Kevin Macnab, president and CEO of Home Hardware Stores Ltd., announced last week his intention to retire. He made the announcement at the company’s annual general meeting on May 8.

Macnab took the helm at Home Hardware in October 2018 and during his tenure there navigated the company through major changes in every aspect of the business, from fulfilment to staffing and organization. He successfully brought the company to its 60th anniversary this year—he was only the fourth CEO at Home Hardware in all that time.

Under his tenure, the company moved forward on its then-new repositioning as a retail company, shifting the strategy from operating as a wholesale company. That process drew a lot of attention to Home Hardware, as it worked to compete in an evolving retail playing field that was upset even more by the Covid pandemic.

Macnab says he has loved retail throughout his career, which has included key roles at Marks & Spencer and almost 20 years at Toys “R” Us. There, he served as both lead for the company in Canada and as president of the international division before he moved to Home Hardware Stores.

“I have long planned to retire no later than my 65th birthday and, after some reflection, I believe that now is the time to think about this next phase of life,” Macnab said. “I have had a 37-year career in retail and have felt a passion for it since day one.”

“On behalf of our dealers and team members, I want to thank Kevin for six years of dedication to Home Hardware,” said Christine Hand, chair of the Home Hardware board. “His commitment to our organization and the retail industry at large is nothing short of inspirational and we look forward to celebrating his retirement.”

No firm timeline has been set for Macnab’s departure, but he says he cares deeply about the continued success of Home, its dealers and team members, and intends to stay on during the board’s succession process to facilitate a smooth transition when his successor is named.

“I am thrilled to have worked alongside the dealers and our team members for the past six years and can see a bright future for this great company.”

McMunn & Yates, the home improvement chain based in Dauphin, Man., has 22 stores in western Canada, with 16 of them in its home province of Manitoba. The stores represent more than eight percent of that province’s home improvement sales (source: the Hardlines Market Share Report). Now, the opening of three new locations expands the retailer’s reach in the West.

“This was our acquisition of the Canadian Lumber stores, owned by Henry and Brenda Friesen, in the southern Manitoba communities of Winkler, Morden, and Altona (shown here),” says McMunn & Yates president Jason Yates. The three stores are near the south end of the province of Manitoba, not far from the U.S. border. They had comprised the business that was founded in 1987 by Henry Friesen and his father Harry Friesen. When the Friesens decided to sell their shares, McMunn & Yates acquired the stores in the summer of 2023.

The majority of McMunn & Yates stores are spread through the centre of the province, including the retailer’s home city of Dauphin, with additional locations close to the TransCanada Highway from Steinbach to Winnipeg to Brandon. The most northerly store is in Thompson, Man. There are also two stores in Saskatchewan and two in northwestern Ontario. The southern expansion takes the company into fresh territory.

“This region is a busy and active area of Manitoba and is a nice fit for our store model,” says Yates.

Even though the acquisitions took place almost a year ago, Yates explains the timing of the recent openings. “We have been working on renovations and merchandising changes the past several months. We coordinated the new store opening sale to be in conjunction with our annual anniversary sale held at our other stores.”

A new report by consumer affairs magazine Protégez-Vous ranks Quebec’s hardware chains in terms of customer satisfaction, and smaller firms occupy the top of the list. G.H. Berger, Canac, and Laferté scored high on product mix, quality, and in-stock quantities.

Hardware shoppers expressed overall approval of their in-store experience, giving an average score of eight out of 10. One soft spot in consumer sentiment is around staffing: the report points to data from Quebec industry association AQMAT that indicates two-thirds of customers want assistance or advice when making purchases.

In the Protégez-Vous survey, a quarter of respondents said finding that help can be a challenge. The trend was most pronounced in big boxes (though Home Depot, which drew modest ratings on that front, was an exception). “When you don’t need a staff member, it’s fine,” said one survey respondent.

While coming in second place overall, Canac stole the show in terms of pricing. “It succeeds in offering the best prices, especially because it orders its products in large quantities,” Protégez-Vous’ Marie-Eve Shaffer noted in a release.

Patrick Morin came close for its value offering. There, a basket of 30 items that cost $675 at Canac rang up at $771. “The prices are competitive at Patrick Morin, but not always,” said one respondent.

The two chains focus on buying local, helping them to avoid international shipping costs, and can store large quantities of product in their warehouses. Both consist entirely of corporate stores, with no independent affiliates.

“They basically cut through the middle men,” AQMAT president Richard Darveau explained to Protégez-Vous, “which allows them to be more aggressive because their purchasing costs are lower.”

Among big boxes, Home Depot came out on top in terms of pricing, with the benchmark basket totalling $773. Still, the study noted that effect was department-specific. Building materials and electric tools were more likely to be priced competitively. Home Depot’s prices for painting and finishing products, on the other hand, were elevated compared to banners like L’entrepôt RONA and Réno-Dépôt.

The magazine also assessed the state of e-commerce in the industry. Two thirds of survey participants acknowledged having shopped in-store without consulting a web site first.

While chains like RONA and Canadian Tire may make up to a tenth of their sales online, Hardlines president Michael McLarney told Protégez-Vous that “in general, independent hardware stores do less than one percent.”

Canadian Tire Corp. has seen tremendous growth in its loyalty program, Triangle Rewards, and that growth was spurred by the rise in online selling through Covid. The brilliance of the program is that it spans the range of Canadian Tire banners, including Sport Chek and Mark’s, and lets shoppers collect points from any of these stores. Now, following a year where Canadian Tire, like so many other hardlines retailers, saw sales slump (or normalize???—Editor), the company is putting even more emphasis than ever on its points program. It released its first-quarter results late last week, indicating that it still struggles to rebound from the Covid fall-off effect “in a challenging consumer demand environment,” according to its Q1 results release. Comps for the whole company were down 1.6 percent, with the Canadian Tire Retail stores down 0.6 percent.

The importance of Canadian Tire using every weapon in its arsenal becomes even more acute. And its loyalty program is a big part of that arsenal. The retailer is holding what it calls “our biggest rewards event of the season” with a series of promotions that will give shoppers the chance to earn multiple rewards, called stacking, with the “Triangle Max Stack Event.” From May 9 to May 16, Triangle Rewards members have access to savings in-store and online.

According to a release, “This one-of-a-kind event allows Canadians to purchase amazing items at reduced prices, stack exclusive offers on select products and earn 15-times to 50-times bonus CT money that they can then use towards the purchase of other items across their favourite Canadian Tire banner store.”

One promotion, held this past weekend, let users earn storewide bonus offers: members who spend $150 or more will earn $30 in additional CT Money and those purchases over $250 will earn $50 in bonus CT Money. In addition, an assortment of stackable offers will be available throughout this week, including the ability to earn extra points on specific products.

PEOPLE ON THE MOVE

Alex Yakovyshenko, CEO and general manager of Haney Builders’ Supplies in Maple Ridge, B.C., has been named chairman of the board of the Building Supply Industry Association of British Columbia. He takes over from Gary Sangha of Crown Building Supplies in Surrey, B.C.

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RETAILER NEWS

Canadian Tire Corp.’s first-quarter results show the company is still recovering from the drop-off in sales post-Covid, but its hardware business managed better than other divisions. Revenue was $3.52 billion, down 4.9 percent from $3.71 billion in the same period last year. Comparable sales for the whole company were down 1.6 percent, while comps at Canadian Tire Retail stores were down only 0.6 percent. Essential categories at CTR were up two percent, led by automotive. Discretionary categories were down overall, but seasonal and gardening categories grew. Despite the continued sluggish results, the company enjoyed “product margin appreciation for the quarter, while also reducing inventory levels,” said Greg Hicks, president and CEO of Canadian Tire Corp.

Quebec dealer Matériaux Pont-Masson is making buzz with its latest marketing campaign, a tribute to the 1977 film Slap Shot. The BMR-affiliated store network has partnered with Gravité Marketing since 2019 and the idea for the spot came out of a brainstorming session between the agency and the retailer. Although an American production, Slap Shot became a cult classic in Quebec due to its casting of local talent and extensive vernacular French dialogue.

Amazon’s first-quarter net sales increased 13 percent to $143.3 billion, compared with $127.4 billion in the first quarter of 2023. Amazon is global, but North American sales kept up, posting an annual increase in the quarter of 12 percent. The company’s operating income increased to $15.3 billion in the first quarter, more than three times the profits of $4.8 billion in the first quarter of 2023.

Canadian Tire and Canac have aligned with the nonprofit Les Produits du Québec to display that organization’s three certification labels on applicable products in the retailers’ stores. They join such retailers as BMR and Walmart who are already partnered with the organization. “They have wind in their sales and we want to be part of their growth,” Patrick Delisle, Canac’s marketing director, told Le Journal de
Montréal.

AD reports that member sales in the first three months of 2024 hit a record $19.5 billion, up seven percent across AD’s 14 divisions in three countries. Same-store sales increased by two percent in Canada, three percent in the U.S., and five percent in Mexico. Member purchases grew by two percent to $4.7 billion. In Canada, AD’s retail home improvement business is represented by its Building Supplies Division, which consists mainly of members of the former TORBSA buying group.

For the first quarter of 2024, Grainger had sales of $4.2 billion, up 3.5 percent, or 4.9 percent on a daily, organic constant currency basis. Sales in the quarter increased 3.5 percent. Operating earnings were $669 million, down 1.6 percent.

Ace Hardware in the U.S. has debuted its own private-label line of barbecue sauces and rubs. The mid-priced assortment is called Loud Mouth, and it became available on April 25.

U.S. farm and hardware retailer Tractor Supply Co. reported that net sales for the first quarter of 2024 increased 2.9 percent to a record $3.39 billion, from $3.30 billion in the first quarter of 2023. The increase was driven by new store openings and growth in comparable store sales, which were up 1.1 percent. Gross profit increased 4.4 percent to $1.22 billion.

Terry Deane of Southridge Building Supplies in Surrey, B.C., and a former owner of Hollyburn Lumber, has died. Born in Montreal in 1946, Deane was considered a pioneer in the building supply industry in the Lower Mainland. He started his career at Seaford Sales in North Vancouver in 1965. In 1975, he moved to Hollyburn Lumber, and became a partner in the business two years later. In 2002, he and his four sons established Southridge Building Supplies. Deane leaves behind his wife, Wilma, four sons and a daughter, as well as eight grandchildren and five great grandchildren.

Taiga Building Products reported Q1 net sales of $393.6 million, down four percent from $408.5 million a year earlier. The decline was attributed to lower sales volumes of commodity products. Net earnings fell to $12.8 million from $13.5 million in the comparable period of 2023.

Canfor Corp. will acquire the El Dorado lumber plant from an Arkansas affiliate of Domtar Corp.  for $73 million. According to Canfor, it will raise the mill’s capacity to 175 million board feet per year through planned upgrades. Meanwhile, the Vancouver-based company narrowed its Q1 loss to $64.5 million, from $142.0 million in the comparable period of last year. Sales for the quarter edged down to $1.38 billion from $1.39 billion.

Western Forest Products Inc. reported a net loss of $8.0 million in the first quarter of 2024, compared to a $17.7 million loss a year earlier. Revenues of $239.5 million were down from $263.8 million. At the same time, the company announced the indefinite curtailment of its Alberni Pacific Division facility.

Home Depot Canada is currently getting its newest facility up and running at full capacity to fill in an important part of its supply chain. The flatbed distribution centre, erected last year in Mississauga, Ont., and now being outfitted, is designed to get large loads of products directly to contractor jobsites. The 300,000-square-foot DC shares space with an equally large bulk distribution centre, which ships commodities to the stores themselves.

Canada’s largest home improvement retailer remains committed to its regular business and expects to build more stores to serve those channels, but Home Depot recognizes the importance of the pro customer and sees huge growth potential with it. In fact, in the U.S., 10 percent of its customers are pros and builders, but they account for almost 50 percent of Home Depot’s sales. According to Michael Rowe, president of Home Depot Canada, the Canadian stores lag slightly behind the U.S. stores when it comes to attracting pros, but that’s changing and the new FDC is key to the strategy to make that happen.

“The ratio of pros here in Canada is very, very close now. We’re not far behind.”

The facility, which has a fleet of large flatbed trucks delivering products by next day if orders are place as late as 4 p.m. (a deadline the company is working to push to 8 p.m.) will go a long way to putting Home Depot on the radar of Canadian contractors. And as the country expands its new housing programs, the potential is huge—but Rowe is still not satisfied. “There’s more to do, clearly.”

That includes the likelihood of even more FDCs in Canada. There are already 17 in the U.S., with more planned. “We’ll add more BDCs and FDCs in smaller markets.” Rowe wouldn’t confirm other locations or timelines—“We’re largely figuring out ourselves how many FDCs”—the obvious suspects are expected to be on the list: Vancouver, Edmonton, possibly Calgary, and Montreal. The company also renamed its contractor loyalty program to ProExtra to conform to the U.S. program. “Renaming this was quite an accelerator for us,” he says.

While the year has started slow, there is opportunity ahead for the retail home improvement industry as Canada shapes its housing policy to increase the number of homes in this country. And Home Hardware CEO Kevin Macnab says the timing is right.

“We all know additional housing in Canada is an absolute necessity. We can and will play a part in helping address the housing shortage by providing expert advice and quality price. But in addition to that, we have a national partnership we’ve established with Skills Canada to help develop skilled tradespeople—because, of course, the country needs that.”

That expected push to build more housing, he adds, will be good for Home Hardware and for the entire industry. “That’s going to benefit us and benefit the sector.”

Michael Rowe, president of Home Depot Canada, agrees. Canada’s commitment to build more housing represents “an opportunity in the Canadian marketplace.” His company is working to gear up its services to sell to larger pro customers, including builders and the commercial or maintenance, repair, and operations (MRO) segment, which addresses the servicing and care of large institutions and civic projects. This is a market, he says, that Home Depot wants to grow.

Both retailers are doing more to address the heavy pro market. Home Depot Canada has opened its first flatbed distribution centre (see story above) to get large commodities deliveries to jobsites within 24 hours or less.

Home Hardware has signed on as a presenting sponsor of the Skills Canada National Competition for 2024. Skills Canada is a not-for-profit organization that actively promotes careers in the skilled trades and technologies to youth and their communities in Canada. The competition will take place in Quebec City on May 30 and 31.

Members of AQMAT, the Quebec Hardware and Building Supply Association, heard a presentation from president Richard Darveau ahead of their annual general meeting last week. Darveau outlined the highlights of the latest edition of the organization’s annual “Family Portrait” of the industry that included tracking movement between the province’s two main banners, RONA and BMR.

With a showman’s flair, Darveau donned a series of coloured novelty eyeglasses to illustrate looking at the industry through different lenses, such as rose-coloured for the positives of the past year, black for the negatives, green to consider an ecological perspective, and a distinctly Québécois blue when examining the impact of buy-local initiatives.

The document offers an overview of the main retail banners for the year, like the Hardlines Retail Report does for Canada as a whole. The Quebec report covers developments including banner changes and store closures, as well as data on the activities of the small number of true independents.

Darveau said it’s a key tool in a world where big “Big Data” is increasingly a force to be reckoned with. “The data is more complex, more varied” than ever, he explained. “There are people my age in this room who remember the ‘good old days’ when everything was slower.”

He sketched a picture of an industry with a sales tally of about $19 billion in a year that saw 18 stores close. In the same period, eight dealers changed banners and another nine stores got new owners while remaining under their existing brands. Five former true independents signed onto banners, while eight retailers shed theirs to strike out on their own. Among six new store openings were a new Canac in the port of Contrecœur, Que., and the largest Patrick Morin to date in Brossard, on Montreal’s South Shore.

Across Quebec, corporate stores comprise some 56 percent of dealers. Independent affiliates make up another 40 percent, while 3.5 percent of stores are unaffiliated. RONA continued to dominate market share in the province, accounting for over a third of total sales. Home Depot was a distant second at just under 15 percent.

Darveau stressed that having an accurate picture of the industry as a whole is key to countering misinformation. As a sports enthusiast, he also compared it to training the body in order to remain competitive. In developing the report, he said, AQMAT strove to be “fair and equitable to all our members,” preferring to work with self-reported figures from head offices wherever possible.

Pedro Da Silva has been named vice-president, industrial divisions, at Goodfellow Inc. Da Silva has been with Goodfellow for almost eight years, most recently in the role of general manager.

Joel Pletch, store manager at Walkerton Home Hardware in southwestern Ontario, has won the North American Hardware and Paint Association (NHPA) 2024 Young Retailer of the Year Award. The Young Retailer of the Year program, now in its 28th year, identifies and promotes the next generation of aspiring independent home improvement, paint, and decorating retailers. It recognizes individuals aged 35 and younger throughout the U.S. and Canada.

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RETAILER NEWS

Kent Building Supplies has opened a new store on Findlay Blvd. in Riverview, N.B. It replaces another location that is now closed on Coverdale Rd. The new location ramped up last month with a contractor event before its grand opening. It hosted some 30 vendors and attracted 250 pro customers along with giveaways and draws.

Peavey Industries recently celebrated the grand opening of a new Peavey Mart store in Steinbach, Man. The new location clocks in at 28,800 square feet, plus an additional 1,440-square-feet greenhouse. A seasonal section will cater to homeowners’ lawn, yard, and garden needs before converting into a Christmas and toy department later in the year.

RONA inc. has welcomed six new dealers as independent affiliates. They are RONA Quincaillerie Saint-Jean-Baptiste in Quebec, RONA Manotick and RONA Timmins in Ontario, RONA Lac La Biche and RONA Olds in Alberta, and RONA Agassiz in British Columbia.

A Stratford, Ont., Giant Tiger store is among the latest retailers to get rid of its self-checkout stations. Owner Scott Savage told CBC News that the decision was motivated not by loss prevention concerns but by feedback from his clientele, many of whom are seniors. “The biggest complaint you have from everybody is, ‘You don’t pay me to work here,’ ” he said.

All through May, customers who visit a participating RONA store will have the opportunity to donate at checkout to support the construction or renovation project of an organization in the province. The RONA Foundation’s Build from the Heart program aims to help organizations across the country carry out projects to revitalize living environments or make it easier to access housing for Canadian populations in need. Last year, the RONA Foundation donated $500,000 to community projects across Canada. The goal this year is to double that amount.

Yantzi Home Building Centre and Tavistock Home Hardware in southwestern Ontario have a new official shareholder of both businesses. Steffan Yantzi, 27, officially became the dealer-owner on Jan. 1. Yantzi Building Supplies is in its 73rd year of operation and joined the Home Hardware banner in 2016. The family purchased Tavistock Home Hardware in 2018.

AD Canada has been recognized as a Great Place to Work for the second year in a row, according to the Top Workplace rankings by Energage LLC, an HR technology company. In addition, AD Canada has been recognized in the ranks of 2024 Best Workplaces in Canada among firms with fewer than 100 Canadian employees, ranking 10th nationally for its size category.

King Marketing’s team of full-time sales representatives gathered for their national sales meeting in Niagara Falls last week. The event culminated with King’s awards night that celebrated the achievements of the sales agency’s reps across the country. Jeremy Ross won the Peddler of the Year Award “for his exemplary work on behalf of his represented vendors,” the company said in a release.

The governments of Alberta and Saskatchewan have awarded $595,000 to fund programs for the building supply industry and directly support members of the Western Retail Lumber Association. Liz Kovach, WRLA president, and Andrew Reimer, WRLA Chair, had the opportunity late last month to thank the Alberta government personally for “enabling us to put ambitious new programs into action.” The first such effort will be to add a permanent Workforce Development position to the WRLA team.

“We live in an ecosystem where everyone interacts together. And we’re the only retail sector with a vertical structure.”
—Richard Darveau, president of Quebec trade association AQMAT, describing the unique position of the home improvement retail marketplace.

Home Hardware is pulling out all the stops during its 60th birthday year. The company, which is one of Canada’s top four home improvement retailers, got its start in the small town of St. Jacobs, nestled in the heart of southern Ontario’s Mennonite country, back in 1964.

Today, the organization generates estimated sales exceeding $9 billion (source: the Hardlines Retail Report) from more than 1,000 stores. Those stores represent a variety of formats under the Home Hardware, Home Building Centre, Home Hardware Building Centre, and Home Furniture banners.

Here are some of the initiatives planned for the year:

• Nostalgic brand campaign featuring Home’s evolution over the last 60 years
• 60th anniversary sale from April 25 to May 8 that features big discounts off BeautiTone Designer Interior & Exterior, Delta Faucets, and Mosaic Cookware & Bakeware
• National contest from April 25 to May 22 that lets customers enter a draw to win one of two $5,000 grand prizes, or one of fifty $1,000 gift cards
• Scene+ “60 Bonus Points Promotion” whereby customers can earn 60 bonus points on purchases of $50 or more
• Social media contests starting April 26, such as Home Hardware Trivia, and inviting Canadians to share their memories of Home Hardware for the chance to win a prize

“This milestone is a testament to over six decades of dedication and hard work by our dealers and team members across the country,” said Kevin Macnab, president and CEO of Home Hardware Stores Ltd. “While celebrating 60 years of rich history, we’re also focused on continued growth to ensure we keep delivering the exceptional customer service we’re known for in communities across Canada.”

In 1964, in St. Jacobs, Ont., Walter Hachborn, Henry Sittler, and silent partner Arthur Zilliax laid the groundwork for what would become Canada’s largest dealer-owned home improvement retailer. With a history that spans 60 years, Home Hardware Stores Ltd. has a legacy to be proud of. That legacy includes grassroots growth and expansion that now represents more than 1,000 stores nationwide.

Throughout that time, the company has had only four CEOs, starting with Hachborn himself. Hardlines spoke recently with Home Hardware’s current president and CEO, Kevin Macnab, about what’s in store for both customers and Home Hardware dealers themselves during the anniversary year ahead. That includes a campaign that focuses on how Home Hardware dealers and head office workers support their local communities.

“We’ll be highlighting the incredible way the Home team, our dealers and corporately, give back to their communities and we’re going to commemorate 60 years of business with 60 stories of goodwill that will be shared both internally and with community media,” he says. “We’re doing a lot this year, but I particularly like that 60 Acts of Kindness Campaign.”

Macnab says customers will see special sales and promotions to celebrate the 60th and promises some great deals for customers. “I’m hesitant to call our strategy high-low. I would say we’ll have really strong promotions through this event.”

He expects the events to create pride for the dealers. And the Homecoming dealer market in September in Toronto will be an occasion for further celebrating their collective achievements. The festivities are a welcome addition for an industry that is coming off a slow year in 2023 and a soft start to 2024. Macnab points out that the company has been supporting the dealers to ensure their growth.

“The key to our success is our dealers and we’ve been working really hard to support them, enabling them to grow their businesses with their customers, or growing their footage.”

The anniversary milestone comes amidst a time of great change for Home Hardware. The company was historically focused primarily on its shareholders—the dealers themselves. But in a shift that actually began under Macnab’s predecessor, interim CEO Terry Davis, a new strategy was begun to put the customer front and centre. As the company phrases it, the move has been from being a hardware wholesaler to a retail company.

“Over the last few years we’ve been very focused on the end consumer to better support our dealers. We’ve made changes to strengthen our product assortments as well as implementing the Scene+ loyalty program, over the last few years,” Macnab says. “So we have made changes—and change is never easy. And sometimes there’s pushback. But what I would tell you—we’re at a point now where we’ve been through the biggest elements of change and dealers are seeing the benefits of the work we’ve done.”

Macnab adds that the company conducted its first-ever dealer satisfaction survey last year, “and we received positive results from it.” All told, he is pleased with the birthday plans, and the array of advertising and promotional programs, “all those things that generate excitement for dealers and customers.”

In conversation with Hardlines, Home Hardware president and CEO Kevin Macnab talked last week about how the company’s newest milestone has served a larger purpose.

“We’ve used our 60th anniversary to clarify Home Hardware’s purpose, vision, and mission. These are Home’s guiding principles, which will drive our decision making,” Macnab says. “They create unity and understanding throughout the company.”

He sees these guiding principles as crucial to driving the company into the future following a series of changes within the company—changes, he says, which are largely now in place. “Our purpose, simply put, is to improve life at home. Now, that can be home with a capital ‘H’ as part of our dealer network. But it also means a store experience with lower case ‘h’ for our customers to improve life.

“Our vision is for home to be Canada’s most trusted and preferred home improvement experience. So we’re very focused on experience,” he says. “And our mission is to serve communities through our strong independent dealer network, by providing superior home improvement experiences with helpful advice, competitive prices, and quality products.”

Macnab suggests that redefining these aspects of the company’s culture after changes the company has been through in recent years is fitting. “Like I’ve said, we’ve made change, and we’ve been through the most significant element of change.”

Orgill Inc., the Memphis-based hardware wholesaler, has a range of customers in Canada. It supplies independent hardware and building supply dealers in every region of the country. Orgill has sales of close to $4 billion, shipping more than 75,000 SKUs from seven distribution centres in the U.S. and one in Canada. But despite its size, this company is working hard to keep up its technology advancements.

Boyden Moore, Orgill’s president and CEO, spoke with Hardlines during the company’s Spring Dealer Market, held in Orlando, Fla., earlier this year. He shared how Orgill is moving forward, with a strategy that has included a new tech lead, dealer-targeted online supports, and even robots.

“A few years ago we brought in a new CIO/CTO role, Mark Hamer,” says Moore. “His charge from me was to modernize our technical infrastructure. He’s made some big gains for us.”

Hamer’s mandate was to learn about the tech that Orgill’s vendors—and customers—are using, understanding every part of the technology within the company’s distribution system, “and every part of the business,” Moore points out. A year later, Hamer came back to Orgill’s executive team. “He put a plan together, a path to mastermind data management to really get the company prepared to take advantage of some of the technology we weren’t taking advantage of.”

Now, even AI is being used. This includes 70 robots at Orgill’s DC in Tifton, Ga. (shown here). The robots are doing demand picking and they work overnight moving stock around based on the next day’s orders. “So the pick cycle is efficient when the workers come in the next day,” Moore says. “We’re using artificial intelligence to see how the pick waves are coming and how they could be rearranged in the modules to be the most efficient when the people come in.”

Technology has been updated and refined for Orgill’s dealer customers, as well. Dealer services include an integrated e-commerce product that is hosted on a dealer’s own website. The platform gives customers access to anything the dealer sells, not just the products supplied from Orgill.

“We knew a dealer would not be able to offer a website unless they could offer their whole product range,” says Moore. That e-commerce platform is under constant improvement, he says, with recent enhancements that include making the search engine better and making services easier to use generally.

“There’s just constant development, and we feel like that’s a role we play, to help our dealers be successful. That, of course, is our mission—and it’s not just in distribution services, but whatever else can we leverage on our dealers’ behalf.”

Aaron Jarosz has been promoted to vice-president, contractor services, at The Home Depot Canada. He most recently led Home Depot Canada’s merchandising execution team as senior director, merchandising operations. Jarosz joined The Home Depot in 2011. In his new role, he will lead the pro/home services team and join the leadership team in Canada, led by company president Michael Rowe.

Brett Harrison is the new territory manager at Regal ideas. Based in Winnipeg, he will cover Manitoba, Saskatchewan, and Northern Ontario. He was formerly a project manager at Winnipeg Building & Decorating Ltd.

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RETAILER NEWS

The Canadian Tire store in Innisfil, Ont., has new owners. The store, about an hour north of Toronto, will hold its grand reopening ribbon cutting on May 4. Stephane Diamond and Christine Forget are the associate dealers. Both of them have experience owning Canadian Tire stores in Montreal.

Two stores in Alberta, Medicine Hat Home Hardware Building Centre and Alta-Wide Home Building Centre in Vegreville, have recently converted to the Home Hardware banner. The stores are owned by Lisa and Mark Brumm, who also own a third store in the province, Sylvan Lake Home Hardware Building Centre, which became a Home store in 2023.

RONA inc. has welcomed six new dealers as independent affiliates. They are RONA Quincaillerie Saint-Jean-Baptiste in Quebec, RONA Manotick and RONA Timmins in Ontario, RONA Lac La Biche and RONA Olds in Alberta, and RONA Agassiz in British Columbia. “Since we announced our new business positioning, along with a series of new programs last December at Connexia, our annual dealers’ event, 11 stores have chosen to join the network of RONA affiliated dealers,” Alain Ménard, senior vice-president for affiliate dealers, said in a release.

As part of IKEA Canada’s ongoing commitment to keep prices down for Canadian consumers (including lowering prices on 1,500 products this year), the retailer has introduced new financial services for customers shopping online. Using the Pay in 4 by Afterpay, customers can split purchases into four interest-free payments. The first payment is taken when the order is placed and the remaining three are automatically processed every two weeks. The service is available for purchases between $50 and $1,000 and is currently available for online purchases only.

RONA inc. has completed the sale of its distribution centre in Terrebonne, a suburb of Montreal, to BMTC Group, a holding company in Montreal that has assets in furniture and household appliances retail. The imminent cessation of regular operations at RONA’s Terrebonne facility had been announced back in January. BMTC, in a release, said that the deal cost $96 million before taxes—and RONA has a lease-back agreement, the details of which were not specified.

United Hardware is merging with another U.S. co-op, Do it Best. The merger is expected to enhance efficiency, add buying power, and drive store growth for the dealers. Both United Hardware and Do it Best leadership teams are focusing on a seamless transition so service to dealer-customers won’t be disrupted. All United Hardware stores will maintain their independent brand identities, allowing them to retain their autonomy and individuality within the larger co-operative framework.

West Fraser Timber Co. reported its Q1 sales remained flat at $1.627 billion from the comparable period of 2023. Earnings of $35 million reversed a loss of $42 million a year earlier. In addition, the company has announced the completion of the sale of its Quesnel River, B.C., and Slave Lake, Alta., pulp mills to an affiliate of a fund managed by Atlas Holdings. Both facilities produce bleached chemi-thermomechanical pulp for the manufacture of paper products.

Retail sales edged down by 0.1 percent to $66.7 billion in February. Sales were down in five of nine subsectors, led by a 2.2 percent decline at gasoline stations and fuel vendors. Core retail sales, which exclude automotive and fuel categories, were unchanged. Sales in the LBM and garden subsectors fell by 0.4 percent. (StatCan)

Investment in building construction declined 1.1 percent to $19.3 billion. Spending in the residential sector dropped by 1.2 percent from January to $13.4 billion, led by a $153 million decline in Ontario. In the single-family detached segment, however, investment rose by 1.3 percent to $6.7 billion, with gains reported across the country with the exception of Yukon. (StatCan)

Mike Rowe says Canadians are turning more and more to pros to get their home repairs and renovations done. And Home Depot Canada is evolving to meet that demand. Rowe is the president of Home Depot Canada. In conversation with Hardlines, he shared his enthusiasm for the latest, and likely the biggest, step the retailer has made in recent years to cater to pros more effectively.

That initiative is a new flatbed distribution centre, which opened late last year in Mississauga, Ont., west of Toronto. The 300,000-square-foot FDC (which is twinned with an equally large area for stock and flow-through) receives and fulfils pro orders sent in by area stores. Those orders, typically too big for one store to ship, are instead shipped directly to the contractor from the FDC. By June, the FDC is expected to ship orders on behalf of 54 Home Depot stores in and around the Greater Toronto Area.

Rowe says the FDC is part of an overall strategy that Home Depot has been rolling out in recent years to attract more contractors into its stores. Banner-wide, pros now make up almost 50 percent of sales, while accounting for barely 10 percent of its customer base.

The new DC carries more than 1,000 SKUs, including drywall, insulation, and lumber. The facility started out by offering next-day delivery for orders placed by 1 p.m., and that has now been moved to a 4 p.m. cutoff. In coming weeks, Rowe expects that to be move even later, to 8 p.m.

The rollout of the FDC parallels other pro initiatives. For example, by 2025, Home Depot Canada aims to offer payment on receipt for large pro orders, as opposed to payment at time of purchase. And the retailer is looking at ways to offer fixed pricing on commodities to contractors and builders that are pricing jobs for clients months in advance.

Last week, Chrystia Freeland, minister of finance, presented the federal government’s budget for the 2024-2025 fiscal year. The business community has almost universally given the budget a thumbs down—mostly because of the controversial change to the capital gains tax in Canada.

Freeland announced that, effective June 25, the capital gains tax “inclusion rate” will increase from 50 percent to 66.6 percent. In other words, whereas gains (such as the difference between the sale price of an entity such as a business or building—or shares—versus the original purchase price) were historically 50 percent tax free, now they will be 33.3 percent tax free—and the rest will be treated like income.

If you sell a hardware store or a building supply yard—or a manufacturing operation or sales agency—that will cost you big time. The “Capital Gains Tax Advantage” became a buzzword of sorts since capital gains were introduced by the feds in 1972. Now, the “advantage” is going to shrink substantially.

The Canadian Chamber of Commerce was among many business groups to react negatively to the budget. They said the tax changes added to businesses’ burden in Canada. “We oppose any measure which will increase the costs for businesses and Canadians when both are currently experiencing challenging economic headwinds,” said Jessica Brandon-Jepp, director of the Chamber’s fiscal and financial services policy.

The federal government says the new capital gains rules were necessary to raise $19.4 billion over five years—to pay for, among other things, Freeland’s housing industry subsidies, most of which had been announced prior to the budget announcement.

On the plus side, those housing construction incentives that the budget delivers are in the billions—and the stimulated demand should be a plus for building centres and their vendors. But in paying for that increased spending, in part, through an increase in capital gains taxes, all of the pluses come with asterisks.

Hardlines talked to one concerned building supply dealer, Roy Perkins, 65, who owns a BMR store in Cornwall, Ont. “This store is my retirement fund,” Perkins said. He planned to join a webinar put on by his accounting firm, BDO Canada, the day after the budget, to learn about the implications to his business—and his retirement.

There is some good news in the changes for small businesses owners. Along with farmers, they will see their lifetime capital gains exemption rise about 25 percent to $1.25 million.

RONA inc., has been named one of Canada’s Greenest Employers for a fourth consecutive year. The national competition celebrates employers who stand out for their sustainable development initiatives and environmental awareness efforts.

Canada’s Greenest Employers is organized by Mediacorp. Home Depot Canada and IKEA Canada were also on the list.

While proclamations and achievements such as this one play well with the media and even the shareholders, do they matter to customers? According to Mélanie Lussier, senior director, communications, public affairs, and sustainable development at RONA inc., the answer is Yes.

“Our goal is to let our customers know that we’re doing the right things when it comes to the environment,” she says. “We’re constantly looking for new opportunities to make our practices and operations greener and more sustainable, and this recognition shows that our efforts are paying off.”

The organizations in the Greenest Employer rankings have been evaluated according to the following criteria:

• Unique initiatives and programs developed to care for the environment
• Measurable efforts that contribute to the reduction of the environmental footprint
• The participation and degree of involvement of employees in these programs, and whether they possess any unique skills that positively contribute
• The extent to which these initiatives are linked to the employer’s public identity and serve to attract new employees and customers

RONA says it’s continually working to develop and deploy new ways to reduce its environmental impact. The company stands out thanks to an offering of over 5,000 ECO-branded products available in different categories and in a wide price a range to help customers reduce their environmental impact, a waste management program in its corporate stores, and procurement policies that exceed current regulations.

“In 2024, we plan to launch new initiatives that will reduce the environmental impact of our products, while continuing to consolidate our accomplishments,” Lussier added.

Canada’s conference for the retail, marketing, and technology community, DX3, returned to the Metro Toronto Convention Centre for its latest edition on April 9 and 10. The event featured a full program of keynotes and panels, along with a trade show showcasing service providers in the digital age.

One breakout, on how to maximize full-funnel sales post-Covid, featured Matthew Bergum, country business director at Bosch Power Tools Canada. Bergum is also responsible for Bosch Power Tools’ North American Amazon business and overall e-commerce strategy development. So he was in a good position to discuss some of the challenges his company has faced through the pandemic.

He admitted that the power tool business went crazy during Covid but has since been flat, even stagnant. Dealing with a post-Covid decrease has meant taking a harder look to full-funnel marketing to optimize marketing spends and ROIs.

Bergum said Bosch has stayed focused on its pro business, using targeted marketing through video ads on Prime, and looking to drive new users across all channels by following through the funnel, from the bottom to the top. He said his team is viewing Amazon as more of a publisher or agency than simply a marketplace.

Panelists all emphasized the need for agility. Their attitude was that if you’re not doing it, someone else will. They stressed the importance of adapting to one’s customers and to the marketplace—and using data effectively. Listen, they agreed, to what the marketing stats are telling you. And don’t be afraid to make mistakes. “If you’re not failing, then you’re not innovating.”

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RETAILER NEWS

Castle Building Centres Group has a new member. Eastcut Wood Building Solutions in Trenton, N.S., is owned by Donald MacDonald, who founded the business in 2019. In response to a shortage of tradespeople available to build homes in the area, he began manufacturing pre-built wall, roof, and floor components for modular homes. The business occupies a 100,000-square-foot space.

Canadian Tire has been recognized as one of Canada’s most trusted brands. In Léger Marketing’s Reputation 2024 study, Canadian Tire landed in the third spot, behind international brands Google and Sony. Last year, it ranked number four. Other retailers on the list were Shoppers Drug Mart at number six, Dollarama at number nine, and Costco at number 10.

Wolseley Canada will hold the grand opening of its latest outlet this week in North Surrey, B.C. It’s a 20,000-square-foot facility offering a full range of Wolseley Canada’s plumbing and HVAC products. The facility also includes a studio showroom featuring the latest in kitchen and bath trends and lighting fixtures. The grand opening will take place on April 24.

Amazon has reached an agreement with the Italian state railways to launch a new rail service, which will move products between Amazon’s distribution centres in Italy and Germany. They are setting up two routes: one from Duisburg in Germany to Pomezia in Italy, and one from Herne, Germany, to Verona, Italy. One aim is to reduce the marketplace’s CO2 emissions. Over time, the e-commerce giant intends to increase its shipments to over 100 rail lanes and more than 300 sea routes.

A Miami-area investigation into three suspects accused of stealing $260,000 in merchandise from multiple Home Depot stores has determined that one of the accused works for the retailer—as a loss prevention officer, no less. The Miami Dade Police Department, a local NBC affiliate reports, conducted an investigation into more than a quarter-million dollars of missing merchandise. The three people are accused of stealing products from Home Depot stores throughout Miami-Dade County.

Richelieu Hardware’s first-quarter sales rose by one percent to $407 million, thanks to growth from acquisitions. In the hardware, retailers, and renovation superstores market, sales of $57.3 million were down by $1.6 million compared a year earlier. Canada sales remained stable at $232 million. Net earnings of $15.2 million represented a decline of 35.7 percent.

The number of housing starts in urban centres across Canada rose 16 percent in March to 17,052 units, from 14,756 units a year earlier. The increase was driven by higher multi-unit starts, up 19 percent, but single-detached starts also grew by two percent. Housing starts were 10 percent and 15 percent higher in Toronto and Vancouver, respectively, though single-detached starts declined. Montreal’s edged down by one percent, dragged by lower multi-unit starts. (CMHC)

Sales of existing Canadian homes edged up 0.5 percent between February and March. The actual (not seasonally adjusted) number of transactions came in 1.7 percent above the previous March’s tally. That was a smaller gain than those recorded in the previous two months, impacted by a largely inactive market during the Easter long weekend. (Canadian Real Estate Assoc.)

Peavey Industries, the Red Deer, Alta.-based retail farm and hardware chain, continues to strengthen its network of Ace dealers in this country. As the licence holder to the brand in Canada, Peavey uses its distribution network to supply some 70 dealers that bear the Ace banner on their stores.

According to Doug Anderson, CEO of Peavey Industries, those stores are about equally broken down into hardware, farm, and building supplies. The hardware and farm lines are supplied from Peavey’s distribution centres in Red Deer and in London, Ont., while LBM is supplied through an agreement with Winnipeg-based Sexton Group.

In an exclusive interview with Hardlines, Anderson shared his concerns for the economy, which is affecting retail in general. In addition, many of the farm communities that his stores serve have been further challenged by droughts and water shortages. He identified some growth in the third quarter of 2023, but inflation and high interest rates are impacting customers everywhere. “But we’ve seen some strength in the new year,” he adds.

While his team works with the Ace dealers, the company’s flagship banner, Peavey Mart continues to see growth, as well. He points to a new Peavey Mart in Steinbach, Man. (shown here), which opened late last month. The 28,800-square-foot building features a 1,440-square-foot greenhouse and even has a dog-washing station, sponsored by Purina.

However, continued growth will be driven at a cautious pace, says Anderson. Based on economic conditions, he says he’s “pretty cautious” about more rollouts, and prefers to wait for consumer confidence to return. Add to that the drought conditions that have affected many markets, especially in the West, and also impacted Peavey’s farm and ranch customers. “We have quite a bit of concern on that front. But you still have to feed and contain your animals, so that part of the business remains strong.”

While he sees further opportunities for new Peavey Mart stores across Canada, he stresses that caution he expressed earlier. “It’s just about us making sure that the timing is right—and recognizing that the timing for aggressive expansion is not now.” Looking ahead, however, he does identify both the Maritimes and British Columbia as opportunities for future strategic growth.

Anderson adds that Peavey Mart’s digital presence has been strong, especially following a series of upgrades implemented over the past six months, including better content and enhanced search capabilities, “and customers are responding nicely.”

Lee Valley Tools has opened its Auto-Store, a “micro-fulfilment centre” in Carp, a community in eastern Ontario that has been part of the city of Ottawa since 2001. The facility has allowed Lee Valley to consolidate 36,000 square feet of picking operations into 6,000 square feet, freeing up space to expand manufacturing.

The facility boasts 18,000 bin locations and 42 shuttles or bots on top of the structure to retrieve products for warehouse pickers. With the new system, the 200-plus operators in the DC can process over 250 orders in an hour. That’s more than double the previous output.

In a release, president and COO Jason Tasse said the DC is “more than a business decision: it’s a commitment to our roots here in Ottawa and prosperity for the Canadian economy.” In 2023, Lee Valley Tools celebrated its 45th year in business.

Through the implementation of technology, the company will work to elevate efficiency and augment job satisfaction and protection for employees. The investment in modernizing operations is expected to enhance business operations and production during peak shopping periods, reducing handling times, and increasing order efficiency.

The automatic picking system has been in the works since the early days of Covid. At that time, the company recognized the critical importance of online sales and began a series of initiatives to strengthen that part of its business. Automating parts of the picking process will free up the company to re-direct employees to more essential, higher-paying functions.

“By investing in manufacturing and automation, we are strengthening our foundation and helping employees with tasks that involve undesirable work, like repetitive lifting and walking all day,” said Tasse.” The more efficient we can make our operations, the more flexibility we have to adapt to disruptions that may occur during seasonal hiring periods and can scale appropriately as needed.”

The National Hardware Show included a series of educational session at its latest edition, held late last month at the Las Vegas Convention Center. Kicking off day two was the NHS Executive Summit, featuring five high-impact sessions in collaboration with the North American Hardware and Paint Association. Participants took away practical insights into consumer behaviour, succession, supply chain, and the state of the industry overall.

In the session entitled “Adapting to Change in the Industry,” Dan Tratensek, COO and publisher for the NHPA (shown left), moderated a panel with Jodi Karroum (centre), director of strategy and business development for Walmart, and Gina Schaefer, co-founder and former CEO of A Few Cool Hardware Stores, a chain of 13 Ace stores in the Washington, D.C. area.

The panel session touched on such topics as attracting good employees by engaging in outside-the-box hiring practices and the importance of having a succession plan in place. Low unemployment rates have “sharpened the pencil” for employers to look beyond relevant work experience and hire based more on an individual’s core values.

“For us, diversity in hiring includes employing those with different genders, races, and cultural backgrounds,” Karroum said. “But it’s also about bringing on people with different career backgrounds and experiences and finding those people who are passionate about the industry.”

Tratensek echoed those sentiments, saying that intentionally seeking out different perspectives strengthens a company overall and can be one route for hiring good employees.

The importance of having women in the workplace—and keeping the door open for women to enter this industry—remains an important issue. In recent years, said the panelists, there has fortunately been lots more growth in diversity in what was once a male-dominated workplace.

Panelists also discussed various ways an independent can tackle the issue of succession. When it comes to succession planning, Tratensek said, one of the biggest mistakes he sees is business owners putting it off until it’s too late. Schaefer offered the strategy of creating an employee-owned business rather than leaving it to one person.

The discussion emphasized that succession planning should be in place from the time a business is acquired. Don’t wait until the owners are approaching retirement. “For anyone who is a business owner, the minute you take on the mantle of running the business, you owe it to your employees to engage in succession planning,” Tratensek said.

The latest edition of the DX3 conference was held last week in Toronto, gathering digital marketing and advertising experts from all aspects of the retailing and retail service industries in Canada. The event featured a full two-day program of keynotes and panels, along with a trade show showcasing service providers in the digital age.

One panel was especially timely. Called “Surviving the Slowdown,” it addressed what has become a common plight for retail in general. The panel featured (from left to right) Jeremiah Curvers, co-founder and CEO of Polysleep, a Montreal-based company selling mattresses online; Vino Jeyapalan, CEO of Kabo, a frozen pet-food provider; and moderator Nadine Hall, a consumer packaged goods consultant.

The past year, along with a slow start to 2024, has posed a challenge to many retailers. For Curvers at Polysleep, the business realities have forced his company to stay focused. “We need to put on a different lens and follow the customer,” he told delegates. That has included a careful evaluation of where the competition is coming from. For Polysleep, said Curvers, that competition has meant the likes of IKEA and Amazon. He added that he expects things to stay slow for another two or three years.

One way to stay ahead is to dig deep into data. “We’ve been using data sets and learnings online.” That means having a strong presence online—and in bricks and mortar—and managing the consumer’s expectations about the brand across all platforms. Polysleep is now in some 120 stores, besides selling online.

“There’s a major discrepancy between what consumers are finding online and what’s in stores.”

Another way Polysleep has managed through the downturn has been through managing costs and maintaining price points, “to make sure product quality is aligned with the cost.” Part of that equation is working closely with suppliers. “That has been a key to our growth in the past.”

Jamal Hamad has started a new position as senior vice-president, professional services at RONA inc. Hamad spent more than 15 years at Home Depot Canada, most recently in the role of senior director of contractor services, pro-tool rental-home services-MRO. But early on, in 1999, he was a store manager in Toronto, then a district manager. In 2008, he got involved in Home Depot Canada’s contractor side of the business, which included the retailer’s tool rental business. He became senior director of contractor services in 2016.

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RETAILER NEWS

Numerous media outlets reported last week that Canadian Tire Corp. gave its top executives no bonuses for its disappointing 2023 performance. Retail (excluding petroleum) same-store sales declined 2.9 percent at CTC in 2023 and total earnings were $604 million, versus $1.01 billion in earnings in 2022. CEO Greg Hicks received a bonus of $983,976 from the company’s annual incentive plan for total compensation of $6.49 million in 2022. In 2023, he received no bonus, according to reports, and his total compensation fell to $6.04 million.

Castle Building Centres has announced that O’Connor Hardware in Oro-Medonte, Ont., is the latest independent retailer to join the group. Founded in 1996, it is under the new ownership of Brent and Sarah Johnston. The general manager is Karen O’Connor.

Home Hardware Stores Ltd. and the Toronto Blue Jays have launched the BeautiTone Balcony at Toronto’s Rogers Centre. Located on the 100 level directly above the BeautiTone Marquee Sign in left field, the BeautiTone Balcony features two tiers of standing room and a reserved group space for up to 40 guests. BeautiTone, Home Hardware’s private label paint brand, is the Jays’ official paint.

Home Depot employees have been hit with a data breach. The breach, which affected the data of company staff, occurred through a slip-up by a third-party software-as-a-service (SaaS) vendor. As a result, that vendor’s database of some of Home Depot’s staff was hacked. About 10,000 employees had their names, work emails, and user names compromised. Home Depot was itself hit by a major data breach in 2014, which exposed the personal details of some 50 million customers.

Marty Young, the owner of Mount Forest Home Hardware Building Centre in Mount Forest, Ont., has acquired another store and adopted the Home Hardware banner. Young’s Home Hardware Building Centre in Walkerton, Ont., re-opened last month under its new name. In 2023, Young’s Mount Forest location was named Best Home Hardware Building Centre in the Central Region by Home Hardware Stores Ltd.

Dollarama reported Q4 net earnings of $323.8 million, or $1.15 a share. That was up from $261.3 million a year earlier. Sales for the quarter rose by 11.3 percent to $1.6 billion. For the full fiscal year, sales jumped 16.1 percent to almost $5.9 billion. Net earnings of $1.0 billion were up from $801.9 million.

The Air Miles loyalty program, which filed for bankruptcy on both sides of the border last year, was acquired by Bank of Montreal last June. With new owners, there are new ideas. According to Maclean’s, a new concept called Air Miles Receipts allows consumers to scan their receipts with an app to earn bonus points and offers, by “layering over” existing retailer programs. This can be done even at stores that offer loyalty programs of their own.

The value of building permits in February increased 9.3 percent month-over-month to $11.8 billion. Residential permits increased 7.4 percent to $7.1 billion. Ontario’s increase, at 14.2 percent to $2.8 billion, contributed the most in both the single- and multi-family sectors. Overall, the value of single-family permits was up 9.6 percent, or $248.2 million. The non-residential sector grew 12.3 percent to $4.7 billion. (StatCan)

The Home Depot has entered into a definitive agreement to acquire SRS Distribution Inc., a residential building products distributor headquartered in McKinney, Texas. It largely serves the roofing industry, but also sells products for landscapers and pool contractors. SRS has 760 branches across 47 states and a sales force of more than 2,500, together with its 4,000-plus truck fleet and jobsite delivery capabilities.

Under the terms of the agreement, a subsidiary of The Home Depot will acquire SRS for a total enterprise value (including net debt) of approximately $18.25 billion, making this the biggest acquisition the retailer has made to date.

According to a release, “SRS will accelerate The Home Depot’s growth with the residential professional customer. SRS complements The Home Depot’s capabilities and will enable the company to better serve complex project purchase occasions with the renovator/remodeler, while also establishing The Home Depot as a leading specialty trade distributor across multiple verticals.”

The deal adds to Home Depot’s portfolio of integrated companies as it works to build a vertical business service network, particularly into the contractor and builder markets. These are considered key growth areas for the company. Although pros account for only 10 percent of its customers, their spend totals 50 percent of the retailer’s total sales. And coming out of Covid, pros’ expenditures have increased faster than DIY dollars.

Home Depot has been making acquisitions since its founding, most of them to round out its services and products for pros. The first was Maintenance Warehouse, a direct mail marketer of maintenance supplies. Home Depot bought it in 1997 for $245 million. Apex Supply, another industrial supplier, was added two years later. In 2004, both these businesses were incorporated as Home Depot Supply.

By 2007, this division was rebranded HD Supply. But only months after the rebranding, it was sold off, at the insistence of shareholders, under the direction of then-CEO Bob Nardelli. Private equity companies led by Bain Capital acquired it for about $8.5 billion. Ironically, as Home Depot continued to expand its vertical reach with acquisitions, the value of the HD Supply business made sense again, and Home Depot bought back the company at the end of 2020 to better serve its growing MRO customer.

Hughes Supply, a large home retail company, represented another large acquisition in 2006 for Home Depot. That deal was worth $3.5 billion. A decade later, Interline Brands, a wholesale MRO chain, was bought up for $1.6 billion.

Home Depot had started a tool rentals division internally back in 1995, but in 2017 the retailer added Compact Power Equipment Inc., an equipment rental and maintenance services business, for $265 million. Most recently, International Designs Group, a distributor of stone and porcelain tile, was added to Home Depot’s portfolio in 2023.

Of course, for Canadians, one of Home Depot’s earliest acquisitions was its most impactful for this market. In 1994, it bought the Aikenhead’s chain from Molson Cos. and made its entry into Canada. The deal, which gave Home Depot a 75 percent share of Aikenhead’s, was worth $150 million. Four years later, Home Depot bought up the remaining 25 percent for $375 million, making Home Depot Canada a wholly-owned subsidiary.

The National Hardware Show was held March 26 to 28 at the Las Vegas Convention Center and the event managed to draw its share of Canadians. Most of them were vendors and agents, including AGT Products, Alliance Consumer Group, Jacobs & Thompson, and Peninsula Plastics. Legacy brands like Robertson Inc. (maker of the Robertson screwdriver), as well as Imperial, Olfa, and Kidde, were also on hand.

Finding key buyers at the show was more difficult. Alexandre Lefebvre, CEO of BMR Group, was at the show, and brought with him a delegation of that group’s lead merchants. But the other majors, including RONA and Home Depot Canada, were notable by their absence from the show floor. However, Home Hardware has been encouraging its own dealer-members to attend the show in recent years, and a group of that banner’s dealers was there again this year.

Despite a limited showing from Canada, the show remains an important forum for networking and building new business. “The vibe was really positive,” says Joelle Cohn, VIP attendee manager for NHS. “The exhibition hall was sold out and we started selling already for 2025. A lot of people were excited about all the new offerings, and the experiences we created for socializing and networking were appreciated by attendees. The chance for relationship building was crucial, as human interaction is so important in building businesses.”

Canadian vendors were showing off new lines and attracting attention, with about 40 Canadian firms exhibiting. New-Line Hoses is looking to expand beyond the commercial markets it currently serves with retail lines. The Surrey, B.C.-based company’s products includes fittings, coupling and adapters, as well as hoses for homeowners that feature specs suitable for industrial applications.

Multinautic was featuring modular aluminum dock kits, with all products needed in one kit. This manufacturer, based in Saint-Sauveur, Que., sells everything but the lumber for the project, including matching accessories—and even flower baskets.

The show was rounded out by various activities and learning sessions. New to NHS for 2024, the Independent Retail Center featured Retailer Roundtables and Ask the Expert sessions. The next National Hardware Show will be held at the Las Vegas Convention Center from March 18 to 20, 2025.

To celebrate National Woodworking Month, Lee Valley Tools has a new campaign under the company’s evergreen brand series, Making Happiness. Throughout the month of April, the specialty tool and woodworking retailer is hosting in-store events and interactive workshops, while releasing original content intended to inspire the Lee Valley community of woodworkers, hobbyists, and garden enthusiasts to immerse themselves in their craft.

“April is National Woodworking Month, the perfect time to learn a new skill or embark on a new project,” says Jason Tasse, president and COO of Lee Valley Tools. “Our dynamic programming speaks to both the experienced woodworker and the younger generation of aspiring crafts people, encouraging them to embrace woodworking and learn a new skill that involves more than just their two thumbs.”

Tasse calls woodworking “a core line of business” for Lee Valley Tools. The Making Happiness campaign is a perennial series for Lee Valley Tools and is centered around highlighting the essence of the Lee Valley brand to both novice hobbyists and experienced craftspeople. The content in the new campaign aims to illustrate how the journey of creating with one’s own hands can lead to a sense of accomplishment. The content will showcase customers’ intrinsic appreciation for craftsmanship.

Lee Valley Tools launched the latest campaign last week with a series of online and in-store activations, including power tool demos over two days at its stores. In addition, the events featured giveaways, contests, plus Lee Valley’s team of sales advisors to help customers. The company is also hosting drop-ins, demos, and workshops throughout the month.

(Jason Tasse, President and COO of Lee Valley Tools, will be a keynote speaker at this year’s Hardlines Conference. The 2024 Hardlines Conference Series is taking place Oct. 22 to 23 at the Fairmont Le Manoir Richelieu, in Charlevoix, Que., in collaboration with AQMAT. Click here for more info!)

The “original local hardware store” has mounted an extensive ad campaign. True Value, the banner displayed by some 4,500 stores in the U.S. and worldwide, has launched “Hardware Hero,” with creative from its agency of record, Laughlin Constable. The campaign is based on a song from the British-American rock band Foreigner, which had a 1981 hit with “Juke Box Hero.”

True Value has been absent from the Canadian hardware landscape since 2012, two years after TruServ Canada Inc. was acquired by RONA. But it has remained one of hardware’s iconic banners south of the border. Nevertheless, True Value said in a release that it recognized that “independent businesses have been navigating a changing retail environment.” The executives in Chicago decided that the hardware banner could benefit from its first national ad campaign in 10 years.

“With 75 years under our tool belt, we knew we needed to continue our evolution and create a campaign that would resonate with not only our independent retailers, who are heroes in their own right, but also our customers,” said Jake Kalnitz, SVP and chief merchandising officer for True Value. “I love this campaign because it’s relatable, refreshing, and straight up fun. It’s different than anything else in the industry.”

Hardware Hero is a geo-targeted campaign designed “to connect consumers with hyper-local” True Value hardware stores. The 15- and 30-second spots will run on TV, YouTube pre-roll, Meta, and programmatic display.

Donna Gerrits, vice-president of sales and marketing at Alexandria Moulding, is retiring. A 40-year veteran of the industry, Gerrits was a co-owner and the general manager of Royal Woodworking until it was acquired in 2012 by Alexandria Moulding. In 2016, she joined Alexandria Moulding in the sales and marketing position. Alexandria Moulding was acquired two years later by Specialty Building Products. Now, Dave Stojni has joined Specialty Building Products as vice-president of sales for Canada. He was formerly with Doman Building Materials Group as general manager, Ontario. Gerrits will remain for several months to work alongside Stojni to facilitate a smooth transition of her responsibilities.

At Suncast Corp., a maker of consumer and commercial products for the home and industrial markets, Chris Whitall has been appointed national sales manager, Canada. He will be working with the major big box, hardware, home improvement, and lawn and garden accounts in Canada, supported by the Canadian sales agency groups that work with Suncast. Whitall previously held senior sales and account manager positions in Canada with Weber, Bosch, and Stanley.

DID YOU KNOW…?

… that as a valued Hardlines Premium Member, you get to run a complimentary Classified Ad once a year? We have a targeted audience of industry professionals who read our newsletter, making it a highly effective way to recruit, find new lines, or seek out new reps. Contact Jillian MacLeod at the Hardlines World Headquarters to book your free Hardlines Classified. (For a full list of all your Premium Membership benefits, click here!)

RETAILER NEWS

Castle Building Centres held its annual general meeting last week at the JW Marriott hotel in Summerland, outside Las Vegas. The event attracted the buying group’s top vendors and dealer-members from across Canada.

A store in Lacombe, Alta., just north of Red Deer, has opened an imaginative shopping area on its upper mezzanine called “The Loft.” In this new retail showroom, Nowco Home Hardware features home accessories and home products including décor, scents, sprays, candles, and soft furnishings. The third-generation owners of the store are Deanna and Tyler Nowochin, who won the Marc Robichaud Award for Community Leadership at last year’s Outstanding Retailer Awards.

To kick off Earth Month, IKEA Canada has launched a “Second-Hand Tax,” an initiative in all IKEA As-is marketplaces across Ontario. It’s another effort by the giant retailer to help Canadians cope with the rising costs of living and promote sustainability. Ontario IKEA stores will feature the Second-Hand Tax, a deduction of 13 percent on the sale price of its re-used products, to match Ontario’s 13 percent HST. The promotion runs from April 2 to 11, 2024 and is available to IKEA Family cardholders. The retailer hopes to make “shopping circular” more attractive and acceptable to Canadians.

The Home Depot has rebranded its online marketplace, Retail Media+, with a new name: Orange Apron Media. The site, which was launched in 2018, hosts vendors of all types, not just those that sell products in Home Depot stores, and claims to have 1.76 billion transactions a year. According to the Orange Apron website, its mission is to “create the best interconnected experience for your brand and the customers we serve.”

Local delivery service DoorDash says it’s partnered with Lowe’s Cos. to offer on-demand delivery from over 1,700 stores in the U.S. This partnership marks DoorDash’s first foray into the home improvement category. Lowe’s products can now be purchased directly on the DoorDash app, helping consumers easily shop for items they need delivered same-day. All participating Lowe’s stores will also be available on DashPass.

Books and lifestyle retailer Indigo Books & Music Inc. has agreed to a deal to sell the majority of its shares to Trilogy Investments L.P. and Trilogy Retail Holdings Inc., taking the company private. TILP will acquire all outstanding common shares of Indigo for $2.50 in cash per share, which represents an increase from the original offer of $2.25. TILP already owns about 60.6 percent of Indigo. The Trilogy companies are controlled by Gerald Schwartz, the husband of Indigo CEO Heather Reisman and CEO of Onex Corp.

Saint-Gobain has announced that its building materials subsidiary CertainTeed Canada will acquire The Bailey Group of Companies. The Vaughan, Ont.-based manufacturer of commercial metal framing and building products was founded in 1950. A family-owned company with almost 700 employees at locations in multiple provinces, it consists of Bailey-Hunt Ltd. and its subsidiaries, including Bailey Metal Products. Under the agreement, Saint-Gobain will also complete the purchase of the remaining equity and assets of The Grid Company, its ceiling grid manufacturing joint venture with Bailey.

Western Forest Products has closed a previously announced deal with four of the six member nations of the Na̲nwak̲olas Council. These four First Nations will acquire a 34 percent interest from Western in a newly formed limited partnership. The partnership consists of certain assets and liabilities of Western’s Mid Island Forest Operation, in a transaction valued at $35.9 million. The parties also announced the new name for the partnership: La-kwa sa muqw Forestry (pronounced la-KWAH-sa-mook). The name means “the wood of four” in the Kwak’wala language.

West Fraser Timber Co. and Mercer International Inc. have announced an agreement to dissolve their 50/50 joint venture in Cariboo Pulp and Paper. West Fraser will continue as the sole owner and operator of the mill, doing business as Cariboo Pulp and Paper Co. Located in Quesnel, B.C., Cariboo has the capacity to produce up to 340,000 tonnes of Northern Bleached Softwood Kraft pulp annually. It employs nearly 300 people.

Retail human resource professionals navigate a complex and changing landscape. Understanding and addressing employee needs has become more crucial than ever for cultivating vibrant workplace environments and cultures. Retail Council of Canada (RCC) will host the Retail Human Resources Conference on April 25 at the International Centre in Mississauga, Ont. It will feature a packed agenda with distinguished speakers, offering a pivotal gathering for retail HR professionals that will explore the pressing issues shaping the future of retail HR. Click here to learn more and register.

The Home Depot is opening four new distribution centres in North America, to serve its contractor customers better. That rollout includes one in the Greater Toronto Area that opened late last year (see our Jan. 15, 2024 edition—Editor). The new facilities are an instrumental part of the retailer’s strategy to better serve pro customers, including those working on larger, more complex projects than typically served by Home Depot stores.

The warehouses are called flatbed distribution centres (FDC); the one in Canada is located in Mississauga, Ont., west of Toronto. The 300,000 square-foot FDC is part of a 600,000-square-foot facility receiving and fulfilling orders to pros that will delivered daily out of that facility, instead of from individual stores.

The other locations are in Detroit, southern Los Angeles, and San Antonio, Texas.

The new distribution centres stock large, bulky merchandise like lumber, insulation, and roofing shingles. With a network of distribution centres stocking a variety of product types, pros can order job lot quantities of the products they need to complete their entire projects, delivered directly to their job sites. The new distribution centres are expected to open in the first half of the year.

Along with its supplier partners, The Home Depot is working to build depth of inventory in each of its top pro markets, with job lot quantities that are meaningfully larger than what it has historically offered through its stores alone. In addition, when jobsite deliveries are fulfilled directly from a distribution centre, there is less congestion in local Home Depot stores from staged products in aisles and more inventory on hand to satisfy the needs of in-store pro customers.

The company has already opened similar pro-focused hubs across the U.S., and expects by the end of 2024 to have 17 of its top pro markets equipped with the new DCs. In addition, Home Depot is building out more offerings for its contractor customers, including:

• localized product assortments specially tailored for each priority market
• dedicated sales forces in each of its priority markets
• digital tools and personalized experiences, including new order management capabilities to better manage complex pro orders
• trade credit, which is currently being piloted with a small number of pro customers
• tiered pro pricing

These services will be added to the company’s existing ProXtra loyalty program, which gives pros specialized perks, business tools to help them manage their businesses, and exclusive sales and events in stores and online.

Amidst a number of changes at RONA’s head office earlier this year, one that stands out for the company’s independent, or affiliated, dealers was the hiring of a new senior executive to manage the affiliate dealer portfolio.

Alain Ménard joined RONA in January as senior vice-president, RONA affiliated dealers. He was recruited from Sobeys and brought with him a range of experience dealing with entrepreneurs—including having been one himself earlier in his career.

Ménard replaced Jean-Sébastien Lamoureux, who had been in charge of the affiliate business at RONA. Lamoureux joined the company in 2017, coming over from the Montreal office of National Public Relations. He started at RONA as VP of communications and PR, and in 2022 was handed the affiliate dealer portfolio. He was instrumental in maintaining the confidence of the independent RONA dealers during the company’s sale by Lowe’s to private-equity firm Sycamore Partners in a deal that closed last February.

With his grocery background, Ménard brings experience that aligns with the RONA model. There is a paucity of national retail companies to draw from in Canada, let alone ones that have a mixed ownership model of corporate and independently owned stores like RONA’s.

Earlier in his career, Ménard held various executive and senior management positions in several major food chains. Before joining RONA, he spent nearly 20 years at Sobeys, most recently as vice-president, development and commercial relations, affiliated merchants. That business consists of the IGA, Tradition, Bonichoix, and Rachelle-Béry banners. During his time there, his responsibilities included innovation, department strategy, optimization of online grocery execution, in-store fixtures and fittings, and operational support.

His earliest involvement with grocery retail was at his local Steinberg’s grocery store, where he went from cleaning floors and bagging groceries to becoming a manager of different corporate stores.

When Steinberg’s went bankrupt in 1992, he joined Provigo and later Metro, where at the age of 28 he bought a series of franchise stores before moving to head office as general manager of Metro’s 162 affiliated stores.

Having spent so much of his career working with real entrepreneurs, typically in family businesses, Ménard developed a strong sense of respect and understanding of the affiliated model. “All of my life I have supported an affiliated dealers’ business model.”

(Alain Ménard will be a keynote speaker at the 28th annual Hardlines Conference. It will be held at the Fairmont Le Manoir Richelieu, in La Malbaie, Que., Oct. 22 to 23. As a Hardlines Premium Member, you have front-of-the-line access to this year’s conference and registration that’s 20 percent off the regular price. For more information about the 2024 Hardlines Conference, click here. Got questions about your Premium Membership? Contact Jillian MacLeod at the Hardlines Virtual World Headquarters!)

Loyalty programs are playing an increasingly important role in the offerings of many home improvement retailers. And the movement last September as Home Hardware joined Scotiabank’s Scene+ program, which includes partners like Sobeys, IGA, Foodland, and FreshCo , bears out how much effort is going into fine-tuning these programs.

One customer points program that took a hit was Air Miles Canada. It was once a national leader and Canada’s “most recognized” loyalty card program. It had steadily built up its retail partners in this country since 1992.

However, in February 2021, Air Miles Canada began to decline sharply. Lowe’s Canada left the program, along with its brands RONA and Réno-Dépôt. Two months later the program suffered a further setback when the Liquor Control Board of Ontario left the program. In 2022, Staples Canada abandoned Air Miles. The biggest blow of all might have been the defection the same year of Empire Co., the parent of Sobeys, Safeway, Farm Boy, Foodland, IGA, and other grocery stores (which are now members of rival program, Scene+).

Air Miles Canada did sign Dollarama as a partner last year but the owner of the program, LoyaltyOne, filed for bankruptcy on both sides of the border in March 2023. The Bank of Montreal purchased Air Miles Canada on June 1, 2023.

Now, in the retail home improvement industry, two major brands, Kent Building Supplies in Atlantic Canada, and TIMBER MART nationally, continue to use Air Miles.

“I do believe there’s value for the dealers that Air Miles can deliver,” TIMBER MART president and CEO Bernie Owens told Hardlines. He expects that the new ownership by BMO will add more “anchor” users that will rebuild the program’s profile. In fact, Owens shares that the issuance of Air Miles points by TIMBER MART dealers increased in 2023. “That shows there’s still value in it.” The program, he adds, is available at the discretion of each dealer, who can evaluate its merits for their own markets.

“I look at Air Miles and say, ‘what are the options out there?’ It’s to build loyalty for dealers at an affordable cost.” He believes BMO has an opportunity to provides better analytics that can help dealers understand their customers.” “If these points systems don’t add value to our dealers, we’ll have to look somewhere else.”

Air Miles Canada still counts on a significant roster of retail partners, including Metro (a grocery chain in Ontario and Quebec), Shell, Global Pet Foods, Jiffy Lube, and a high-profile group of online-only partners through airmileshops.ca.

The International Council of Shopping Centers (ICSC) has published its Consumer Returns Survey, which indicates that online shopping has roughly three times more returns as bricks-and-mortar shopping.

The New York City-based organization polled more than a thousand U.S. consumers last month. The poll showed that for every $100 spent online, about $15 of product is returned. For every $100 spent in physical stores, about $5 of product is returned. The main reasons cited by respondents to the survey who explained why they had recently returned an item purchased online were: “damaged goods” (52 percent), “item did not fit” (50 percent), “item was not as expected” (42 percent), and “the wrong item(s) was sent” (37 percent).

The online return rate was higher than in-store across all categories of retailers studied, though the gap was biggest for discount department stores, where consumers returned just 6.2 percent of items bought in stores compared to 33.2 percent of items bought online.

With 82 percent of respondents reporting that return policies influence whether they decide to purchase from a retailer, those return policies are important. But retailers are fighting back against the growing challenge—and costs—of returns. They are reviewing and updating their online return policies, even as they must keep in mind how customers may respond.

According to the survey results, if retailers were to charge a fee to ship back purchases made online, nearly three-quarters of respondents said they’d likely stop shopping online from that company altogether. Sixty percent said they’d likely stop shopping online with retailers that shortened the free return window.

“We have known for some time the value of brick and mortar to a retailer’s strategy,” said Tom McGee, president and CEO of ICSC, in a release. “Our latest findings further prove this by showing that the return rate for in-store purchases is three times less than the return rate for online purchases. Additionally, consumers are becoming more mindful of changing return policies that result in fees and shortened return windows.”

Wolseley Canada has appointed Jeffrey Gallanty as VP, supply chain. Gallanty joins the company from Ferguson Enterprises, where he managed the distribution and logistics network in the U.S. Northeast for the past five years. Over more than 25 years in supply chain logistics, he has held roles at Brooks Brothers, Bloomingdale’s, and Restoration Hardware.

DID YOU KNOW…?

… that Hardlines is now receiving entries for the 2024 Outstanding Retailer Awards? All Canadian hardware and home improvement retailers and managers who have operated under their current ownership for at least two years are eligible. To enter, please visit www.oras.ca; or contact our Editor-in-Chief, Steve Payne, for further information. (Le formulaire est également disponible en français.)

RETAILER NEWS

Canac will begin construction early next month on its store in Rivière-du-Loup, Que. The site for the chain’s long-awaited 33rd store was purchased back in 2017. It and the upcoming 34th store in Sorel-Tracy, Que., each represent an investment of about $20 million.

About a dozen detectives from the California Highway Patrol recently staked out a Home Depot store in the Los Angeles area for a night-long “blitz” in which they attempted to catch “boosters” in the act of shoplifting. A “booster” is a professional thief who typical sells to a “fence”—someone who resells the items (often power tools). According to a recent article in the New Yorker magazine, anyone caught stealing was handcuffed, taken to a back room, and questioned.

Lowe’s Cos. has announced it will give staff a day off on Easter Sunday, March 31, by closing all its stores and contact centres for the day. It joins other U.S. retailers like Target, Costco, and Sam’s Club, while Wal-Mart and Petco will be among the retailers that intend to stay open. This will be the fifth year in a row that the company closes on Easter. Lowe’s has more than 1,700 stores and 300,000 workers in the U.S.

Loblaw Cos. is testing self-checkout receipt scanners at four of its grocery stores in southern Ontario. The stores are in Oakville, Georgetown, Windsor, and Woodstock. Metal barricades refuse to open if a customer does not scan their receipt after going through self-checkout. If the customer tries to force the barricade, an alarm goes off. An attempt to reduce “organized retail crime” was the reason for the experiment, a company spokesperson said.

Chesapeake, Va.-based Dollar Tree will close a thousand of its stores south of the border in the next few years, says the company. It will close 600 stores under the Family Dollar banner, which it acquired in 2015, in the first half of this year, plus 370 of that brand’s stores over the next few years. In its latest quarter, Dollar Tree lost $1.71 billion. Retail analysts have blamed the botched acquisition of Family Dollar for the losses. There are 227 Dollar Tree stores in Canada, not one of which the company says is being closed at this time. Dollar Tree operates more than 15,000 stores in North America.

Ford Motor Co. and a Hong Kong tool maker have settled their dispute about Ford allegedly restricting the use of its iconic blue oval brand on power and hand tools. A Michigan federal judge dismissed Hong Kong-based Nine HKG’s suit, filed in 2022, and the parties came to a financial agreement. Hardlines had reported on the North American launch of the Ford tools in 2014, where they were debuted at the National Hardware Show in May of that year.

Sales of existing homes fell 3.1 percent in February from the previous month. That followed a cumulative 12.7 percent increase in sales activity in December and January. The actual (not seasonally adjusted) number of transactions came in 19.7 percent above those for February 2023. (Canadian Real Estate Association)

The annualized pace of housing starts rose by 14 percent in February to 253,468 units, from 223,176 units in January. The actual number of urban housing starts was up 11 percent to 17,495 units, from 15,822 a year earlier. Single-detached starts decreased 14 percent in February. (CMHC)

Investment in building construction declined 0.9 percent to $19.7 billion in January. In the residential sector, spending fell by $194 million or 1.4 percent to $13.6 billion. The decline was led by a 4.1 percent drop in Ontario, to $5.4 billion. It was partially offset by increases in five provinces, in particular a $53 million spike in Quebec, where spending reached $2.5 billion. (StatCan)

The Atlantic Building Supply Dealers Association (ABSDA) held its annual Building Supply Expo trade show recently at the Halifax Convention Centre. “Our trade show floor space was totally sold out for the first time at the Halifax venue,” said Denis Melanson, ABSDA president.

The meet and greet opening night on March 5 drew a crowd of about 565 people. Live music was supplied by The Kiln Dried Studs (pictured). “They decided to forgo their fee and play music for us in exchange for a donation to the IWK Heath Centre’s children’s hospital in Halifax,” Melanson told Hardlines. The ABSDA committed $3,000 to the cause—and real estate entrepreneur Adam Barrett, who has just purchased three RONA stores in the Halifax area, matched the $3,000 donation.

A third, anonymous donation of $2,500 to IWK children’s hospital soon followed. Kiln Dried Studs’ drummer, Steve Foran, sold band T-shirts through the night to supplement the donation. All told, over $12,000 was raised for IWK at the ABSDA Expo.

At the awards gala on March 6, 720 attendees saw Ryan Buck of Buck’s Home Building Centre, Bridgewater, N.S., win the award for Young Leader of the Year. Retailer of the Year went to Yvon Godin, a TIMBER MART dealer from Neguac, N.B. The Salesperson of the Year award went to Sheldon Atkinson, Gentek. ABSDA’s Industry Achievement award went to Kevin Pelley from Kohltech Windows.

“Expo 2024 will go on record as one of our best shows in the past decades,” said Melanson. Next year’s ABSDA Building Supply Expo will return to Halifax for the industry association’s 70th anniversary. The 2025 dates will be announced in the weeks ahead.

Canada represents a small but very important market for Orgill. And even though sales here were off for the giant U.S. hardware wholesaler last year, the company remains committed to serving dealers in every part of the country.

Boyden Moore, Orgill’s president and CEO, spoke with Hardlines during the company’s Spring Dealer Market, held in Orlando, Fla., last month. He reflected on the performance of Canadian dealers and the outlook for the industry overall.

He started out by being up front about Orgill’s performance post-Covid. Sales in Canada were actually down around five or six percent in 2023, even as Orgill’s business in the U.S. market was up about one percent.

Canada’s dealers weren’t necessarily doing any worse than their U.S. counterparts, but Orgill picked up more new customers south of the border. “I think we kind of went about the same with the Canadian market as with our customers here. We probably grew more new business in the U.S. market than we did in the Canadian market.”

Orgill overall saw sales up two percent last year; that includes the U.S., Canadian, and international business. He notes that, given conditions overall, his company fared well, noting “that’s against a backdrop of an industry that was down about three percent.” (Both Home Depot and Lowe’s reported negative sales of around four percent last year.)

“We continue to outperform the industry, which is really what our goal is. And we’ve been really pleased, over the past three years in particular, with the efficiencies that we’ve picked up in the Canadian market. Weve been getting better and better at what we’re doing there.” Orgill has made “incremental improvements” to its two distribution centres that serve this country, one in Post Falls, Idaho, and a DC in London, Ont. The latter delivers to stores in central and eastern Canada.

And those improvements have been achieved even as the miles per delivery continue to go up in Canada, adding more cost. “But we’ve found our way to do what we want to do in Canada.”

Looking ahead, Moore shares an outlook that is cautious in the near term, in anticipation of Canada’s commitment to increase housing, which will impact dealers positively.

“We expect the first half of the year in both the U.S. and Canada to be a little soft as the Fed and the Bank of Canada keep interest rates higher for a little bit longer. But as they start to come down, we’re going to see the opportunity for housing to pick up. When people come off the sidelines and aren’t afraid to get a mortgage, that’s going to make a lot of difference.”

As a result, dealers are showing excitement. “They’re not afraid of the future. They see a kind of slow period that they’re going to work through. But everyone is very optimistic and very enthusiastic about the future.”

While walking the aisles of the Orgill Spring Market last month, we caught up with Ken Jenkins, president and CEO of Castle Building Centres Group. As a major group with more than 300 member locations, Castle and its dealers represent major customers for Orgill’s hardware distribution services in this country.

We asked Jenkins about Orgill’s role in Canada and its efforts over the years to establish itself with independent dealers here as a source for their hardware products. “The success of Orgill’s penetration is not that they made a big grab at the market all at once,” Jenkins told Hardlines. “They’ve been infusing themselves gradually into the market over time.”

That gradual, incremental approach appears to be paying off, despite an industry-wide dip in hardware sales overall.

Jenkins was asked to comment on an observation made by one of Orgill’s executives. Canadian dealers are not as used to buying through distribution as their counterparts in the U.S., Greg Stine, EVP marketing and communications at Orgill, told Hardlines earlier at the show. As a result, one of the things Orgill does with its Canuck customers is try and educate them on the value of better managed inventory, which, Stine noted, can result in higher turns.

Jenkins concurred. “Canadians buy direct more.” Dealing with a market that is thinly spread across a large geography has historically hampered most independent Canadian hardware distributors. In addition, the buying groups here have tremendous power to help dealers buy direct.

While hardlines represent a smaller portion of the sales for most building centres, having the right assortments is critical. “About 14 to 17 percent of our Castle dealers’ sales come from the front end,” Jenkins said. “I don’t expect that to change much. But Orgill is good at satisfying that need with their large assortments and big buying power that comes from its base of U.S. customers.”

“Over time, Orgill will become a more and more important part of the Canadian market.”

Canadians can expect to see measures in the upcoming federal budget aimed at boosting housing affordability, CIBC economist Benjamin Tal told the Financial Post. “The government realizes that housing is a major issue and the next elections will be all about housing,” he said.

The federal government says some 5.8 million new homes must be built within the decade, necessitating a doubling of housing starts, according to Kevin Lee, CEO of the Canadian Home Builders’ Association. His organization is calling on the government to aid first-time buyers by bringing back 30-year amortization on insured mortgages.

Meanwhile, eyes are on the direction that interest rates will take. The Bank of Canada announced that it is keeping its policy rate at five percent, which it has maintained since July 2023.

“We don’t want to keep monetary policy this restrictive for longer than we have to. But nor do we want to jeopardize the progress we’ve made in bringing inflation down,” said bank governor Tiff Macklem. Canada’s inflation rate settled to 2.9 percent in January. The Bank of Canada’s target inflation rate is two percent.

DID YOU KNOW…?

… that Hardlines is now receiving entries for the 2024 Outstanding Retailer Awards? All Canadian hardware and home improvement retailers and managers who have operated under their current ownership for at least two years are eligible. To enter, please visit www.oras.ca; or contact our Editor-in-Chief, Steve Payne, for further information. (Le formulaire est également disponible en français.)

RETAILER NEWS

BMR Group has announced that BMR Brae-Con Building Supplies has acquired a new store in Wasaga Beach, Ont. The location joins owner George Begley’s existing outlet in neighbouring Elmvale. The 13,500-square-foot Wasaga Beach store has been in operation for nearly 40 years. It converted to the BMR banner on March 8.

A 30-year-old Chatham-Kent, Ont., man has been charged with assault with a weapon and theft of $120 in merchandise from a Home Hardware store. Police say that the store manager and employees confronted the man as he was leaving, and that he then assaulted the staff. He was arrested shortly after.

RONA inc. has been named, for the fourth consecutive year, one of Montreal’s Top Employers. The annual list is published by Mediacorp, which also publishes Canada’s Top 100 Employers.

Costco Wholesale Corp. had net income of $1.74 billion, up from $1.47 billion, in the second quarter of its 2024 fiscal year. Revenues of $58.44 billion were up by 5.7 percent. The Canadian market logged an increase of nine percent in same-store sales, better than 4.8 percent in the U.S. and 8.2 percent in other countries.

Lowe’s has partnered with consulting firm Accenture and tech firm Relex to bring artificial intelligence (AI) into its seasonal inventory planning. The article says that Relex provides the AI, while Accenture is providing its delivery and industry experience to advise Lowe’s on the initiative.

Eisenwarenmesse, the International Hardware Fair, held in Cologne, Germany, from March 3 to 6, attracted more than 3,200 exhibitors from 54 countries. They presented the current trends and new products in these categories: tools and accessories, industrial supply, fixing and fastening technology, and building supplies and home improvement. In spite of various public transport strikes, 38,000 trade visitors from 133 countries made their way to Cologne. The next edition of the show is scheduled to take place March 3 to 6, 2026.

CORRECTION: In our excitement to share the addition of Alain Menard of RONA inc. to our lineup of speakers at this year’s Hardlines Conference, we got his title wrong. He is in fact senior vice-president, RONA dealers and affiliates.

The value of building permits in Canada rose 13.5 percent month-over-month in January to $10.8 billion, rebounding after a decrease of 11.5 percent in December. The value of residential permits increased 12.6 percent to $6.5 billion. Gains were led by a strong rebound in multi-unit construction intentions. Single-family dwelling permits were down 10.3 percent to $2.6 billion, with declines occurring in nine provinces. (StatCan)

Retailers are expected to lean into discounts or other targeted promotions to capture the selective spending and move product. Retailers going out of business are also forecast to create more vacancies in markets where they have previously been scarce. (2024 Canada Real Estate Market Outlook)

This year’s Hardlines Conference promises to bring together another world-class lineup of industry experts and retail thought leaders. And it’s being held at an equally world-class destination, the Fairmont Le Manoir Richelieu, in the Charlevoix region of Quebec, Oct. 22 to 23.

To present this year’s conference in la belle province, we are proud to collaborate with the Quebec Hardware and Building Materials Association (AQMAT), Quebec’s hardware and building supply industry association, which is offering up major support for this event. “AQMAT has chosen not to hold its usual annual congress in 2024 so that all the spotlight can be on the first edition of the Hardlines Conference to be held in Quebec,” said Richard Darveau, president of AQMAT and the founder of the buy-Canadian program, Well Made Here.

At the Hardlines Conference, you will join your colleagues and customers for two incredible days of information and inspiration, as well as a fantastic networking experience. This year’s speaker line-up includes executives from RONA, BMR Group, Lee Valley Tools, Altus Group, Gibson Building Supplies, and more.

Our confirmed speakers so far are:

• Alexandre Lefebvre, president and CEO of BMR Group
• David Collas, general manager of Les Mousquetaires, the European-based buying group representing 4,000 points of sale internationally
• Jason Tasse, president and CEO of Lee Valley Tools
• Helene Loberg, sustainability manager for IKEA Canada
• Richard Darveau, president of AQMAT
• Pierre Battah, nationally recognized HR advisor and workplace expert
• Michelle Chouinard-Kenney, CEO of Gibson Building Supplies, a major GSD in Ontario
• Sherri Amos, director of dealer support, Home Hardware Stores Ltd.
• Peter Norman, vice-president and chief economist at Altus Group
• Alain Ménard, vice-president at RONA inc.

“We are excited to take the Hardlines Conference to the province of Quebec, which has such a vibrant and diverse home improvement market,” said David Chestnut, vice-president and publisher at Hardlines Inc. “And our venue this year, the Fairmont Le Manoir Richelieu in Charlevoix, is a truly world-class destination that will give delegates a chance to savour the province’s beauty while building their business and their professional contacts.”

The Hardlines Conference is a key annual gathering point for top retail executives, leading dealers, major vendors, and, of course, features a prestigious roster of Canadian and international presenters. It’s also just plain fun. Please save the date for the 28th Hardlines Conference at the Fairmont Le Manoir Richelieu, in La Malbaie, Que., Oct. 22 to 23.

As a Premium Member (thanks to your subscription to this newsletter), you have front-of-the-line access to this year’s conference and registration that’s 20 percent off the regular price.

(For more information about the 2024 Hardlines Conference, click here.)

With the latest—and the final—round of store conversions of its remaining Lowe’s stores, RONA has declared the “sunset of the Lowe’s banner in Canada.” The last remaining 15 Lowe’s stores, out of a total of 62 in this country, were converted to RONA’s new banner, RONA+ earlier this month. Six are in Calgary, five are in the Edmonton area, and there is one each in Red Deer and Lethbridge, Alta., and Abbotsford and Vancouver (Grandview), B.C.

Also, RONA has moved to convert another two Réno-Dépôt big boxes to the RONA+ banner. The conversions, in Sherbrooke and Charlemagne, join the previously-announced “pilot project” that will convert the Réno-Dépôt in Hull to RONA+ later this month. The timing of the Sherbrooke and Charlemagne conversions is set for April. The stores are among 21 locations carrying the Réno-Dépôt banner, which exists only in Quebec.

“The conversions to the RONA+ banner that took place in other Canadian provinces had a very positive impact on store performance,” said a spokesperson from RONA. Réno-Dépôt is a banner that targets decorators, contractors and knowledgeable DIY customers and has historically been one of the most successful big box banners in North America, according to Hardlines data.

Meanwhile, the flagship RONA banner has experienced a brand repositioning. It will “go back to its roots, focusing on its entrepreneurial DNA and putting the RONA brand front and centre of all its marketing offensives,” said the company.

That rebranding includes a series of ads devised by Sid Lee with a theme centred on people who love to create, both contractors and DIYers. In addition, the retailer continues to expand its RONA+ banner and roll out a renewed visual identity for RONA affiliated dealers (see our Dec. 18 issue—Editor).

The company is also launching a new reality TV show in Quebec: Le grand chantier RONA.

“This is the most significant repositioning of the RONA brand in the last two decades. We’re refocusing our marketing around RONA, putting this brand, with its 85 years of history and consumer trust, at the core of our efforts,” said Catherine Laporte, senior vice-president, marketing and customer experience at RONA inc. “By emphasizing our commitment to our customers, the uniqueness of our stores, and our relationship with local communities, we reinforce the values of proximity and commitment that distinguish our network.”

Federated Co-operatives Ltd. held its 95th annual meeting last week and shared its 2023 financial results. FCL reported $12.46 billion in total sales for 2023, down slightly from $12.52 billion a year earlier. However, net income was up more than 90 percent to $781 million. Based on these results, the company distributed $399 million in patronage back to local co-ops.

Based in Saskatoon, FCL is one of the largest companies in Saskatchewan. It supplies everything from groceries and ag products to building materials and fuel to 161 local Co-ops and two affiliate members across western Canada. Representing over 26,400 employees, these co-ops serve 2.1 million members and even more non-member customers through 1,600-plus retail locations in more than 650 communities.

Collectively, FCL and this group of local co-operatives form the Co-operative Retailing System (CRS). The company supports those co-ops, which represent more than 1,600 retail locations through western Canada, with strategy and logistics, operational support, business services, and marketing.

Home and Building Solutions (HABS), the division that serves FCL’s home centres, had sales of $379 million in 2023, down from $412 million in 2022. Net income dipped from $12 million to $9 million. FCL added one new home centre during the year, as well.

The HABS team sourced 21 new Canadian-made products last year, bringing the total offered to 3,048. FCL also continued to roll out the electronic shelf label program to help local Co-ops manage in-store pricing more effectively. By the end of 2023, more than 1.5 million active electronic shelf labels were installed across 130 Co-op stores. The rollout will continue in food stores throughout 2024, with plans to explore additional ESL capabilities and expand the program to other business lines, including its home centres.

In 2023, FCL continued to search out environmentally friendly plastic alternatives, and this commitment was reaffirmed when Co-op signed the Canada Plastics Pact (CPP) in January 2022. In alignment with changing federal regulations, the company says it made significant progress in 2023 with the elimination of single-use plastic checkout bags. It also found new sourcing and alternative options for small items like plastic cutlery and stir sticks, and reduced the use of Styrofoam in packaging for products sold through the HABS division.

Sollio Cooperative Group held its annual general meeting at the end of last month in Montreal. The parent of BMR Group announced its net earnings totalled $115.4 million in the fiscal year ending Oct. 28, 2023. That followed a net loss of $336.9 million in the previous year.

Sales declined from $8.4 million to $8.3 billion. At the same time, the company announced the buyback of $28 million in shares.

Sollio’s retail division, BMR Group, earned net income of $34.5 million in 2023, compared to $41 million the previous year, due in part to a “historic drop” in housing starts, particularly in its home province of Quebec. Total sales came to $1.46 billion, where the division had reported net sales of $1.57 billion for 2022.

The fiscal year saw major upgrades to 12 BMR stores in Quebec and Ontario, according to Sollio’s annual report. BMR also launched a new Vendor Excellence Program and marked the return of its in-person buying show in Quebec City, where it welcomed almost 1,200 participants.

Asked about BMR’s expansion plans, CEO Alexandre Lefebvre underlined the addition of a VP of business development, Simon Gouin, at the end of last year, which he described as “central to our growth strategy.” Lefebvre noted that BMR was attracting media attention as “the grouping for independent dealers throughout eastern Canada, so we’re canvassing across all banners.” He also touted its remarkable dealer retention, highlighting that for yet another year, “we didn’t lose a single retailer.”

He believes that stability sets the group apart. “I think that’s circulating through the industry” and the message is resonating with dealers of competing banners. Lefebvre says to watch for more announcements in the near future.

Regal ideas has named Corey Weir as territory manager for Manitoba, Saskatchewan, and northern Ontario. Weir was most recently with EAB Tools, where he climbed the ranks to become regional manager, taking the lead on major accounts in the U.S. and western Canada. He has also been a writer for TSN and a PR professional for the Edmonton Oilers.

At Wolseley Canada, Steven Beggs has been promoted to vice-president, human resources. He joined Wolseley Canada in 2019. In his new role, Beggs will oversee all facets of the human resources department and provide strategic direction to Wolseley Canada’s senior leadership team. Before joining Wolseley Canada, he held positions with The Home Depot and American Express. Additionally, he served for 12 years in the Canadian Armed Forces.

DID YOU KNOW…?

… that we are now inviting nominations for our 2024 Outstanding Retailer Awards? The Outstanding Retailer Awards are Canada’s only national awards program dedicated to celebrating the achievements of hardware, home improvement, and building supply dealers and their staff. The ORA Awards Gala Dinner will take place Oct. 22 at Fairmont Le Manoir Richelieu in Charlevoix, Que. If you are a winner, you and a colleague or family member will be there as our guest! Entries are due at Hardlines by June 14. Download the English ORA entry form here, and French ORA entry form here.

RETAILER NEWS

Three corporate RONA stores in Nova Scotia have been purchased by the new affiliated dealer and local businessman, Adam Barrett of Terraine Capital. The stores joining Terraine Capital are RONA Halifax, RONA Elmsdale, and RONA Tantallon. This acquisition means that all RONA stores in the Halifax regional municipality are now dealer-owned. Barrett’s company, Terraine Capital (formerly BlackBay Management), owns commercial and residential rental properties in the Halifax area. The deals for all three stores will close by March 24.

Gypsum Management & Supply Inc. has announced the completion of its acquisition of Kamco Supply Corp. Kamco is a supplier of ceilings, wallboard, steel, and lumber in the New York City area. Founded in 1939, it logged revenues of about $245 million last year. GMS has a growing number of stores in Canada, including Watson Building Supplies in the Greater Toronto Area, Slegg Building Materials on Vancouver Island, and Rigney Building Supplies in Kingston, Ont.

A new RONA store, MSJ Building Supplies, has opened in Barrington Passage, N.S. The business is owned by Tom MacDonell, who has a background in business and project development in the home improvement industry. The new store features 5,025 square feet of sales area and a 148,000-square-foot lumber yard. It represents a $350,000 local investment and created 10 jobs. Jim Allair is the store manager.

Corydon Hardware in Winnipeg will close its doors after 75 years in business. As he approaches retirement, owner Rob Benson doesn’t think a sale is viable, and he plans to rent the space out instead. The story of the closing has been picked up by various media, including CBC and the Winnipeg Free Press, and the store has become a lightning rod in local and national media for the vulnerability of independent retailers in today’s economic climate.

RONA has a new reality show, Le grand chantier RONA. It debuts on Quebec TV April 1. Produced in partnership with Noovo and Zone3, it’s hosted by Marie-Lyne Joncas, with the collaboration of designer Daniel Corbin and contractor, Pierre-Olivier Cantin. The premise of the show will pit 12 couples against each other over a 10-week period, as they complete a series of home improvement projects to win a fully-furnished new home worth $700,000.

Doman Building Materials Group Ltd., the owner of CanWel, has acquired, through its U.S. subsidiary, two lumber pressure-treating plants formerly owned by Southeast Forest Products. They are located in Richmond, Ind., and near Birmingham, Ala. The acquisition adds approximately 300 million board feet of annual treating capacity to the Doman Lumber platform.

Canfor Pulp Products reported a net loss of $96 million for the fiscal year 2023, compared with a $79.1 million loss in 2022. For the fourth quarter, the company narrowed its net loss to $13.2 million from $69.8 million a year earlier. Sales for the year fell to $875.5 million from $1.09 billion in 2022. In Q4, sales of $193.9 million were down from $268.1 million.

Canada’s central interest rate will remain at five percent, a level that has been maintained since July 2023. It was not lowered amidst fears that such a cut would further aggravate the country’s inflation and heat up the housing market. Canada’s inflation rate settled to 2.9 percent in January. The Bank of Canada’s target inflation rate is two percent. (Bank of Canada)