peavey turned to the people who shop in its stores. The result weighs on the side of the status quo. “We have to take a very cautious approach and ask and listen to our customers,” says Sidloski. “Over and over the majority of Peavey Mart customers say they still prefer the paper flyers.”

However, the company has made changes within that mandate. Sidloski admits in the podcast that Peavey had some catching up to do regarding online selling. But TSC, which was purchased by Peavey in 2016, “had a decade of expertise online,” he says.

In fact, in 2010, TSC launched a distribution arm called TSC Country Pro Services. The wholesale business provided a range of tools and hardware, with a focus on farm and ranch, to dealers throughout Ontario and Manitoba. That involved expanding its warehouse capacity, recruiting a fleet of trucks, and building up an online sales portal.

With the additional support of the TSC digital expertise, Peavey relaunched its website in April of this year, making it easier to select and purchase products. But the paper flyers have remained an important part of the mix.

Sidloski says the printed promos were reduced from 52 times a year to 36, and the page count was reduced as well. They feature what Sidloski calls “bread-and-butter products,” augmented by links to a wider array of items. Digital flyers fill in for the other weeks. “We were able to take that paper flyer and add digital pages to it for online views.”

Daniel Rioux, TIMBER MART’s regional director of member services for Quebec, has retired. Rioux has been in the building material and hardware industry since 1979. In 2008, he joined TIMBER MART and was charged with establishing the group’s office in Quebec. In 2014, he was appointed TIMBER MART’s regional director of member services for Quebec and eastern Ontario. He worked as a liaison with the vendor community and TIMBER MART head office on behalf of the members in that area. In his retirement, Rioux has achieved status as a certified personal coach.

Lindsay Barber, Masco Canada’s director of product management, has been named a winner of the 2021 Canada’s Most Powerful Women: Top 100 Awards released by Women’s Executive Network. The award recognizes 100 outstanding women across Canada who advocate for workforce diversity and inspire tomorrow’s leaders. Lindsay joined Masco Canada in St. Thomas, Ont., in 2002 in the customer service department. In 2019, she was appointed director of product management in charge of Masco’s plumbing portfolio.

The Home Depot has promoted John Deaton to the role of EVP of supply chain and product development. He replaces Mark Holifield, who has moved to another company after 15 years with Home Depot in Atlanta. Deaton began his career with Home Depot in 2007 as VP of supply chain development. In 2011, he was promoted to senior VP of brand and product development. Since 2017, he has been senior VP of supply chain.

DID YOU KNOW…?

… that our recent Hardlines Conference was a huge success? Okay, we’re biased, but it was just so great to see our colleagues from across Canada join together at last! They all helped us celebrate our 25th anniversary (postponed from last year). Thanks to everyone who attended, and to our amazing sponsors, who made it a reality during these difficult times.

This year’s Lowe’s Canada Heroes campaign garnered the greatest participation to date. Eight distribution centres and 71 RONA affiliated dealer stores joined the Lowe’s, RONA, and Réno-Dépôt corporate stores. As a result, more than $1.5 million will be distributed to more than 235 charities and schools.

Home Depot is using Walmart’s GoLocal delivery service. Launched in late August, it is being tested in stores in New Mexico and will be rolled out across the country before the end of the year. GoLocal drivers can be either Walmart staff, gig workers, or even third-party delivery services, offering two-hour and next-day delivery options. Products being delivered in this fashion include paint, fasteners, and hardware items that can easily fit in a car.

Lowe’s Cos. is launching an advertising venture, One Roof Media Network, to sell ads on its website and app. It will also make its first-party data available for use in targeted ads elsewhere. Lowe’s said its website has a “big, aggregated audience” that makes it suitable for tailored ads.

SUPPLIER NEWS

The National Hardware Show returned to the Las Vegas Convention Center from Oct. 21 to 23 for its 75th edition. A new feature this year is the Habitat platform, both online and on site, which explored new ideas and technologies that are impacting the concepts of home and living. The show also unveiled NHS Backyard, an outdoor component with live demonstrations and grilling competitions.

Trex Co. plans to develop a new production site in Little Rock, Ark. The company says building a third U.S. manufacturing facility will help it keep pace with the ongoing high demand for products in outdoor living categories.

MoistureShield, a division of Oldcastle APG, has launched the MoistureShield Valued Partner (MVP) certified contractor program. The three-tiered program offers contractors additional training, support, and rewards, along with a labour warranty program for pros who regularly use MoistureShield products. Benefits include access to the MoistureShield University (MSU) online training resource.

3M Co. says it will raise prices amid inflation and supply chain difficulties. “Inflation has come in faster than anybody thought,” CFO Monish Patolawala told analysts on an earnings call. “We don’t see the raw material or the inflation environment slowing down in any way.” The company will also resort to dual sourcing of raw materials.

DuPont has signed an agreement to acquire MaxLife Industries’ ArmorWall business. The transaction, slated to close in Q4, includes the ArmorWall brand, patented technology, and a manufacturing facility in Salisbury, N.C. The financial terms of the deal were not disclosed.

West Fraser Timber has reached a deal to acquire Georgia Pacific’s oriented strand board mill near Allendale, S.C. The transaction, valued at about $280 million, is expected to close after satisfying U.S. regulatory requirements. The Allendale facility, which began producing OSB in 2007, has been idle since late 2019.

ECONOMIC INDICATORS

Retail sales were up 2.1 percent to $57.2 billion in August. A 2.8 percent hike in LBM and garden supply sales contributed to the increase. The biggest growth was in food and beverage stores, gasoline stations, and clothing and accessories. Sales increased in nine of 11 subsectors, representing 94.6 percent of retail trade. (StatCan)

Sales of new U.S. homes rose by 14 percent to a seasonally adjusted annual rate of 800,000 units in September. That was the highest level since March. (U.S. Commerce Dept.)

Sales of existing U.S. homes in September rose by seven percent to a seasonally adjusted annual rate of 6.29 million units. That was the biggest increase in a year, surpassing analyst expectations of 6.09 million units. Home resales declined by 2.3 percent on a year-over-year basis. (National Association of Realtors)

NOTED

Walmart claims that about 90 percent of Americans live within 16 kilometres of one of its stores. It has about 4,700 stores in the U.S.

OVERHEARD…

“We’ve once again reached a new campaign milestone in terms of the number of participating locations this year, as a record number of distribution centres and affiliated RONA dealers joined forces with our corporate stores network. We couldn’t be prouder of our 2021 results and how our teams came together under challenging conditions to support worthy causes across the country.”
—Jean-Sébastien Lamoureux, senior VP, public affairs, asset protection, and sustainable development, on the success of this year’s Lowe’s Canada Heroes campaign, which raised $1.5 million for causes across the country.

Suppliers and retailers from across Canada gathered last week to honour the retail home improvement industry’s best hardware and building supply retailers. The occasion was the 2021 Outstanding Retailer Awards Gala Dinner, which marked the end of day one of the 25th Annual Hardlines Conference at the Queen’s Landing hotel in Niagara-on-the-Lake, Ont.

Attendance at this year’s Hardlines Conference and Awards Gala was limited by COVID safety protocols, so additional delegates were able to join the events virtually for the first time. Whether in person or remotely, leaders from the retail chains, co-ops, and buying groups from across the country were present to honour their members and fellow retailers.

Dealers were awarded in eight categories covering the range of hardware and home improvement retailing formats. This year’s winners are:

• Best Hardware Store, any size – Gravenhurst Home Hardware, Gravenhurst, Ont. Ian and Tara McNaughton, owners. Sponsored by the North American Hardware and Paint Association (NHPA).
• Best Building Supply or Home Centre under 15,000 square feet – Bulkley Valley Home Centre, Telkwa, B.C. Lenard Vriend, Travis Nanninga, Rodney Leffers, and Darin Super, owners. Sponsored by Taiga Building Products.
• Best Building Supply or Home Centre over 15,000 square feet – GrandErie Home Hardware Building Centre, Dunnville, Ont. Ken Zantingh, Henry DeKlerk, Bert Mulder, Wes Zantingh, and Nathan Mulder, owners. Sponsored by JRTech Solutions.
• Best Contractor Specialist – RONA Cowansville, Cowansville, Que. Luc Lamarche, store manager. Sponsored by Johns Manville Canada.
• Best Large Surface Retailer – RONA Kelowna, Kelowna, B.C. Matt Wachter, store manager. Sponsored by Techniseal.
• Best Young Retailer – Jillian Sexton, co-owner of Sherwood TIMBER MART, Charlottetown, P.E.I. Sponsored by BMF.
• Marc Robichaud Community Leader – Gibsons Building Supplies. Julie Reeves, CEO. Sponsored by Trex.
• Retail Spirit – Annapolis Home Hardware Building Centre, Annapolis Royal, N.S. Rob and Joanne Lawrie, owners. Sponsored by the National Hardware Show (NHS).

The winners are carefully chosen from a field of high-quality nominees submitted from every part of Canada. The winners stood out within this elite group thanks to their ability to exceed in the areas of good business practice, customer relations, innovation, and niche marketing.

“Over the past year and a half, we have seen the entire retail home improvement industry rise to meet the challenges of COVID, serving customers and taking care of customers under extremely distressing conditions,” said Michael McLarney, president of Hardlines.

Retail is undergoing a massive sea change, analyst Doug Stephens told the 25th Hardlines Conference last week.

The founder of Retail Prophet is a keen observer of retail trends and he kicked off the conference sharing his insights with told the combined in-person and virtual audience.

“Some say this is all just acceleration of trends that would happen anyway. I don’t believe that. I believe COVID has become like a wormhole in time. We’ve been ripped out of the industrial era and put firmly into the digital era,” he said, referring to the changes that have occurred over the past two years.

This shift, said Stephens, is affecting everything from store format to logistics to staffing. “For e-retailers, this has been 19 months of steroid drip.” At the same time, the push to get products to the consumer’s door has become paramount. “We’re also seeing a delivery arms race.”

Stephens pointed to one online company whose digital expertise is cutting edge—and represents a trend to watch. JD.com employs something called “anticipatory shipping.” When the Chinese online merchant sees a spike in clicks on a given item, it can calculate the approximate proportion of those views that will result in sales and start to move product accordingly. He warned that this kind of deep understanding of data will continue to grow.

“The endgame is that Amazon could eventually start shipping products to customers before they order them,” said Stephens.

More and more, those products will be hardlines and—yes—building materials, he further warned. The notion that LBM is just too big or bulky for the digital supply chain is fast being disproved by a range of players.

“It’s easy to pick on Amazon: they’re the piñata but everyone is coming for home improvement.” This, he stressed, will place a huge competitive challenge in front of traditional dealers.

The solution, he says, is to become indispensable. “What’s your purpose to consumers? If your brand is the answer, what is the question?”

Stephens outlined a grid with four fields: product, culture, expertise, and entertainment. “What quadrant are you going to dominate? That’s the only way to beat Amazon: to go so far down your rabbit-hole that no one can get to you.”

Dealers, vendors, agents, and executives from across Canada descended on the Queen’s Landing hotel in Niagara-on-the-Lake, Ont., last week for the 25th Hardlines Conference. Postponed from 2020 due to the pandemic, it was, for many attendees, the first in-person event for the industry in Canada.

Doug Stephens, founder of Retail Prophet, opened the first morning’s program (see story in this issue). Hardlines president Michael McLarney and retail consultant Bill Morrison then took the stage for the inaugural Hardlines Debate.

The pair found much common ground in their forecasts for the industry over the coming years, but Morrison expressed more pessimism about the trials to be endured in the medium term on the road to recovery. “I am tremendously confident in this industry,” he said. “But there are bills coming due, and I think we can expect a very different approach to how the economy will look.”

Economist Peter Norman had previously addressed the Hardlines Conference in 2019, just a few short months before the pandemic put the brakes on everything. “Unfortunately, you can scrap everything I told you in 2019,” he acknowledged at the outset. “Recovery has been very strong but uneven. It’s the unevenness that brings risks, but also opportunities.”

Other speakers included Jamal Hamad, who heads up the pro business for Home Depot Canada, and Marc MacDonald, head of HR for Lowe’s Canada.

Rob Faries, owner of three Ace stores in the neighbouring communities of Moose Factory and Moosonee, Ont., opened the second morning’s program. A Cree descended from a “company servant family” formed by the offspring of Hudson’s Bay traders and local indigenous women, he recalled the stir his father Donald Faries created when he opened his own business in the 1970s.

“It was a big deal. You don’t compete against the Hudson’s Bay Company. But he did, and it was noted.”

Faries faces unique challenges in getting product to his stores in the far north due to their distance from transportation hubs. In the spring and fall, inventory has to be brought in by way of pricey helicopter shipments.

Donald passed away just weeks before the conference, and the audience was moved as Rob recalled his father’s pride knowing that Rob would be addressing this year’s delegates.

Peavey Industries CEO Doug Anderson (shown here) then took the stage, recounting how the company pivoted to bring the Ace banner on board during the pandemic. He also discussed the integration of the TSC stores into the Peavey banner.

Finally, Home Hardware’s Kevin Macnab gave an overview of Home Hardware’s development over the past few years and its current transformation under his leadership. He spoke of the company’s focus on growth in Quebec, demonstrated by its acquisition of Patrick Morin, and its shift “from a wholesale model to a dealer-owned integrated model.”

“We are taking a more strategic approach with our suppliers,” he added. “We recognize that we are always stronger when working together and firmly believe that solid partnerships and collaboration are the key to success.”

At the end of the second morning, attendees were sent home with box lunches and an invitation to join the next Hardlines Conference on Oct. 18 and 19, 2022.

More than 500 participants from nearly 200 RONA affiliated stores took part last week in the second virtual RONA Buying Show organized by Lowe’s Canada.

For seven weeks, dealers will be able to discover new products and meet online experts. To give dealers more flexibility and a chance to make the most of the platform, and to allow them to focus on running their stores, the show has been divided into three events, each of them lasting either two or three weeks. Each event focuses on specific product categories: home décor, lumber and building materials, and seasonal and horticulture.

The online event kicked off with video presentations from the Lowe’s Canada executive team, speaking directly with the dealers. Participants also had access to thematic conferences, presentations, and workshops. Exhibitors can use the show’s platform to upload pre-recorded videos and promotional material to explain product features. The virtual show includes promotional offers and the ability for dealers to plan virtual meetings with members of their dealer support team.

As part of the event, the 2021 RONA Builder of Success awards were presented to outstanding dealers. RONA Val-des-Monts (Val-des-Monts, Que.) and owner Claude Bélec were recognized in the Community category. Michael and Stephen Allen of RONA North Vancouver and RONA Powell River received the Young Entrepreneur award. André Dagenais, owner of RONA H. Dagenais & Fils in Saint-Sauveur and Sainte-Anne-des-Lacs, Que., was recognized for Lifetime Achievement.

Martin Menard has joined Longueuil, Que.-based wholesaler Évolution Distribution as director for floor covering. He was previously with BMR Group for 13 years, followed by a brief stint at Lowe’s Canada.

Vanesa Fung has joined Montreal-based merchandising company RDTS as marketing coordinator. Her main duties are assisting with the development, execution, and monitoring of the website, social media, content marketing campaigns, creating original content, projects across Canada, strategies, and market research. She was previously a social media community manager for Really Local Harvest.

Shaun Guthrie has been appointed senior vice president, information technology, at Peavey Industries, based at the company’s Red Deer head office. He was formerly with the CIO Association of Canada in the role of vice president.

At BuildDirect Technologies Inc., CEO Dan Park will trade that role for the chair of its board, effective Dec. 31. Effective immediately, former Home Depot Canada executive Peg Hunter and Henry Lees-Buckley have also been appointed to the board. The company has engaged Boyden Canada, an executive search firm, to recruit a new CEO.

DID YOU KNOW…?

… that the 2021 Hardlines Market Share Report is now available? It features exclusive information on the market share in every store format, region, and province using sales data for year-end 2020. Sales by province and region of every hardware and home improvement retailer in the country are detailed. Changes from the 2019 to 2020 data are presented in percentages and market shares are broken down by store format. Click here to order yours today!

Lee Valley Tools told customers by email this month that it was dispatching its Christmas catalogue “uncomfortably early.” That’s because it is expecting major delays in order fulfillment ahead of the holiday rush. “The message for consumers is buy early, because there is no chance to reorder or to replenish [before Christmas],” CEO Robin Lee told CBC News. Compounding those problems, Lee said that labour and fuel shortages are driving up product prices.

The Guelph Tool Library in Guelph, Ont., has received a Peavey Industries Community Agriculture Grant valued at $20,000. The funding will support the Guelph Urban Food Initiative, which includes a seed library and community garden. The award was the result of a national contest in support of community agriculture projects across Canada. Peavey distributes a total of $100,000 each year to grants in support of projects in that field.

Lowe’s Canada is launching an exclusive collection of pre-assembled, Canadian-made cabinets. Called Eklipse, the line includes drawers, shelves, hinges, and legs. Since the legs are adjustable, all that remains is to level the pre-assembled boxes and install them. The boxes’ doors and drawers are equipped with Richelieu Hardware’s signature soft closing system.

A Burlington, Ont., Bay store has resurrected the iconic Zellers brand in pop-up form. It’s offering a limited selection of clothing, housewares, and toys. But in a twist, Hudson’s Bay Co. has filed sued against a Quebec family that has applied for trademarks for companies using the Zellers name. In a claim submitted to the Federal Court of Canada, HBC says the Moniz family is infringing on its trademark and deceiving customers. The family has applied for trademarks for businesses with names such as Zellers Inc. and Zellers Convenience Store Inc.

U.S. farm and ranch retailer Tractor Supply Co. saw sales for its third-quarter increase 15.8 percent to $3.02 billion compared with the third quarter of 2020. Comparable store sales increased 13.1 percent, as compared to an increase of 26.8 percent in the prior year’s third quarter. Gross profit increased 14.5 percent to $1.09 billion.

SUPPLIER NEWS

Global water tech firm A. O. Smith Corp. has acquired Giant Factories Inc. The purchase price is approximately US$192 million in cash. The Canadian manufacturer of residential and commercial water heaters employs 300 people, mostly in Canada, and has approximate annual sales of US$105 million. A family-owned business founded in 1945, Giant manufactures water heaters at two facilities in Montreal and sells water heating products across Canada.

Wall and ceiling specialist Trusscore has raised $26 million in Series A funding. Led by Round 13 Capital, the investment will enable Trusscore to grow in research and development and sales and marketing capabilities. It will also drive additional manufacturing capacity to meet growing product demand.

ECONOMIC INDICATORS

The seasonally adjusted annual rate of housing starts was 251,151 units in September. That was a decrease of 4.4 percent from 262,754 units in August. The SAAR of urban starts decreased by 4.5 percent to 223,055 units. Single-detached urban starts decreased by 5.9 percent to 57,194 units. (CMHC)

Sales of existing homes were up 0.9 percent between August and September. That was the first month-over-month increase since March. The actual (not seasonally adjusted) number of transactions in September was down 17.5 percent on a year-over-year basis, from the record for that month set last year. However, it was still the second-highest ever September sales figure by a sizeable margin. (Canadian Real Estate Association)

U.S. housing starts saw an unexpected decrease in September. The seasonally adjusted annual rate fell by 1.6 percent to 1.56 million units. Permits for September dropped by 7.7 percent to a rate of 1.59 million units. (U.S. Commerce Dept.)

NOTED

HomeStars, the online marketplace connecting homeowners with contractors, has released its third annual Reno Report. Through the Angus Reid Forum, the company surveyed Canadian homeowners who have undertaken renovations since the pandemic’s onset. The findings challenged conventional wisdom, as 68 percent of respondents said that COVID-19 did not influence their decision to renovate. Instead, the top reason cited was to improve the overall aesthetics of the home.

OVERHEARD…

“Again this year, through these hardships, we were able to identify retailers and individuals that were truly outstanding through this time. We are proud to share their excellence through these awards.”
—Michael McLarney, president of Hardlines, on the achievements that exemplified this year’s Outstanding Retailer Award winners. They were honoured at the 25th Hardlines Conference, held last week.

Startup hardlines distributor brings new store format to Canada

OMC Tools & Hardware has set up shop as a new tool and hardware distributor in Canada. Omar and Matt Chaaban, two brothers from Lebanon, already have a distribution business there. Now they are introducing their product lines to Canadian dealers.

OMC is a distributor for a giant Chinese manufacturer, Total Tools. But Total offers more than just tools. It also has a store concept of its own. Everything in the store falls under the Total brand.

Total Tools can pull this off because it manufactures its product line, consisting of some 2,000 SKUs, at its facilities in China. Product lines include Total’s signature brand of 20-volt lithium-ion power tools, plus hand tools, power tool accessories, safety tools, and hardware. Total’s facilities are spread over more than one million square feet of manufacturing space.

The proprietary store concept is a logical extension of this product range. Total now has 1,000 “Total One-Stop Tools Station” stores, mainly in developing countries. The strategy is to pursue a marketplace of five billion people that exists in these emerging regions, rather than the one billion represented by developed countries.

Through OMC, Total Tools promises to deliver full support for any dealer who wants to set up a Total One-Stop Tools Station. “The development of concept stores is highly supported,” says Matt Chaaban. “We provide our customers with marketing materials, including flyers, displays, and signage. In addition, we advise our customers on display setup and how to most effectively incorporate our products into their store.”

He adds that the new concept is definitely attracting attention. “We have received a lot of positive feedback on the concept store idea, as well as inquiries on the best way to implement.”

The Total name is common in countries such as Malaysia, Vietnam, Thailand, Syria, Senegal, Albania, and Macedonia. It also has a presence in several markets in South America, such as Peru, El Salvador, and Paraguay. But expansion has seen it enter smaller developed countries, including Italy and now, through OMC, Canada.

The supply chain travails of 2020 have impacted the purchasing practices of dealers and distributors through 2021. Many of them have reported that their experiences have provided valuable lessons about supply and demand.

“The last 18 months told us that we don’t know anything,” said Robert Glecoff, general manager of Gravenhurst Home Building Centre, which has three locations in Ontario’s near north. The good news for his company is that its relationships with key suppliers weren’t damaged, and in some cases were strengthened.

Glecoff is confident enough in the market’s rebound that his company will rely on pre-COVID sales history in its forecasting for future purchases.

Fraser Valley Building Supplies, which has eight locations in British Columbia, has been reducing its SKUs and bulking up on better-selling items. Prices, which fluctuated wildly last year, continue to be unstable now. According to Peter Gilson, the company’s director of supply chain, purchasing decisions are now being based on history “and what’s in the pipeline now.”

“We’re going where our customers are looking, and not going ‘all in’ on too many items,” he added. “We’ll be more cautious on the [market’s] upswing, and cautious after that.”

Dave McNeil, vice president of Taiga Building Products, said the LBM wholesaler has “refined” how it reviews inventory management, “and we’re applying more science to the business, end to end.” He added that his company would continue to build inventories, but also conceded that can be tricky with categories like composite decking, which have so many SKUs.

Marcel Pelland is the general manager of Olympic Building Centre in Winnipeg. He questions whether some distributors overbought, creating further price volatility. However, now Olympic is being more particular about its clientele and what its forecasts are based on. “We expect honest relationships,” said Pelland.

His company will also rely more on purchasing models so it can be “more analytical” in its buying. By doing so, Olympic can better present itself to pro customers as a consistent, reliable source of supply.

(This story is excerpted from a more comprehensive article in the latest issue of our sister publication, Hardlines Home Improvement Quarterly. This print magazine will be mailed to more than 11,000 dealers and store managers across the country next week. Find out more by clicking here!)

Jim Inglis was there from the early days. At the invitation of co-founder Pat Farrah, he met with the executives of The Home Depot at the opening of its ninth store in 1983 and liked what he saw. The combination of a bigger store and lower prices than the home improvement had ever before seen had him hooked.

Inglis served in executive positions with The Home Depot for 13 years. Today, he is the president of Inglis Retailing. He’s also the author of a new book, “Breakthrough Retailing: How a Bleeding Orange Culture Can Change Everything!”

The book recalls Home Depot’s entry into Canada, when, in 1994, the company bought a 75 percent stake in Aikenhead’s. He gets some details correct, such as how many Aikenhead’s stores there were—seven had been completed by that time—but said they were bought from “Busy Beaver.” In fact, Aikenhead’s was owned by Molson Cos., which had also owned Beaver Lumber. Inglis also recalls that Home Depot already had a store open in Vancouver. It was indeed under construction at the time but would open much later.

These small details do not, however, detract from the substance of the book, nor from its overriding business message about what a strong corporate culture can do to accelerate a company’s growth and maintain its focus.

Inglis also shares some of the growing pains that Home Depot experienced when it took over Aikenhead’s, including the challenge of system integration. “We also encountered even stronger resistance to the Home Depot’s Bleeding Orange culture due to Canadian distrust of the U.S. management team. We initially put some of our veteran U.S. managers in the key management positions, including the role of ‘country president.’ The negative response of the Canadian staff soon alerted us to the need to recall these veteran managers.”

Realizing they “could not treat Canada as just another state,” Inglis says the executive team eventually put a Canadian in place to run the business effectively.

The book provides an insider’s glimpse of the world’s largest home improvement retailer, including how the company lost focus under Bob Nardelli, who served as CEO from 2000 to 2007. Nardelli replaced the entrepreneurial focus on customer service with relentless cost-cutting. Only with the appointment of Frank Blake as his successor did the retailer return to its “bleeding orange” roots.

Retailers should be ready to capture more smart home sales

New data from the Home Improvement Research Institute (HIRI) in the U.S. shows that the smart home technology industry is growing rapidly, clocking in at $58.5 billion in sales last year and expected to exceed $175 billion by 2025. From Wi-Fi-enabled speakers to video doorbells and lightbulbs controlled by smartphones, smart technology brings new levels of safety and customization to DIYers.

HIRI reviewed Omdia’s 2021 State of the Smart Home Report to understand key trends shaping the industry and what retailers should know to guide their inventory in the years to come.

Retail accounted for roughly 88 percent of all smart home device shipments in the U.S. in 2020, proving bricks-and-mortar and e-commerce operators are the trusted partners for customers looking to outfit their homes with new tech enhancements.

“We estimated the number of apartments in the U.S. with smart devices will increase from about 930,000 in 2020 to 11.9 million in 2025,” says Blake Kozak, senior principal analyst for Omdia.

Single-family home builders are expected to start offering smart home devices as standard features of their homes—and not just as expensive upgrades. As the industry evolves and new standards emerge, retailers can expect more products to work together to streamline sales, installation, and usage. This will only increase their accessibility to homeowners.

The continuing effects of the pandemic could also force an eventual rise in smart home adoption. As new variants of the virus have emerged, people are again spending time at home and exploring how smart technology can make their spaces more comfortable and safer.

For retailers, the category is expected to keep growing. Kozak says the smart home industry will see a record number of new product announcements this year and next, which should prompt many retailers to re-evaluate their smart home inventory. New products will focus on security, voice commands, radar insights, and energy and water management to serve customers better.

DID YOU KNOW…?

… that the 25th Hardlines Conference is being held Oct. 19 and 20? We’re at capacity for the live event, but this year we’re offering virtual access to both the Hardlines Conference and the Outstanding Retailer Awards gala dinner, including a special rate for retailers. Virtual conference tickets can be purchased here for $195 plus tax. Retailers and store managers get a special rate, so email Michelle Porter to get your savings. The virtual conference ticket includes a live stream of the Outstanding Retailer Awards Gala. We hope you can join us!

Peavey Industries is opening two new Peavey Mart stores this month. Earlier this month, a new store opened in Brooks, Alta., and another location is opening in Prince Albert, Sask. Grand opening celebrations are planned for both stores from Oct. 29 to 31. The openings continue Peavey’s momentum in the Prairie provinces. Its Airdrie, Alta., store opened in June.

Quebec’s financial regulator has found that two investors profited from advance knowledge of the 2016 sale of RONA to Lowe’s. Alain Poudrette was fined $430,990 and Rénald Moreau $16,563. In anticipation of the sale, the pair bought up bulk quantities of shares in RONA, selling them at considerable profits when the deal became public. In both cases, the amounts of the penalties, therefore, represent approximately 1.5 times the earnings pocketed through insider trading.

Ikea Canada is expanding its Design Studio network this month with three Ontario locations in Brampton, St. Catharines, and London. The Design Studio allows customers to design and order complex home furnishing systems for the kitchen, bath, bedroom, and living room. They have the choice of scheduling one-on-one planning sessions with an Ikea design expert or using a self-service planning station in a dedicated studio space. The first Design Studio opened in Oshawa, Ont., on Sept. 1. The Brampton Design Studio opened on Oct. 14.

Home Depot is the first retailer to take advantage of Walmart’s GoLocal business. The program, announced in August, makes Walmart’s fleet of gig-working drivers available to other companies. Walmart and Home Depot did not disclose the terms of the deal, but the partnership will begin at select stores in Texas, Arkansas, and New Mexico. It will then expand to other U.S. locations before the end of the year.

Amazon Canada will expand in Quebec with a new facility in the east end of Montreal, Le Journal de Montréal reports. Developer Broccolini, a regular real estate partner of the e-retail giant, has purchased a 2.5 million-square-foot site straddling Montreal’s Anjou district and the separate city of Montréal-Est.

Ace Hardware was named number four in this year’s Franchise Times Top 400 List, moving up from third place last year. The annual ranking orders the largest U.S.-based franchise systems by total global sales in the previous year. Ace’s 2020 sales grew by more than 21 percent, or $3.5 billion, the best dollar amount sales increase across all franchises.

SUPPLIER NEWS

Richelieu Hardware Ltd. reported its Q3 profits rose by almost 40 percent from the prior quarter. Profit attributable to shareholders was $38.7 million, compared to $28.7 million in Q3 of 2020. Sales rose to $373.3 million, from $311.2 million. Sales to Canadian hardware dealers and reno centres spiked by more than 16 percent.

West Fraser has made a deal to acquire the Angelina Forest Products lumber mill in Lufkin, Tex., for roughly $300 million, pending the completion of U.S. regulatory reviews. The facility, which produces southern yellow pine lumber products, commenced operations in late 2019 and is expected to reach full production capacity of approximately 305 million board feet over the next three to four years.

ECONOMIC INDICATORS

Investment in building construction decreased  two percent to $17.7 billion in August, a fourth consecutive monthly decline. Residential construction was down 2.9 percent for the month, while investment in non-residential construction edged up 0.6 percent. Investment in single-family homes was down 2.6 percent to $7 billion. Despite a fourth consecutive monthly decrease, single unit construction was 25.6 percent higher than a year earlier. Multi-unit construction investment declined in all provinces, down 3.3 percent nationally to $6 billion in August. (StatCan)

U.S. investment in construction was unchanged in August, following a 0.3 percent uptick in July. Year-over-year, however, spending was up by 8.9 percent. Construction of single-family homes dropped by 0.7 percent, hit by high materials costs and labour shortages. (U.S. Commerce Dept.)

NOTED

In our latest podcast, we talk with Beth Casson, VP and event leader of the National Hardware Show. In conversation with Hardlines publisher David Chestnut, she discusses how the NHS has weathered the challenges of the pandemic and its plans for the next in-person show. Click here to listen to the episode and to subscribe to the series!

The value of the pro business to The Home Depot continues to grow. During the second quarter, sales to contractor customers grew significantly over the previous year, reported Ted Decker, president and COO of Home Depot, during a call to analysts. Pros bought big in categories such as lumber, vinyl plank flooring, gypsum, and pipe and fittings.

“During the second quarter, pro sales growth outpaced DIY growth for the second quarter in a row,” Decker added. “And larger pros and pro transactions are outpacing the business with smaller contractors.”

Ten out of 24 of Home Depot’s merchandising departments posted positive comps during the quarter. But leading the pack were categories that tend to be more pro-oriented: lumber, kitchens, and baths. At the same time, DIY-driven categories, which exploded in 2020, saw negative comps this past quarter. They included paint, hardware, and garden.

The housing market continued to remain strong through the summer, which Home Depot execs took as positive for ensuring continued strong sales to larger pros. Remodelling projects that reflected contractor activity generated strong sales in “kitchen and bath categories, like our in-stock kitchens, tubs and showers and vanities, all of which posted one- and two-year comps above the company average,” Decker said.

(We’ll get an update on Home Depot Canada’s relationship with its pro customers at the upcoming Hardlines Conference from Jamal Hamad, the retailer’s senior director of contractor services. While space at this COVID-restricted event is now at capacity, you can join us remotely. Click here to register for virtual access to the conference!)

The labour shortage across North America has businesses looking for ways to attract people more effectively. At the same time, existing staff may pose a “retention risk” if they’re looking elsewhere for a better opportunity, says one expert.

These are the hard realities of today’s COVID-era job market—and some of the issues being addressed in the latest issue of our sister publication, Hardlines HR Advisor.

The single biggest draw for any employee is, of course, salary. That’s why some of the world’s top retailers are taking steps to raise wages, according to our latest issue.

Here in Canada, Amazon Canada has boosted base pay to attract workers as it seeks to hire 15,000 this fall. At the same time, the company is increasing the starting wage for its front-line, hourly employees in Canada to between $17 and $21.65 an hour. Starting wage is currently about $16 an hour.

Besides pay, working conditions figure as an important way to find and retain good people. If your organization can offer employees the option of working remotely, even part of the time, and you don’t find innovative ways to make this happen, you can expect turnover.

“Remote work is one of a number of substantiated trends from COVID that isn’t going away,” says coach and author Sarah McVanel (shown here). She is the founder of Greatness Magnified, an organization that specializes in providing training programs and certifications for employees at large. 

“Many people in our current knowledge workforce not only can work remotely, but they may do their best work without the distractions, commute times, and stress of a typical five-day workweek,” McVanel adds.

(HR Advisor is the newest publication from Hardlines. It focuses on issues of hiring, retention, workplace culture, and leadership in the retail home improvement industry. To get your free subscription, click here.)

The focus by consumers on smaller events and holidays has been a boon to hardware dealers. The “micro-seasonal” sales trend is growing and includes personal milestones like birthdays and graduations. Halloween is at the forefront, providing all kinds of opportunities for product sales and related merchandising.

In the U.S., the National Retail Federation expects Halloween spending to reach US$10 billion this year, while the Canadian market has been estimated at $1 billion. The NRF projects that consumers will spend $102.74 per person for Halloween, up from $92.12 in 2020. 

While they may take a back seat to the Christmas holiday season, the importance of these secondary celebrations has been picked up by other retailers. Walmart Canada offers a prominent party section in its stores. In 2019, Canadian Tire Corp. acquired the Party City chain, consisting of 65 stores.

This season, Lowe’s Canada is offering lots of fall and harvest-time products, such as harvest lanterns and battery-powered pumpkins. It’s also making hay about its range of spooky home décor products, including pumpkins, ghosts, giant spiders, and skeletons.

Speaking of skeletons, the now-famous 12-foot skeleton that Home Depot carried for the second year running has become a sales—and social media—phenomenon. Even at $398, it’s sold out in stores across Canada. The product is part of Home Depot’s own Home Accents Holiday brand of holiday-themed décor and accessories. Besides scary lawn ornaments, the line includes Christmas decorations, ornaments, and trees, underscoring the importance of both the traditional seasonal and the newer micro-seasonal events for home improvement retailers.

Four retail groups keep accounting for more and more share of the retail home improvement industry. According to the 2021 Hardlines Retail Report, just four companies account for two-thirds of all home improvement retail sales in Canada.

In 2019, they comprised 63.2 percent of the industry. In 2020, that had grown slightly to 63.6 percent.

The Home Depot Canada continues to lead the industry, with estimated sales now exceeding $10 billion. Not only is it the largest home improvement retailer in Canada, but its parent company, The Home Depot, is also the largest in the world.

Still firmly in the number-two spot, Lowe’s Canada continues to grow both with new stores and through expansion and repositioning of existing stores.

Home Hardware, with nearly 1,100 stores, remains a strong brand and an attractive model for dealers. It continues to add to its ranks while expanding the square footage of existing dealers.

Canadian Tire has undertaken a great deal of restructuring of its retail business, focusing on acquisitions and expanding its private labels. These include brands focused on “fixing” and home enhancement and lifestyle. The retailer’s online sales increased by more than 250 percent in 2020, which has been taken into account in calculating its hardware and housewares sales for the past year.

The report analyzes these four leading groups in depth to explain strategies, competitive advantages, and expansion plans. It further identifies and ranks the top 20 retail players in retail home improvement.

The 2021 Hardlines Retail Report is our annual in-depth look at the size of the retail market for hardware and home improvement sales in Canada. It examines the growth within the industry from several angles: store type (hardware, building centre, big box) and regional (by province). It’s filled with proprietary research on the industry’s biggest retail groups that is not available anywhere else.

(The 2020 Hardlines Retail Report fills more than 185 PowerPoint slides and is packed with dozens of charts, graphs, and photographs. For more information and to order the 2021 Hardlines Retail Report, click here.)

DID YOU KNOW…?

… that the 25th Hardlines Conference is being held Oct. 19 and 20? We’re at capacity for the live event, but this year we’re offering virtual access to both the Hardlines Conference and the Outstanding Retailer Awards gala dinner, including a special rate for retailers. Virtual conference tickets can be purchased here for $195 plus tax. Retailers and store managers get a special rate, so email Michelle Porter to get your savings. The virtual conference ticket includes a live stream of the Outstanding Retailer Awards Gala. We hope you can join us!

Home Hardware staff and volunteers harvested hundreds of pounds of fresh produce this year from the Home Hardware Community Garden in St. Jacobs, Ont. Donations went to area food banks and meals on wheels programs. This is Home Hardware’s sixth consecutive year harvesting fresh fruits and vegetables for community members in need. Since 2016, Home Hardware has donated more than 17,000 pounds of produce to local charities.

Lowe’s Canada and fire safety products maker First Alert are partnering with firefighters and public educators to mark Fire Prevention Month in October. Select Lowe’s, RONA, and Réno-Dépôt stores across the country will host a variety of fire safety events. These will feature fire trucks and educational materials for people of all ages to learn about the importance of home safety.

JDS Building Supply in Saskatoon is the newest shareholder member of the TORBSA buying group. JDS was founded in 2018 by Justin Scheuer and serves the commercial and residential stucco and exteriors markets. Its customer base is drawn from across Saskatoon and surrounding areas. This is TORBSA’s second member in the province, after CTI Building Supply, which specializes in modular homes and is also in Saskatoon.

Home Hardware’s BeautiTone paint brand has announced its 2022 Colour of the Year. Called “Warm Hugs,” it’s a mid-tone shade of red-pink with an influence of orange that, the company says, “offers hope and comfort in one exquisite hue.” It’s part of BeautiTone’s 2022 Colour Trends Palette, available at all Home Hardware-bannered stores across Canada.

Ace Hardware held an in-person convention from Sept. 21 to 23 in Orlando, Fla., that brought together more than 10,000 total attendees. In all, there were over 3,300 Ace stores in attendance from every U.S. state and more than 1,200 vendor exhibits.

Princess Auto is slated to take over the space vacated by a Lowe’s store in Sault Ste. Marie, Ont. The original building is currently being torn down, according to Sootoday.com, to make way for the new store.

ECONOMIC INDICATORS

The total value of building permits in Canada decreased 2.1 percent to $9.7 billion in August. Although most provinces reported increases, notable declines in Ontario and British Columbia pulled the national results lower compared with July. Residential permits fell by 8.3 percent to $6.4 billion, the lowest level since March. Single-family intentions rose slightly by 1.2 percent, led by a 15.7 percent gain in Quebec. (StatCan)

Retail sales fell 0.6 percent to $55.8 billion in July, the third decrease in four months. The decline was primarily driven by lower sales at building material and garden equipment and supplies dealers, which were down 7.3 percent. (StatCan)

Sales of new U.S. single-family homes rose by 1.5 percent in August to an annualized rate of 740,000 units. That pace was the highest in four months. (U.S. Commerce Dept.)

NOTED

When The Home Depot in Atlanta reported its second-quarter results, it revealed that big-ticket comp transactions, identified as those over $1,000, were up a healthy 24 percent compared to the same quarter a year earlier.

The biggest challenge during the latter part of the summer is trying to work up excitement amongst you, our Faithful Readers, for the upcoming Hardlines Conference. But like so much that has happened this year, our experience these past weeks has been quite different than usual.

This year, we’ve had to turn people away as we prepare to hold a live conference in Niagara-on-the-Lake on Oct. 19 and the morning of Oct. 20. The Queen’s Landing Hotel has limited seating capacity and we have the unique problem of being filled right up. But for those of you who can’t join us in person, we are offering virtual access to both the Hardlines Conference and the Outstanding Retailer Awards gala dinner, including a special rate for retailers.

This will be our 25th-anniversary event, postponed from last year, so we hope you can join us, even if it’s from the comfort of your own home or office. Some more good reasons to attend include the fact that it’s Canada’s only national event that welcomes all the banners and retail groups, and at the end of day one, we will host the Outstanding Retailer Awards gala, recognizing the finest retailers in the country.

We have an incredible lineup of presenters, including Kevin Macnab, president and CEO, Home Hardware Stores; Doug Anderson, president and CEO, Peavey Industries; Marc MacDonald, SVP of HR at Lowe’s Canada; and Jamal Hamad, senior director, contractor services at Home Depot Canada. Doug Stephens, the renowned “Retail Prophet,” will kick off the conference on the morning of Oct. 19.

Besides getting the big-picture outlook, we will have a presentation from retail’s front lines, courtesy of Rob Faries, of GG’s Ace Hardware in Moosonee, Ont. And we’ll welcome the return of Peter Norman, chief economist and VP at Altus Group, to share his economic and housing insights. To make sure we’ve covered all the angles, we’ve invited Bill Morrison, former VP at Ace Canada and Lowe’s Canada, to debate the issues facing the industry with Hardlines’ own Michael McLarney.

Virtual conference tickets are now on sale and can be purchased here for $195 plus tax. Retailers and store managers get a special rate, so email Michelle Porter to get your savings. The virtual conference ticket also includes a live stream of the 2021 Outstanding Retailer Awards.

We hope you can join us, either in person or virtually, to help us celebrate our 25th Hardlines Conference!

A new tool distribution business has landed in Canada. Omar and Matt Chaaban, two brothers from Lebanon, already have a distribution business there. Now they’ve arrived here and established OMC Tools & Hardware, based in Mississauga, Ont.

The company’s product line, consisting of some 2,000 SKUs, is unique because all the products are from one company, Total Tools. This Chinese company produces its brand of power tools, hand tools, accessories, safety tools, and hardware, all from facilities spread over more than one million square feet of manufacturing.

Hardlines attended OMC’s introductory event recently (and our first industry event since the pandemic started!). A gathering of retail and industrial dealers and buyers was on hand to get details of the story behind Total Tools. They also got a glimpse into the size and reach of the company that OMC has partnered with. The Chaaban brothers’ presentation was tied in live with Total’s head office in China, where product managers and engineers presented in real time to the Canadian audience from a giant screen at the front of the room.

Total’s marketing strategy is to focus largely on developing countries, including Malaysia, Vietnam, Thailand, Syria, Senegal, Albania, and Macedonia. It also has a presence in several markets in South America, such as Peru, El Salvador, and Paraguay. The goal is to provide products that are high-quality but affordable, so middle- and low-income customers can afford them. In these developing countries, said one brand manager who spoke from China, “we are absolutely the number one brand here.”

But Total has its eye on other markets, such as Italy. With the arrival of the Chaaban brothers, Canada gets added to that list.

The presentation included a couple of surprises. The first was the launch of a 20-volt lithium-ion power tool line. The Total power tool line is positioned as higher quality at a reasonable price point, positioned just below premium pro brands like DeWalt and Milwaukee, while putting itself ahead of more entry-level brands suited for DIYers.

Second, the evening’s event featured the introduction of a completely new store concept. Because of its extensive product line, Total has a store program whose products fill the entire store. There are 1,000 “Total One-Stop Tools Station” stores in 180 countries worldwide. (Hardlines will feature more on the Total store program in an upcoming issue.)

Lowe’s Canada is raising its game to get product to its customers with a new same-day delivery service. The retailer’s pro and DIY customers can receive orders on the same day if they submit them before 2 p.m. on weekdays and before noon on Saturdays.

The new service puts Lowe’s delivery services on par with grocery retailers and contends with Amazon, which provides next-day deliveries for its elite Prime customers. The company also joins the ranks of other hardlines retailers, especially Home Depot Canada, which has introduced an express same-day delivery option in 2019 that includes three-hour delivery and is currently available across more than 90 percent of its stores.

“Online shopping is deeply rooted in our shopping habits, and we are pleased to expand our delivery service offering to better meet the needs of our customers who are looking to avoid delays and get their orders quickly,” said Véronique Paris, vice president, supply chain, distribution, and logistics at Lowe’s Canada, in a release.

“We are constantly seeking to be agile in order to offer our customers more options for picking up their orders,” Paris continued. “The addition of this new service is a good example of these efforts. In fact, once the initial rollout phase is completed, we will be able to offer same-day delivery in additional Lowe’s, RONA, and Réno-Dépôt stores nationwide.”

Through a third-party provider, Lowe’s Canada is making the service available initially in over 140 of its Lowe’s, RONA, and Réno-Dépôt corporate stores, concentrated in major urban hubs in British Columbia, Alberta, Ontario, and Quebec. To take advantage of this service, the delivery address must be within the delivery zone of the participating store, and the articles selected when ordering online must be eligible for same-day delivery. The cost for deliveries ranges from $35 to $75.

(Click here to see all locations that offer the new same-day service in Canada.)

Home Hardware hosted its 2021 Virtual Fall Market from Sept. 27 to Oct. 4 as the company waits out the impacts of COVID. This is the fourth time the company has used an online platform, a format that began with its spring 2020 event.  

“While we look forward to the day when we can safely return to a physical market, we are pleased to host Home Hardware’s 2021 Virtual Fall Market,” said CEO and president Kevin Macnab in a release. “We continue to optimize our virtual platform and provide dealers with an interactive experience where they can learn about the great deals and buying opportunities that will position them for success.”

The company could not confirm when it will return to a live event.

In the meantime, the virtual event served to provide the member-dealers with as many of the amenities of a face-to-face market as possible. These included updates from the merchandise team on hardlines and LBM products, category webinars to review new and innovative products, and a video chat feature.

In addition, BeautiTone officially unveiled its 2022 Colour of the Year from the 2022 Colour Trends Palette. The launch tied in with a rebranding of Home Hardware’s proprietary paint line, one that included dropping the hyphen in the BeautiTone name. 

The retailer also used the event to celebrate the achievements of its dealers. The Proud of My Home Achievement Awards were presented during a celebration on Sept. 27. Fulton’s Home Hardware Building Centre in Airdrie, Alta., was the recipient of the annual Walter J. Hachborn Store of the Year Award. It was presented to Mike and Colleen Fulton, dealer-owners of the winning business, for epitomizing the qualities of value, service, and dependability espoused by co-founder Home Hardware Walter Hachborn. Other categories included Best Home Hardware, Best Home Building Centre, and Best Home Hardware Building Centre, each presented to four regional winners.

Glen Knowles has joined LavaGrip Traction Aid Ltd. as vice president, sales and marketing. Based in Langley, B.C., LavaGrip owns a volcanic mine in Quesnel, B.C., that produces an organic, non-corrosive traction aid for ice management. Knowles will be responsible for the leadership of LavaGrip’s sales and marketing teams. His background includes serving as vice president sales and marketing at Sherwin Williams Consumer Brands Group.
glen.knowles@LavaGrip.com

DID YOU KNOW…?

… The 2021 Hardlines Market Share Report is now available! It features exclusive information on the market share in every store format, region, and province using sales data for year-end 2020. Sales by province and region of every hardware and home improvement retailer in the country are detailed. Changes from the 2019 to 2020 data are presented in percentages and market shares are broken down by store format. Click here to order yours today!

The Home Depot Canada Foundation has launched a program to combat youth homelessness. Called TradeWorx, the initiative will provide career education and skilled trades training. Through its initial $1 million investment, 100 Canadian youth will receive the training and social support necessary to work in the skilled trades. “TradeWorx builds upon our work with community partners that provide emergency housing and social supports for youth, by connecting them with the training needed to establish lasting careers and acquire stable housing,” said Pamela O’Rourke, board chair, The Home Depot Canada Foundation, and VP merchandising, The Home Depot Canada.

BeautiTone, Home Hardware’s proprietary paint brand, has undergone a rebranding. The new look aims to create a stronger emotional attachment and a more youthful and contemporary image for the brand. Developed in collaboration with john st., “Rethink Colour” is an integrated campaign that features TV, digital advertising, social media, and in-store elements. In Quebec, the campaign is called “Révélez vos couleurs.” A cornerstone of the campaign is this 30-second video.

Costco Wholesale Corp. reported a rise in fourth-quarter net income to $1.67 billion, or $3.76 per share, from $1.39 billion ($3.13) a year ago. Revenues increased to $62.68 billion from $53.38 billion. Comp sales were up by 9.4 percent.

The Home Depot will invest $10 million in venture capital funds that promote U.S. diversity, technology, and entrepreneurship. The investments are part of the company’s efforts to build opportunities for minority-owned companies and Historically Black Colleges and Universities (HBCUs).

Staples Canada is teaming up with comedian Howie Mandel and TV personality Pierre-Yves Lord for a new campaign. In 15- and 30-second spots devised to highlight the retailer’s position as what it calls “the working and learning company,” the pair channel the inner voice of customers’ curiosity. Click here to watch the promotions.

SUPPLIER NEWS

EAB Tool Inc. (Exchange-A-Blade) held a 45th-anniversary celebration this month at its Delta, B.C., manufacturing hub. The focus of the festivities, which took place with limited attendance, was on the toolmaker’s commitment to sustainability. “Our customers, locally and internationally, have appreciated the savings our exchange system offers and supported our green initiatives since our inception,” founder and owner Rob Forbes said at the event.

The National Hardware Show (NHS) has announced the debut of its new platform, Habitat, for its 75th edition show. It will offer future outlooks and product innovation showcases both online and on-site at the show. This year’s edition of the NHS takes place at the Las Vegas Convention Center’s new West Hall from Oct. 21 to 23.

ECONOMIC INDICATORS

Retail sales fell 0.6 percent to $55.8 billion in July, the third decrease in four months. The decline was primarily driven by lower sales at building material and garden equipment and supplies dealers, which were down 7.3 percent, and food and beverage stores. (StatCan)

Sales of new U.S. single-family homes rose by 1.5 percent in August to an annualized rate of 740,000 units. That pace was the highest in four months. (U.S. Commerce Dept.)

OVERHEARD…

“Habitat is the intersection of merchandise and mission—a platform for industry members to discover new product innovations and source inspiration from one another. From environmental innovations to cultural and social shifts, Habitat will keep a trained eye on new ideas and technologies that are evolving how we will live at home.”
—Beth Casson, event leader for the National Hardware Show, on innovations being put in place as the show returns with a live event in Las Vegas from Oct. 21 to 24.

Many dealers are concerned that the wild ride home improvement has enjoyed during COVID may fall off as restrictions ease and lockdowns end. Increased spending on many non-essential retail products was tracked by StatCan as restrictions related to the third wave of the COVID-19 pandemic began to ease across the country back in June.

Despite concerns, Canadians continued to spend on tools and projects related to home improvement in June, with sales of hardware, tools, and renovation and lawn and garden products increasing 5.9 percent from the same month a year earlier. The largest contributor to sales growth in this category was lumber and other renovation materials and supplies, which were up 12.1 percent, followed by floor coverings and tiles—up almost 30 percent.

But can the trend continue? By the end of the summer, and facing a fourth wave, some groups were already seeing slowdowns.

Eric Palmer, vice president and general manager of Sexton Group, reports that his dealers noted sales slowing as the summer was wound down. Product shortages, especially feeding into dealers’ contractor business, created added uncertainty. But Palmer says his members remain largely positive about the continued health of the economy.

Indications of sales starting to slow

Other groups are detecting similar slowdowns. “August was soft as sales were down and, additionally, dealers were significantly lowering their white wood and panel inventories due to lumber wholesale price depreciation,” says Bernie Owens, president and CEO of TIMBER MART. “September has been better than August,” he adds, but any big rush that was anticipated after Labour Day did not materialize.

Cody Smith, director of Home and Building Solutions (HABS) at Federated Co-operatives Ltd., concurs. He has observed that sales overall have been sliding over the past two months, “especially as we compare them with the previous year. We don’t have any hard data to verify why sales are lower comparatively.”

Smith remains uncertain about the rest of the year. “With restrictions easing, we would speculate that disposable income is being spent elsewhere in the economy.  The other factor is the decline in lumber pricing.”

Owens is a bit more optimistic but has some reservations of his own. “Looking ahead, most dealers are hopeful the fall will be busy, but there is still some doubt being felt as we’ve entered a fourth wave of COVID-19. Dealers are not sure if semi-lockdowns will affect jobs and consumer traffic coming into their stores.”

Their concerns, he adds, extend to how preliminary countervailing and anti-dumping rates in the U.S. on Canadian softwood will impact lumber pricing, and “if container shipping rates will prevent the dealers from receiving goods from overseas or whether COVID outbreaks at production plants will further strain supply.”

Expect homeowners to stay put and renovate

Palmer at Sexton recognizes that, as LBM prices have eased, so has demand. But he expects low interest rates and the high cost of housing will keep people home and renovating, often with higher-end projects, rather than moving.

Looking further out, Owens anticipates a similar scenario based on how consumer spending habits have been affected by COVID. “These uncertainties are underscored by a shift in consumer mentality, whereby people seem to be placing a greater value on home improvement and renovation projects—both inside and outside the home.

“Due to this shift, we believe that we’ll continue to see strength in renovation demand well into 2022, which is positive for our industry and our dealers.” He adds that TIMBER MART will continue to direct members’ purchase volumes through his group’s programs and leverage vendor relationships and distribution networks to remain stocked and competitive.
(Photo: Rebekah Littlejohn)

Peavey Industries held its latest Ace Canada virtual trade show last week. The event ran from Sept. 22 to 23.

While relying on a virtual platform, the event did have live interaction, says Jest Sidloski, vice president, marketing, e-commerce, and customer experience at Peavey. The virtual event was available to dealers ahead of the actual trade show, “and the platform will remain up past the two live days.”

Peavey, which took over the licence for Ace in Canada from Lowe’s Canada in March 2020, serves about 100 Ace-bannered dealers across the country from its distribution centres in Red Deer, Alta., and London, Ont. Sidloski says he expected fully 95 percent of those dealers would participate.

The event offered more than show specials. Dealers could get updates on Ace’s private-label programs, while vendors could offer information videos as well as additional content and training through their virtual “booths.”

“Aside from vendor interaction, Peavey Industries corporate will also have departments throughout the show to speak to any questions dealers may have concerning anything from marketing to accounting,” Sidloski adds.

(Get the full story on Peavey’s expansion of the Ace banner from Peavey president and CEO Doug Anderson, who will present live at the upcoming Hardlines Conference. In addition, we’ll have a presentation from an Ace dealer. Rob Faries is the general manager of GG’s Ace Hardware & Building Centre, with locations in Moosonee and Moose Factory, Ont. A double-whammy of Ace insights! While space at this COVID-restricted event is now at capacity, you can join us remotely. Click here to register for virtual access to the conference!)

Home Hardware Stores Ltd. has again joined Tree Canada to plant hundreds of trees and shrubs at different locations across Canada. The campaign ties in with National Tree Day, which fell this year on Sept. 22.

Tree Canada is a national non-profit organization dedicated to planting and caring for trees in both rural and urban environments. Since 1992, Home Hardware dealers have planted over 28,000 trees, valued at over $1.6 million, in green spaces from coast to coast.

The initiative has endured for almost three decades because it resonates with the dealers. “As a supplier of lumber and building materials, this is an important initiative that we support corporately, and our dealers continue to be passionate about,” said a spokesperson for Home Hardware Stores.

“Our stores and their local communities face a variety of challenges, whether it be natural disasters or environmental events, leading to the loss of trees. Tree plants are a great opportunity to engage the local community, regreen or beautify areas in need, and, above all, create a long-lasting, positive environmental impact.”

This year, on the 10th anniversary of National Tree Day, 32 Home Hardware locations are participating in tree planting initiatives within their communities. For example, staff from Geerlinks Home Hardware Building Centre in St. Thomas, Ont. (shown here), partnered with nearby Mitchell Hepburn Public School to encourage the next generation to become better aware of the environment.

Similarly, Harris Home Hardware in London, Ont., planted 80 trees at a nearby park. The site was selected because it’s close to a newly developed residential area in need of more greenery.

National Tree Day is part of National Forest Week, an awareness campaign to remind Canadians of the health and environmental benefits of trees. The day is celebrated across the country with tree dedications, plantings, workshops, and outdoor education walks.

“We continue to see steady growth in the program amongst our stores, as we expand to new communities and work together toward our shared goal of growing better places to live in,” added the spokesperson.

Pascal Houle has formally transitioned into his new role as CEO of Sollio Cooperative Group. Houle spent six years as CEO of BMR Group and also served as executive VP of parent company Sollio. He was named COO of Sollio in early 2021, and less than two months later was announced as the successor of outgoing Sollio CEO Gaétan Desroches.

Kohltech Windows & Entrance Systems has announced two new appointments to its sales team. The Nova Scotia-based firm named Jeff Barsalou to lead its U.S. sales team as business development manager. He will be responsible for the oversight and growth of Kohltech throughout the U.S. John Ballard has been named to lead the central Canada sales team. He will also play a key role in guiding the new North Bay manufacturing plant’s product strategy.

DID YOU KNOW…?

… The 2021 Hardlines Market Share Report is now available! It features exclusive information on the market share in every store format, region, and province using sales data for year-end 2020. Sales by province and region of every hardware and home improvement retailer in the country are detailed. Changes from the 2019 to 2020 data are presented in percentages and market shares are broken down by store format. Click here to order yours today!

Tractor Supply Co. will become the exclusive retail carrier of Porter-Cable’s power tools and accessories in the U.S. The agreement between retailer and manufacturer will include the launch of new cordless products over the coming year. “By pairing the Porter-Cable brand with Tractor Supply, the largest rural lifestyle retailer in the United States, we are able to get our tools into more hands than ever before,” said Tabata Gomez, chief marketing officer for Stanley Black & Decker’s Global Tools & Storage division, Porter-Cable’s parent.

SUPPLIER NEWS

JRTech Solutions has signed a three-year agreement with Castle Building Centres Group, making it Castle’s exclusive provider of electronic shelf labels (ESLs). Long a fixture in the Quebec market, where several BMR dealers have the program, JRTech recently added Laferté Renovation Center, an I.L.D.C. member based in St-Hyacinthe, Que., and has been expanding into other parts of Canada.

A fire broke out recently at a log yard owned by West Fraser Timber in Chetwynd, B.C. Employees at the adjoining mill spotted the blaze in the early afternoon. There were no injuries and the company said that the fire was contained to the yard and posed no threat to the mill. According to the local RCMP detachment, no foul play is suspected.

Three men have died due to their injuries after an explosion at a wood manufacturing plant in Beauceville, Que. Among the eight people injured, six had to be transferred to a trauma care unit some 80 miles away. Of those, the other three remain in critical condition, according to Quebec’s provincial police. Séchoirs de Beauce specializes in processing and drying “jointed and laminated wood into door and window components,” the company’s website says.

ECONOMIC INDICATORS

The seasonally adjusted annual rate of housing starts was 260,239 units in August. That was a 3.9 percent drop from 270,744 units in July. The SAAR of urban starts decreased by 4.7 percent for the month to 235,782 units. Single-detached urban starts fell by two percent to 62,662 units. Rural starts were estimated at a rate of 24,457 units. (CMHC)

Sales of existing U.S. homes declined in August amid ongoing tight supply. All regions contributed to the two percent drop, which brought resales for the month to an annualized rate of 5.88 million units. In the single-family category, sales were down by 1.9 percent. Year over year, home resales fell by 1.5 percent. (U.S. Commerce Dept.)

U.S. retail sales rose unexpectedly by 0.7 percent in August. LBM and garden equipment sales rose 0.9 percent from July and 6.3 percent from August 2020. Excluding automobiles, August sales were up 1.8 percent. (U.S. Commerce Dept.)

Housing starts in the U.S. rose by 3.9 percent in August to a seasonally adjusted annual rate of 1.615 million units, from July’s pace of 1.554 million units. (U.S. Commerce Dept.)

NOTED

The latest issue of Hardlines HR Advisor is now available. In this edition, read about how wages are on the rise, the value of remote work, and navigating the fourth wave of the pandemic. If you did not get your copy emailed to you, you can sign up at no cost right here.

OVERHEARD…

“After thoroughly reviewing several electronic shelf label solutions and providers, JRTech Solutions’ system stood out as the perfect fit for our member stores.”
—Ken Jenkins, president of Castle Building Centres, on the group’s adoption of new electronic bin label technology by JRTech.

We are keenly anticipating the upcoming Hardlines Conference. It will be our 25th anniversary, postponed from last year. We are restricted however as to how many people we’ll be able to let in the room, so we have not released any tickets for sale.

The conference—Canada’s only national event that welcomes all the banners and retail groups—will be held Oct. 19 and 20 at the Queen’s Landing hotel in Niagara-on-the-Lake, Ont., a destination resort just over an hour from Toronto. At the end of day one of the conference, we will host the Outstanding Retailer Awards Gala, recognizing the finest retailers in the country.

However, after we factor in attendance by speakers, sponsors, and ORA winners, the live event is at full capacity. So this year, we’ve added a virtual component to the conference. We invite you to join us remotely, as the presenters will be incredible. They are:

• Kevin Macnab, president and CEO, Home Hardware Stores
• Doug Anderson, president and CEO, Peavey Industries
• Doug Stephens, Retail Prophet
• Marc MacDonald, SVP of HR at Lowe’s Canada
• Jamal Hamad, senior director, contractor services at Home Depot Canada
• Rob Faries, GG’s Ace Hardware
• Peter Norman, economist and VP at Altus Group
• Bill Morrison, former VP of Ace Canada and Lowe’s Canada

Virtual conference tickets are now on sale and can be purchased here for $195.00 plus tax. Dealers can email Michelle Porter for a special rate. The virtual conference ticket also includes a live stream of the 2021 Outstanding Retailer Awards.

I hope you can join us, either in person or virtually, to help us celebrate our 25th Hardlines Conference!

When Home Depot first came to Canada in 1995, the company promised to install up to 50 of its innovative big box stores in this country over time. At the time, people in the retail home improvement industry couldn’t imagine more than a dozen markets that might sustain the large-surface format. Yet a quarter-century later, Canada is home to more than 300 home improvement big boxes—and well over half of them are Home Depot stores.

Collectively, those big boxes account for almost $15 billion in retail sales in 2020. But despite their size and their retail clout, they’re only part of a larger retail landscape, which consists of almost 5,000 stores in Canada.

These are just some of the findings in the latest edition of the Hardlines Market Share Report, which was released last week. The report features the market share of every hardware and home improvement banner in the country, with sales and market shares.

The Market Share Report tracks who the market leaders are in each province. For example, in Quebec, Lowe’s Canada’s banners lead the way, followed by Canadian Tire, Home Depot Canada, Home Hardware, and BMR Group. In Manitoba, Home Depot Canada tops the list, followed by Home Hardware, Lowe’s Canada, Canadian Tire, and TIMBER MART.

Sales are also measured by province, showing year-over-year increases and market shares by each region. Available now, it comes in a handy PowerPoint format for access to charts and tables to let users build custom reports for buyers or sales teams.

(The Hardlines Market Share Report features exclusive information on the market share in every store format, region, and province using sales data for year-end 2020. Sales by province and region of every hardware and home improvement retailer in the country are detailed. Click here to order yours today!)

After reaching record highs during the pandemic, lumber prices have been easing since before Labour Day. I In the spring—prices hit US$1,600 per 1,000 board feet, triple the pre-pandemic cost, but since thenthe value of lumber has been dropping at a fast rate, which has left dealers stuck with over-priced inventory that they’ve had to sell at a loss.

“It’s been a challenge on the retail side,” Liz Kovach, president of the Western Retail Lumber Association, said in an interview with the Canadian Press. “We’ve seen a lot of blowout price sales, just so that [dealers] can move the materials.”

Lumber production was already slowing early in the summer. According to StatCan, it decreased 7.4 percent from June to 4.49 million cubic metres in July. Sawmills shipped 4.55 million cubic metres of lumber in July, down 4.2 percent from June and down 0.7 percent from a year prior. But at their peak, the Canadian Home Builders Association had estimated that the higher prices were adding as much as $30,000 to the cost of a new home.

According to a report by Madison’s Lumber Reporter, many buyers believe the market has hit bottom, and there are even signs of prices creeping back up. In the meantime, buyers are still trying to keep inventories low while not being caught out of stock.

Dollarama latest to face supply issues, retailers worry about holiday shortages

A shortage of shipping containers has put pressure on Dollarama’s finances, CEO and president Neil Rossy has acknowledged. That concern comes even as the company reports healthy second-quarter results. But it’s also putting pressure on pricing.

Dollarama reported that Q2 sales rose by 1.6 percent to $1.03 billion, compared to the comparable period in fiscal 2020. Comp sales fell by 5.1 percent., however, mainly because of Ontario’s ban on non-essential sales during the first several weeks of the quarter as well as the strength of last year’s quarter.

Continued growth is being restricted, however, by shortages on the shelves as international shipping remains backed up. This could have an impact on results for years to come. “The pressure on container shipping costs continues to build and, as a result, will be felt more in fiscal 2023 as we renew [shipping] contracts,” Rossy told analysts on a conference call.

His concerns for the future include tight supply for retailers in general as the holiday season approaches. Several forecasts, including by MasterCard and Deloitte, expect U.S. retail sales to grow by at least seven percent during the holidays.

But shortages of everything from raw materials to products and staff could complicate things. COVID outbreaks in Vietnamese factories are forcing closures there, compounding the uncertainty.

TIMBER MART has appointed Kevin Guest as regional director of member services for Atlantic Canada, effective Sept. 27. Guest began his career in the building materials industry in 1983 at Builders Market, then moved to Reynolds Metals. In 1989, he joined Alcan Building Products as a sales representative and has worked with a variety of suppliers since then. Guest will work out of TIMBER MART’s Dartmouth, N.S., office, reporting directly to Jon Irwin, VP of member services. He replaces Dave Dingwell, who passed away in the spring.

Laura Baker has been appointed VP, marketing, at Home Hardware Stores Ltd. Baker is a retail marketing expert with over 20 years of experience growing brands like Tim Hortons and Sleep Country. In her new role, she will be responsible for Home Hardware’s brand identity and marketing strategy. She reports to Home Hardware president Kevin Macnab.

Bruno Baldessari, formerly VP of merchandising and vendor relations at BMR Group, has left the company. He had been there for 15 years in a variety of roles. BMR did not confirm whether a replacement has been named yet.

DID YOU KNOW…?

… The 2021 Hardlines Market Share Report is now available! It features exclusive information on the market share in every store format, region, and province using sales data for year-end 2020. Sales by province and region of every hardware and home improvement retailer in the country are detailed. Changes from the 2019 to 2020 data are presented in percentages and market shares are broken down by store format. Click here to order yours today!

The Retail Council of Canada recognized 16 companies at its 2021 Excellence in Retailing Gala last week. There was an unprecedented number of ties this year, including the categories for Omni-Channel (Lowe’s Canada and Mastermind Toys), Retail Marketing (Lee Valley Tools and Sephora Canada), and Talent Development (The Home Depot Canada and Michael Hill Jeweller). Federated Co-operatives took the honours for Environmental Leadership, while Canadian Tire Corp. earned the nod for Pop-Up Experience and Design.

Ace Hardware Corp. is slated to open 60 more stores in the U.S. by year’s end. Those stores will join the 110 new locations already opened so far in 2021. “Our proposition for consumers is that Ace is the most helpful store on the planet; for prospective new store owners, our proposition is that Ace is the most financially and emotionally rewarding opportunity available,” CEO and president John Venhuizen said in a release.

Walmart Canada is donating $100,000 to Food Banks of Canada to provide newly arrived families from Afghanistan with some 200,000 meals. The company is also making in-kind donations of household items, toys, and craft supplies to help children weather quarantine. Walmart Foundation in turn is contributing $100,000 to the company’s efforts. Newcomers are also being invited to apply for jobs at Walmart stores and DCs across Canada.

Home Depot announced back in the middle of August that it had already sold out of an early release of Halloween products, though its full assortments are going on sale closer to the holiday. Still, the early run on plastic pumpkins and the now-infamous 12-foot skeleton took the company by surprise.

ECONOMIC INDICATORS

Canadian sales of existing homes were more or less flat between July and August. On a month-to-month basis, sales edged down by 0.5 percent. The actual (not seasonally adjusted) activity was down 14 percent on a year-over-year basis. The month was nevertheless the second-best August on record. (Canadian Real Estate Association)

Investment in building construction was down 1.7 percent to $18.1 billion in July. Residential construction spending was down 2.6 percent, a third consecutive monthly decline after a sustained period of strong growth from May 2020 to April 2021. Declines in all provinces brought investment in single-family homes down four percent to $7.2 billion. (StatCan)

NOTED

In the latest episode of our podcast series, What’s in Store, we talk with Eric Palmer, VP and GM of the Sexton Group. In conversation with Hardlines’ Michael McLarney, Eric shares his dealers’ outlook on how people are spending their money as more sectors open up. Will travel, destinations, and events cut into the discretionary dollars that people have been spending on their homes? (Click here to listen to the episode and to subscribe to the series!)

OVERHEARD…

“We look forward to seeing our members in Atlantic Canada strengthen their relationships with Kevin and benefit from his deep knowledge of both the supplier and retail side of the business.”
—Jon Irwin, VP of member services for the TIMBER MART buying group, on the hiring of Kevin Guest as member services director for Atlantic Canada.

In the latest podcast from Hardlines, we talk with Eric Palmer, vice president and general manager of the Sexton Group, to get his take on how people are spending their money as more sectors open up.

Sexton’s members consist of 400-plus dealers across the country. They are strong in LBM and include some large commodity lumber dealers and gypsum specialty dealers.

A big concern among many dealers is whether spending will continue in the home improvement sector as society opens up and people are able to do other things. Will travel, destinations, and events cut into the discretionary dollars that people have been spending on their homes?

Palmer says that his members remain largely positive about the continued health of the economy. However, “we’re starting to hear from some of our very large vendor partners that, for some of them, retail is slowing down a little bit.”

As LBM prices have eased, so has demand. Palmer points out that a lot of yards now have “mountains of treated lumber.” But, he adds, demand remains high for a lot of products that supply the building sector. “We’re still in supply crunch on a number of product lines that are really important before the construction phase.”

Regional differences affect dealers as well. Ontario, Palmer notes, continues to be strong while Alberta has turned a corner, both in cities like Calgary and Edmonton and in the rural areas. But there are still some exceptions. “When you get into northern Alberta, Fort McMurray, that’s still it’s a struggle up there, most definitely.”

(Our conversation with Eric Palmer is featured in the latest instalment of the Hardlines podcast series, What’s in Store. It will be available tomorrow. Click here to sign up for all our podcasts!)

The worldwide restrictions on supply chains have put the squeeze on everything from finished products to raw materials. The constraints have some companies taking matters into their own hands, including one of Canada’s largest retailers.

Canadian Tire Corp. has bought 25 percent interest in an inland port facility in British Columbia. For $40 million, the company acquired a stake in Ashcroft Terminal Ltd., which operates east of Vancouver near CP and CN rail lines. “Our retail supply chain is a monster machine that needs to do its job before the customer order gets fulfilled,” CEO and president Greg Hicks (pictured) said on CTC’s recent Q2 earnings call.

Based on its latest results, Canadian Tire is in good shape to make such a move. It posted net income of $223.6 million in the second quarter, bouncing back from a loss of $20 million a year prior. Revenues rose by 24 percent to $3.92 billion.

“This $40 million investment will enhance the flexibility of our supply chain and drive longer-term savings and lower carbon emissions by allowing us to stage more inventory in BC, rather than shipping it back and forth across the country.”

Nor is Canadian Tire alone in attempting to control its own worldwide shipping. Out-of-stocks have become too common among retailers as the surge in e-commerce selling continues. In June, Home Depot attempted to solve its supply chain headaches by investing in a ship of its own. Walmart too recently made a similar announcement.

But it’s not an inexpensive option. A chartered ship can cost US$40,000 per day.

The trend to taking shipping matters in hand is not a new one, however. In Sweden, IKEA has, since 2012, owned its own railroad system, which gets product to key European markets. IKEA Rail runs between Almhult, Sweden, and Duisburg, Germany.

Futura Corp. owner Amar Doman, whose holdings include CanWel Building Materials, is the new owner of the CFL’s BC Lions.

Hardlines spoke recently with Doman about this latest acquisition.

He is open about his passion for football—and for the deal itself. “I’ve been a fan for a long, long time, since I was a kid, number one. And number two, I’ve been working on this for over six years.”

Doman acquired the team from the estate of David Braley, who was also the former owner of the Toronto Argonauts and the Hamilton Tiger-Cats. Braley lived in Burlington, Ont. He died in October 2020, in the middle of negotiations. However, Doman was able to continue discussions with Braley’s estate and completed the deal in early August. “I’m very, very happy about this,” he says.

He got to share that enthusiasm when he appeared before the crowd at a Lions game at BC Place on Aug. 31 (shown here). “That was a pretty big moment for me.”

Doman talks about the reasons why securing the team was important. His answer goes well beyond personal ambition. He talks about the need for a strong sports presence for the province—and especially for young people.

Priding himself on being a business builder, Doman has been quoted saying he wants to rebuild the BC Lions, as well. But it’s a solid team, so what challenges exist?

He agrees that the team is strong, and the fans loyal. But the Lions have seen attendance at games drop by 30 percent from the highs it enjoyed 15 years ago. Doman says the team needs a boost by the attention of a local owner. “For British Columbia, having a local owner here for the team was important.”

Both the Lions and the Canadian Football League are great brands, he says. Now, he has the chance to revitalize the Lions as a brand. He would like to see the team actively involved in personal appearances and signings to connect with and inspire youth.

“If we can also make a difference to use sports where children choose the right path in life, that’s really important to me and that’s what this is about.” Doman wants to get as many families as possible involved in the excitement of the game. That includes working with underprivileged kids and charities and trying to get the ticket prices down.

“We really need to promote getting the families to the game. That is so important to me.”

When asked if he can tie in this latest acquisition with his existing LBM businesses, he sees lots of opportunities there as well. “Yes, for the Canwel building materials division, our largest division in Canada, we have so many thoughts about how to utilize the BC Lions asset.” Those opportunities include bringing customers and employees in to watch the games, inviting rivals from other provinces, and having some “great banter” among the rival teams.

“We’re ready to invest in the team—and that’s with my own wallet, making this work—and it’s going to take time. But I’m committed for the long term, like I am with anything else we do.”

Home Depot invests in supply chain to meet challenge of erratic inventories

Retail sales remain strong even as supply chains remain challenged, a fact that was discussed by Home Depot executives during the company’s recent second-quarter earnings call.

Craig Menear, chairman and CEO, noted early in the call that in-stocks were “not at satisfactory levels” during the quarter. Raw material shortages, production constraints, and pressures on international transportation continue to create a difficult supply chain environment.

However, Menear did see some improvements. While in-stocks still remain lower than they should be, “they have improved from where they were a year ago, and our network continues to flow goods remarkably well, thanks to the investments we have made in our supply chain over a number of years.”

Menear said his team continues to make progress building out the company’s supply chain. “We remain largely on track with our plans with the critical mass of buildings scheduled to come online this year and next. We believe that the network we are building is unique to the market.”

He expects the initiative to “enhance the customer experience from a delivery standpoint, but also expand the breadth and depth of our current opportunity set, drive efficiency end to end and leverage our scale to further extend our low-cost position in home improvement.”

The goal, he says, is to “further strengthen our position as a low-cost provider in home improvement, with a relentless focus on productivity and efficiency, and deliver exceptional shareholder value.”

At Home Hardware Stores Ltd., Laura Baker has been appointed VP, marketing, effective Sept. 20. Baker is a retail marketing expert with over 20 years of experience growing brands like Tim Hortons and Sleep Country. In her new role, she will be responsible for Home Hardware’s brand identity and marketing strategy. She reports to president Kevin Macnab.

Lyndon Madden has joined The Hillman Group Canada as director of marketing, overseeing marketing and product for Canada. He was most recently director of marketing at Spectrum Brands. Working out of Hillman’s Scarborough, Ont., office, Madden reports to president Scott Ride.

Wolseley Canada has appointed Mark Gallant as VP, supply chain. Gallant, who spent the last 12 years at Home Depot, began his new role on Sept. 7 at Wolseley Canada’s head office in Burlington, Ont. Prior to his time with Home Depot, Gallant spent 11 years at Accenture as senior manager and practice leader for supply chain strategy.

DID YOU KNOW…?

… that the Hardlines Conference is already at capacity? Attendance at the live event, Oct. 19 and 20, is restricted by Ontario’s COVID restrictions. If you’d like to join us in person, please fill out this form to be added to the waiting list. However, tickets to our virtual event go on sale soon. As a Hardlines Subscriber, you will be notified when we have the registration in place. (Virtual registration includes the Outstanding Retailer Awards Gala!).

Home Hardware is the exclusive home improvement retailing partner for the latest edition of Tim Hortons’ Roll Up To Win contest. This is the second time this year that the company has sponsored the promotion. Tim Hortons customers will have the chance to win one of 1,000 Home Hardware eGift Cards valued at $100 each. Roll Up To Win runs from Sept. 20 to Oct. 17. eGift Cards can be redeemed at any Home Hardware, Home Building Centre, Home Hardware Building Centre, or Home Furniture location.

Canac’s latest marketing campaign is highlighting the chain’s efforts to aid Quebec charities. Building on its renovation assistance last spring to a community kitchen and a foundation aiding sick children in their families, Canac worked this year with Camp Papillion, a camp for disabled children, and an organization operating men’s and women’s shelters.

Groupe GestiPro has announced its acquisition of Quincaillerie L’Ancienne-Lorette, near Quebec City. GestiPro already operates nearby Quincaillerie St-Jean-Baptiste, a Home Hardware in Quebec City proper. This second store has operated as a family business for almost 40 years.

Walmart Canada has broken ground on its first distribution centre in Atlantic Canada. The 223,000-square-foot warehouse in Moncton is slated to open in the fall of 2022. It will provide fresh and frozen groceries to 43 of Atlantic Canada’s Walmart stores.

U.S. mass merchant Target enjoyed an 8.9 percent increase in sales in its second quarter, with online sales climbing by 10 percent. The retailer’s forecast puts its sales north of $100 billion for the full year.

Ontario will introduce a vaccine pass system beginning Sept. 22, the provincial government announced. The “enhanced COVID-19 vaccine certificate” will be required to access non-essential services such as restaurants and gyms, but not for shopping in retail settings. From Oct. 22, the province will use QR codes accompanied by a verification app. The app will be made available to retailers not included in the mandate to enable them to set their own policies.

Wildfires in British Columbia, slowing orders for forest products, constraints on the availability of raw materials, transportation interruptions, and overall inventory levels are affecting output by West Fraser Timber Co. It has adjusted output at some facilities in both the U.S. and Canada by between five and 10 percent over the past two months. It anticipates reduced operating rates through the remainder of the third quarter, depending on inventory levels, log supply, fires, availability of labour, transportation resources, and customer needs.

Kitchen fixtures brand Blanco reported record sales of €408 million worldwide for 2020, up 3.1 percent. The company says it is expanding facilities in Canada, the Czech Republic, and Germany to increase production of its Silgranite sinks. It is also investing in the expansion of a “global, decentralized quality management system,” with a test centre at its Oberderdingen, Germany, headquarters.

IKO plans to establish a new quarry and granule production facility near Ironton, Mo., to support its U.S. manufacturing operations. The $75 million project will see IKO establish both a quarry site and a roofing granule manufacturing and colouring plant in the area. The company currently operates granule facilities in Madoc, Ont.; and Ashcroft, BC IKO expects to break ground on the site in 2022, and have it up and running in 2024.

ECONOMIC INDICATORS

Existing-home sales in the U.S. rose by two percent to a seasonally adjusted annual rate of 5.99 million units in July. Compared to July 2020, sales were up just 1.5 percent. (National Association of Realtors)

Sales of new homes in the U.S. edged up by one percent in July to an annual rate of 708,000. It was the first increase following three monthly declines. On a year-over-year basis, sales were down by 27.2 percent. (U.S. Commerce Dept.)

NOTED

The National Hardware Show (NHS) has opened attendee registration for its 75th edition show. The in-person event with digital support is set for Oct. 21 to 23 at the Las Vegas Convention Center’s new West Hall. Click here to register as an attendee for the show.

OVERHEARD…

“For more than two years, Canac has been promoting the ‘Help for Real’ concept … Once again, we wanted to take concrete action, and the idea of getting involved in the community with these two other organizations was a natural and necessary one.”
—Patrick Delisle, marketing director for Quebec retail chain Canac, on the company’s efforts to support various charitable causes around the province.

The Home Depot and Lowe’s Cos. both posted second-quarter earnings last month surpassing Wall Street estimates. The Home Depot’s earnings rose to $4.81 billion, ($4.53 per share) from $4.33 billion ($4.02) a year earlier. Analysts had forecast earnings of $4.44 per share. Revenues were up by 8.1 percent to $41.12 billion from $38.05 billion in Q2 of 2020, beating estimates of $40.79 billion.

Lowe’s Cos. posted a $3.02 billion profit (EPS $4.25) for the quarter. It too beat out both earnings for the comparable period of 2020 ($2.83 billion or $3.74 per share) and analysts’ expectations of $3.74 per share. Revenues edged up by one percent to $27.57 billion from $27.30 billion.

Both companies took a hit to their comp sales during the quarter, as the pandemic-inspired DIY boom finally shows signs of slowing down. At Home Depot, U.S. same-store sales grew by 3.4 percent, cooling down from a 25 percent increase in Q2 of 2020. Comp sales overall were up 4.5 percent. Lowe’s comp sales declined by 1.6 percent.

The two rivals also boosted their sales to pros, in Lowe’s case by 21 percent year-over-year. Just as loosening public health restrictions encouraged would-be DIYers to divert spending to entertainment and travel, they also opened the door to bigger projects by contractors. The result was a rise in sales of big-ticket items like building materials, countering the decline in demand in categories such as paint and garden tools.

“Growth with our larger pros continues to outpace that of our smaller pros,” Home Depot chairman and CEO Craig Menear told analysts on a conference call, “and they tell us that their backlogs are long and growing.” For the second quarter in a row, Home Depot’s pro sales grew faster than the DIY category.

Darrin Noble is taking over as president and COO of Cloverdale Paint. An executive at Home Hardware for 14 years, where he oversaw the retail company’s paint manufacturing business, Noble is replacing current president and COO Larry Lozinski, who will retire at year’s end. Beginning Sept. 27, the two will work together until Noble takes over on Jan. 1, 2022.

Based in Surrey, B.C., Cloverdale Paint operates manufacturing plants in Surrey, Calgary, and Winnipeg, as well as facilities in Ontario in Mississauga, Oakville, and London. It also has a subsidiary in Portland, Ore., called Rodda Paint.

The news of Noble’s hire came just weeks after he announced his retirement as Home Hardware’s VP, store operations and Burford Paint and Home Products. And it’s less than three years after he was given the added role at Home Hardware of vice-president, store operations.

He started at Home Hardware as VP and GM of paint and home products in 2007.

Noble (shown here presenting at the 2018 Hardlines Conference) says he was approached by Cloverdale after his retirement was announced. “I left Home Hardware on my own accord at the end of May and this opportunity emerged as the paint industry learned of my departure from Home Hardware,” he told Hardlines. “Ideally, I would have had more time between my decision to leave Home Hardware and the start of this new role, but the opportunity at Cloverdale was outstanding.”

Noble was drawn to Cloverdale by its corporate culture. The service-oriented, family-owned business shares a lot of the values he enjoyed at Home Hardware. “Cloverdale puts customers and employees at the top of the hierarchy, along with business performance.”

Nor did he feel there was any conflict of interest with his former employer. “Cloverdale is focused on industrial and pro painters, hence there is almost no competing overlap with Home Hardware,” he added. “This was a critical decision factor for me.”

Family commitments will keep Noble in Ontario initially, so for now he will commute to British Columbia, where he has secured a rental home in the Lower Mainland. 

Orgill concluded its 2021 Fall Online Buying Event last week, bringing together its retail customers and hundreds of vendors.

The virtual events have been gaining traction since the Memphis-based hardware wholesaler initiated them in August 2020 to cope with the impact of COVID. According to CEO and president Boyden Moore, customers understand the platform and how to get the most out of it. “If you look at the sales figures from each of these events, they all nearly mirror each other,” Moore said. “That tells us that our customers are engaging with vendors and that they are able to utilize the events to effectively buy for their businesses.”

In fact, following Orgill’s spring Online Buying Event, 97 percent of all warehouse orders were fulfilled and 94 percent of all promotional product orders were booked successfully. In addition, the latest buying event was accessible on mobile devices.

“Based on the participation in these events and the ability to follow through on the orders, we think our customers have a much better idea of what to expect,” said Greg Stine, Orgill’s executive vice president of marketing and communications.

Prior to the event, Moore addressed the wholesaler’s retail partners in a webinar. In his talk, Moore acknowledged that supply chain recovery has been slower than anticipated. The latest surge in COVID cases and ongoing staffing challenges have been compounded by the impact of inflation.

“Our number-one priority is to restore the dependability of our supply chain as quickly as we can,” Moore assured listeners. “We believe we will begin to see better recovery in the coming months. However, we also believe that it will take longer into 2022 before we begin to return to our historical standards.”

He pointed to the success of Orgill’s online buying events and the expansion of its fulfillment network as positive signs of growth. Orgill’s next Online Buying Event will be held in late October and an in-person Spring Dealer Market is scheduled for Feb. 24 to 26, 2022, in Orlando, Fla.

Ace banner re-enters Atlantic Canada with member in Newfoundland

After taking over the Ace Canada licence last year, Peavey Industries has been gradually expanding its reach, signing new members after a lengthy transition process made all the more difficult by the onset of COVID. (The deal, with Lowe’s Canada, closed just one week before shutdowns began in March 2020.)

Now, with the signing of Pike’s Building Centre in Salt Pond, N.L., the Ace banner is once again flying in Atlantic Canada.

Pike’s Building Centre is already a member of the Sexton Group. The assumption of the Ace banner reflects a strategic alliance between Peavey and Sexton, which can provide lumber and building products to Ace dealers, filling a gap in the Peavey supply chain. For Sexton members, the Ace option provides the opportunity to round out their hardware assortments.

“It is remarkable to see our strategic alliance program take shape in Newfoundland and we are beyond excited to welcome Albert Pike and Pike’s Ace Building Centre to our dealer network as the first Ace location east of Ontario and Quebec,” said Derek Smith, VP, Ace Canada Division, Peavey Industries, in a release.

Recruitment is just one way Peavey is looking to help independents. In June, it added Maple Ave Ace Hardware as a brand new hardware and lumber outlet in Medicine Hat, Alta. At around the same time, Lealta Building Supplies in Lethbridge, Alta., a 28-year member of Sexton, added the Ace banner for its hardware needs.

And when it comes to succession, the company will even take over a store and bring it into Peavey’s corporate fold. The first such takeover was the Ace Hardware in Manning, Alta. Formerly an independent dealer-owned outlet with a long history in Manning, it transitioned into a corporate store. The same happened with Ace Hardware in Port Hardy, B.C. Dealer owners Vera and Terry Smyth decided to retire after 35 years.

Ace Canada is looking to add more dealers across Canada, whether start-ups or as a succession alternative for an existing retailer.

TORBSA has appointed Emmanuel Robitaille as VP, business development. He will report to the group president and board of directors of the Bolton, Ont.-based buying group. Robitaille was most recently Quebec VP with On Side Restoration Services Ltd.

DID YOU KNOW…?

… that the Hardlines Conference is coming up on Oct. 19 and 20? But we don’t know how big a live audience we’ll be able to have. Tickets, both live and virtual, will go on sale soon, but they may be very limited depending on restrictions. We’ll have more information for you in the next few days, so stay tuned. Click here for more info on the conference!

Castle Building Centres has added Peninsula Castle in Fortune, N.L., as its newest member. The store is the latest acquisition and third Castle location for Derek and Nicole Fudge of Marystown, who have been Castle members for over a decade. (Derek is a former chairman of the group). The Peninsula Castle team hopes to hold a grand opening event in the fall.

Lowe’s Canada’s Heroes Campaign is currently underway, until the end of the month. Customers at participating stores are invited to make donations at checkout in support of a local cause selected by each store. This year, eight of the network’s distribution centres and 71 RONA-affiliated dealer stores will join the Lowe’s, RONA, and Réno-Dépôt corporate stores. At the end of the campaign, Lowe’s Canada will match 50 percent of the funds raised by the 311 participating locations, to support 235 non-profit organizations and public schools across the country.

Ace Hardware Corp. reported record Q2 revenues of $2.5 billion. That was an increase of 8.2 percent from the comparable period in 2020. Net income was $116 million, down $22.9 million. Among U.S. Ace dealers who share daily retail sales data, same-store sales rose 1.2 percent.

Walmart posted adjusted earnings of $1.78 per share in its second quarter. Revenues reached $141 billion. Comp sales in Canada declined by 3.6 percent, with declines in operating income as well.

BuildDirect, the online building materials seller, recorded a big jump in sales in Q2, reaching $23.4 million, an increase of 79 percent compared to the second quarter of 2020. The gain was due largely to the reverse takeover of FloorSource at the end of 2020, along with an increase in customer demand for building supplies. Gross profit increased 70 percent to $8.8 million. The Vancouver-based company, which recently went public, expects annual revenues to reach between $90 million and $98 million this year.

SUPPLIER NEWS

Taiga Building Products reported Q2 sales of $786.7 million, up 120 percent from $356.9 million a year ago. The increase was largely due to higher selling prices for commodity products. Net earnings rose to $58.5 million from $7.1 million primarily due to increased gross margin.

Loblaw is expanding its online shopping experience, Loblaw’s Marketplace, and is looking to add hundreds of new sellers before the end of the year. The retailer is seeking to expand its offerings in the home and living, baby, pet, toys, sporting goods, and consumer electronics categories. The CHPTA and COPA are hosting an online information session with Loblaw’s merchandising team at 2 p.m. on Sept. 14. (Click here to register)

Stanley Black & Decker has reached a deal to acquire the remaining 80 percent stake in MTD Holdings Inc. Stanley has owned a 20 percent interest in the privately held outdoor power equipment manufacturer since 2019. Now it will pay $1.6 billion in cash for the remainder of MTD, whose brands include Cub Cadet and Troy-Bilt. The transaction is expected to close before year end.

The Global Home Improvement Network and the International Hardware Association announced that they are merging, effective Oct. 1. GHIN has 216 members operating in 74 countries with more than 32,000 stores and sales exceeding €330 billion. It will now also represent the IHA, whose members consists of thousands of hardware stores worldwide through the country associations of Australia, China, France, Germany, Japan, Sweden, Switzerland, and the U.S. The IHA will remain an independent network administered by GHIN, but with its own president.

ECONOMIC INDICATORS

Retail sales were up 4.2 percent to $56.2 billion in June, led by higher sales at clothing and clothing accessories stores. Sales at building material and garden equipment and supplies dealers fell 3.1 percent, the third consecutive monthly decline. In June, 5.3 percent of retailers in the subsector reported being closed for at least one day. (StatCan)

The seasonally adjusted annual rate of housing starts was 272,176 units in July. That was a decrease of 3.2 percent from 281,200 units in June. The SAAR of urban starts decreased by 0.65 percent to 249,001 units. Multiple urban starts decreased by 3.1 percent to 184,759 units in July. Single-detached urban starts increased by 7.1 percent to 64,242 units. (CMHC)

NOTED

In the latest edition of the Hardlines Podcast Series, we recall the history of Ace Hardware in Canada. We examine the brand’s presence here in detail, from its first foray into British Columbia in the mid-1980s to the recent acquisition of the Ace licence by Peavey Industries. Click here to subscribe to the Hardlines Podcast Series for free and catch up on past episodes!

Retail is, above all, about people. Customers need to be looked after, but so does the retail team. That was made more evident than ever under COVID.

That’s why this year’s Hardlines Conference, Oct. 19 and 20 in Niagara-on-the-Lake, Ont., will feature speakers to address the needs of both staff and customers.

Marc Macdonald (shown here) is the senior vice-president, human resources, at Lowe’s Canada. A Certified Human Resources Professional (CHRP), he joined the company in 2017 and leads the teams responsible for talent management and acquisition, organizational transformation, labour relations, health and safety, and total compensation.

Before joining Lowe’s Canada, he was chief human resources officer at DAVIDsTEA. Prior to that, he served as VP, human resources, for Keurig Green Mountain at its Canadian, UK, and Asia-Pacific business units, and as director, human resources, for The Home Depot Canada.

Macdonald has a lot of experience taking care of a company’s people. And he needed all that experience and learning during the past 18 months, as COVID brought companies face to face with a whole new set of challenges. These included accommodating staff who were reluctant or afraid to work, supporting workers financially during a period of high stress, and even buying lunch for thousands of workers across all Lowe’s Canada’s corporate stores.

(The importance of HR has become so acute under COVID that Hardlines launched a new publication, Hardlines HR Advisor, this year. You can check it out here. Yeow! More shameless self-promotion.—your Faithful Editor)

On the customer side, one of the fastest-growing and most important sectors for Home Depot Canada is its contractor, or pro, clientele. Jamal Hamad, senior director, contractor services sales and operations pro-rental-MRO-home services, at Home Depot Canada, will talk about this all-important customer.

Home Depot Canada has been aggressively pursuing the contractor customer with new initiatives, programs, and financing initiatives. Hamad has headed up that growth, putting independents on alert as Home Depot continues to gain acceptance—and market share—among pros.

The Hardlines Conference—Canada’s only national event that welcomes all the banners and retail groups—will be held Oct. 19 and 20 at the Queen’s Landing hotel in Niagara-on-the-Lake, Ont., a destination resort just 70 minutes from Toronto. At the end of day one of the conference, we will host the Outstanding Retailer Awards Gala, recognizing the finest retailers in the country from across all banners.

In addition to Macdonald and Hamad, the conference will feature these incredible retail leaders:

• Kevin Macnab, president and CEO, Home Hardware Stores
• Doug Anderson, president and CEO, Peavey Industries
• Doug Stephens, high-powered retail consultant with Retail Prophet
• Rob Faries, Ace dealer from Moose Factory, Ont.
• Drew Green, CEO of clothing chain Indochino
• Peter Norman, economist and VP at Altus Group

We look forward to a live event in October, as vaccination rates continue to rise in Canada. Tickets will be made available as we determine final attendance numbers. And for people who cannot join us live, the conference will feature, for the first time, a virtual component so dealers and suppliers can watch our speakers and view the Outstanding Retailer Awards Gala from the comfort of their own homes or offices.

The 25th annual Hardlines Conference will be held at the Queen’s Landing resort hotel in Niagara-on-the-Lake, Ont., Oct. 19 and 20. (Click here for more info on the conference and our amazing venue!)

U.S. hardware wholesaler Orgill welcomed hundreds of customers, vendors, and local dignitaries to Rome, N.Y., last week to celebrate, tour, and take part in the official ribbon-cutting ceremony marking the grand opening of its newest distribution centre.

“We enjoyed the opportunity to have so many of our customers and vendor partners on hand so they could get a first-hand look at the Rome DC, see the investments we are making in our distribution network, and have the opportunity to meet our team,” said Boyden Moore, Orgill president and CEO. “This milestone in our growth is only possible because of our customers’ continued growth and our vendor partners’ continued support.”

The 780,000-square-foot Rome site is Orgill’s eighth distribution centre, joining facilities in Tifton, Ga.; Inwood, W.Va.; Sikeston, Mo.; Kilgore, Texas; Hurricane, Utah; Post Falls, Idaho; and London, Ont. The latter two locations continue to service Orgill’s Canadian customers.

Innovations in distribution technology and design that Orgill showcased during the grand opening ceremony included the latest in voice picking systems, a space-maximizing very narrow-aisle (VNA) layout, and a new, multi-tiered conveyor system. All of these features are designed to create efficiencies for the distribution team and ultimately reduce friction in receiving, picking, and fulfilling customer orders.

Owens Corning manufactures fibreglass insulation, shingles and roofing accessories, as well as mineral wool and extruded polystyrene rigid insulation.

Now the company has trademarked its latest product advancement. PINK Next Gen Fiberglas insulation features advanced fibre technology, which, says OC, enables up to 23 percent faster installation compared to its existing products, while meeting the latest building codes.

This advanced technology creates a tightly woven network of soft, fine fibres to form a resilient blanket of insulating micro-pockets. With these innovations, the new product has been designed to be safe for installers and residents.

“Contractors today have high performance expectations and extremely tight timelines,” said Joe Wagner, insulation marketing director. “This product evolution is a significant step-change in meeting the needs of contractors, as well as installers, builders, and homeowners.”

In Canada, Owens Corning has two plants that manufacture fibreglass insulation, one in Toronto and one in Edmonton. It also operates a plant in Valleyfield, Que., that manufactures extruded polystyrene rigid insulation.

Home Depot, a values-based company, issues sustainability report

Home Depot has published its 2021 Environmental, Social and Governance (ESG) Report. The document notes Home Depot’s goal to reach 100 percent renewable electricity for its facilities by 2030.

Its latest achievements include reducing carbon emissions by more than 127,000 metric tons in 2020—a 22 percent reduction in carbon intensity—while at the same time growing the business by nearly 20 percent. The retailer also joined the Science Based Targets initiative (SBTi) to reduce global emissions, committing to set goals for emissions by 2023.

“Our commitment to reducing our impact on the planet, taking care of our people, and building strong, sustainable communities is foundational to who we are,” said Craig Menear, chairman and CEO of The Home Depot.

But good governance does not end with sustainability efforts. In fiscal 2020, the company paid approximately $2 billion in enhanced pay and benefits to front-line, hourly associates in response to COVID-19. It also paid $616 million in record success-sharing bonus payments to non-management associates.

Home Depot Canada has been doing its part as well. Over the last 10 years, the Canadian division has reduced store electricity consumption by 43 percent. In 2020 alone, electricity use in Canadian stores fell more than eight percent due to the installation of LED lighting, building automation systems, and energy-efficient HVAC systems.

“We are committed to demonstrating leadership through action. Reducing our impact on the planet is part of our core values. These improvements and initiatives will benefit our people, our communities, and our environment,” said Michael Rowe, president, The Home Depot Canada. “Sustainable business is good business that benefits the associates and customers we engage with every day.”

Lowe’s Canada’s sustainability report supports environment, communities, staff

Lowe’s Canada has released its 2020 Canada Corporate Responsibility Highlights. Following the release earlier this year of the company’s 2020 Corporate Responsibility Report, this document illustrates the trajectory of Lowe’s Canada’s sustainability goals.

“In 2020, our communities dealt with the many challenges brought on by the COVID-19 pandemic, and it was more important than ever for us to be there for our fellow Canadians,” Jean-Sébastien Lamoureux, senior VP, public affairs, asset protection, and sustainable development, said in an accompanying release. “We made significant investments to support both our associates and local charities providing essential services, such as health care and food aid.”

Lowe’s Canada’s 2020 corporate responsibility highlights:

• Investing $4 million in communities, including more than $1.5 million to support associates and local charities during the first wave of the COVID-19 pandemic
• Reducing GHG emissions by more than six thousand metric tons compared to 2016
• Reaching 42 percent of the target to recycle 75 percent of all waste produced at corporate sites by 2025, which represents close to 22,000 metric tons of materials
• Recycling more than two metric tons of used paint in 2020
• Offering more than 5,000 ECO-branded products instore and online
• Helping customers identify and buy local products through the Well Made Here program

The retailer’s initiatives extended to its employees in new and creative ways under COVID. Some programs, such as its ongoing investment in local communities, have amounted to a $16 million investment since 2016. Last year alone, Lowe’s Canada invested $1.5 million into supporting its associates and their communities during the pandemic.

In April, Lowe’s Canada was recognized for its sustainability efforts as part of Mediacorp’s Canada’s Greenest Employers annual competition. The contest celebrates employers that have implemented exceptional sustainability initiatives and led the way toward creating a culture of environmental awareness within their organizations.

Will lumber prices fall anytime soon? Opinions vary

The easing of lockdown measures has customers returning to stores, but retailers continue to face pressures on their bottom lines, according to the Globe and Mail. Transport and input costs have shot up, driven by a dearth of shipping containers worldwide as well as hot demand for raw materials.

Some retailers are taking the hit to their margins in hopes of riding out a “temporary imbalance.” Others are raising prices, thereby stoking inflation, which in May reached its highest level in a decade.

Even as prices have seen a correction over recent weeks, some believe the correction has yet to be felt by consumers. “Lumber inventories purchased at high prices remain relatively substantial among retailers,” AQMAT president Richard Darveau told La Presse.

According to Darveau, most retailers won’t want to mark down those wares until “the rebound in orders from builders and renovators to finish their high summer housing starts season,” which he added is shaping up to be strong again this year.

“Unless lumber dealers initiate sales or even ‘loss leader’ sales, especially in seasonal products such as treated lumber, I would not expect to see retail price declines as large as those seen in the major forest products futures markets,” Darveau concluded.

The state of the Canadian dollar, which has seen a 9.6 percent boost over the past year, is the one silver lining. “When the Canadian dollar is stronger, that gives them at least a small buffer,” said Retail Council of Canada CEO Diane Brisebois.

SPECIAL REPORT: Dealers in buying groups hold their own through COVID

The LBM buying groups are a unique beast in Canada. They have no direct parallel in other markets, like the U.S. And their operation and structure are quite distinct from large retail banners and big-box chains that make up such a large part of the U.S. market.

So they can be a point of puzzlement for vendors who are new to the Canadian market. But overlook them at your peril. Since 2016, buying groups have represented at least one-third of sales by the Canadian retail home improvement market—a market worth more than $50 billion in 2020. Last year, the market share of the buying groups actually grew to almost 38 percent of the overall market.

Those sales were generated by more than 2,500 independently owned outlets that are members of eight buying groups across the country.

The largest of the buying groups is Home Hardware Stores with more than $5.5 billion in retail sales (for the purposes of Hardlines’ analysis of the industry, Home Hardware’s building centre and home centre stores are treated as part of their own buying group). Next is Independent Lumber Dealers Co-operative, whose combined membership accounts for an estimated $4.4 billion. The other buying groups are, in order of size, TIMBER MART, Sexton Group, Castle Building Centres, BMR Group, Delroc Industries, and TORBSA.

These dealers were an important part of the boom that the industry enjoyed during the year of lockdowns in 2020. Many of these dealers are in smaller or secondary markets, where big box stores are not as dominant. This reflects the durability of independent dealers that make up the buying groups.

(This data is drawn from the 2021 Hardlines Retail Report. If you want to know the sales growth and market shares of all the hardware and home improvement groups in Canada, and the strategic analysis of the top players, this is the report for you. It features 190 slides and dozens of photographs and tables. For more info and to order, click here!)

Employers get creative to find new hires in a competitive job market

In a bid to stem the post-pandemic labour shortage, employers are offering a variety of incentives to potential workers. That can mean flexible hours, higher wages, or even signing bonuses.

This last perk is usually reserved for corporate executives or specialist workers in technology or trades. But CBC News reports that it’s becoming an increasingly common feature of want ads for positions ranging from hair stylists to call centre workers.

Marie-Hélène Budworth of York University’s School of Human Resource Management says it’s a sign that “these are desperate times” for many employers. On the other hand, some employers prefer to invest in higher overall wages rather than a one-time bonus, which Budworth says is a greater benefit to workers in the long run.

Julie Labrie, president of recruitment firm BlueSky Personnel Solutions, says salaries have gone up “drastically.” Increased paid time off, sometimes as much as four weeks of vacation is also becoming more common.

Others are thinking outside the box to lure employees. One Montreal grocer is offering bus passes and store rebates to employees. A Halifax baby boutique joined forces with neighbouring retailers to give new hires the option to combine part-time positions.

“We talked with other tenants in the mall who were also finding it really hard to attract workers,” Ivy Liu, owner of Fluffy Bottom Babies in Bedford, N.S., told the Globe and Mail. “We came up with a plan that if we find the right worker but they want full-time hours, they could work three days here and two days in another store.”

Since the pandemic’s outbreak, workers in essential services have been publicly celebrated, but material compensation has often lagged. Meanwhile, those who had worked in non-essential fields found they could earn more money staying home, thanks to programs like CERB. Now, burnout is widespread, and a looming “mass exodus” of workers has shifted the balance of power to jobseekers.

“The power swings back and forth based on market conditions and supply and demand from employer to employee,” executive recruiter Ken Stoddart told the CBC. “And right now it’s skewed towards the employee.”

Other retailers are setting their sights on younger recruits. Tristan Tremblay, 14, works at a store in Chicoutimi, Que., which includes a hardware store as well as a filling station and convenience store. “My father started working young and he wanted me to start working young too,” he explained to Le Journal de Montréal. The work, he added, is “a bit repetitive … but it’s going well.”

At the same time, some retailers are looking to the other end of the lifespan. Don Dyck is president of Kingdon TIMBER MART in Peterborough, Ont. The store used to count on Trent University students for seasonal work, but interest from that demographic has waned. Nowadays, he says, his seasonal employees are more likely to be workers later in their careers who don’t wish to work year-round.

Duchesne et Fils has appointed Jon Watson as Ontario sales manager. Watson has more than 10 years of experience in the building materials industry, in the window and door segment. He will oversee Dennis MacCulloch, sales representative in northern Ontario, Rob Mongraw in the east of the province, and Sean McIlravey, newly appointed in the southwest.

DID YOU KNOW…?

… that the latest episode of Hardlines’ podcast The History of Home Improvement looks at the rise and unlikely fall of Dolliver Frederick, a man who made his mark on the hardware industry in a big way before his giant hardware wholesale company went under? Click here to subscribe to the Hardlines Podcast Series for free and catch up on this and all our past episodes!

A man who stole treated lumber from a Sarnia, Ont.-area TIMBER MART committed an offence akin to stealing precious metals, prosecutors told a court recently. “Some would argue that during the pandemic the theft of lumber is equivalent to the theft of gold for what they are charging for the price of wood these days,” Crown attorney David Rows submitted. Justice Deborah Austin agreed, issuing a six-month prison sentence to the 45-year-old defendant.

Federated Co-operatives Limited (FCL) reached a new four-year agreement with employees at its Edmonton distribution centre. More than 170 team members represented by Teamsters Local 987 voted 92 percent in favour of accepting FCL’s latest offer. The agreement includes improvements to benefits for all employees, expanded use of part-time employees, and increased scheduling flexibility. The agreement also includes the introduction of an alternate wage scale for new employees. This wage scale is key to sustaining FCL’s operations and the ability to serve local Co-ops across Western Canada over the long term.  FCL and its union have been bargaining since the last collective bargaining agreement expired on Aug. 31, 2020.

Princess Auto has opened a new Quebec location, and its fourth in that province, in Lévis. It follows another opening in Saint-Hubert in May. The new store caters to tradespeople, hobbyists, home mechanics, and DIYers. Categories that set Princess Auto apart include hydraulics and surplus, in addition to an ever-expanding farm category. The privately-owned retailer now has 50 stores employing over 3,000 workers across the country.

W. W. Grainger reported its Q2 operating earnings of $334 million were up 62 percent from a year ago. Q2 earnings in 2020 had been heavily affected by losses related to Grainger’s divestment of its Fabory business. On an adjusted basis, earnings were up by six percent to $4.27 per share. Net sales of $3.2 billion represented a 13 percent increase from Q2 of 2020.

U.S. big boxes are moving to require masks for employees once again, even in states which have lifted general indoor mask mandates. Lowe’s, Home Depot, Target, and Kohls are all following the advice of the Centers for Disease Control. The agency is recommending masks indoors even for vaccinated persons, as cases of the delta variant rise. Customers are also encouraged, though not required, to mask up in-store.

Montreal-based Guillevin, one of Canada’s largest distributors of electrical equipment, is acquiring McLoughlan Supplies Ltd. Founded in 1956, McLoughlan has branches in Newfoundland & Labrador, Nova Scotia, and Prince Edward Island. The company will continue to operate under the McLoughlan name under the leadership of Cory MacGuigan, newly appointed general manager. He was previously GM of the Charlottetown branch. All jobs will be maintained under the new ownership.

West Fraser Timber Co. saw its Q2 sales rise by 61 percent from the previous quarter to $3.78 billion. Earnings increased to $1.49 billion from $665 million in Q1. Operating earnings in the lumber segment amounted to $955 million, up from $607 million in the prior quarter.

3M Co. earned net income of $1.52 billion, or $2.59 per share, in Q2. That was up from $1.306 billion, or $2.25 a share, a year ago. Adjusted earnings of $2.59 per share beat estimates of $2.28. Sales rose to $8.95 billion from $7.18 billion, topping estimates of $8.525 billion.

Canfor enjoyed increases in its second quarter as adjusted net income reached $721.2 million. Sales of $2.5 billion were up from $1.12 billion in the previous Q2. For the lumber segment, earnings increased $393.8 million quarter-over-quarter, to an all-time high of $1 billion. Lumber prices remain at record highs, helping to buoy the growth.

ECONOMIC INDICATORS

The total value of building permits rose 6.9 percent to $10.3 billion in June. Seven provinces contributed to the gain, led by Ontario, which jumped 22.7 percent. Construction intentions in the residential sector were up 9.1 percent to $7.2 billion, while the non-residential sector advanced 2.2 percent. Construction intentions for single-family dwellings increased 4.7 percent to $3.4 billion. Seven provinces saw gains in this component, led by Ontario and Alberta. (StatCan)

Investment in U.S. construction was almost flat in June, but residential construction was a strong spot. Construction spending rose by 0.1 percent. Private construction, however, rose by 0.4 percent, with spending on single-family homebuilding rallying by 1.8 percent. On a year-over-year basis, total construction spending was up by 8.2 percent. (U.S. Commerce Dept.)

NOTED

The annual Hardlines Retail Report is now available. This powerful set of research is a marketer’s dream. If you want to know the sales growth and market shares of all the hardware and home improvement groups in Canada, and the strategic analysis of the top players, this is the report for you. It features 190 slides and dozens of photographs and tables. (For more info and to order yours, click here!)

The Home Depot puts a priority on taking care of its people. That includes furthering efforts to promote diversity, equity, and inclusion. In 2020, its U.S. hires were 35 percent female and 53 percent ethnically and racially diverse. The company was recently recognized as one of Forbes’ Best Employers for Diversity.

The RCC STORE Conference, Sept. 13 to 16, brings Canada’s most influential retail leaders, world-renowned visionaries, and passionate entrepreneurs together to discuss critical topics affecting retail. (See the full agenda here!)

OVERHEARD…

“Technology, innovation, and capacity are all factors that drive our distribution efficiencies at a facility like Rome, but ultimately, all of these investments are designed to help us better serve our customers and help them make their businesses more successful.”
—Randy Williams, Orgill’s executive vice president of distribution, on the recent grand opening of the hardware wholesaler’s eighth DC.