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.

The 25th annual Hardlines Conference is ready to go live this year. The event, which was cancelled due to COVID in 2020, will return to a face-to-face setting this year, as restrictions are lifted and vaccine rollouts continue.

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 very cool 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.

While a lot can happen between now and mid-October, we are confident that enough normalcy will have been restored, with widespread vaccinations expected for all Canadians by September. However, 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 Hardlines Conference will play host to an incredible lineup of retail leaders:

• Kevin Macnab, president and CEO, Home Hardware Stores
• Doug Anderson, president and CEO, Peavey Industries
• Jamal Hamad, senior director, contractor services sales and operations, Pro-Rental-MRO-home services at Home Depot Canada
• Drew Green, CEO of clothing chain Indochino
• Peter Norman, economist and VP at Altus Group
• Plus two more speakers just added (see article below!)

With the inclusion of Home Hardware’s Macnab, Anderson from Peavey, and Hamad from Home Depot Canada, attendees are guaranteed to get insights first-hand from some of the industry’s leading home improvement retailers.

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

The addition of Drew Green to this year’s lineup ensures that the conference will once again look outward for guidance on best practices and trends in retail. Indochino is a burgeoning retailer of custom, made-to-measure suits. Green has been involved in multiple start-ups and in just the past seven years, he’s grown two businesses to over $200 million in market cap. Not to be missed!

Rounding out the Hardlines Conference, we’ll hear from our leading housing and economic advisor, Peter Norman of Altus Group.

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. It guarantees a world-class destination to maximize networking among the retail home improvement industry’s leading dealers, retail chains, buying groups and suppliers. (Click here for more info on the conference and our amazing venue!)

This year’s Hardlines Conference has just confirmed two more speakers, a virtual alpha and omega of retail experience on one stage. We already have an amazing roster of speakers lined up for you, and with the addition of two more important industry figures, we have rounded out our program.

The conference will be held Oct. 19 and 20 at the Queen’s Landing hotel in Niagara-on-the-Lake, Ont., a destination location just 70 minutes outside of Toronto.

Doug Stephens, of retail consultancy Retail Prophet (shown here), will kick off the 25th edition of the conference. A high-level retail consultant, author, and dynamic presenter, Stephens will share his thoughts on where retail in general—and hardware and home improvement in particular—is headed post-COVID.

Each year, we showcase one dealer to share their story from the front lines of home improvement retail. For this special edition of the conference, we are pleased to host Rob Faries, general manager of GG’s Ace Hardware & Building Centre.

The business was started by Faries’ dad in 1976 as GG’s Corner and Gift, offering grocery, confectionery, and gifts. The younger Faries, A member of the Moose Cree First Nation, was born the year after the store opened and he spent his entire life surrounded by retail. As he grew up, so did the store, adding clothing, housewares, and sporting goods. Today, GG’s has three locations in Moosonee and Moose Factory, Ont., near James Bay. Faries will talk about the challenges of working in the tough conditions—both physical and business—of northern Canada.

Stephens and Faries join an already outstanding lineup of speakers at this year’s conference. (The 25th annual Hardlines Conference will be held at the Queen’s Landing hotel in Niagara-on-the-Lake, Ont., Oct. 19 and 20. Click here for more info!)

Lumber prices have plummeted by 70 percent in just eight weeks, as the price of two-by-fours made from western spruce, pine, and fir (SPF) reached US$485 for 1,000 board feet last week. That was down from US$1,630 in mid-May.

Since reaching record highs in May, prices have been slipping. But according to Madison’s Lumber Report, the prices are not likely to drop to pre-pandemic levels. And with the epidemic of forest fires across British Columbia, supply is getting constrained again—and prices have inched back up. As of July 21, the impact of the western forest fires caused lumber futures to jump 7.7 percent on the Chicago futures market, where they were priced at $584.50.

Canfor, the giant forest products company, will begin curtailing production today, as fires wreak havoc on both supply and the ability to transport product to market. However, observers suggest the move may be partly to counteract the fall in prices.

Canadian sawmills have done a brisk trade during the pandemic, but some private owners of woodlots in New Brunswick say they’re being frozen out of the boom. Unlike other provinces, which have raised royalties for harvesting on Crown land, New Brunswick has kept its rates frozen for about six years.

“I was getting more money for my wood in the 1990s,” lot owner John Sabine told The Globe and Mail. “A lot of people aren’t bothering to harvest at all because prices are so poor. It’s not worth it.” Sabine says that stance means millions of dollars in lost revenue for both the provincial government, which owns half the commercial forestry lands in the province, and private lot owners.

Technology helps Patrick Morin’s outside sales teams stay connected

To keep its outside salespeople connected in the field, Quebec-based retailer Patrick Morin is still sending its people out to job sites for major projects. But it also supplied new laptops to its district and regional managers, who double as outside salespeople for the company’s 20 locations. The laptops let the managers communicate with their contractor customers via Zoom, Microsoft Teams, and other platforms without having to go onto construction areas.

“We’re trying to use the latest communications and messaging software so our people can contact customers directly, and respect social distancing protocols,” says general manager Daniel Lampron. “It’s worked pretty well so far.”

Like many dealers, Patrick Morin experienced a “huge” increase in online sales last year that has carried into 2021. Lampron observes that customers these days expect quick delivery, regardless of what they’re ordering, “so products need to be well managed.” That’s been a challenge during the pandemic, which created shortages in many commodities, most notably lumber. Patrick Morin has used electronic communications to keep customers informed about product availability or shipment delays.

Moving dealers and their customers to greater reliance on virtual communication “is a really big deal because the construction industry has been late to using technology,” says Lampron.

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

Darrin Noble retired last week as Home Hardware’s VP, store operations and Burford Paint and Home Products. He joined as VP and GM of Home’s paint business in 2007 and took on his current role in 2019. A longtime friend of Hardlines, he spoke to the 2018 Hardlines Conference on the importance of private label brands.

DID YOU KNOW…?

… that July’s edition of Hardlines Dealer News is out now? In this issue, read about how one dealer adapted during the pandemic, which products dealers tell us are the hottest sellers, and Castle’s member growth in the Toronto area. Hardlines Dealer News is monthly—and it’s free. Sign up here to subscribe!

The Spyder brand of circular saw blades, jigsaw blades, hole saws, Stinger spade bits, and auger bits has been introduced in Canada. The company has partnered with Lowe’s Canada to expand its offering of tool accessories for pro customers. The Lowe’s, RONA, and Réno-Dépôt banners are the exclusive building centre and big box carriers of these products in Canada.

Giant Tiger Stores Ltd. has opened a new store near Hamilton, Ont. The 18,044 square-foot store is located in Ancaster at 120 Portia Drive.

Tractor Supply Co. reported Q2 net sales of $3.6 billion, an increase of more than 13 percent from $3.2 billion a year ago. Comp sales swelled by 10.5 percent as demand remained strong for seasonal and consumable products. Profits rose by 11.3 percent to $1.3 billion, from $1.2 billion a year prior.

SUPPLIER NEWS

Carlisle Cos. Inc. has struck a deal to acquire fellow building envelope systems (BES) provider Henry Co. from a private equity firm. Under the terms of the agreement, Carlisle will purchase Henry for $1.575 billion in cash. Henry’s BES offerings control the flow of water, vapour, air, and energy in buildings.

Canfor Corp. will curtail about 115 million board feet of production capacity at its Canadian sawmills during Q3. The decision comes as wildfires in western Canada are creating significant supply chain challenges and a transportation backlog.

The 130th China Import and Export Fair (Canton Fair) will be held both online and in-person from Oct. 15 to Nov. 3. This edition of the fair will feature displays in 51 exhibition sections based on 16 product categories. 

Manufacturers of wooden pallets are caught between lumber shortages and unpredictability in the supply chain, The Globe and Mail reported. Between wait times for machinery and pressures on the labour market, boosting production is not an option, according to Shawn Hicks, CEO of CPS Wood Products in Cobourg, Ont. “We’ve had to turn away new opportunities from big companies—we just can’t handle the extra demand.”

ECONOMIC INDICATORS

Sales of existing Canadian homes fell by 8.4 percent month-over-month in June. It was the third straight monthly slowdown since activity hit an all-time record back in March. While sales are now down a cumulative 25 percent from their peak, and below every other month in the last year, June transactions still managed to set a record for that month. Sales moderated in about 80 percent of all local markets, including almost all large markets across the country. (Canadian Real Estate Association)

U.S. retail sales for June were estimated at $621.3 billion. That was a 0.6 percent increase from May, and 18 percent higher than sales for June 2020. Building and garden materials sales amounted to $45.05 billion, down slightly from $46.98 billion in May. (U.S. Census Bureau)

U.S. housing starts in June were estimated at a seasonally adjusted annual rate of 1.643 million units. That was 6.3 percent above the previous month and 29.1 percent above the June 2020 rate. Single-family starts were up 6.3 percent from May to 1.16 million. (U.S. Census Bureau)

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!)

OVERHEARD…

“We’re running flat out. We can’t cut any more lumber; we can’t produce any more product. Our costs are up on every front.”
—Shawn Hicks, CEO of CPS Wood Products in Cobourg, Ont. He was quoted in the Globe and Mail last week regarding the huge demand currently for wood pallets.

Matériaux Pont-Masson is moving its seven stores to BMR’s banner. Founded in 1979 by Monique and Richard Bailey, Matériaux Pont-Masson serves Quebec (Mirabel, Rigaud, Roxboro, Sainte-Clotilde-de-Châteauguay, and Valleyfield) and eastern Ontario (Alfred and Casselman).

Its stores have been under the RONA banner for nearly 35 years. With an estimated $100 million in annual sales, it’s considered one of the largest affiliate dealers in the RONA stable. The transition to BMR takes effect on Aug. 11.

In a release, Matériaux Pont-Masson president Éric Bailey said he was seeking to enhance the business’s offerings. “As a major player in the hardware industry in Quebec and Canada, BMR represents for Matériaux Pont-Masson an outstanding business partner to ensure the continuity of our success.”

“I am very pleased to see Éric Bailey and the entire Matériaux Pont-Masson team join the ranks of Groupe BMR, a decision that Éric has carefully considered over the past few years,” said Alexandre Lefebvre, CEO of BMR Group. He expects BMR to increase its sales among its nearly 300 dealer members by $200 million in 2021.

A Lowe’s Canada spokesperson said that the giant retailer “values collaborative business relationships with its dealers where the priority is the mutual success of the parties involved.” For its part, Lowe’s Canada reiterated its ongoing commitment to its independent affiliates, “who remain a priority within our business model.”

Given the dealer’s size and its number of locations, the recruitment of Pont-Masson represents a solid gain for BMR, which has been working to make meaningful moves outside its home province of Quebec, especially in Ontario, where two of the stores are located.

“This alliance will not only allow us to increase our presence in key markets, particularly in Ontario but also to enhance our product offering to our customers with the wide range of products that are exclusive to Matériaux Pont-Masson, all at competitive prices,” said Jonathan Gendreau, vice president, strategy and network development at BMR.

Home Hardware has announced the launch of the Home Hardware Return to Sport Matching Grant. A partnership with shopping rewards app FlipGive, the initiative will offer $25,000 in grants to help get kids back in the game after being sidelined by COVID-19.

The program invites youth sports teams across Canada to register on FlipGive, a shopping rewards app. The alliance with Home Hardware is designed to help parents lower the cost of their involvement in sports by offering rebates on products purchased through FlipGive. The first 250 teams to raise $100 in rebates through purchases will receive a $100 matching grant from Home Hardware.

“Sport runs deep for us,” says Jessica Kuepfer, director, communications, Home Hardware Stores Ltd. She mentions the company’s participation in the Special Olympics. “But it’s also a continuation of everything that our dealers are doing. When you look at how our dealers are supporting their local communities, they are doing it in so many different ways.

“We’re looking to our dealers and seeing where their hearts and charities lie and just trying to align that. It’s really something that’s deep in our DNA.”

In addition, FlipGive is a Canadian company, she says, further making it a good fit for Home Hardware.

Does the program indicate any greater involvement in sporting goods by Home Hardware than in the past? Kuepfer admits that sports and recreational products sold well during the pandemic. She points out though that “we sold a lot more of everything over the past year and a half. But people are definitely looking for ways to have fun at home.”

The Home Hardware Return to Sport initiative is open to youth sports teams across Canada and will run until Nov. 30.

Peavey Industries has entered into a five-year agreement with Westerner Park, central Alberta’s largest convention, agricultural, sports, and entertainment facility. Under the deal, Peavey secures the naming rights to Red Deer’s landmark Westerner Park Centrium as its official agricultural supply partner. The complex is now known as the Peavey Mart Centrium.

“Peavey Industries’ head office has been located here for decades, making Peavey Mart truly ‘Red Deer’ at its very core,” said CEO and president Doug Anderson. The company owns the Peavey Mart and MainStreet Hardware banners, as well as the licence for the Ace Hardware brand in Canada.

Peavey’s marketing efforts are part of a long tradition of big retailers buying up naming rights to sports complexes—though it’s more common in the U.S. There, Lowe’s was a loyal supporter of NASCAR racing dating back as far as 1960. In 1999, the retailer bought up naming rights to a popular racetrack in Charlotte, N.C., renaming it the Lowe’s Motor Speedway for the next 11 years. It also sponsored racing superstar Jimmie Johnson from 2001 until 2018. Home Depot also got involved in NASCAR in 1999, ending its sponsorships in 2014.

In Canada, Canadian Tire drew a lot of attention in 2013 when it secured naming rights for the Scotiabank Arena in Kanata, Ont., which is the home ice for the Ottawa Senators. To this day, it is known as the Canadian Tire Centre.

As Peavey establishes itself as a national retail presence, the renaming of the Westerner Park Centrium gives the company a valuable boost to its brand at home.

“We are thrilled to partner with Westerner Park and further our local connection while showcasing the overarching dedication we have for a city we are also very proud to call our hometown,” Anderson said.

Provinces loosen retail rules as vaccination rates continue to climb nationally

With vaccination rates continuing to rise across Canada, several provinces advanced in their reopening plans last week. That meant further relaxation of rules for retailers, particularly around the number of in-person shoppers.

Quebec dropped fixed capacity limits in stores last week. Instead, retailers must ensure that there is enough room for customers to maintain physical distance. That distance was also cut from two metres to one. Similar rules are in place in Newfoundland and Labrador.
 
Also last week, Ontario entered Step 3 of its reopening plan—five days ahead of schedule. It too has dropped percentage-based capacity limits in favour of a simple physical distancing requirement. Nova Scotia did the same, moving into the fourth of its five planned phases.  
 
Since July 1, British Columbia has been in Step 3. Masks are recommended but no longer required in indoor public spaces. Store occupancy is at the discretion of the retailer. Alberta entered its final stage on the same date; all retail restrictions are now lifted. Saskatchewan entered its Phase 3 on July 11, lifting all public health orders including the mask mandate.

Similarly, Prince Edward Island encourages but no longer requires masks in indoor public spaces. Those serving the public, like retail employees, should continue to wear them, however.
 
This week, Manitoba’s premier, Brian Pallister, and the province’s top physician are slated to hold a press conference outlining the province’s next steps. Manitoba reached Milestone 1 in late June. Retail stores can currently open at 25 percent capacity, to a maximum of 250 individuals. The province has now hit its vaccination target for the second of the three milestones. Pallister is expected to offer details of what the easing of restrictions will look like.

DID YOU KNOW…?

… that the annual Hardlines Retail Report is now available—and it’s selling like crazy? 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, click here!

Sexton Group has become a supporter of the buy-Canadian initiative Well Made Here (WMH). Eric Palmer, Sexton’s VP and GM, will hold a seat on WMH’s board of directors alongside the executives of the other participating banners.

“As a proud Canadian company, Sexton Group supports quality domestically made products,” he said in a release. “A partnership with Well Made Here is very much aligned with our values.” As a major partner of Well Made Here, Sexton gives its stores the opportunity to advertise themselves as destinations of choice for accredited Canadian-made products.

Lowe’s Canada has partnered with the Charles-Bruneau Foundation to support pediatric cancer research in Quebec. Through the participation of more than 15 of its suppliers and the fundraising campaign led by its cycling team, the organization presented a $400,000 cheque to the foundation as part of the 25th Tour CIBC Charles-Bruneau. The 57 cyclists of the Lowe’s Canada team took part in various treks of the tour earlier this month, including the 50 km, the 80 km, the 141 km, and the remote tour.

Castle Building Centres Group has announced the addition of Hometown Flooring as its newest member in Nova Scotia. Under Castle, the Truro specialty flooring retailer will be expanding its business into a full-service building materials retailer. Owners Paul and Janet Harris purchased the business in 2017. Paul has decades of experience in the retail building supplies industry working alongside his father Ron and brother Doug, who founded the business over 25 years ago. After a renovation to expand the store, it will have a grand reopening sometime in 2022.

Castle Building Centres also welcomes Quincaillerie Shipek in Longue-Pointe-de-Mingan, Que., as its newest Castle Centre du Rénovation. After Mingan’s original hardware store closed, locals found they had to travel over 40 km to get to the nearest store. After four years, the Pekuashipi and Ekuanitshit Innu Nations bought the hardware business. Quincaillerie Shipek will celebrate a grand opening in the late summer.

Lowe’s Cos. is teaming up again with Daymond John for the next round of Making It…With Lowe’s. The pitch program gives entrepreneurs who are members of minority groups across the U.S. a chance to sell their wares on Lowes.com and in Lowe’s stores nationwide. John is a star of ABC’s Shark Tank, the U.S. version of the international Dragon’s Den franchise. The program “shines a light on the remarkable stories of diverse small business owners who are often overlooked and underrepresented,” says John, who will return as host and advisor to the finalists.

SUPPLIER NEWS

Richelieu Hardware Ltd. more than doubled its Q2 profits, as net income amounted to $37.4 million, up from $17.8 million a year ago. Sales increased to $371.4 million from $248.3 million, due to same-store sales growth of 60 percent in Canada and 50 percent in the U.S.

Manufacturers of wooden pallets are caught between lumber shortages and unpredictability in the supply chain, The Globe and Mail reported. Between wait times for machinery and pressures on the labour market, boosting production is not an option, according to Shawn Hicks, CEO of CPS Wood Products in Cobourg, Ont. “We’ve had to turn away new opportunities from big companies—we just can’t handle the extra demand.” Experts say unless pricing cools down, consumers will see costs passed on to them.

ECONOMIC INDICATORS

Investment in building construction cooled slightly in May, decreasing 1.9 percent to $19.4 billion. This was the first drop in seven months. Residential construction investment declined for the first time since April 2020, while non-residential construction increased slightly. Residential construction was down 2.7 percent in May, bringing total investment to $14.8 billion, with declines in both single and multi-unit construction. Investment in single-family homes was also down 2.7 percent to $8.3 billion. Quebec and Ontario posted the largest declines. Still, single-unit investment remained approximately 60 percent above pre-COVID-19 levels. (StatCanada)

NOTED

The latest instalment of our Hardlines Podcast Series features Bernie Owens, president and CEO of TIMBER MART. Bernie talks about the value of independents reacting quickly to their local markets and the importance of buying groups. Click here to receive updates when new episodes are launched!

OVERHEARD…

“If the last 18 months have taught us anything, it’s how important it is to have access to high-quality healthcare. In this context, we are particularly pleased to once again be a Diamond Partner of the Tour CIBC Charles-Bruneau and to financially support cutting-edge pediatric hemato-oncology research.”
—Jean-Sébastien Lamoureux, senior VP, public affairs, asset protection, and sustainable development at Lowe’s Canada, on his company’s fundraising campaign that generated $400,000 for kids with cancer.

Bernie Owens is the president and CEO of TIMBER MART, one of the country’s largest LBM buying groups. He’s held the post for almost eight years and during this time he has gotten close to his dealers—and their concerns on the front lines.

Owens also has some observations about the larger issues facing the retail home improvement industry. We had the opportunity to speak with him recently on a range of topics. That conversation is featured in the latest episode of the Hardlines podcast series, What’s in Store.

The importance of a buying group, and the necessity for size, is greater than ever before, says Owens.

“If I look at the independent dealers today, and the challenges they are facing, an independent dealer should be looking at a buying group that offers critical mass to the vendor community, significant volumes, buying power, and LBM distribution to assist when they have stockouts.”

He says that independents can react to their local markets more quickly than a big chain can. But these same independents have other concerns, and a major one nowadays is the security of supply. Over the past 16 months, maintaining supply has been crucial for all dealers and Owens only expects this situation to worsen in the coming months. But the relationships TIMBER MART has with key vendors ensure that source of supply for its members.

“More than ever, independent dealers truly need to work together to make sure they are looked after and remain competitive against corporate entities.”

Dealers face new challenges as they attempt to manage their inventories in the face of rising prices. Costs have to be weighed against long lead times as supply is squeezed. Another concern for Owens’ dealers—and one that retail is facing more widely—is the importance of attracting people to work in their stores and to be part of this industry.

Another issue Owens has seen his dealers struggle with is cybersecurity. He believes all dealers must stay on the alert. “I encourage all businesses, regardless of who you are, whether you’re a small business or a large business, to keep cybersecurity training top of mind and give your employees the knowledge they need to help protect the business.”

(Our conversation with Bernie Owens is featured in the latest instalment of the Hardlines podcast series, What’s in Store. Click here to listen to the full interview and to sign up for all our podcasts!)

Canada is one of the most buoyant home improvement markets in the world and market conditions under COVID have driven the sector to unprecedented heights. According to the 2021 Hardlines Retail Report, growth in 2020 by hardware and home improvement dealers in Canada set a record.

The latest Hardlines Retail Report examines the industry, and the retail players that make it up, in detail using data and statistics that are not available anywhere else. The proprietary research and strategic insights in the report shed light on how much the industry is growing, where the growth vectors are coming from and which players are leading the way.

The sector faced a year of unprecedented sales activity in this sector under COVID in 2020. The year resulted in an average sales increase from all stores measured in this study of more than 15 percent, a rate of growth not seen since Hardlines began tracking the industry 25 years ago.

Unlike previous years, the increase was seen across the country, even in the Prairies, where a slowed energy sector had impacted those markets. The Maritimes also saw an increase, which in other years has seen only slow or flat growth.

Growth was not consistent across all store types. Hardware stores as a sector saw the slowest growth of all the store formats. However, this reflects the ongoing reduction in the number of these stores in favour of more full-line building centres. They now account for less than seven percent of sales in the industry. Despite this, hardware stores had some of the biggest same-store sales of any sector, many of them reporting sales increases in 2020 of 25 percent and up, and even 40 percent increases.

Building centres and big boxes both reported healthy double-digit increases, reflecting the surge in renovations and improvements that consumers undertook during COVID. Big boxes also made gains in their overall share of the market, bearing out their viability during the year of pandemic.

For vendors trying to understand their customers, or retail groups that want to keep abreast of their competitors, the report identifies and ranks the top 20 retail players in the sector. In addition, the four leading groups are analyzed in-depth to explain strategies, competitive advantages, and expansion plans.

Areas of study include:

• The size of the industry year-over-year
• In-depth analysis of the top players, Home Depot Canada, Lowe’s Canada, Home Hardware, and Canadian Tire Retail
• The winning formats—how the independents are faring against the big boxes
• The hot provinces and how market shares have changed by region year over year
• The newest trends and challenges facing the industry today
• Forecasts for the industry in 2021 and 2022

Designed to help retailers and suppliers alike develop their business plans for the year ahead, the 2021 Hardlines Retail Report provides valuable forecasts for the industry and its top players for 2021 and 2022. It features 190 PowerPoint slides and is packed with dozens of charts, graphs, and photographs.

(Click here for more information and to order your report now!)

Eisenwarenmesse, the International Hardware Fair, is preparing to return to a live event next year. Pre-bookings by vendors for the giant hardware fair in Cologne, Germany, indicate strong support for a return to face-to-face business. Show organizers report that the event already has almost 2,500 registrations through its early-bird booking. These bookings were also a success internationally, as exhibitors from over 40 countries have registered so far.

The show has evolved over the years to become not just a showcase for new products, but a springboard for new ideas and trends. Exhibitors from all over the globe will be presenting their innovations, ranging from tools and fixing and fastening technology to construction and home improvement supplies.

After the time-out in 2020 and 2021 due to the pandemic, the current number of applications received underlines the significance of the leading global trade fair and the need of the market participants for personal contact and the desire to return to an environment that addresses all senses. With this knowledge, the show in 2022 will be a hybrid physical and online event.

Some key trends to watch for in Cologne:

• Healthy products that are becoming more ergonomic. A new, ergonomically shaped generation of tools facilitates handling and operation.
• Safety at work and on the job is another top theme to come out of the pandemic. That includes the show itself. The International Hardware Fair promises the highest level of safety for attendees next year.
• Faster and more efficient tools continue to represent an important trend. The new products of many manufacturers aim to accelerate the work process.
• Focus on design combines function with form as everything from screwdrivers to workshop trolleys strive to be more attractive, some even being issued in limited design editions.

Eisenwarenmesse takes place March 6 to 9, 2022, in Cologne, Germany.

Retailers race to update their IT teams to capture e-commerce sales

The surge in online sales over the past year represented a huge shift in consumer habits—and a huge concern for dealers and managers. Through the pandemic, the shift to online sales has grown exponentially.

Retailers with established platforms, such as Canadian Tire, Lowe’s Canada, and Home Depot Canada, fared well over the past year as their online sales soared. But the move was often a difficult one for independents, especially as this trend continues even after the worst of the pandemic is behind us.

However, the big groups are well-positioned to ramp up their online sales game and an article in ITBusiness.ca provides some details of what two of those groups are doing. According to the article, Rajat Khanna, vice-president of information technology at Lowe’s Canada, saw the retailer’s website traffic increase by 200 percent and digital volume was up 400 percent. Initially, one of the big sellers was paint. In response, Lowe’s Canada introduced an online paint selector, which lets customers transform the room they want to paint virtually.

At Home Hardware Stores Ltd., Chris Parsons, director of e-commerce, was quoted as saying the banner’s website traffic more than doubled during the past year under COVID. Parsons noted that his company rolled out a platform to help its dealers track and process online orders.

Even as more customers moved online, the company’s call centre experienced a huge surge in use as well, rising by 350 percent. At Lowe’s Canada, that number went up by 800 percent, said Khanna.

For both companies, as well as companies like Canadian Tire, the focus has been on hiring more IT staff and beefing up the tech sides of their businesses.

BMR Group has appointed Simon Gouin as senior director, business development, eastern Canada. In his new role, Gouin will oversee the development of the dealer network in Quebec, Ontario, and the Maritimes, as well as BMR’s business relationship with current dealers. A graduate of HEC Montreal in business administration, Gouin has more than 15 years of experience in business development in the construction and renovation industry. He managed hardware stores for almost a decade before holding various management positions in sales and business development, including management roles at Patrick Morin and TORBSA.

DID YOU KNOW…?

… that 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 more than 185 slides and dozens of photographs and tables. For more info and to pre-order, click here!

The Home Depot Canada Foundation is renewing its major funding of $300,000 over two years to support education and job readiness programs at Dans la rue. Founded by Father Emmett “Pops” Johns, the organization has supported homeless youth in Montreal since 1988. Since 2015, it has received more than $1 million through the foundation’s Orange Door Project. Until Aug. 1, customers at Home Depot’s Boisbriand store will have the option of making a $2 donation to Dans la rue.

The Retail Council of Canada has recognized Lowe’s Canada as a finalist in this year’s Excellence in Retail Awards. The retailer was included in the Environmental Leadership and Omni-Channel categories for its sustainability initiatives. Also among the Environmental Leadership finalists are Federated Co-operatives Ltd. and Walmart Canada. In the Omni-Channel category, Lowe’s Canada was joined by Lee Valley Tools. Canadian Tire Corp. placed in the In-Store Experience and Design, Philanthropic Leadership, and Pop-Up Experience and Design categories. Federated Co-operatives, Lee Valley Tools, and Peavey Industries were recognized for Retail Marketing. Canadian Tire and The Home Depot Canada received the nod for Talent Development.

Groupe LTM has acquired the RONA store in Marieville, Que., now named RONA Matériaux Marieville. The group owns three other Montreal-area RONA hardware stores, under general manager Bruno Paradis. The latest addition is a 5,000-square-foot store offering a range of hardware, paint, tools, and seasonal products. It also sells school and office supplies through its Papetrie ABCD stationery shop.

GMS Inc. has announced the completion of its acquisition of Westside Building Material. The parent of WSB Titan originally announced the $135 million deal in May. The acquisition increases GMS’s reach in several major California markets and marks the commercial dealer’s first foray into the Las Vegas market.

Rockwool North America has begun commercial production of stone wool insulation products at its newest U.S. manufacturing facility, located in Jefferson County, W.Va. The 460,000-square-foot factory produces Rockwool’s residential, commercial, and industrial stone wool insulation.

Trusscore has announced the acquisition of Calgary-based Westech Building Products, a developer of vinyl building materials. Westech was acquired from its parent company, Westlake Chemical Corporation. Westech is a Houston-based manufacturer and supplier of petrochemicals, polymers, and building products.

Intertape Polymer Group has reached an agreement to acquire Nuevopak Global Ltd. for approximately $43.8 million. Nuevopak is a privately held company based in Hong Kong and develops machines to make protective packaging. That segment “continues to be a strategic portion of our product bundle,” said Greg Yull, president and CEO of IPG, in a release. “Nuevopak has been a valued partner of ours for several years and this acquisition was a natural evolution of that relationship.”

ECONOMIC INDICATORS

The value of building permits fell in May by a record $1.6 billion, or 14.8 percent, to $9.5 billion. The decline affected all sectors, with almost three-fifths of it due to multi-family dwellings in Ontario. All provinces except for Newfoundland and Labrador posted a decrease in the value of permits issued for single-family dwellings, which fell 10.6 percent nationally to $3.2 billion. Quebec accounted for almost half of that decline. (StatCanada)

Total U.S. retail sales excluding non-store retailers (not seasonally adjusted) in March were up 31.9 percent from March 2020. All 50 states and the District of Columbia had positive and significant year-over-year percentage changes from March 2020 to March 2021. (U.S. Census Bureau)

NOTED

The latest episode, “The Legacy of J.Pascal Hardware,” of the Hardlines podcast series, The History of Home Improvement, is now available. It looks at the story of J. Pascal Hardware, a family-owned enterprise for almost 90 years. Founded by Jacob Pascal, a Romanian Jewish immigrant to Montreal, it spread to 21 locations throughout Quebec and Ontario. The company pioneered the use of discount and remainder bins to appeal to customers on a tight budget. Click here to subscribe to the Hardlines podcast series for free and to listen to past episodes!

OVERHEARD…

“It’s a challenge. It’s definitely a challenge for the dealers to get people out to work… However, I’m hopeful that as more of the population gets vaccinated, and the COVID cases eventually begin to decline, that we’ll see more people entering the workforce.”
—Bernie Owens, president and CEO of TIMBER MART, on the need to attract young, talented people to the retail home improvement industry. He is featured on the next  episode of the Hardlines podcast series, What’s in Store.

Home Depot is rolling out an online rental service at its 1,300 rental locations across North America. But the Canadian division has been up and running with it since earlier this year.

Aimed at both contractors and heavy DIYers, the service uses Home Depot’s new ‘Rent Online, Pick-up in Store’ technology. The retailer’s rental services offer a range of products aimed at pros and heavy DIYers, including demolition tools like breakers and concrete saws, landscaping tools like tillers, sod cutters, trailers, and moving vehicles. Customers can reserve and rent equipment online up to 30 days in advance.

“This new online technology saves pro and DIY customers time and trips to the store because they can conveniently check equipment availability and reserve what they need in advance to get in and out of our rental centres more quickly than ever,” said Richard Porter, vice president of The Home Depot Rental in the U.S. “For urgent needs at the job site or in the midst of that weekend project, customers can also check availability at multiple locations and make reservations on their phone or other mobile device.”

The company touted the piloting of online reservations in various U.S. cities, namely in the Atlanta, Charlotte, Houston markets. But the program has been up and running in its own fashion here in Canada for several months already.

According to a spokesperson at Home Depot Canada, the program here “is in fact something that our teams started rolling out earlier in the year. It’s available nationally across Canada.” Home Depot has 178 rental locations in Canada, out of a total of 182 stores in this country.

In the U.S., Home Depot is catching up in terms of locations. It has opened eight new rental centres since January.

Ace Hardware is seeing tremendous growth in the U.S., where it has some 5,000 stores. But it is keenly interested in the activities of its Ace dealers in Canada as well. Here, the Ace brand is licensed to, and managed by, Red Deer, Alta.-based Peavey Industries.

Mike Berschauer is VP of sales, customer service, and operations for Ace International Holdings, the division that works with the Ace licence in Canada. Berschauer believes the union with Peavey makes for a strong fit. “[Peavey CEO] Doug Anderson and Peavey Mart already represent a strong retail operator functioning in a profitable manner in the rural farm and ranch market. They already have an understanding of that segment.”

That fits well with the growth Ace has seen in Canada, where stores are typically smaller operations that thrive in smaller locales. However, says Berschauer, Ace can provide much more. “Ace has an urban store program. We’ve got models and methodologies that will help us support Peavey in any market.”

He sees lots of opportunities for the partnership to keep growing, thanks to a relative lack of consolidation. “From a per capita standpoint, there are so many medium to small players in Canada compared to the U.S.”

The Canadian team at Peavey, Berschauer adds, “have strong logistics and a national mindset to tackle proper expansion and determine what differentiates Ace in the marketplace.”

Ace was formerly in the hands of Lowe’s Canada and for many Ace dealers making the switch, it was important to find alignment with Ace’s values. That happened with Peavey, he believes, as that company has made a strong commitment as a primary hardlines supplier that fits with the Ace dealers.

Ace International’s approach has evolved, and it fits with the new partnership at Peavey. “We’ve moved away from being just a source of supply to our international customers to more of a franchise model,” says Berschauer. That means a big push on making the Ace culture of training and customer service skills a key part of what it means to take on the Ace banner.

“Peavey’s field teams are now mirroring the best practices and training, the category sets and store optimization—they’re learning and understanding and then applying those concepts in the Canadian market.”

Swedish discount DIY retailer Byggmax sees e-commerce exploding

The impact of COVID worldwide has had positive effects on home improvement retailers. But the challenges are also similar.

In a recent talk with the Global Home Improvement Network (GHIN), Mattias Ankarberg, CWEO of Byggmax Group, shared some of the challenges and strategies his company has experienced over the past 16 months. Byggmax is a chain of discount home improvement stores based in Sweden. Ankarberg spoke with John Herbert, general secretary of the European DIY Retail Association (EDRA) and GHIN.

Ankarberg noted that the essential status helped his stores in many countries, including Finland and Sweden, while locations in Denmark and Finland did not enjoy such status and were forced to close for months at a time. In addition, the company has faced the familiar issues of supply chain restrictions, the explosion of e-commerce, and the impacts of the pandemic on the retailer’s workers that have plagued retail worldwide.

Byggmax Group oversees 169 Byggmax discount home improvement stores, 116 in Sweden, 43 in Norway, and ten in Finland. Sales by the group grew almost 30 percent in 2020, while e-commerce sales grew by 50 percent. “E-commerce has exploded for us. Click-and-collect has really taken off,” Ankarberg said.

When GHIN’s Herbert asked him what he had learned from the pandemic, Ankarberg referred to a range of factors. But the overriding one was getting accustomed to “just how much money people were willing to spend on home improvements and DIY.” His company is already up 29 percent so far this year. And he expects the trend to continue. “Our view is that the home is more important after the pandemic than it was even during the pandemic.”

He expects people to stay emotionally tied to their homes, while concepts like staycations will continue to be popular as people keep buying things to enjoy in their homes. This year won’t be as good as 2020, he says, but he does expect home spending to continue into 2022 and beyond.

Ankarberg also foresees that the online side of the business will keep growing and expects it will account for one-third of Byggmax’s sales by 2025.

Tristant L. Langelier has joined the Sexton Group as business development manager for Quebec. In his new position, Langelier will be instrumental in building relationships and growing the membership in Quebec. His background includes an account manager role at McCordick Glove and most recently a position as regional sales manager for KP Building Products, the aluminum and vinyl siding company. Sexton Group considers the hire an important step in helping the group make inroads in Quebec.

DID YOU KNOW…?

… that the annual Hardlines Retail Report is available next week? 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 more than 185 slides and dozens of photographs and tables. For more info and to pre-order, click here!

A new RONA affiliate store has opened in Dryden, Ont. Owners Lori and Marc Palsson acquired the store, which has been serving the Dryden area for over 40 years, in March and set about renovating it as a one-stop home improvement shop. It now features a new seasonal sales area as well as a kitchen, bath, and appliance centre.

Peavey Industries has been adding members to its Ace Hardware banner. Maple Avenu Ace Hardware is the new hardware and lumber outlet in Medicine Hat, Alta. It’s relying on Ace Canada’s alliance with Sexton Group to get access to both hardware and LBM assortments. Lealta Building Supplies in Lethbridge, Alta., a 28-year member of Sexton, is adding the Ace banner for its hardware needs. The business is owned by Dave and Tammy Jackson.

Ace Hardware in Port Hardy, B.C., is the newest addition to Ace’s corporate holdings. Always a part of the same family of companies, the store began as Macleods and transitioned to True Value in the early 1990s; it was rebranded to TRU Hardware before final realignment to Ace Hardware in 2015. Dealer-owners Vera and Terry Smyth are retiring after 35 years serving the community.

ECONOMIC INDICATORS

Retail sales were down 5.7 percent to $54.8 billion in April. The decline coincided with the third wave of the COVID-19 pandemic and was the largest decline in retail sales since April 2020, during the first wave of the pandemic. Sales at building material and garden equipment and supplies dealers were down 10.4 percent, the first decline in nine months. Despite the drop, sales remained above levels reached in February 2021. (StatCan)

U.S. home prices in April rose at their fastest pace since 2005, as bidders scrambled to compete for a tight supply of properties. Housing prices in 20 U.S. cities logged a 15 percent rise in April compared to a year prior. The pandemic has seen many families move away from city centres in search of more space. Low mortgage rates have also helped to fuel demand. Yet even with sales slowing, as more and more buyers are priced out, analysts see no sign of prices moderating any time soon. (S&P CoreLogic Case-Shiller Index)

OVERHEARD…

“We have worked hard to strengthen our national footprint, we are committed to bringing the full value of the Sexton Group to Quebec, and we are excited to enter this untapped market.” —Eric Palmer, vice president and general manager of the Sexton Group, on the recent hiring of a business development manager who will be focused on the province of Quebec.

Peavey Industries has struck a deal with Surrey, B.C.-based Cloverdale Paint to provide a private-label coatings line for Peavey’s Ace Canada dealers.

Cloverdale is making the paint for both of Ace’s paint lines, Royal and the premium Clark + Kensington brand. The paint fills an important gap in the Ace assortment in this country, as Ace’s paint provider in the U.S. would not ship to Canada. Finding a homegrown source was a natural solution, says Derek Smith, vice president of the Ace Canada division at Peavey. “It just makes sense to be buying in Canadian dollars and supporting a good Canadian company.”

Smith points out another benefit of the new partnership. “Cloverdale is also taking care of the training for the Ace staff and dealers. It’s not something Ace Canada had to worry about and provides good support for the Ace dealers.”

The background to the shuffle started almost a decade ago when Ace sold its paint manufacturing operation to Valspar in 2012. At that time it started carrying Valspar along with its house brands. But five years later, Valspar was bought by Sherwin-Williams. But Sherwin-Williams had made a deal a year earlier with Lowe’s Cos. to supply that retailer’s paint.

Ace then turned to Benjamin Moore, a Berkshire Hathaway company, to make the dealer-owned co-op’s high-end line, Clark + Kensington, and eventually expanded production to handle all of Ace’s paint supply later in 2019.

Smith summed up what the latest development of the Ace paint line represents. “We are focused on building Ace brand products for Canadian dealers.”

The Lumber and Building Materials Association of Ontario (LBMAO) has hit back at comments about the industry by Premier Doug Ford. During a press conference last week, the premier mused that “those lumber companies who are jacking up prices need to be held accountable.”

In an open letter, LBMAO president Dave Campbell rejected any suggestion that “our sector is ‘ripping the public off.’” Campbell sent the letter to the premier’s office. Lumber pricing, he explained in the letter, has been impacted from multiple directions.

Supply chain pressures and heightened demand followed both the pandemic and extreme weather in the U.S. At the same time, he said some of the increase in pricing had been “artificially orchestrated by provincial government policies to mitigate the impact of the COVID-19 pandemic,” adding that the LBMAO had “fully endorsed” those measures.

In an interview with Hardlines, Campbell expressed his outrage. “I thought it was just a stupid comment that did not address what the market represents.”

Commenting further on the letter, Campbell pointed out that these market pressures are out of the hands of dealers. “We have no control over prices. It’s dictated by the mills. Add to that product shortages, which are widespread and not just limited to lumber. And I didn’t even mention the devastation that’s been caused by the mountain pine beetles in B.C. forests.”

Campbell says the response from the industry has been very supportive. Dealers and suppliers alike let him know they agreed that Ford’s comments needed to be addressed. “The products we sell are commodities and pricing is dictated by the free market. The prices are already starting to go down. Whether they will go down to where they were two years ago, you never know. But they will level off.”

As of press time, Campbell had yet to receive a response from Premier Ford or his office and lumber prices have already begun to tumble.

A building centre in Scarborough, Ont., is the latest dealer to join Castle Building Centres. But it’s not the first dealer in the Greater Toronto Area to sign with the buying group so far this year. And it’s part of a significant expansion of Castle’s presence in a major urban market.

Global Building Supplies is a full-service lumber, building materials, and hardware retailer in a suburb on the east side of Toronto. The business was founded in 2020 by Min Lin, who has worked in the industry for close to a decade.

Castle has made a series of wins within the GTA since the beginning of 2021. In March, it signed Peel Hardware & Supply, a family-owned business in Caledon, a community on the west side of Toronto. Owner Bill Hewson founded the business in 2013; his daughter Jennifer Hewson manages it now.

Less than a month later, the buying group announced another Toronto member, ML Lumber & Building Supplies. Owners Connie Vieira and her son Rene Silva Jr. have operated in Toronto since 1974. Soon after that, Castle continued its expansion in the region with the addition of BDC Lighting and All Trade Supply in Brampton.

The next business to join Castle added to the ranks of the group’s commercial division, CBS. RGS Rascom Greenbuild Services in Concord, Ont., under the owner and managing director Rick Stacey, has been there for a dozen years, providing contractors with building envelope products.

The latest recruits bring Castle’s representation in the GTA to a dozen stores. The group has almost 300 member stores in total, with sales from all stores totalling an estimated $2.3 billion in 2020 (source: Hardlines Retail Report). However, the majority of its stores are in smaller centres across Canada. While it has three stores each in Calgary and Edmonton, for example, there are none in the Montreal area or the Lower Mainland of British Columbia, according to the Castle website. The increase in numbers in the GTA marks a notable expansion into an urban market.

Castle would not comment on whether the recent wins were part of a larger plan or merely a coincidence, as the geographically related dealers came on board around the same time.

The global home improvement retail market shrank in 2020. Worldwide, sales fell by 2.2 percent to a value of $279.28 billion (all sales in USD). This figure was given by Miles Agbanrin, a consultant at Euromonitor International, in a recent presentation to the Global DIY Network.

Although the growth rate of e-commerce in the global home improvement trade doubled from 23 percent in 2019 to 47 percent in 2020, the overall decline in market volume could not be averted. Sales in home improvement and garden stores, whose market share is put at 70 percent by Euromonitor International, were down by one percent, while sales in other distribution channels fell by nine percent to 22 percent. The market share of e-commerce increased from three to eight percent between 2015 and 2020.

However, the overall decline was not realized in the Western industrialized nations, many of which saw record increases. The slowdowns occurred in the so-called developing markets, Agbanrin explained. He cited India, Taiwan, and China as examples.

Sales of wooden flooring in the Asia-Pacific Region, for example, fell by $1.89 billion, decorative paint sales declined by $2.13 billion, and sales of floor tiles were down by $3.16 billion.

On the other hand, “light DIY” was in demand in America and Europe. In North America, retail sales in the decorative paint category rose by $1.05 billion and in the hardware category by $950 million. In Western Europe, decorative paint added $647 million in sales.

Euromonitor International expects the global market volume to increase again in 2021 to $291.25 billion. By 2025 it should rise to $315.08 billion.

DID YOU KNOW…?

… that the annual Hardlines Retail Report is available soon? 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 more than 185 slides and dozens of photographs and tables. For more info and to pre-order, click here!

TIMBER MART has signed Centre de peinture Picasso as its fourth new member in Quebec to join this year. Located in Val-d’Or, the store has served as a destination for paint, plaster, tile, and siding in the Abitibi region for more than 35 years. The retailer wants to build out the business beyond paint and accessories, says co-owner Julie Bergeron.

IKEA Canada has partnered with ACCES Employment to launch a national Refugee Skills for Employment program. Supports include virtual customer service training, paid work placements, one-on-one culture and language coaching, job search strategies, and mentorship from IKEA Canada leaders. The program aims to hire 150 refugees within three years and is part of a broader commitment from IKEA globally to reach 2,500 refugees with meaningful employment by 2022.

To help speed up the length of in-store visits, Australian big box home improvement retailer Bunnings has introduced interactive maps. It’s a new feature on the retailer’s product finder app, available across most of its stores. The new feature allows customers to view the location of a product and access the fastest route to get to it. Customers can also locate different services within the stores.

SUPPLIER NEWS

JRTech Solutions, the Montreal-based supplier of electronic shelf labels (ESL), has signed an agreement with Metro, one of Canada’s largest food retailers, for its Pricer ESL system. The deal builds on an initial agreement between JRTech Solutions and Metro that was signed in 2018. This latest update includes the deployment of Pricer Plaza’s cloud platform, which leverages electronic shelf labels to automatically locate a product in a store.

Pre-bookings by vendors for next year’s giant hardware fair in Cologne, Germany, indicates strong support for a return to face-to-face business. Eisenwarenmesse, the International Hardware Fair already has almost 2,500 registrations through its early-bird booking. The booking was also a success internationally, say the organizers, as exhibitors from over 40 countries have registered so far. The show will be held from Feb. 21 to 24, 2022.

ECONOMIC INDICATORS

Current housing trends and the outlook for housing market fundamentals suggest activity will remain strong through 2021. This is expected to result in a record number of sales this year, despite a slowdown that began in April. However, over time activity is forecast to continue returning toward more typical levels. As a result, 2022 is expected to see significantly fewer home sales than in 2021. (Canadian Real Estate Association)

Retail sales were down 5.7 percent to $54.8 billion in April. The decline coincided with the third wave of the COVID-19 pandemic and was the largest decline in retail sales since April 2020, during the first wave of the pandemic. Sales at building material and garden equipment and supplies dealers were down 10.4 percent, the first decline in nine months. Despite the decline, sales remained above levels reached in February 2021. (StatCanada)

Sales in the U.S. of new single‐family houses in May were at a seasonally adjusted annual rate of 769,000. This is 5.9 percent below the April rate but is 9.2 percent above the same month a year ago. (U.S. Census Bureau)

NOTED

Ace Hardware Corporation says it’s hiring 30,000 employees this summer through the U.S., adding to the ranks of its retail stores and distribution centres. This comes amidst a record first-quarter earnings report and Ace Hardware earning J.D. Power’s highest ranking for customer service among home improvement stores.

The retail hardware and home improvement industry performed strongly during COVID, up by more than 15 percent in 2020 over 2019. Many dealers reported being up by 20 to 30 percent, thanks to huge demand by consumers and contractors alike. This represents a huge turnaround from 2019 when overall home improvement retail sales dipped slightly—for the first time in more than a decade.

These are just some of the statistics and findings in the 2021 Hardlines Retail Report. The report is our annual in-depth look at the size of the retail market for hardware and home improvement sales in Canada.

The report looks at growth within the industry from several angles: based on store type (hardware, building centre, big box) and regionally. Breakdowns of the number of stores by type, according to province, are also found in the 2021 Retail Report. It’s filled with proprietary research on the industry’s biggest retail groups that is not available anywhere else.

The report identifies and ranks the top 20 retail players in the sector. The four leading groups each are analyzed in-depth to explain strategies, competitive advantages, and expansion plans.

Areas of study include:

• The size of the industry year-over-year
• In-depth analysis of the top players, Home Depot Canada, Lowe’s Canada, Home Hardware, and Canadian Tire Retail
• The winning formats—how the independents are faring against the big boxes
• The hot provinces and how market shares have changed by region year over year
• The newest trends and challenges facing the industry today
• Forecasts for the industry in 2021 and 2022

Designed to help retailers and suppliers alike develop their business plans for the year ahead, this year’s report provides valuable forecasts for the industry for 2021 and through to 2022. Forecasts include the estimated performance of the industry’s top four home improvement retailers.

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 pre-order the 2021 Hardlines Retail Report, click here.)

Home Depot has done an end-run around the global supply chain headaches that continue to plague retail supply. The giant retailer has secured its own ship.

“We have a ship that’s solely going to be ours and it’s just going to go back and forth 100 percent dedicated to Home Depot,” COO Ted Decker told NBC News.

The contracted ship will make its first runs next month. It’s just one of the extraordinary steps the company has taken to mitigate disruptions to supply caused by the pandemic. And it should have no trouble filling the ship. According to the Journal of Commerce, Home Depot is the third-largest U.S. importer by volume of ocean containers. (Lowe’s is number four.)

The move was made as the flow of raw materials—and the goods they are made into—remains sporadic and backlogs are daily occurrences. Nor is the problem exclusive to home improvement: furniture, consumer goods, electronics, and shoes are just some of the other areas affected.

Now, a new outbreak of COVID-19 is spreading through Southern China, creating concerns that factory production in that country will get disrupted even further. Meanwhile, shipping rates are climbing, with the cost of a 40-foot container up more than 150 percent in North American ports.

Orgill continues to beef up its distribution network and the latest addition to its network is a new distribution centre in Rome, N.Y. That facility is now fully operational and will begin servicing customers in an eight-state region as it ramps up operations over the next 10 weeks. Orgill is touting it as the fastest start-to-finish completion of a ground-up DC in the hardware wholesaler’s modern history.

The Rome site is Orgill’s eighth DC, joining existing facilities throughout the U.S. and Canada, including two, in Post Falls, Idaho, and London, Ont., that serve Orgill customers in this country.

“We are extremely pleased that our Rome distribution centre is now online to provide even better service, speed, and responsiveness to our customers,” said Boyden Moore, Orgill’s president and CEO, in a release.

The newest facility will serve Orgill customers throughout New York, Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, and northeastern Pennsylvania. It effectively doubles Orgill’s distribution capacity in the region.

Plans for the 780,000-square-foot facility were first announced in the spring of 2019 as a way to better accommodate Orgill’s growth throughout the Northeast and Mid-Atlantic regions. However, according to Randy Williams, Orgill’s executive vice president of distribution, the impact of the new DC will be felt beyond its immediate service area, creating a “ripple effect” on its other distribution centres. “In reality, Rome will create greater capacity at almost all of our DCs and allow us to better service our growing customer base across much of our service areas.”

But the new DC will not impact distribution to Orgill’s Canadian customers, who will continue to be served out of Post Falls and London.

Williams also says the state-of-the-art Rome facility will serve as a proving ground for new distribution and logistics best practices that Orgill can learn from and roll out to other DCs in the future.

For example, the Rome distribution centre was designed using what’s known as a very narrow-aisle (VNA) layout. True to its name, this format uses aisles that are more narrowly spaced and special equipment to navigate those aisles. The narrower aisle spacing allows for more merchandise to be stocked in less space.

“In addition to the VNA layout, the Rome facility also takes advantage of features such as utilizing a multi-tiered conveyor system instead of the traditional spiral conveyor. The multi-tiered system is more efficient and helps reduce any unwanted slowdowns if there are any issues with the conveyor,” says Mark Scanlon, Orgill’s vice president of northeast distribution.

Sexton Group is going ahead with a series of virtual events, dubbed the Spark Series, to stay in touch with its member dealers and to keep them informed of current issues and trends. The virtual aspect got support based on feedback from Sexton’s first virtual AGM, held in January. It’s further supported by the advances in digital communications that Sexton has made under COVID to keep members informed.

Under the series, three virtual learning events have been held so far. The kick-off was a day-long event with key vendor partners sharing new products and market information. “This is another way we offer exceptional value to our members by presenting timely topics that affect their business,” Eric Palmer, VP and general manager, said in a release. “It’s a great channel to reach members across Canada and provide updates on the market, product information, and much more.”

The second event featured critical information on cybersecurity awareness, a growing concern for businesses of all sizes. The most recent Spark event, held last week, was on wood commodity, hosted by Don Humphrey, Sexton’s national commodity wood manager.

The move by Sexton reflects the hesitancy of Canadian companies to go live prematurely, even as shows in the U.S. are opening up. For example, the National Hardware Show will be held in Las Vegas in October. But back home, BMR confirmed that its dealer show in November will be virtual again this year. Lowe’s Canada has just announced that it, too, will hold its RONA Buying Show virtually in September.

The Spark Series will pause during the summer months, but it will return in the fall with a new series of topics to help members’ businesses.

DID YOU KNOW…?

… that the newest episode in the Hardlines Podcast Series features part two of our interview with Lowe’s Canada president and CEO Tony Hurst? In this latest instalment, you’ll hear about the strategies for leveraging Lowes Canada‘s unique multi-banner approach and the advantages of the affiliated dealer program under the RONA banner. Hurst also shares his thoughts on leading the company during his first year and a half during the pandemic. Listen here—and join our mailing list so you don’t miss out on future podcasts!

RETAILER NEWS

Federated Co-operatives Ltd. is funding 15 local projects in Western Canada through its Co-op Community Spaces initiative. This year, the organization is providing $1 million in funding for local projects like restoring a natural green roof on an interpretive centre in Stonewall, Man.; building a multi-use trail network along the North Saskatchewan River near Langham, Sask.; a covered outdoor pavilion in Camrose, Alta.; and a community garden and learning space to provide food education in Langley, B.C.

TIMBER MART’s newest member is K.G. TIMBER MART Ltd. in Prince George, B.C. Owner Bruce Kidd has been in the construction business for over 30 years. The new retail business will fall under the Kidd Group of companies, which owns other businesses in Prince George related to construction, real estate, fuel, convenience stores, and car washes. K.G. TIMBER MART will serve contractors and residential builders out of its 3,000-square-foot retail space and storage buildings.

Lowe’s Canada says its RONA Buying Show will return this year as an online event only. It will run from October 18 to December 3. The event is an opportunity for RONA dealers to meet with various suppliers, benefit from expert advice, and get a sneak preview of the spring and summer 2022 product lineup.

TORBSA has announced that Peridot Supply in Brampton, Ont., is its newest shareholder member. Peridot was founded in 2020 by Douglas Brown Jr., after more than a decade of working within the building materials distribution business. The business will focus on servicing the commercial and residential roofing markets across the Greater Toronto Area.

SUPPLIER NEWS

Reed Exhibitions, organizer of the National Hardware Show, has been renamed RX and taken on a new visual identity. “The opportunities to combine both digital and face-to-face interactions have a significant part to play in the global economy,” CEO Hugh Jones said in a release.

Jeld-Wen of Canada is making a multi-million-dollar investment in its Quebec manufacturing facilities. Jeld-Wen’s 150,000-square-foot door factory in Saint-Henri sits on 12 acres of land. The expansion project will add 50,000 square feet to the facility and will be completed toward the end of 2021. In addition, its Saint-Apollinaire, Que., window plant will receive a new automated manufacturing and packaging line, which will help the company meet growing demand.

Vinyl Window Designs (VWD), a Toronto-based manufacturer of vinyl windows, entry doors, and patio doors, has acquired Vinylbilt Windows & Doors. The terms of the deal were not disclosed. Incoming Vinylbilt president Anthony Spatafora will oversee the transition and all employees and management will be retained.

ECONOMIC INDICATORS

Sales of existing Canadian homes fell by 7.4 percent month-over-month in May. That decline follows April’s 11 percent drop. Month-over-month declines in sales activity were observed in close to 80 percent of all local markets. However, on a year-over-year basis, the number of transactions this year represented a 103.6 percent increase. (Canadian Real Estate Association)

U.S. housing starts in May were at a seasonally adjusted annual rate of 1,572,000, 3.6 percent above the previous month and 50.3 percent above May 2020. Building permits were at a SAAR of 1,681,000, down three percent from April but 34.9 percent above a year ago. (U.S. Census Bureau)

U.S. retail sales fell by 1.3 percent in May as Americans began to travel again and to shift spending from goods to services. LBM and garden sales activity were up 21.1 percent from a year ago but down 5.9 percent from April. (U.S. Census Bureau)

OVERHEARD…

“Effective and efficient distribution of products is at the heart of what we do and it is core to how we ensure that our customers can manage and run their businesses profitably. Just because we have one of the most modern distribution networks in the industry doesn’t mean we are going to shy away from making investments and incremental improvements wherever possible.”
—Boyden Moore, president and CEO of hardware distributor Orgill, on the completion of a new DC in the U.S. Northeast.

“The last 15 months have been a challenging time for people across Western Canada. As communities begin to safely re-open, Co-op is providing spaces for residents to rebuild their community connections.”
—Pam Skotnitsky, VP of strategy at Federated Co-operatives Ltd., on the company’s Community Spaces initiative, which provides funding for local projects.

The cost of building materials has risen by between 20 and 30 percent in the past twelve months in the U.S., the National Association of Home Builders and Wells Fargo found in a survey of the association’s stakeholders.

The average response indicated costs had risen by about 26.1 percent. More than one in five respondents said they have seen costs go up by at least 40 percent.

The market south of the border remains heated, putting further pressure on supply and prices. April’s construction spending in the U.S. edged up by 0.2 percent, the U.S. Commerce Department reported, and year over year it was up almost 10 percent.

Likewise, here in Canada, the 2021 Business Conditions Survey by Hardlines found that product availability and high prices are among the top concerns of hardware dealers.

These findings are borne out by industry observers. Oregon-based Random Lengths, which monitors wood markets, said in its recent newsletter that the price of Western SPF two-by-fours dropped for a second consecutive week. Yet cash prices for lumber remain high—nearly four times higher than the June 2020 benchmark.

“My sense is that prices have peaked,” consultant Russ Taylor told The Globe & Mail. “But very few producers are building new mills. They’re buying existing mills and modernizing.”

After 52 years, it was time for a change. That’s how Sam Moncada explains the rebranding of the association that represents Canada’s hardware and housewares vendors and agencies. Last month, the Canadian Hardware & Housewares Manufacturers Association (CHHMA) unveiled a new name, the Canadian Home Products Trade Association (CHPTA), or L’Association Canadienne du Commerce des Produits de Maison (ACCPM) in French.

The change wasn’t considered lightly. Moncada, the president of the association, says it did its homework and that focus groups revealed the distinction between housewares and hardware could be reflected in a more unified way, with the word “home.”

The group also wants to be more encompassing. “That’s why we eliminated the word ’manufacturers’ from the name,” Moncada says.

As the industry has evolved, so has the association. It no longer represents vendors solely. Membership includes manufacturers’ reps and service companies. “We wanted to make everyone feel included so we used ‘trade’ instead. Now we can be more inclusive of the entire sector.”

At the heart of the change is the goal of helping the organization’s membership grow by appealing to a larger audience beyond the vendor community. That will include retailers, dealers, builders, tradespeople, suppliers, and end consumers. Over time, says Moncada, the association could eventually embrace other industries and product markets.

Like just about everything else that’s been happening during COVID, anticipating what the job market would be like now has been a mystery. But as the industry nears the halfway point of the year, companies are finding the need to hire has stayed strong—to say the least.

In fact, given changes in how people work, companies are having difficulty finding staff.

“As an organization, we were expecting things to be a little quiet during the first half of the year, but that’s not really what’s happening,” says Matt Frost, senior recruitment consultant at Lock Search Group, a recruitment firm based in Toronto. Frost’s specialty is in the home improvement and building supplies space.

“There’s been lots of activity within the industry, whether that be companies amping up their online presence or tapping into heightened sales activity thanks to the rise in home renos.”

Wolf Gugler, president of Wolf Gugler Executive Search, is based in Oklahoma. Although the company is based in the U.S., Gugler built his career recruiting in Canada for hardware vendors and retailers alike. “Yeah, I’m busy. On both sides of the border,” he says. “I’m just closing a search for a lumber trader at a Canadian group, and a director of national accounts role for a vendor in the U.S.”
 
As business in the hardware and home improvement sector has remained buoyant, lockdowns are lifting and the sector is expected to stay active. But that’s leaving some companies playing catch-up. Frost says a lot of organizations identified previous blind spots within their companies during the pandemic, especially in areas like their omnichannel environment.

“We’re also seeing companies building growth plans to expand their field teams as our economy continues opening up a little more because they want to gain access to top talent on the market before their competitors do,” Frost notes.

Gugler says most of the positions he’s hiring for are new roles, after so many companies held back under COVID. “The demand in the market and the uptick in the business has increased the need,” he adds. “These companies may have the tactical strength already, but they needed support on the strategic side, areas like marketing and promotion.”
 
While this may sound dire for companies that want to hire, Frost points out that from a candidate perspective, there is plenty of good talent out there. Many were let go due to the pandemic and are now looking for their next opportunity.  “The second half of the year, which is really just around the corner, is going to be busy, so that’s a good thing.”
 
The last word can go to an HR director of a major hardware manufacturer, who spoke with us off the record. Companies will encounter a lot of people who couldn’t or wouldn’t work during the year of the pandemic, whether to look after kids or parents or to protect themselves because of age or pre-existing conditions. “Expect a lot of gaps on resumés,” they say.

The Home Depot Canada continues to ramp up its services for pros and contractors. The pilot of a same-day delivery service exclusive to pros is being tested in some Toronto-area stores is just the latest example.

The service can deliver orders of any size, including bulk items, within two hours. Delivery rates are based on the postal code. Four stores in the Greater Toronto Area currently offer the service, each with its own delivery team of two drivers. Each crew uses Sprinter vans, the same vans used in Home Depot’s rental service. Home Depot can also provide its flatbed service as required for larger orders.

The company has plans to expand the service to other Home Depot stores over time.

You won’t find the program online. Right now it’s an in-store service only, managed through each store’s pro desk staff. This allows Home Depot associates to enter pro customers’ orders on-site and then direct those orders to the delivery crews.
 
In the pilot phase, there is no minimum order. The store’s delivery team will pick, load, and deliver orders of any size. Orders deemed too small for the new service will be redirected to Home Depot’s existing express delivery channel.

The pilot program has been in place since February and the retailer is working to expand the volume within the four pilot stores. , Home Depot plans to tweak the service before expanding it, incorporating feedback from both the stores and the contractors themselves. The company says that it will then get the service online, which will enable the opportunity to leverage any store for product and delivery.

At TORBSA Ltd., Gary Sangha of Crown Building Supplies Ltd. in Surrey, B.C., has been elected as chairman of its board for the year 2021. In addition, the 2021 board of directors includes past chairman Steve Guglietti, Pro Con Building Supplies, Brampton, Ont.; vice-chairman Michael Burkart, Bernardi Building Supplies, Mississauga, Ont.; treasurer Len Hewson, Hewson Brothers Building Supply, Cambridge, Ont.; vice-chairman of operations Dante DiGiovanni, Blair Building Materials, Maple, Ont.; and secretary Greg Drouillard, Target Building Materials, Windsor, Ont.

DID YOU KNOW…?

… that nominations for the 2021 Outstanding Retailer Awards are due June 25? All Canadian hardware and home improvement retailers and managers who have operated under their current ownership for at least two years are eligible. Dealers may submit their entries directly or their chain or buying group head offices may select their best dealer(s) and prepare their entries in collaboration with the dealer. Click here for more information and application forms (en français aussi).

BMR Group will hold its buying show in a virtual format for a second consecutive year, the company has announced. The decision was based on the uncertainties surrounding the health measures that will be in effect in the fall and the limitations that still apply today in relation to business gatherings. The group says it has “decided to err on the side of caution.” In addition, BMR reports positive results from its fall 2020 virtual show, so it’s working to determine the format of this year’s event to optimize the experience for its member-dealers.

TIMBER MART has entered a partnership with Toronto-based international payments and foreign exchange firm Dunbridge Financial. Dunbridge will offer all TIMBER MART members access to foreign exchange, global payment and receipts, and currency risk management protection. The service is available to all TIMBER MART locations across Canada and includes secure money transfers for all foreign purchasing and revenue repatriation needs. The partnership is intended to enable foreign hardware and LBM suppliers to enter the Canadian market more easily.

Dollarama reported Q1 earnings of $113.6 million, compared with $86.1 million a year ago, while sales rose 13 percent. Earnings of $0.37 per diluted share were about in line with analyst expectations of $0.38 and above $0.28 in 2020. Comp sales, excluding temporarily closed stores, rose by 5.8 percent. The Montreal-based discount retailer’s sales momentum took a hit from retail restrictions put in place during the stay-at-home order in Ontario, which is home to 40 percent of its stores.

W.W. Grainger has announced the publication of its 2021 corporate social responsibility report, which is now online. It’s the 10th annual edition of the report, which outlines the company’s commitment to addressing key environmental, social, and governance (ESG) concerns.

Key to the report is the company’s materiality assessment, which was updated this year from the inaugural assessment in 2018. Customers, suppliers, investors, community partners, and team members contributed to this assessment, which highlights topics such as diversity, equity and inclusion; energy and emissions; and product quality.

CORRECTION: Our survey article on dealer recruitment efforts in Quebec in last week’s edition had some errors. One of the recent signings by Home Hardware was a hardware store in Laurier-Station. It is 7,000 square feet in size, not 1,000. Another, Quincaillerie Y. Gosselin et Fils Ltd. in Frelighsburg, is a former RONA dealer, not an independent. Finally, we reported that TORBSA does not have a member in Quebec. We had overlooked that buying group’s signing last summer of Matériaux de Construction Létourneau, based in Waterville, Que.

SUPPLIER NEWS

Canadian point-of-sale software provider Lightspeed POS announced the acquisition of two California-based businesses. The company is set to purchase e-commerce platform Ecwid Inc. for $500 million and NuORDER Inc., which automates wholesale orders, for $425 million. The acquisitions will expand Lightspeed’s reach in the retail sector and make it a potential rival to Canadian giant Shopify.

The announcement late last month of Natural Resources Canada’s Canada Greener Homes Grant generated enough buzz to crash its website, but concerns remain about the program’s parameters. Homeowners must make a considerable up-front investment before they see any reimbursements, including paying for two energy audits.

OVERHEARD…

“Since there’s a heightened amount of people looking for their next career opportunity, it’s becoming even more challenging for smaller HR teams to dedicate the required time to proactively chase down top talent.”
—Matt Frost, senior recruitment consultant at Lock Search Group, on the challenges of finding the right candidate without the help of an executive search firm.