ST. JACOBS, Ont. — Major changes have occurred at Home Hardware Stores Limited over the past couple of years. And most recently, the company’s merchandising department has seen a raft of new faces, beginning with the hiring of Marianne Thompson at the beginning of 2019.

Thompson came from the vendor side—she spent almost nine years at Alexandria Moulding before joining Jeld-Wen in 2017. At Home Hardware, as senior vice president, merchandising, her buying teams have undergone a major overhaul. She spoke recently with Hardlines.

One concern that dealers and vendors alike have expressed to Hardlines is the state of the culture of Home Hardware, as established by co-founder Walter Hachborn.

Thompson was happy to address that point. She notes that what underlies the changes taking place is the company’s shift from operating as a wholesaler, whose customers are primarily the dealers, to being “an integrated retailer.” That means the focus is on the end customer walking into those dealers’ stores.

“In a wholesale model, we had our dealers at the centre of the business model. And moving forward, it’s about having consumer-centric assortments.” That means putting the customer at the centre of that model. “It’s a significant, fundamental shift. It’s about understanding consumer insights, how consumers shop categories and making sure our dealers have the best-in-class assortments—and obviously having that selection in our distribution centre to support them.”

Thompson stresses that the core values of the company remain intact. “The vision has not changed—that is to be Canada’s most trusted home improvement brand.”

She admits that, with more than 1,000 dealers to serve, each of them striving to provide a product mix that suits their respective community, managing that assortment “brings complexity” to her team. “We have to be flexible with that and carry more SKUs in our assortment because we believe in our dealers having that localization of their assortment. It’s what makes them win in their market and makes a customer go to their store in their community.”

Looking internally, a number of the new hires on her team have been drawn from other large retailers, including Canadian Tire, Lowe’s Canada and Sobeys. Here again, Home Hardware has broken from tradition, having traditionally encouraged hiring from within.

“It’s really invaluable, as we build out the customer-focused assortment, how to buy for category management assortment is different than the wholesaler model,” says Thompson, adding that the new faces from other retailers bring real expertise.

“Today, Home Hardware is a brand that Canadian’s know, love and trust. We are on a journey to strengthen this great organization which serves over 1,000 communities across Canada. We are locally owned, genuinely Canadian, and we are building on the best of the past to ensure an even brighter future,” she adds.

BOUCHERVILLE, Que. — BMR Group’s totally virtual trade show took place from October 5 to 8 under the theme “Strong. Here. Now”. The theme reflects network members’ engagement and positive attitude during an exceptional year. The online event featured new product information that also revealed some new lines and strategic growth categories for the group.

The format enabled the company to offer a series of webinars that featured new products and shared BMR Group’s vision with its member dealers.

A private, web-based platform was specially designed to give BMR dealers access to relevant information to support them during their annual bookings. According to BMR, the event was “a huge success,” as indicated by the levels of online participation it received. The webinars were viewed either live or in their recorded formats more than 2,800 times. Nearly 1,250 connections were recorded on the web-based platform dedicated to the event.

Among the many new products presented to dealers was a new urban flooring concept aimed at making BMR a leader in that field. The company also took the opportunity to roll out its new modern kitchen and plumbing assortment, as well as new lines in fast-growing categories such as horticulture.

As with the live show of the past, BMR wanted to celebrate the year’s achievements with its members. The show’s closing event took place virtually before a crowd of 500 dealers, employees and suppliers. The group presented 20 awards in the categories of growth in purchase volume, suppliers of the year and entrepreneurship, where dealers who made acquisitions or renovated their stores were recognized.

The Quebec-based group, which serves more than 300 building centres and hardware stores in Quebec, Ontario and the Maritimes, also took the opportunity to highlight the arrival of five new dealers—four in Quebec and one in Ontario.

During the closing event, CEO Pascal Houle presented an honorary award to all BMR dealers to express his appreciation for their exceptional work in recent months.

SPECIAL REPORT — A single retail chain accounts for almost one-quarter of retail home improvement sales in British Columbia. In Quebec, one independent chain, with fewer than 30 stores, has almost as much market share as all 130-plus Home Hardware dealers.

These are just some of the insights in the 2020 Hardlines Market Share Report.

The report compares the sales strength of the various banners and buying groups based on province and region. For example, Castle Building Centres is second only to Home Hardware for share of market in Newfoundland and Labrador. While Home Hardware has just over 50 dealers in the province, Castle’s 37 member dealers there provide solid competition in the number-two spot.

The latest Hardlines Market Share Report breaks out the sales by banner of every major retail banner and buying group in Canada by province. The data is accompanied by store counts and estimated sales per region.

This exclusive report, only available from HARDLINES, features:

• Sales by province and region of every key hardware and home improvement retailer in the country;
• Market share broken down by store format;
• Charts and graphs to visually represent all data;
• Market share by province of all the hardware and home improvement retailers in Canada, including year-over-year comparisons.

The report, in handy PowerPoint format, provides never-before released information on the market share in every store format, region and province using sales data for year-end 2019.

(For more info or to order your own copy of the Hardlines Market Share Report, click here!)

CHHMA appeals to feds to create rules for vendor contracts with retailers

TORONTO — As retailers grab up any product they can to keep their own customers satisfied, vendors are having trouble keeping enough inventory of their own. But efforts to stockpile can be hampered by limits to staff and output that were in place months ago based on yearly forecasting.

Now, vendors are feeling further pressure from large retail customers even as infection rates are on the rise in many parts of the country. Loblaw Cos. revealed recently it would fully reinstate fines to suppliers for light shipments. That charge had been suspended in March as demand became unpredictable. The grocery giant had begun to phase fines in again in June while still allowing for light shipments when demand soared above forecasts.

According to Sam Moncada, president of the Canadian Hardware and Housewares Manufacturers Association, this is not a strategy that has emerged in the home improvement channel. But it’s the kind of thing that concerns his members. “The vendors are trying to be responsible and respectful, trying to meet the needs of all their customers,” he says. This kind of move would add pressure while the pandemic continues to rage and force them to play favourites with their retailer customers, he says.

A common practice, especially in grocery, is for retailers to begin deducting two or three percent off the amount owed on invoices for everything from stocking fees to development charges. Walmart Canada went even further back in July when it announced it would withhold payments to suppliers as a way to force them to fund the chain’s physical and e-commerce expansion efforts.

With the increase in executives and merchants getting hired from the large grocery chains by home improvement retailers, such practices are growing in this sector.

CHHMA has been lobbying the federal government to adopt a “code of conduct” for retailers that would set guidelines for their negotiations with suppliers. The concern among vendors is so great that CHHMA is now working with an economic advisor at Innovation, Science and Economic Development in Ottawa.

One result was the drafting of a letter that has been sent out to various ministers asking them to review retail practices and look for ways to support Canadian vendors and Canadian jobs. The letter states in part that “years of government-approved mergers have left just a few retailers in control of more than 80 percent of retail sales in Canada.  These giants have long implemented unfair practices that contribute to high costs … and make Canada increasingly uncompetitive and severely limit manufacturing investment and job creation.”

“We’re asking the federal government to put something in place that would include discussion with the vendors,” says Moncada. He’s pushing for rules or some kind of legislation that would limit the kinds of changes or revisions a retailer can add to contracts after they’ve been negotiated.

He’s heartened by the fact that the feds approached CHHMA looking to help. “Kudos to the federal government for reaching out to various industries and looking for ways to keep the economy on track.”

At OS&B, Alison Watson has joined the plumbing manufacturer as retail manager. Watson has an extensive background in the retail sector, from account management and support roles to selling to contractors and builders. Her background includes 11 years at CertainTeed and more than 12 years at Home Depot.

… that we are always looking for new products to feature for dealers? We have two publications that serve home improvement retailers. Our print magazine, Hardlines Home Improvement Quarterly, and our monthly e-newsletter, Hardlines Dealer News, both reach audiences of dealers and store managers across the country. And one of the things we know they are interested in is new products. If you’re a supplier with new products that are available to Canadian dealers, let us know! Send your product info to our New Product Editor, Geoffrey McLarney. (And yes, this is a free editorial service!)

VAUGHAN, Ont. — TIMBER MART’s buying show is the latest event to shift to remote participation. The show will take place February 8 to 11, 2021 via an online trade show platform. The buying group is expecting a healthier turnout at the TIMBER MART Virtual Buying Show than it has had at in-person events. “Without barriers to entry like cost of travel and time out of the store, we expect that more of our members will attend this show than ever before,” TIMBER MART CEO and President Bernie Owens said.

ST. JACOBS, Ont. — The Kawartha Home Hardware Group is slated to open its newest store by the end of November in Lakefield, Ont. The new Home Building Centre will occupy a site acquired from another banner, right behind the local Foodland store. General Manager Frank Geerlinks has plans to showcase the new store once the shelves and lumber yard are fully stocked and finishing touches on the retail space are complete.

BOUCHERVILLE, Que. — Lowe’s Canada has announced that its Heroes Campaign has raised more than $2.1 million for some 235 non-profit organizations and public schools across the country. This year, for the first time, 47 stores affiliated with the RONA banner and five distribution centres in the network joined Lowe’s, RONA and Reno-Depot corporate stores in the campaign. Throughout September, 289 Lowe’s Canada network sites joined forces to raise funds in support of their chosen partner organization’s mission or specific project.

MISSISSAUGA, Ont. — Walmart Canada is seeking to immediately hire 10,000 new workers. The hiring news follows a $3.5 billion investment in the business to generate growth and simplify the connection for customers between online and in-store shopping. The investment over the next five years will lead to the use of advanced technologies to move products as quickly as possible. The jobs include e-commerce store associates who prepare online orders, drivers to deliver those orders and grocery staff.

ATLANTA — The Home Depot has announced the winners of its 2020 Innovation Awards for state-of-the-art products. The Overall Winner is the Frigidaire Air Fry Range by Electrolux and the First Runner Up, also in the cooking category, is the Masterbuilt Gravity-Fed Grill/Smoker. Second Runner Up is the Lutron Sunnata Touch Dimmer with LED+ Technology. The Home Depot held its annual supplier meeting and 2020 Innovation Awards virtually for the first time, with suppliers and partners joining virtually for a live-streamed ceremony.

OAK BROOK, Ill. — Ace Hardware Corp. has placed fifth in the 2020 Franchise Times Top 200 List. The magazine’s annual list ranks the largest U.S. franchises by global sales. Ace Hardware first moved up to the number-five spot last year after four consecutive years in sixth position.

MONTREAL — Richelieu Hardware reported Q3 sales of $311.2 million, a 15.6 percent increase from the year prior. Sales to hardware retailers and big boxes stood at $64.7 million, up 82.8 percent over Q3 of 2019, amid the surge in demand in the wake of the COVID-19 outbreak. In Canada, Richelieu recorded sales of $203 million, up $23.1 million or 12.8 percent from a year ago, of which 8.2 percent was from internal growth and 4.6 percent from acquisitions.

NORWALK, Conn. — The National Hardware Show held its first-ever virtual event last week. It offered participants a platform for viewing new products and setting up virtual meetings with online exhibitors. They could also connect with NHS on Facebook and Instagram for real time updates. A big part of the show was the educational aspect, hosted mainly by the North American Hardware and Paint Association, through its All-Industry Conference.

NOTED

Retailers are struggling to keep bird feed stocked amid a spike in demand. Ontario-based Armstrong Bird Food supplies chains such as Canadian Tire, RONA and Canac. Ingrid Smith, who heads up customer service at Armstrong, confirmed the shortage in a note to Quebec City’s Le Soleil.

OVERHEARD…

“There are several studies that show that increased evening daylight actually gets people out shopping, so it helps our small businesses.”
—Jeremy Roberts, Ontario MPP for Nepean, whose private member’s bill to abolish the time change has passed second reading.

ATLANTA & TORONTO — Jeff Kinnaird has been promoted to executive vice president of merchandising at The Home Depot. Most recently, he was president of The Home Depot Canada.

Michael Rowe (shown here) has been promoted to replace Kinnaird as president of The Home Depot Canada.

Kinnaird joined The Home Depot in 1996, starting in the lumber yard at the Richmond, B.C., store. He worked his way through various roles, including store manager and district manager, to become Regional VP of operations in 2005. After that, he oversaw divisional product assortment and innovation as the VP of merchandising for five years until he was appointed president of the Canadian business in 2016.

As part of the restructure, Home Depot has confirmed that Kinnaird will move to Atlanta eventually to assume his EVP merchandising role.

Prior to getting the top job in Canada, Rowe was vice president of e-commerce, marketing and contractor services, where he led all marketing and advertising efforts across Canada, as well as e-commerce, installation services, contractor services and strategy. Prior to that, he served as CFO for The Home Depot Canada. Rowe joined the company in 2006.

The changes in Canada are part of a wider executive reorg within the company out of its head office in Atlanta. Company head Craig Menear has served as CEO and president of The Home Depot since November 2014 and added the chairman title early in 2015. He has handed the president’s role to Ted Decker. A 20-year veteran of the company, Decker served most recently as EVP merchandising, before that job was handed off to Kinnaird, and now holds the COO title in addition to being named president.

RED DEER, Alta. — The acquisition of TSC Stores by Peavey Industries has created a juggernaut in the farm and ranch sector, with stores that now reach from Ontario to British Columbia. With two exceptions, the TSC stores are all in Ontario and starting this week, their signage is being switched to the Peavey Mart banner.

Doug Anderson, president and CEO of parent company Peavey Industries, is excited about the latest step in consolidating the TSC business. He’s also positive about the farm and ranch sector in general. “It’s stable. It’s strong. It’s growing, especially in the U.S.,” where, he notes, there are still lots of regional players.

Anderson sees strong growth in Canada, as well, with several smaller retailers operating. “But Peavey has established itself as the country’s leading farm and ranch retailer,” he says. And the sector has seen strong sales over the past six months. “Both Peavey and TSC saw significant increases during COVID.”

Peavey began the takeover of TSC in 2016, buying up full ownership over the following year. The union was a natural fit between the two privately held retail chains that shared a similar retail model, while being distinct geographically. TSC Stores was based in London, Ont. and Peavey is based in Red Deer, Alta. At the time of the takeover, Peavey had 36 stores ranging in size from 10,000 to 35,000 square feet. The stores feature a wide assortment of hardware, farm and pet, automotive and home improvement products. Serving Western markets, most of Peavey’s stores are in Alberta and Saskatchewan.

The TSC acquisition added 51 stores that average 16,000 square feet in size. Except for two stores in Manitoba, all of its business is based in Ontario. Those two Manitoba stores turned out to be the testing ground for Peavey’s plan to switch out the TSC banner. The locations, in Winkler and Brandon, were converted to Peavey Mart soon after the initial takeover.

According to Jest Sidloski, vice president marketing, e-commerce and customer experience at Peavey, the success of the transition wasn’t a given, as the retailer did not have any of its own stores in that province. “It was not really Peavey country,” he says.

Nevertheless, the company did get feel for the viability of a wholesale switch of the TSC banner. “We got some learnings from that and saw some great success,” Sidloski continues.” It was really Peavey’s introduction to Manitoba and it was received very well.”

The conversion process is expected to be completed by early 2021.

Anderson adds that the entire process of the TSC takeover gave him and his team a chance to dig deeper into the Peavey business. “Both companies are similar on the surface. But there are differences in how they were built up. The structure of TSC was a huge opportunity for us to really grow as a combined entity.”

NORWALK, Conn. — The National Hardware Show is starting today, and you can still attend, as it’s a virtual event. It runs until October 15.

A virtual exhibitor directory of NHS suppliers and manufacturers will showcase products and brands across a range of categories. Other highlights of the event include a new product showcase, which will allow buyers to source and expand their current product offerings, and a “Pitch Panel” hosted by the United Inventors Association.

A big part of the show is the educational aspect, hosted mainly by the North American Hardware and Paint Association, through its All-Industry Conference.

“We are pleased to be able to host NHPA virtually, as the full program will offer a mix of keynotes and panel presentations from an all-star roster of industry professionals with different perspectives and valuable insight to help evolve and propel businesses forward,” says Rich Russo, the NHS’s industry VP.

As keynote presentations, NHPA executive VP Dan Tratensek will hold a conversation with Dan Starr, CEO and president of Do it Best Corp., on “How Independents Are Still Disrupting”. Kevin Hancock, chairman and CEO of Hancock Lumber, will deliver a talk entitled “Employees First: Disrupting Assumptions for More Loyal Customers and Stronger Sales.”

(Click here for full program details and dates.)

WINNIPEG — For the first time in its history, the Western Retail Lumber Association’s Building & Hardware Showcase in-person event has been cancelled, a result of the ongoing COVID-19 pandemic. The show was originally scheduled for January 21 to 22, 2021 in Winnipeg.

To ensure that the WRLA can safeguard the health and safety of members, the association has developed a platform that will include its publication, Yardstick, supported by an app. With these tools, the WRLA intends to provide a new platform to engage vendor and dealer connections, offer education opportunities and build industry awareness.

“The WRLA board and staff are disappointed that we had to cancel one of the industry’s largest shows,” says WRLA President Liz Kovach. “We recognize this event is important to members’ business development and these alternatives will allow everyone to still collaborate, network and showcase innovation to the industry.”

The January issue of the association’s bi-monthly Yardstick magazine will contain a special product showcase section. Through the publication and app, members can participate in:

• member “booths” with company profiles, product info and staff intros created by the members;
• a new products feature area;
• show specials;
• warehouse sales;
• opportunities to connect with other members;
• in-app contests.

Members can also have virtual product knowledge sessions hosted by the WRLA. The association will hold various education sessions on industry and business topics from January 18 to 29, 2021.

(For more information on the show publication and app, download the media kit here.)

Greg Muir has been named west region sales manager at Allegion, PLC. He is based in Okotoks, Alta.

Steve Guterres has been promoted to director of sales in Canada for BLANCO. He will report to Garth Wallin, president and CEO of BLANCO North America. Guterres joined the BLANCO Sales team in 2011 as a key account manager before being promoted to national sales manager. He was made senior national sales manager in 2017.

… that just two provinces account for more than half of all retail home improvement sales in Canada? Or that one retailer has twice the share of the market in British Columbia than the nearest competitor? It’s all in the new Hardlines Market Share Report. Hardlines subscribers save more than 20 percent on pricing, so be sure and take advantage of this! Click here now to learn more and order yours!

BOUCHERVILLE, Que. — Lowe’s Canada will pay a discretionary bonus to all eligible full-time, part-time and seasonal associates working at Lowe’s, RONA, or Reno-Depot corporate stores, contact centres, and supply-chain facilities in Canada in the latter half of October. Full-time hourly workers will receive $300, and part-time and seasonal associates will receive $150. The October bonus is in addition to the discretionary bonuses paid in March and August, and to the special $2-per-hour wage premium paid from April through July.

WINNIPEG — Sexton Group has announced the addition of three new members. Urban Windows & Doors in Sudbury, Ont., was founded in 2006. Midwest Island Woodworking Inc. is located in Nanaimo, B.C., and offers environmentally friendly flooring. Rounding out the new recruits is 16 Lumber, located in Russell, Man., near the Saskatchewan border.

BOUCHERVILLE, Que. — BMR Group has added Centre de rénovation Port-Daniel in the Gaspé as a member in Quebec. Richard Briand is the store owner. With a sales area of 2,800 square feet and a 15,000-square-foot lumber yard, the overhauled store will offer nearly 6,000 products.

OTTAWA — Lee Valley Tools is taking its in-store COVID-19 precautions a step further with the launch of a new mobile shopping tool. Integrated with the LeeValley.com website, it allows for mobile contactless shopping in each of the company’s 20 locations. Customers do not need to download a separate app to use the mobile feature. They simply visit LeeValley.com when they enter the store and click a barcode icon, select their store location and start shopping.

SUPPLIER NEWS

OSAKA — OLFA Corp. has announced the establishment of two new companies in North America: OLFA North America Inc., based in Oakville, Ont., and OLFA U.S.A. Inc. in Terre Haute, Ind. The move aims to strengthen OLFA’s sales and marketing capabilities and product development. Both companies are wholly owned subsidiaries of OLFA and sales activities will commence December 7. OLFA has been selling products in North America through its distributor, Corelle Brands, but effective December 5, the distribution of OLFA products will transition from Corelle Brands to the two new companies. (For Canadian inquiries regarding OLFA products, contact: Sales Canada.)

ECONOMIC INDICATORS

Housing starts in September slid to a seasonally adjusted annual rate of 208,980 units, down 20.1 percent from 261,547 units in August. The SAAR of urban starts decreased by 21.1 percent to 195,909 units. Multiple urban starts decreased by 27 percent to 146,005 units while single-detached urban starts increased by 3.4 percent to 49,904 units. Rural starts were estimated at a SAAR of 13,071 units. (CMHC)

Total investment in building construction increased five percent to $16 billion in August. Residential-sector investment increased 8.2 percent to $10.8 billion, while non-residential investment decreased 1.2 percent to $5.2 billion. Investment in residential construction rose for the fourth month in a row in August, with a 5.4 percent increase in the single-family sector to a total of $5.4 billion. (StatCan)

OVERHEARD…

“This new format is actually a really exciting opportunity for members. This is a fresh way for vendors to reach people they would have seen at the show, plus they can also connect with others who may not normally travel to the show. … This is the next-best thing to an in-person event.”
—Joel Seibert, chair of the board of the Western Retail Lumber Association, on the WRLA’s move to a virtual buying show in January.

“We continue to grow our diverse member base across Canada, and our three new members from eastern and western provinces reflect that.”
—Eric Palmer, vice president and general manager of the Sexton Group, on the recruitment of three new member dealers.

ST. JACOBS, Ont. & RED DEER, Alta. — Home Hardware held its 2020 Virtual Fall Market from September 13 to 23. Dealers and store staff could view presentations, while suppliers showcased their products on a digital platform.

But they weren’t alone. Peavey Industries held its first online market for its Ace dealers last week. According to Scott Bennett, senior vice president of merchandising, the event was well received over the two days it was held, attracting Ace dealers from across the country to connect with more than 150 vendors. The platform will remain open until October 13 for dealers to finish placing orders.

Meanwhile, BMR Group is hosting its dealer market online beginning today and running until October 9. It replaces the traditional live show that is historically held the first week of November in Quebec City. The company has moved up the date as it intends to roll out its new Solstice ERP system next month.

Lowe’s Canada says this year’s RONA buying show will be held exclusively online. It’s open to all RONA affiliated dealers and is expected to showcase about 250 vendors. It starts October 19 and will last until November 27.

The model appears to be working. Both Home Hardware and Peavey expressed satisfaction with the virtual buying process. “We are thrilled with the success of our 2020 Virtual Fall Market, which built on the experience and capabilities of our inaugural virtual market held in the spring,” said Home Hardware President and CEO Kevin Macnab. “Our enhanced platform allowed us to deliver engaging presentations in our virtual auditorium and host an interactive tradeshow, providing dealers with an even better market experience.”

For Peavey, Bennett said his team learned a lot from the online Ace show. Dealers had access to the senior executives at Peavey, as well as the entire merchandising team over the two days. He expects the company will build on what they’ve learned to better connect dealers and vendors in the future.

BOLTON, Ont. — Less than two months into his tenure at the helm of TORBSA, Paul Williams is already busy making good on his pledge to focus on dealer recruitment and vendor relations. Those objectives feed into each other as Williams is able to draw on his Rolodex to build relationships on both sides of the business.

“Our plan short-term and long-term is to grow the membership. I come from the vendor community and I have a lot of contacts on that side,” he says. “Whether it’s from dealers who aren’t with a group currently or dealers who are with a competitor, growth is the goal.”

In September, the buying group announced it was welcoming A Line Acoustic Supply, a distributor of drywall, ceiling and insulation products from outside Toronto. Later in the month, Rehill Building Supplies (shown here), a Peterborough, Ont., masonry specialist dating back to the 1870s, followed suit.

Those expansions followed the July announcement that Matériaux de Construction Létourneau, with locations in Waterville and Sherbrooke, Que., was joining TORBSA, growing the buying group’s footprint outside its Ontario base.

Williams says that the group’s transparency and low overheard are key to its appeal to dealers. “We do full financial audits at the end of the year that we give back to our shareholder-dealers so nothing is a secret,” he explains. “All our programs with our vendors are negotiated with our shareholders so … in terms of rebates, we don’t hide anything.”

“We have a lean team in Bolton,” he adds. “We don’t hire anyone who would be unnecessary, for marketing reasons or to have bells and whistles. Costs are low in order to put dollars back in dealers’ pockets.”

That cautious and strategic approach extends to dealer recruitment. Williams says that building trust with prospective recruits takes time and constant communication.

“I’ve been on the job for eight weeks and had no less than 16 or 17 discussions with dealers across the country. It’s always ongoing.”

LAVAL, Que. — A national merchandising agency based in the Montreal area is adding services to help its vendor customers deal more effectively with the challenges of the current COVID-19 pandemic. RDTS has begun surveying those vendors to get an indication of how the pandemic is affecting business. In mid-August, the company asked how vendors have been impacted.

While retail has been strong across the country, the results from the supply side were surprisingly mixed. Almost one-third saw sales increase during the crisis, while 29 percent said it had “no impact.” Yet fully 40 percent reported a decrease in sales, reflecting just how deeply the effects of the pandemic are being felt.

RDTS President Robert Di Tomasso says sales have certainly increased for a range of vendors, but some did not benefit from the surge in lockdown-inspired DIY that has supported most home improvement retailers through the past six months.

The current DIY boom started with paint and decorating projects, with those vendors reporting record increases—and empty warehouses. When people moved outdoors to begin landscaping and patio projects, related suppliers of these products saw similar gains.

However, product demand has been shifting, says Di Tomasso. “Plumbing and electrical categories did not enjoy as much sales growth, as contractors who drive these categories could not work on residential jobs for three months.”

Looking ahead, the survey asked when vendors expect a return to normal conditions. Almost 10 percent saw it happening right now, with one-fifth (21 percent) anticipating a return by year’s end. However, two-thirds said a recovery will take until 2021 to occur. An even more sobering outlook was reported by eight percent of respondents, who said business will never be like before.

RDTS is planning a second survey in coming weeks, reflecting the effects of a second wave now being felt in some parts of the country. “We will continue to survey the industry on a regular basis and collect more intimate data,” he says. “It helps us better understand the consumers, but also the changes occurring quickly in consumer behaviour, as well as retail offerings and product categories,” says Di Tomasso.

“We want to keep close to our customers with retail insights and marketing intelligence.”

ATLANTA — Over the past decade, Home Depot has seen a steady rise in its contractor customer base. Coming out of the global recession of 2008 and 2009, those pro customers got back into Home Depot stores faster than DIYers.

The company has invested heavily in catering to pros in recent years. But coming through the current COVID-19 pandemic, Home Depot, like so many home improvement retailers, has seen a surge in retail traffic. Speaking recently at an investment conference in the U.S., Chairman, President and CEO Craig Menear said he estimates pro business for Home Depot at about $60 billion, or 54 percent of overall sales. But he notes that DIY has been leading the charge in recent months.

This remains good news, Menear says. Despite the rise of the pro in recent years, he says he doesn’t want the company to lose sight of the DIY customer base upon which Home Depot was built.

During COVID, he says, sales increased by double digits in 13 of the retailer’s 14 categories. Plumbing was the one category that fell short. Although sales here were in the high single digits, plumbing suffered overall as the installation business fell off and these types of contractor jobs were put on hold.

DIY projects that gained momentum in recent months included lawn and garden as well as paint and décor. And even though lockdowns have helped accelerate DIY sales, the company is also seeing the millennial generation begin to embrace a more do-it-yourself attitude.

The Home Depot Canada is experiencing a similar trend. “We recognize that through COVID-19, both our Canadian consumers and pros have faced unique challenges, but engagement remained high through both segments,” says a company spokesperson. “Many millennials are tackling DIY projects or renos for the first time, while we’re also seeing more mature shoppers purchasing online for the first time.”

Giant Tiger Stores has appointed 17-year company veteran Paul Wood to take over as CEO from founder Gordon Reid, as conditions for the discount goods market heat up during the pandemic. Wood says the company will continue to look for expansion opportunities in new markets.

… that more than half of all retail home improvement sales last year came from just four retailer groups? That is just one of the many statistics you’ll find in the 2020 Hardlines Retail Report. It’s your definitive guide to the state of the industry, with in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent on pricing, so be sure and take advantage of this! Click here now to learn more and order yours!

BOUCHERVILLE, Que. — Lowe’s Canada is recruiting to fill more than 625 full-time and part-time positions in its RONA and Reno-Depot corporate stores in Quebec. About 30 positions are also available at the Boucherville distribution centre. Available positions include sales specialists, lumberyard associates, department managers, cashiers, stockers and customer service assistants.

BOUCHERVILLE, Que. — RONA Weyburn is celebrating its grand opening under dealer-owner Jeff Chessall. The store, which is near the Saskatchewan-North Dakota border, now boasts a 10,000-square-foot sales area, a 25,000-square-foot outdoor lumberyard and a 3,000-square-foot garden centre.

ISSAQUAH, Wash. — Costco Wholesale Corp. reported Q4 earnings rose by 16.36 percent to $3.13 per share. Revenues of $53.38 billion were up 12.39 percent. For the fiscal year, net income came to $4 billion, compared to $3.66 billion. In Canada, comp sales rose by 9.1 percent for the quarter and five percent during fiscal 2020.

SUPPLIER NEWS

DELTA, B.C. — Regal ideas is partnering with Melville, N.Y.-based Sherwood Lumber for the distribution of Regal’s outdoor living products in the U.S. Northeast. Sherwood Lumber will stock Regal ideas products in its DCs and offer the manufacturer’s complete line of products.

QUEBEC CITY — Building trades have been spared as Montreal and Quebec City enter a “red zone.” These Quebec regions, as well as Chaudière-Appalaches, which have all entered the highest level of provincial public health measures, won’t see restrictions re-introduced on construction sites. The province’s initial lockdown measures saw jobsites left in limbo from March 25 to May 10. The regional “red alert” saw restaurants and bars close October 1, even though most other businesses remain open.

ECONOMIC INDICATORS

Sales of new U.S. homes rose by 4.8 percent in August to a seasonally adjusted annual rate of 1.011 million units. It’s the highest level those sales have reached since September 2006. (U.S. Commerce Dept.)

NOTED

The U.S. government is taking criticism for wanting to appeal the World Trade Organization’s latest ruling on the softwood lumber dispute, even as it has worked to delegitimize the agency’s appeals body. Currently, the WTO lacks a quorum of judges, as the U.S. has vetoed the appointment of replacements for retiring incumbents in protest at what it sees as the body’s overreach. The Canadian government has hit back at the apparent contradiction in the U.S. seeking recourse to a body it decries as unfair.

OVERHEARD…

“We’re really not set up for new construction. We have homebuilders that shop at the Home Depot. But that is not what we are really set up to do. We really don’t cater to new construction. We couldn’t put together a lumber package to save our life. That’s just not our forte. We don’t have the space in our stores to be able to do that. That’s just not who we are.”
—Craig Menear, chairman, president and CEO of the Home Depot. He spoke recently at an investment conference about the importance of the pro customer.

NORWALK, Conn. — The National Hardware Virtual Show will be held from October 12 to 15. In addition to a lineup of online exhibitors, the virtual show will feature educational programming focused on today’s challenges and trends.

It will be held in conjunction with the virtual All-Industry Conference, organized by the North American Hardware and Paint Association (NHPA). This year’s conference is presented with the theme “Industry Disrupters: How Today’s Leaders Are Winning the Retail Game.” Both events are free to dealers and buyers.

During the virtual show, attendees will be able to sync up their calendars and allow NHS to facilitate direct and virtual appointments between buyers and retailers and their suppliers, via Jublia, an event app. Additionally, attendees will get the chance to see and source the newest products and tools to help expand their current product offerings.

“Over the past few months, our team has had to rethink everything and open our minds to new, innovative ideas,” said Rich Russo, industry vice president, National Hardware Show. “We’re excited about our pivot to virtual, which allows us to bring our robust NHS programming to customers across the globe in a new, safe way.”

NHS is also working on plans to return to a physical show in Las Vegas next spring, with scheduled dates of May 11 to 13, 2021.

(For full details on the upcoming virtual NHS, click here.)

SPECIAL REPORT — The news recently that Shop-Vac is going out of business drew a lot of attention within the industry. The brand, which was synonymous with the wet-dry vac category, is closing its doors after 70 years in business. In statements to the press, the company blamed its demise on the challenges of an economy battered by the effects of the COVID-19 pandemic. It had set its hopes on being acquired by another company, but that deal fell through.

The fate of Shop-Vac does not, however, appear to typify the state of other vendors in the home improvement channel, especially in this country. While suppliers and retailers alike have felt the impact of the current crisis, hardware and home improvement has enjoyed more buoyancy than other retail sectors throughout the summer and into the fall.

According to Sam Moncada, president of the Canadian Hardware and Housewares Manufacturers Association (CHHMA), his members “are doing very well.” Moncada was surprised to hear about Shop-Vac, as his indications were that the company had been doing well—at least in Canada. “They were the ‘Kleenex’ of the wet-dry vac category. That’s how well-known they were,” he says.

Moncada believes the entire hardware and home improvement industry is on track to have a good year. “Everybody is stable. Everyone is making their numbers.”

In fact, vendors are having the problem of keeping up with demand, as the industry is benefitting from a populace that is stuck at home and willing to invest in their spaces to make living and working more amenable. “Most of our members are having issues keeping product in stock for the next three to six months, as everyone is drawing on their inventory. Their sales are all over expectations.”

Wolf Gugler, president of Wolf Gugler Executive Search, focuses on the hardware and home improvement industry. He evaluates the health of the industry based on how many individuals are in flux with their jobs. Early in the lockdown, he had a rash of calls from people who found themselves out of work. But by the end of the second quarter, things had settled down. “The flow of candidates who have lost their jobs due to COVID are few and far between now,” he says. He had only one executive search get put on hold due to the pandemic—and he fully expects that to resume in the near future.

One factor that has changed is the demand for people with digital experience. As the online sales at most retailers have soared over the past six months, being digitally savvy is a big plus for candidates. “The important factor now is the e-commerce experience,” Gugler adds.

The next challenge for vendors is how to prepare for the months ahead. As retailers draw on more inventory, everyone is stockpiling product whenever they can. Moncada at the CHHMA expects the rest of the year to be positive, even if forecasting remains uncertain for 2021. But overall, he says the outlook is positive. “If you’re well managed and you’re doing well now, you’re going to be okay.”

INDIANAPOLIS — The North American Retail Hardware Association (NRHA) is broadening the reach of its membership to include independent paint and decorating store operators. And it’s changing its name to reflect this evolution.

The association will now be known as the North American Hardware and Paint Association (NHPA) and will represent the interests of all independently operated hardware stores and home centres, plus paint and decorating outlets, throughout North America. The change comes following the closure of the Paint and Decorating Retailers Association, an organization that NRHA had worked with for many years.

“Independent hardware stores and home centres share so much common DNA with independent paint and decorating retailers that this expansion of our membership can only benefit the industry as a whole,” says NHPA President and CEO Bob Cutter. “We are excited to offer paint and decorating retailers an expanded breadth of resources, and we look forward to combining all of their ideas and insights with the already strong pool of retail thought leaders from the hardware side of the channel.”

As part of this expansion, independent paint and decorating store owners and operators will immediately have access to all of the free programs and services already available through the newly named NHPA.

Former PDRA CEO LeAnn Day will be serving as NHPA’s executive director for NHPA paint and decorating programs, a newly created position. Dan Simon, a long-time fixture with PDRA’s publishing operations, will also continue to represent ​Paint & Decorating Retailer​ magazine to the industry. NHPA will take over producing the monthly publication.

“We want to make sure paint and decorating retailers have access to the programs and information they have come to rely on to run their businesses better and more efficiently, but also have them realize they are now part of a larger community with a broader range of resources and programs available to them,” Cutter says.

NATIONAL REPORT — The lead story in Hardlines 25 years ago was a roundup of business conditions across the country. At the time, the industry was dealing with a slow housing market and a tight retail market.

In the West, IRLY Distributors, whose member-dealers carried the IRLY Bird banner, reported business slowing on Vancouver Island and in British Columbia’s interior region. That followed the group’s second-biggest August ever, according to General Manager Al Munro. On the other side of the country, John MacDougall, president of the AWARD buying group, admitted his members were contending with one of the worst housing markets in the country, especially in Newfoundland.

Both groups would merge into the TIMBER MART buying group over the next few years.

And at the TIMBER MART office (then called Tim-BR-Marts Ltd.), VP Merchandising David Mackenzie said his group had seen “a slight turnaround,” despite conditions. At Castle Building Centres, Pro Wylie was positive about his dealers’ performance overall, saying they had fared relatively well, despite pressure on margins due to growing competition.

Home Hardware had just had its fall market a week earlier and reported steady growth. However, the LBM side was below budget for the year to date, which was also blamed on slow housing starts.

Larry Tysoe at ILDC expressed the outlook of most groups when he said, “the regional picture is as bleak as the national one,” and expected his dealers for the year to “be about even.”

At Liteline Corp., Martin Parilak has joined the company’s Canadian regional sales team supporting customers in Western Canada. Parilak brings more than 20 years of electrical industry knowledge and experience to the lighting manufacturer, as both a distributor and agent.

…that more than half of all retail home improvement sales last year came from just four retailer groups? That is just one of the many statistics you’ll find in the 2020 Hardlines Retail Report. It’s your definitive guide to the state of the industry, with in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent on pricing, so be sure and take advantage of this! Click here now to learn more and order yours!

RED DEER, Alta. — Ace Canada held its Virtual Buying Show over two days last week. It was the first virtual show for the banner’s approximately 100 dealers, and their first show since Peavey Industries acquired the Ace licence and distribution business back in March. Peavey is supplying all Ace Canada dealers’ hardware and farm needs out of its Red Deer, Alta., and London, Ont., facilities.

KITCHENER, Ont. — Retailers are selling out of outdoor heaters as restaurateurs seek to prolong the patio season for as long as possible to mitigate the pandemic’s hit on their revenues. “Whenever the demand is that high for something it’s just really difficult to find them anywhere in town,” said Zach Haime, manager of Swanson’s Home Hardware in Kitchener. “[The] supply chain took a hit and everything is backed up. They’re trying their hardest to get everything going.”

ATLANTA — Home Depot will not hold its usual Black Friday event this year, opting to offer seasonal discounts during November and December rather than promote a one-day surge in store traffic. The retailer published a statement on its website explaining that pandemic safety considerations influenced its decision to “reinvent” Black Friday, which has already been transitioning into a more digital event. Deals will be available in-store and online, with mobile app users getting first crack at savings on select items in early November.

BURFORD, Ont. — Beauti-Tone Paint has announced its 2021 Colour of the Year, a pastel blue dubbed Dancing in the Rain. “We took a serene and carefree approach with our 2021 Colour of the Year,” said Kristen Gear, Beauti-Tone’s lead colour designer. “It’s a blue we can relax in while feeling as though we are in a calm and tranquil environment.”

BURLINGTON, Ont. — IKEA Canada has been named one of Canada’s Greenest Employers for the 12th consecutive year by Mediacorp Canada. The retailer, which has just launched a “Year of Sustainability,” has phased out single-use plastics and committed to 100 percent zero-emission home delivery by 2025.

Sales of existing Canadian homes rose a further 6.2 percent in August, raising them to another new all-time monthly record. Actual (not seasonally adjusted) sales activity posted a 33.5 percent year-over-year gain in August. Unlike the previous two months, in which activity was up right across the country, sales in August were led by the Greater Toronto Area and by British Columbia’s Lower Mainland. It was a new record for the month and the sixth-highest monthly sales figure of any month on record. (Canadian Real Estate Association)

U.S. retail sales in August edged up by 0.6 percent. Sales of building materials and garden equipment rose by two percent. (U.S. Commerce Dept.)

OVERHEARD…

“For years we have preached that independent retailers are so much stronger when they come together through their association, and now we are stronger than ever.”
—Bob Cutter, president and CEO of the newly renamed North American Hardware and Paint Association. Formerly NRHA, the new name reflects the inclusion of paint dealers in the association’s membership.

“Sometimes the fine is greater than the margin generated from the order, so you actually lose money on the order. The manufacturer has to make a decision: do I send the medium-size order to the independent who has no compliance fines, or do I send the complete order to the large retailer?”
—Michael Graydon, head of Food, Health and Consumer Products of Canada, in a statement decrying the move by Loblaw to start punishing vendors with charges for incomplete orders.

MEMPHIS — Orgill, Inc. recently completed its first e-Volution Online Buying Event, bringing together nearly 10,000 retailers, vendors and service providers in a completely virtual environment.

The event ran from August 24 to September 4, enabling Orgill’s retail customers to take advantage of promotional buying opportunities, browse through thousands of new products remotely and schedule live meetings with suppliers.

“Because this is the first time we have ever held an event like this, we weren’t quite sure what to expect,” says Boyden Moore, Orgill’s president and CEO. “Now that it’s over, I can say that we couldn’t be more pleased with the results. While we knew this event could not replace the entire live Orgill Dealer Market experience, based on the results, it was clear that customers and vendors embraced the concept.”

Orgill reports that buying activity during e-Volution actually exceeded the results of any previous dealer market in the company’s history—including last fall’s live event.

Brent Perry of Peterborough, Ont.-based Alf Curtis Home Improvements said he was extremely pleased with the event. “I think Orgill has done a great job for this first round and I think they have a great platform to build on and move forward with,” Perry says. “I think we learned a lot here about how to work an online event like this. I think we will actually find ourselves maybe buying more at an event like this than we have in the past.”

For vendors like Daniel Kautz of Milwaukee Tool, the experience was also positive. “This year’s Online Buying Event served as a terrific showcase for us, just as the fall show always does,” Kautz says. He adds that his company will support another virtual event in the future.

The decision to develop and hold the online event came in May when safety precautions surrounding the COVID-19 outbreak prompted Orgill to cancel its in-person Fall Dealer Market, which had been scheduled for August 27 to 29 in Las Vegas. Based on the positive feedback of vendors and attendees to the inaugural virtual market, Moore believes it will serve as a valuable learning opportunity for the company.

Nevertheless, Orgill is planning to hold its Spring Dealer Market live in Orlando, Fla., from February 25 to 27.

ST. JACOBS, Ont. — Home Hardware Stores Ltd. has welcomed three new member locations in Quebec.

The expansion of Home’s presence in Quebec also reflects the retailer’s evolving strategy. After years of recruiting new members, Home is now working closely with existing member dealers to help them grow their businesses. That can mean an additional location or purchasing a competitor’s business. Two of the new locations are stores added by existing dealers, while one is a banner conversion.

Dealer-owner Jean-Claude Parr’s L’Acadien Bricoleur is opening a fifth location in Gentilly, under the Home Hardware Building Centre format. Another Home Hardware Building Centre, Matériaux Marquette in Baie-Comeau, is the second location for Matériaux Manic. There, Michel Charette and his wife Élise Caron are re-opening a site vacated by another banner.

At Centre de Rénovation Saint-Paulin in Saint-Paulin, Dominic Crête and Dany Garand have converted from another independent group to the Home Hardware banner.

“Success in retail is about finding the right people who will deliver the right customer service experience,” said Luc Martin, Home’s senior business development manager. “In addition to our national footprint, these stores represent our commitment to better serving the industry.”

These latest signings follow the addition of three other members that joined six months ago, bringing the banner’s total number of stores in the province to about 140. They were Quincaillerie Limoilou in Quebec City, Matériaux Manic in Baie-Comeau
and Réno Mat St-Etienne in St-Etienne-de-Lauzon.

Quebec continues to be a battleground for groups and banners vying for new members. The province, which accounts for more than one-fifth of all retail home improvement sales in the country, was for decades dominated by RONA, which still maintains the greatest market share by sales, followed by BMR Group, which has more than 250 stores in the province (source: 2020 Hardlines Market Share Report).

Lowe’s Canada continues to tweak its store lineup in the province. Most recently, it has announced major renovations at the dealer-owned RONA store in Wickham, while the RONA in Napierville is set to close by the end of the month. And just last month, BMR Group added Quincaillerie Matériaux P.A. in Les Cèdres to its burgeoning BMR Express banner.

But Quebec continues to attract the efforts of other retail groups. Two of the five dealers Castle has signed in the last 10 months are located in Quebec. And back in May, TIMBER MART announced the addition of O. Coderre et Fils as its newest member in Quebec. The family business has two retail locations in the Lanaudière region. Even TORBSA, the Ontario-based buying group, has managed to regain a presence in Quebec. In July, it signed Matériaux de Construction Létourneau, based in Waterville, Que., a former BMR member.

TORONTO — In a webinar earlier this month, Hardlines President Michael McLarney updated members of the Canadian Hardware & Housewares Manufacturers Association on the latest industry trends. Drawing on research featured in Hardlines’ latest annual Retail Report, he summarized the state of play since the outbreak of COVID-19 and offered a glimpse of what to expect going forward.

Using the findings from the Retail Report to describe the annual growth trends within the retail home improvement industry, he explained that sales slowed considerably in 2019. Then he outlined the conditions that are driving the report’s forecasts for 2020 and 2021.

McLarney reviewed the surge in sales as lockdown measures went into place in the spring. He likened the events of this year to the outbreaks of World War I and the Great Depression in terms of impact on the global economy: “Even when we return to normal here, it will be a different normal.”

For some retailers, he said, this was the end of the line, “but other retailers are pivoting.” He cited examples such as Walmart, which has done a brisk trade in online sales and opened drive-in cinemas in store parking lots across the U.S. In Canada, Indigo Books & Music has launched a new line of private label home and lifestyle products under the name OUI.

Citing statistics from the Retail Report, McLarney said big boxes have done exceptionally well in recent years, gaining a record amount of market share. But, he noted, many independents maintain the lion’s share of the market and they have managed to fare well during the pandemic. “One reason for independents’ share is their ability to pivot,” he explained. For example, as many provinces ordered retailers to move to curbside pickup, smaller local stores were often in the best position to execute that turnaround quickly.

On the other hand, forward-looking statements are a trickier proposition in the current climate. “Dealers I’ve spoken with in every part of the country are concerned about just how long this can last,” McLarney emphasized.

There are key trends to watch for guidance, such as an increased push by some major banners to woo pro customers, but plenty of uncertainty will continue, he concluded, before we see a new normal. “No matter what,” McLarney summed up, “it’s important to recognize that the much-anticipated recovery won’t happen quickly.”

(The 2020 Hardlines Retail Report features 184 PowerPoint slides, plus dozens of charts, graphs and photographs that reveal the sales and strategies of the industry’s top retail players—as well as provincial breakouts and the performance of the various store formats. Click here now to order yours!)

MOORESVILLE, N.C. — Lowe’s biggest rival has spent the last decade firmly focused on securing a bigger share of the contractor market in its stores. One of its strategies was the development of tool rentals more than two decades ago.

Now Lowe’s is fighting back with a program of its own. The company has begun rolling out rental departments to its stores in the U.S. featuring tools and equipment both pros and DIY customers need to complete home improvement projects. The first Lowe’s Tool Rental opened in Charlotte, N.C., on August 20. The new department will be added to other locations in what the company calls “a multi-year national rollout.”

The departments will be newly constructed spaces that either expand an existing Lowe’s store or are located on the same property next to an existing store. They will be 4,000 square feet in size and include a mechanic’s shop to service tools and space for on-site cleaning and product demos.

The company has not announced any intention to roll out the program in its Canadian stores at this time.

“For all of our customers, having the right tool is key to every project, but they may not always want to purchase a new tool or piece of equipment. Lowe’s Tool Rental helps customers save on the cost of owning, maintaining and storing the tools they need,” said Fred Stokes, senior vice president of Pro Sales and Services for Lowe’s Cos.

The tool rental department will feature a range of commercial-grade tools including Husqvarna, Bosch and Metabo HPT. Products for maintenance and repair will also figure in the mix. Pros will be able to find tools and equipment to do drain cleaning, restoration, sanitation and concrete repair, while related lines such as protective equipment and cleaning products will be available for purchase.

To support the new tool rental departments, Lowe’s is installing technology to facilitate easy check-out. Users have an online reservation option, while in-store self-service kiosks let them generate digital documents that can be signed from a mobile device.

Burlington Merchandising & Fixtures Inc. has announced three new appointments to its leadership team. Sarah Hounslow has been promoted to the position of VP of sales and marketing. She has 17 years of experience in the design and manufacture of store fixtures and displays. Brian Glen has joined BMF as director of North American Sales. He has nearly 20 years of industry experience with Alexandria Mouldings and JELD-WEN. And Terry LaFlamme has joined as store planner. He spent 20 years in operations and store planning with Canadian Tire and Lowe’s.

… that more than half of all retail home improvement sales last year came from just four retail groups? This is just one of the many statistics you’ll find in the 2020 Hardlines Retail Report. It’s your definitive guide to the state of the industry, with in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent, so act now! Click here now to learn more and order your own Retail Report!

ST. JACOBS, Ont. — Chemong Home Hardware Building Centre has been recognized by Home Hardware Stores Ltd. with the annual Walter J. Hachborn Store of the Year Award. The award was presented to Terry Jenkins, Randy Kingdon, Mike Kingdon and Fred Sweeting, dealer-owners of the Selwyn, Ont., store. The store also took the category of Best Home Hardware Building Centre Over 15,000 Square Feet. Other honourees include Parry Sound Home Hardware in Parry Sound, Ont., for Best Home Hardware Store Over 6,000 Square Feet; and Ryan Buck of Buck’s Home Building Centre in Bridgewater, N.S., for Best Young Retailer.

ATLANTA — With predictions of a record number of potential hurricanes through November in the U.S., Home Depot is introducing a Hurricane and Storm Preparedness Livestream Workshop to help residents in storm-prone regions. The workshops are being livestreamed weekly through the end of November. Viewers will learn how to put together an emergency supply kit, take proper safety precautions, track storm trajectories and minimize home damage.

SEATTLE — Amazon says it will hire 100,000 new workers in the U.S. and Canada to help meet a surge in demand created by the COVID-19 pandemic. It’s Amazon’s fourth recruitment push this year. The e-retail giant will also open 100 new operational facilities this month, including fulfilment centres, delivery stations and sorting centres.

OTTAWA — Supply of office furniture is tightening as more Canadians convert their homes into multi-purpose spaces, IKEA Canada warns. A company spokesperson told the Canadian Press that the company is seeing an increase in demand for work-from-home equipment. With the prospect of a second wave of COVID-19 outbreaks, many workers are waiting the pandemic out and staying away from offices. Meanwhile, many of IKEA’s overseas suppliers either remain shuttered or are receiving an unprecedented volume of orders.

SUPPLIER NEWS

LAVAL, Que. — Uniboard will host its first live virtual product launch. Taking place on September 23, the online event will also include a behind-the-scenes tour of Uniboard’s Sayabec mill. Attendees will view an interactive sneak peek of the company’s newest additions to its design collection of high-pressure laminate. The 20-minute virtual event will be broadcast through livestream app Yoop, moderated by radio and TV host Isabelle Racicot. Click here for more information and registration.

Sales of existing Canadian homes rose a further 6.2 percent in August, raising them to another new all-time monthly record. Actual (not seasonally adjusted) sales activity posted a 33.5 percent year-over-year gain in August. Unlike the previous two months, in which activity was up right across the country, sales in August were led by the Greater Toronto Area and by British Columbia’s Lower Mainland. It was a new record for the month and the sixth-highest monthly sales figure of any month on record. (Canadian Real Estate Association)

U.S. retail sales in August edged up by 0.6 percent. Sales of building materials and garden equipment rose by two percent. (U.S. Commerce Dept.)

NOTED

The North American Retail Hardware Association (NRHA) invites all members of the independent home improvement industry to a webinar on September 30 at 2 p.m. EDT. Sponsored by Epicor, this session will examine how the COVID-19 pandemic has left an indelible mark on the home improvement industry. Attendees will also review new, proprietary research from NRHA about how independent home improvement retailers have seen their own operations impacted by COVID-19. Register now!

OVERHEARD…

“When I play football, I’m not a decision maker. Out here, I’m my own boss. I’m the owner, I’m the worker, I’m everything.”
—Montreal Alouettes receiver Félix Faubert-Lussier. With the Canadian Football League’s season cancelled, he has taken up home renovation as an interim job, purchasing a triplex in Montreal’s Villeray district to overhaul the units for rental. He spoke to the CBC.

BOUCHERVILLE, Que. — Lowe’s Canada has introduced a program for professionals and contractors that is supported by a new app. The program, which is unique to Lowe’s Canada, will apply to all its Lowe’s, RONA and Reno-Depot corporate stores.

The new program is designed to offer Lowe’s Canada’s pro customers an improved and integrated purchasing experience. Contractors will have access to the same discounts and advantages throughout the Lowe’s Canada corporate store network, plus a range of features on a new VIPpro mobile application.

“One of the strengths of the Lowe’s Canada network is that we operate over 235 corporate stores of various formats under three distinct and complementary banners throughout the country,” said Tony Cioffi, senior vice-president, stores. “With the VIPpro program, our pro customers can now take advantage of our wide network seamlessly: depending on the nature of their projects, they can shop at the store that best suits their needs while having access to the same benefits, and using a single Lowe’s Canada VIPpro account.”

In addition to a five percent discount on all purchases—and 10 percent off paint—the VIPpro program provides pro customers with services including dedicated customer service, bulk discounts and price-match guarantees.

At the stores, contractors will find dedicated entrances and parking, early opening hours and priority curbside pickup available from 7 a.m. to 9 a.m.
 
The VIPpro app was developed by Toronto-based Kinetic Commerce. Users can view their purchasing data, special offers and profile information on their mobile device, in addition to their complete purchasing history from Lowe’s, RONA and Reno-Depot corporate stores.

This first version of the app will be updated over the coming months to provide added features to VIPpro members. Later this fall, the app will start presenting customized offers based on each customer’s preferences and purchasing history. The introduction of a VIPpro web portal is also in the works for 2020. This new feature will enable VIPpro members to access the Lowe’s, RONA and Reno-Depot websites.

MEMPHIS — Orgill CEO Boyden Moore spoke to dealers via Zoom last month to give an update on the hardware wholesaler’s business, while its e-Volution online buying event was in progress. The company’s first-ever such event, which brought together nearly 10,000 retailers in a completely virtual environment, ended on September 4.

“We specifically did not want to call this a virtual dealer market,” Moore said, explaining that it was “a stretch to think that we might somehow pull off what happens at a dealer market in any kind of virtual way.”

Moore outlined how operations are gradually returning to normal: sales continue to ride a pandemic high, and the company is readying itself for the economy’s recovery, which it anticipates some time after Q2 of next year. Hardware and farm stores were identified as the biggest segments for growth.

Despite 79 confirmed COVID-19 cases among Orgill employees, no closures of distribution centres had been necessary, though the company has suspended store conversions. Some 85 percent of the office staff in Memphis had transitioned to remote work, Moore added. “We appreciated our customers working with us when we moved our order cut-off back one day,” he noted.

With supply chains squeezed during the outbreak, Orgill had been forced to take measures, such as introducing maximum line counts. At its DCs in Inwood, Va., and Sikeston, Mo., Orgill temporarily suspended orders from customers it serves as a secondary wholesaler.

“While we value all our customers, we knew we had to prioritize customers with the strongest commitment to us,” he said. By late August, however, nearly all line-count restrictions had been lifted, while orders from secondary customers were being fulfilled at increasing capacity.

Moore also announced that the opening of Orgill’s new Rome, N.Y., distribution centre is now slated to take place by next summer, a year ahead of schedule. Meanwhile, the wholesaler is speeding up plans to expand its footprint in the western U.S. as well.

BOLTON, Ont. — Since taking the helm of TORBSA, Paul Williams has set his sights on some key initiatives to ensure the prosperity of the buying group. One is to build dealer ranks. Williams believes strongly that the group’s lean, no-frills operating model is ideally suited to commercial yards that wish to increase their purchasing power without added costs from marketing or other supports that bring value to dealers with a more DIY-based customer.

But he is also committed to building relations with the vendor community. He sees his role as focusing on managing relationships with vendors and ensuring purchasing plateaus are being met by dealers to satisfy the agreements of those relationships.

TORBSA is a relatively small group compared to bigger cousins like Sexton Group or ILDC, but Williams says it’s not just about sheer volume. It’s about having the right dealers in the group to support vendor programs.

He also believes the group offers value to vendors, despite its size. “The vendor community absolutely respects and values the business with TORBSA. We still represent a fairly substantial volume of business for them.”

Nor does he anticipate any kind of integration with one of those larger groups. “We’re an independent group and we plan to be an independent group moving forward.”

NATIONAL REPORT — The retail home improvement industry’s regional associations are supporting their dealers through an incredibly difficult time during the COVID-19 pandemic. Yet, for the most part, dealers are experiencing record sales, and so are the vendors supplying them.

Reports of product shortages have become common across the country, even finding their way into the news as home improvement retailers keep busy trying to supply a pandemic-induced frenzy for home improvements and renovations.

But dealers, vendors and associations alike are keeping a wary eye on the weeks and months ahead. They are wondering if, and more likely when, this boom will run its course. Looking long-term to a stable set of conditions that will support the industry is the common ground for all the associations, which consist of the ABSDA in Atlantic Canada, AQMAT in Quebec, LBMAO in Ontario, WRLA in the West and BSIABC in British Columbia.

The majority of the associations have come together under one umbrella, the Building Material Council of Canada. Initially, it included all five regional associations, but the Quebec arm dropped out after some internal disputes. Nevertheless, the national organization helps pool concerns that are shared among all the associations. These include hiring, training, shop local campaigns and government-related issues. Currently, the top of that list is the push for the revival of a renovation tax credit.

According to Denis Melanson, president of the ABSDA, a renovation tax credit is simply “a good idea.”

A reno tax credit was instituted in 2009, following the worldwide recession. The program lasted 13 months. The incentive gave hardware and home improvement dealers a significant shot in the arm. Hardlines estimates that overall sales generated by an otherwise sluggish industry in 2009 rose by an additional $500 million.

The BMCC commissioned a report that builds a case for the government to revive the tax credit program. According to a bulletin issued by WRLA President Liz Kovach, the report “highlights the success of the 2009 HRTC implemented by the Conservative government and [concludes] it would be beneficial to consider this once again as we look to the fall and beyond.”

The report was included with a letter sent to the Prime Minister and to the office of the Leader of the Opposition last month.

This initiative would give homeowners a tax credit on the cost of purchases they make on home repairs or renovations. It provides a genuine financial break for consumers, while helping lessen the grey market among contractors and trades who may work for cash to save claiming the income—and saving their customers the sales tax on the job. So a reno tax credit becomes a win all around. Consumers get a tax break, the feds get access to more taxable income from the contractors and dealers benefit from the increased sales this incentive could provide.

At Bona, Pontus Cornelius has been appointed president and CEO effective January 11, 2021. Kerstin Lindell, the flooring care firm’s current president and CEO, will then shift to the role of chairman of the board. Cornelius was most recently president and CEO of Ernströmgruppen AB, a privately owned industrial conglomerate based in Gothenburg, Sweden.

… that more than half of all retail home improvement sales last year came from just four retail groups? This is just one of the many statistics you’ll find in the 2020 Hardlines Retail Report. It’s your definitive guide to the state of the industry, with in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent on pricing, so be sure to take advantage of this! Click here now to learn more and order yours!

BOUCHERVILLE, Que. — Lowe’s Canada has announced that major renovations are underway at the RONA store in Wickham, Que., operated by dealer-owner Rosaire Mathieu Inc. The Mathieu family is investing to add nearly 4,000 square feet to the store’s sales floor. The indoor and outdoor layout will also be transformed to provide an open-space shopping environment and maximize the product offering. The store will remain open during the renovations, slated for completion in December, when customers will see an expanded product offering including seasonal items.

MISSISSAUGA, Ont. — Walmart has launched a pilot program in Fayetteville, N.C., offering home delivery of select items in partnership with Flytrex, an end-to-end drone delivery firm. “The drones, which are controlled over the cloud using a smart and easy control dashboard, will help us gain valuable insight into the customer and associate experience—from picking and packing to takeoff and delivery,” Tom Ward, senior VP of customer products, explained in a blog post. Widespread implementation of drone delivery, he added, is still a long-term prospect.

MONTREAL — Dollarama reported that Q2 sales rose to $1.01 billion from $946 million for the comparable period last year, while profits were flat at $142.5 million. Strong seasonal demand for home and backyard items drove sales for the quarter.

SUPPLIER NEWS

MEMPHIS — Orgill’s first e-Volution Online Buying Event, which concluded earlier this month, brought nearly 10,000 retailers together with vendors and service providers in a virtual environment. The event allowed Orgill’s retail customer base to take advantage of promotional buying opportunities, shop for seasonal merchandise and browse through thousands of new products. The company reports that buying activity during the event was higher than at any dealer market in its history.

VICTORIAVILLE, Que. — LM2 Marketing has expanded its sales and marketing representation of SamaN to Quebec. LM2 will service hardware, paint and flooring retailers as well as distributors in the province. LM2 now represents SamaN from Ontario to the Maritimes.

WATERFORD, N.Y. — Momentive Performance Materials has announced the pending sale of its consumer sealants segment to Henkel. The terms of the sale, which includes GE-branded consumer sealants carried by hardware retailers, have not been disclosed.

NORWALK, Conn. — The National Hardware Show will take place virtually October 12 to 15. The roster of keynote speakers at the NRHA All-Industry Conference includes Do it Best president and CEO Dan Starr. During the Virtual Show, attendees will be able to sync up their calendars and allow NHS to help facilitate and direct virtual appointments among top industry buyers, retailers and NHS suppliers and manufacturers.

MONTREAL — Cobra Anchors Co. Ltd., a privately held maker of masonry and hollow wall anchors, announced it has logged a 20 percent sales hike since the beginning of the year. The company has invested $4.5 million over the last eight months toward injection molding machines, robotic assembly and packaging cells for its Canadian facility. Cobra is also working on a redesigned and streamlined website, slated to go live next month, and a new product launch for the winter, the WallDriller Plus anchor.

ECONOMIC INDICATORS

Housing starts in August were at a seasonally adjusted annual rate of 262,396 units, an increase of 6.9 percent from 245,425 units in July. The SAAR of urban starts increased by 7.1 percent in August to 248,154 units. Multiple urban starts increased by 9.1 percent, while single-detached urban starts decreased by one percent. (CMHC)

NOTED

On average, the U.S. sees 35,000 injuries a year from operating a lawn mower. And those accidents account for 90 deaths a year there. People are more likely to die from a lawn mower than they are from combined shark, bear and alligator attacks, which average at one fatality per year, or snake bites, which average at six deaths.

OVERHEARD…

“We are confident that this new program will help us provide our pro customers with a hassle-free purchasing experience and added value, bringing us one step closer to our goal of becoming the number-one destination for home improvement and construction professionals in Canada.”
—Tony Cioffi, senior vice-president, stores at Lowe’s Canada, on the launch of a new program, supported by an app, for Lowe’s contractor customers.

ST. JACOBS, Ont. — Home Hardware Stores Limited has hired a new team of directors, all from outside the company, to fill the senior ranks of its merchandising teams. The new hires all report to Marianne Thompson, Home’s senior vice-president, merchandise.

The appointments are in line with other recent senior promotions in the merchandising team (see also “People on the Move” in this issue for changes in Home Hardware’s sales and operations teams—Editor). Thompson was hired in January 2019 and put in charge of LBM purchases, working alongside then-VP merchandise hardlines, Joel Marks. When Marks retired in June, Thompson was named SVP, merchandise for the entire merchandising team, and handed the portfolio for hardlines, in addition to her LBM duties.

Rob Szekszer joined Home Hardware in June 2019 as director, merchandise hardlines. He moves into the VP, merchandise role overseeing hardlines, effective September 8 and will report directly to Thompson.

The latest appointments draw from a range of Canadian retailers. Tara Spengen, who succeeds Brian Straus as director, merchandise hardlines, has spent more than 25 years in retail. Her experience includes ACI Brands Inc., Korhani Home, Walmart Canada and Hudson’s Bay Co.

Carol Crystal is taking over the position of director, merchandise hardlines, which was previously held by Dave Martin. Crystal’s nearly 20 years of retail experience includes time with Lowe’s Canada, Walmart Canada and HBC.

Craig Thompson was most recently a commercial planning and analytics leader at Walmart Canada. He will serve as director, merchandise hardlines, succeeding Szekszer.

Meriyem Kaf will fill the newly created role of director, merchandise strategy and execution. She brings 15 years of experience at Walmart Canada, Sobeys and AC Nielsen with a focus on category management optimization. Spengen, Crystal and Craig Thompson report to Szekszer. When she steps into her new role on September 8, Kaf will report to Marianne Thompson.

RED DEER, Alta. — Peavey Industries has announced it will convert its TSC Stores, all located in Ontario, to the Peavey Mart banner. Peavey gained a controlling interest in TSC in 2016 with an option to acquire the London, Ont.-based chain outright. It exercised that option and closed the acquisition at the end of 2017, a year ahead of schedule.

“We are eager to move forward with this conversion, strengthening our corporate brand while further streamlining our internal processes,” Peavey CEO Doug Anderson said. The conversions to the Peavey Mart banner are slated for completion by February 2021.

With the addition of the TSC stores, the Peavey Mart banner will comprise a network of 89 stores across the country.

Jest Sidloski, VP of marketing, customer experience and e-commerce at Peavey, said the decision to convert the TSC stores was not a given from the outset of the takeover, “but … we did a lot of things over the years to merge the companies and make efficiencies and [one] of the last pieces is that brand banner name.”

“It feels really natural to a lot of us,” added Scott Bennett, senior VP of merchandising. He reaffirmed the synergies across both banners. “We’ve been working for the last couple of years, really integrating two companies into one company.”

That included everything from buying—one team, under Bennett, now manages both TSC and Peavey Mart—to marketing and corporate culture. “All the different cross-functional groups have integrated into one team.”

The conversions will not impact the recently acquired Ace Canada banner or MainStreet Hardware banner, also owned by Peavey Industries.

MOORESVILLE, N.C. & ATLANTA — The Home Depot and Lowe’s Cos. both posted favourable Q2 results last month, buoyed by increased spending on DIY projects as public health measures limited options for entertainment outside the home. Despite each retailer investing more than $450 million in store safety and employee benefits, both logged increases in sales and profits that exceeded forecasts.

Home Depot’s sales for the quarter rallied by 23.4 percent, while U.S. same-store sales soared by 25 percent, the biggest increase in at least 20 years. The retailer reported net income of $4.33 billion, up 24.5 percent. The company enjoyed strong performance throughout its U.S. business as well as for Home Depot Canada, which reported record sales.

At Lowe’s Cos., sales rose by 30.1 percent to $27.3 billion, while same-store sales were up 34.2 percent. Net earnings soared by nearly 70 percent to $2.83 billion.

That includes positive comps for the Canadian business that exceeded 20 percent, “driven by … consumer focus on the home as well as strong execution by our new leadership team,” noted President and CEO Marvin Ellison, in a call to analysts.

Ellison also offered some indication of Lowe’s ambitions in Canada. “While we’re pleased with their efforts to serve the incremental demand this quarter, our Canadian team remains focused on the work ahead to improve operating efficiency while driving sales.”

With a greater proportion of DIY customers, Lowe’s in particular benefitted from the trend. Both Lowe’s and Home Depot gained market share at the expense of smaller competitors who struggled to keep inventory in stock. Significantly, sales were similarly strong for both chains across all regions of the U.S., regardless of how hard different areas were hit by COVID-19.

WTO backs Canada in softwood lumber dispute—yet again

GENEVA — The World Trade Organization has ruled that the U.S. Commerce Department and the U.S. International Trade Commission erred when they imposed countervailing duties on Canadian softwood lumber in 2017. The U.S. has repeatedly attempted to introduce tariffs to offset Canada’s stumpage fee system, which it considers a form of unfair subsidy, but has been consistently rebuffed by international tribunals.

“This flawed report confirms what the United States has been saying for years: the WTO dispute settlement system is being used to shield non-market practices and harm U.S. interests,” U.S. Trade Representative Robert Lighthizer said in a statement.

The U.S., under President Donald Trump, has yet to remove the tariffs, despite the WTO ruling. Lighthizer and his team criticized the process, saying the decision should have been left to “the reasoned judgment of the investigating authority, the U.S. Department of Commerce.”

However, Canadian lumber producers see it differently. “For three decades, we have been saying that the U.S. trade remedy process is flawed. Unfortunately, this is just the latest chapter in the ongoing attack on the Canadian lumber industry,” said Susan Yurkovich, president of the B.C. Lumber Trade Council.

The latest ruling by the WTO against the U.S. is consistent with conclusions that have been reached going back as far as the mid-1980s.

The dispute centres on the Canadian system of stumpage fees paid by foresters to the Crown for harvesting rights. In the U.S., softwood lumber is harvested on private land. In the eyes of successive U.S. governments, this means that the Canadian industry is unfairly subsidized and that countervailing duties on Canadian softwood lumber are therefore warranted. International tribunals have consistently ruled against such tariffs.

“Each of the prior two lumber disputes ended with neutral, international tribunals issuing rulings that forced [the] Commerce [Department] to rescind their flawed and unsupported subsidy findings for similar reasons,” Yurkovich added.

Darrin Sayles has been appointed senior director, national sales and operations at Home Hardware Stores Limited, joining the team on September 8. Most recently at Carter’s, where he held the role of senior director of retail sales and operations, Sayles has also held operational leadership positions at Campus Crew, American Eagle and Jean Machine. The four retail operations directors, Jeff Martin, Grant Allen, Tim Dietrich and Mario Durocher, and their regional teams will report into Sayles. All Ontario retail sales and operations managers will report directly to Allen, who is director for the central region. Dale MacPherson has been appointed senior director, store operations support. The business development team, formerly led by Dunc Wilson before his retirement earlier this year, was previously realigned to report directly to MacPherson. But MacPherson will now oversee construction and real estate, while continuing to provide support and oversight for the dealer application process.

… that the 2020 Hardlines Retail Report, your definitive guide to the state of the industry, is now available? The report includes valuable proprietary information you won’t find anywhere else, including in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent on pricing, so be sure and take advantage of this! Click here now to learn more and order your copy!

BOUCHERVILLE, Que. — BMR Group has added two new Quebec dealers to its BMR Express program. Quincaillerie Matériaux P.A. in Les Cèdres is making changes to the store’s façade over the coming months. Quincaillerie J.R. Grégoire is also making the switch, under the leadership of third-generation owner Delphine Grégoire, on the eve of the store’s 100th anniversary.

MOORESVILLE, N.C. — Lowe’s Cos. is set to open a new e-commerce fulfilment centre in Mira Loma, Calif., as part of its $1.7 billion push to update its supply chain. The retailer is also adding 20 cross-dock delivery terminals to its network before year’s end.

OAK BROOK, Ill. — Ace Hardware, through its international division, will enter the growing Mexican market. “The expansion of the franchise model in Mexico gives us a platform to further deliver on Ace Hardware’s legacy of providing local investment and ownership opportunities to entrepreneurs,” said Alejandro Lorenzo, VP of international business development at Ace International.

BENTONVILLE, Ark. — Walmart’s online sales almost doubled in the second quarter, while U.S. same-store sales spiked by 9.3 percent. Net income for the quarter came to $6.48 billion. Revenues reached $137.74 billion. In Canada, net sales grew by 13.9 percent while comparable sales were up a full 14 percent.

SUPPLIER NEWS

BURNABY, B.C. — Taiga Building Products has developed an online B2B ordering, catalogue and administrative platform. Branded as TaigaNow, it allows for placement of orders at the user’s convenience. It is currently live and available to customers served by the Calgary and Saskatoon branches and will be added to more western markets before expanding eastward.

DELSON, Que. — Goodfellow has become Knauf Insulation’s exclusive distributor of residential insulation products for the LBM segment outside Quebec.

MEDINA, Ohio — Through its Rust-Oleum business, RPM International has acquired Ali Industries, LLC, a manufacturer of sandpaper and other abrasives. Based in Fairborn, Ohio, Ali Industries has annual net sales of approximately $75 million and operates commercially as Gator Finishing Products.

TORONTO — Softwood lumber prices have climbed aggressively recently as homebuilding activity made record gains in Canada and the U.S. The price of shares in West Fraser Timber Co., Interfor, Canfor, CanWel Building Materials Group and Norbord all logged 52-week highs on the Toronto Stock Exchange.

National home sales and new listings continued to rebound in July 2020. New listings hit their highest level on record for the month of July, while sales posted the highest level of any month in history. Sales of existing homes rose 26 percent on a month-over-month basis, the third consecutive monthly increase. (Canadian Real Estate Association)

Sales of new single-family homes in the U.S. logged a third consecutive major monthly increase and hit their highest levels since 2006. July’s sales were up 14 percent from June to a seasonally adjusted annual rate of 901,000 units, beating analyst expectations of 790,000 units. New home sales in July were up 36 percent from the year prior. (U.S. Census Bureau)

The value of building permits issued by Canadian municipalities fell three percent to $7.8 billion in July, entirely as a result of declines in British Columbia (-34.2 percent to $1.2 billion), Quebec (-15.1 percent to $1.5 billion) and Newfoundland and Labrador (-19 percent to $54 million). (StatCan)

NOTED

Only one in four small businesses are back to making normal sales, according to the Canadian Federation of Independent Business. Its Small Business Recovery Dashboard shows that 63 percent of small businesses are fully open (up 10 percent since June), while 39 percent are fully staffed (+7 percent) and just 26 percent are making normal sales (+7 percent).

BOLTON, Ont. — TORBSA announced the appointment earlier this month of Paul Williams as its new president. He replaces General Manager Bob Holmes, who will retire after 26 years at the helm of the group. In an exclusive interview with Hardlines, Williams shares his vision to grow the Ontario-based buying group’s ranks and reinforce relations with suppliers.

Bringing with him a strong background on the supplier side, Williams spent the last nine years in senior sales positions at Owens Corning and then CGC.

TORBSA works to combine purchases for two dozen member dealers (Williams stresses that the dealers are TORBSA shareholders) who represent about 45 stores. Most of those stores are in Ontario. Crown Building Supplies is in Surrey, B.C., and the newest member-shareholder, Matériaux de Construction Létourneau, with two locations in Sherbrooke, Que., joined just last month.

Total sales for all members totalled $576 million in 2019 (source: the latest Hardlines Retail Report—Editor). Despite the group’s relatively small size compared to other buying groups, such as Castle or TIMBER MART, Williams says he respects the way the business is run. “It’s a unique model, one that maintains a very lean team of just four people at head office. And Bob will stay on to the end of the year, as part of the transition,” he says.

TORBSA remains a low-cost operation, Williams says, because it operates without the kinds of supports provided by other groups. These can include marketing, branding and even distribution. “There’s an inherent value in that approach,” he says, “especially for dealers with a DIY focus or those that cater to walk-in business. But we’re not strictly targeting those types of dealers.”

In fact, the majority of members are focused on commercial sales, with sales teams on the road selling to all facets of the construction industry. For those kinds of dealers, Williams sees a fit with the group. “I think there’s an opportunity for the prospective dealer to come over to TORBSA.”

He also notes that this streamlined model ensures full transparency to dealers so they can truly understand the costs of each vendor agreement. “Every single percentage of each sale goes back to the dealer. They’re not paying for extra costs at head office.”

Adding members will be one of his priorities, especially as the group has lost some members in recent years. “So moving forward, there will be a major emphasis on solidifying our core of shareholders and building our purchases with our vendor partners. I’ve been given carte blanche to spread the TORBSA message and talk to prospective members.”

TORONTO — Just four retailers account for almost six out of every 10 dollars spent on hardware and home improvement products in Canada. According to the 2020 Hardlines Retail Report, Home Depot Canada, Lowe’s Canada, Home Hardware Stores and hardware-related volumes through Canadian Tire Retail generated almost $29 billion in sales in 2019, representing well over half of the industry.

This consolidation at the top has been a trend in the industry for decades, as smaller players have disappeared through new competition, as from the rise of Home Depot Canada over the past 25 years. It now owns close to 18 percent of the market here, according to the report.

Other companies were absorbed by competitors. RONA was a key agent of this trend over the past two decades until it, in turn, was acquired by Lowe’s. At the end of 2019, Lowe’s Canada generated more than 14 percent of the Canadian market’s sales.

Beyond these top four players, almost 90 percent of sales by Canadian home improvement retailers are generated by 20 retail groups. This ongoing consolidation of the industry is among the many findings and forecasts in the 2020 Hardlines Retail Report.

This year’s report analyzes how much the industry grew last year and identifies the best-performing provinces. The report also tracks the growth of the big box format in Canada, identifying that more than one-quarter of the market is represented by large-surface home improvement stores.

Designed to help retailers and suppliers alike to develop their business plans for the year ahead, this year’s report provides valuable industry forecasts for 2019 and 2020, including analysis of the strategies and performance of home improvement retailing’s top players—Home Depot Canada, Lowe’s Canada, Home Hardware Stores Limited and Canadian Tire Retail.

The 2020 Hardlines Retail Report fills 184 PowerPoint slides and is packed with dozens of charts, graphs and photographs. (For more information about the 2020 Hardlines Retail Report, please click here.)

MISSISSAUGA, Ont. — Walmart Canada says its $3.5 million investment in stores and e-retail will improve the customer experience and boost sales, but new fees aimed at recovering costs have outraged suppliers. In a letter earlier this month, Walmart explained to vendors that beginning September 14, it will be charging a new “infrastructure development fee” of 1.25 percent of the price of products, with an additional five percent for wares sold online. All of this is on top of existing fees set by arrangement with each vendor.

The retailer considers the fees a fair trade-off for suppliers, who it says will benefit from the investment plan in increased sales. But at Food and Consumer Products of Canada, CEO Michael Graydon calls the timing of the announcement “diabolical” and says his members who supply Walmart are “absolutely furious.”

Graydon is calling on federal and provincial governments to act in order to prevent other retailers from making similar moves. “When you look at five percent on e-comm sales—that’s your margin,” he told the Financial Post. “So you’re going to give it away.”

Sure enough, a group of Walmart Canada’s grocery competitors is following its lead in seeking savings from suppliers. United Grocers Inc., a buying group representing such banners as Metro, Longo’s and Couche-Tard, wrote to suppliers saying it will “expect to receive any cost reduction you may decide to offer any competitors.”

UGI President Michael Forgione did not specify how it would obtain the reductions but said the group would not set similar fees.

Shortages continue as dealers and wholesalers scramble for product

NATIONAL REPORT — In the midst of the COVID-19 pandemic, Osoyoos Home Hardware, in British Columbia’s Okanagan Valley, shortened its hours while maintaining full pay for staff. And even though store traffic has remained high, it has been slowed by the need for physical distancing and hygiene protocols. On top of that, product supply has been interrupted and deliveries to the store remain erratic. In spite of these challenges, Frances Sologuk says her store had its best July ever.

But if she could have maintained a steadier flow of products, she wonders just how much better the store might have performed. “I can’t imagine what sales would have been like without the out-of-stocks and back orders. It would have been mind-boggling,” Sologuk says.

Demand has risen sharply among DIYers. Stuck at home, they are looking to fix up their living spaces in lieu of expenditures on cottages and camps and in restaurants and bars. That’s put a pinch on supply for contractors, who are trying to get larger projects done.

Farther north, in Princeton, B.C., Susan Robinson of Princeton Home Building Centre reports a similar scenario. After watching sales plummet by 50 percent through February and part of March, business took off. She saw huge runs on personal protective equipment, sanitizers and toilet paper. “They are now available,” she notes. “We’re seeing lumber shortages now, primarily of treated woods.”

In Ontario, Rebecca Wichers-Schreur at Wood Works of Renfrew, a Castle dealer in Renfrew, about an hour west of Ottawa, is facing the same challenges. Business has been strong, marred only by product shortages. “Pressure treated is still very difficult to get, and a lot of suppliers for construction lumber and sheeting are either not taking orders for certain things or the orders they are taking are about two months out.”

She is also seeing shortages in other categories. “Some hardware items have also been difficult to find—decking accessories in particular like joist hangers and fencing materials.”

Supply chain disrupted
The problem of disrupted supply chain is a consistent one across the country. Denis Melanson, president of the Atlantic Building Supply Dealers Association, says his dealers have rebounded. “They’re doing absolutely fantastic and it’s turned into a stimulus for our industry in general.”

But those same dealers are also expressing concerns about supply. “I’ve talked to a lot of dealers—and some of the vendors—and they’ve never seen anything like it.”

In mid-July, Kent Building Supplies made news for being out of stock on wood products, particularly plywood and pressure treated lumber, in its stores across Atlantic Canada. The retailer even sent an email to its sales associates advising them of the situation. “The huge sales increase has completely stripped the supply chain,” it read in part. “There is no supply left in Atlantic Canada. Replacement from Western Canada is five to six weeks away … Costs are through the roof.”

Melanson at ABSDA sums up the issue when he says, “That’s the new challenge—getting products on the shelves.”

Amanda Fancy at Gow’s Home Hardware and Home Furniture in Bridgewater, N.S., reports that sales are up over last year. But she too has found that her biggest challenge is getting product. The Home Hardware truck would typically come each Tuesday and Friday. Now, when a shipment comes, it can take a week, and sometimes everything comes at once—in two 53-foot trailers.

Retail teams deal with disruption
Disrupted supply affects more than just sales. It can disrupt the rhythm of a store’s operations. For Sologuk in Osoyoos, the once-regular truck has been turned into a hit-and-miss affair. “We’re not even getting a truck a week,” she says. “And when it does come, it’s not always convenient.” She recalls the arrival of a truck on a Saturday over a recent long weekend. “Thank goodness some of my team came in to unload, even though it was their day off.”

Back on the West Coast, other suppliers are scrambling to keep up. Ross Power is president of PowerHouse Building Solutions in Surrey, B.C. The company sells building materials to dealers in the Lower Mainland and beyond.

Despite being slower than usual for this time of year, “things are overall pretty healthy,” he says. His company has been able to maintain stock levels and products he was having difficulty getting have returned to normal.

Brad McCluskie, general manager of Coast Distributors, based in Nanaimo, B.C., says some regions, like the northern part of British Columbia, “are setting records each month.” But product shortages have taken their toll. He’s had to manage the orders, as some independent dealers have tried to buy up all his stock in lines like lawn and garden.

As shortages ease in some categories, the overall supply chain remains unsettled. Distributors scramble to get materials and keep production lines moving, all the while wondering how long the boom times will last.

“We’ll just have to see what happens,” says McCluskie. “We’re all just guessing now.”

WINDSOR, Ont. — Like most dealers across the country, Charlie Hotham watched business flip on its ear in March. But fortunately for him, his business managed to keep busy with the infrastructure and construction jobs that remained essential services in Ontario as the COVID-19 pandemic grew.

Hotham Building Materials is in the southwestern Ontario city of Windsor. And more good news came last week as his region entered phase three, lagging behind the rest of the province due to COVID-19 outbreaks at farming facilities in the area.

Hotham’s store doesn’t carry lumber, focusing instead on masonry, concrete insulation and waterproofing. But despite the focus on contractors and commercial, Hotham Building Materials also enjoys good traffic from walk-in customers. He does a brisk business with pool installers. They are telling him they’re not even giving quotes anymore. “They’re done for this year.”

His big concern is another one shared across the country: shortage of supply. “We’ve experienced some difficulty with the supply chain,” Hotham says. “But as far as people coming in the door, we’re very, very busy.”

He expects the trend to continue right through until winter, when things typically slow down for him. But he’s not confident that things will pick up in the spring the way they typically do. “It might be short-lived, but at this time I see zero signs of a slowdown.”

SPECIAL REPORT — Lowe’s Cos. took heat from customers who signed a petition in North Carolina, demanding that the retailer enforce rules that their customers wear masks. Yet from the start, CEO Marvin Ellison had told workers to lead by example and avoid confrontation that could result in an unpleasant or downright violent outcome.

Closer to home, where many stores reserved the first hour of opening for seniors who are at greater risk of getting seriously ill from COVID-19 than the younger population, those rules were not enforced. Retailers weren’t keen to ask an hourly worker, often very young themselves, to confront a customer and risk an incident.

Yet informal conversations with store managers and employees from a range of sectors reveals that customers do not consistently follow rules. While entering a store without a mask may just be a case of neglect or forgetfulness, it can be indicative of a bigger issue. Many people have embraced the notion, in spite of medical evidence to the contrary, that masks are not only useless in preventing or minimizing the risk of contagion, but that they’re downright harmful.

Walmart Canada began requiring staff and customers to wear masks in all of its stores last week. Walmart stores in the U.S. have instructed customers to wear masks since last month, but are not refusing service to those who decline so that employees do not put themselves at risk by attempting to enforce the rule.

These contrasting attitudes are creating tensions anywhere that people gather, including inside a store. That puts pressure on sales staff to monitor protocols—and the anxieties and even anger of customers.

The pressure can become even greater for independent dealers in communities where they know many of their customers by name. Confronting them over mask wearing or proper distancing procedures can be very touchy—and leave lasting impressions that can affect one’s relationship with customers long term.

Altercations can also go viral. In the case of the Lowe’s store in Atlanta, when the store manager was chastised for not confronting unmasked customers, he produced a letter from CEO Ellison that actually advised staff not to take action. The customer was so upset by this response that they started a petition online to urge Lowe’s to be more proactive. Within two weeks, the petition had racked up 114,000 names.

TORONTO — Canadian Tire Corp. posted a net loss of $20 million in its second quarter, compared to earnings of $177.4 million a year ago. Strong sales online and under the Canadian Tire banner made for an overall retail sales gain of 1.7 percent to nearly $4.4 billion but weren’t enough to offset losses.

Public health measures obliged the company to shutter its Mark’s, Helly Hansen and SportChek stores, while Canadian Tire stores in Ontario, making up 40 percent of CTC’s store network, were limited to curbside pickup and delivery for most of April. Revenues fell by 14.2 percent to some $3.2 billion as franchisees cut orders amid the uncertainty of the pandemic. Yet the company underscored that revenues have been on the rise since stores reopened, climbing by 24 percent in June after the specialty banners were permitted to reopen their stores.

“E-commerce demand exploded in April and May, and in June, we saw new heightened levels relative to pre-COVID-19 activity,” CEO and President Greg Hicks told analysts on a conference call. “In the quarter, our consolidated e-commerce business reached over $600 million in sales, up $500 million or 400 percent, with CTR, SportChek and Mark’s up 500 percent, 300 percent and 350 percent, respectively.”

Early in the quarter, demand even caused the CTR website to crash for some users. Once back on track, however, the online channel proved to be a strong driver, along with the Canadian Tire banner, to the company’s retail sales growth for the quarter.

In particular, e-commerce was a draw for young adults and “active families,” as Canadian Tire refers to them. “As they engaged with us through their e-commerce adoption, we saw very strong spend per customer increases of over 30 percent,” said Hicks. “Triangle Rewards enables us to know exactly how our customers are engaging with us in a time like this.”

NATIONAL REPORT — Looking back through a quarter century of history in the retail home improvement industry uncovers news from companies that are themselves lost to history.

In Hardlines 25 years ago this week, Cashway Building Centres, a chain of 57 stores in Ontario, was busy reorganizing its ownership under Chairman Craig Graham and moving its head office from the west end of Toronto to Port Hope, a community about an hour east. Around the same time, Glen French came over from Home Depot to head up merchandising for the company. Cashway would be bought by RONA in 1999.

Also around that time 25 years ago, Turkstra Lumber was wrapping up some vigorous expansion. The Hamilton, Ont.-based chain added its ninth store, while a new distribution centre was being readied for operation. Still going strong, Turkstra, which to this day is a member of ILDC, has 11 stores throughout southwestern Ontario.

Home Depot Canada made news as it continued its aggressive expansion. The retailer opened a buying office in Western Canada, solidifying its presence as a true national player. At the time, President Stephen Bebis said the move would mean quicker lead times for its Western stores “and will let us be more sensitive to the nuances of product demands in the West.” Hardlines revealed the company’s plans to open new stores in both Ontario and British Columbia in the coming months. Home Depot Canada would have 24 stores by the following year, 1996.

Barrie Brooks, owner of Opeongo Sales Ltd., has retired after 50 years working in the retail hardware business. Brooks got his start at Sears Canada working as a buyer and marketing manager from 1969 to 1990. He then became president of Grant Brothers Sales in its Hardware Division for the better part of a decade, before serving as Director of Sales Coleman Powermate at Sunbeam Canada in 2000. He spent two years there before heading out on his own to form his own agency, Opeongo Sales Ltd., in 2002.

… that the 2020 Hardlines Retail Report, your definitive guide to the state of the industry, is now available? The report includes valuable proprietary information you won’t find anywhere else, including in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent on pricing, so be sure and take advantage of this! Click here now to learn more and order yours!

MISSISSAUGA, Ont. — Walmart Canada, together with Condor Properties, has broken ground on a new distribution centre in Vaughan, Ont. When the facility is operational in 2024, it will handle ambient general merchandise and food products in the highest volume of any Walmart facility in the country. The project is expected to create hundreds of construction jobs in Vaughan. The Vaughan project joins the construction of a 300,000-square-foot DC currently underway in Surrey, B.C., and the renovation of an existing warehouse in Cornwall, Ont.

BOUCHERVILLE, Que. — Lowe’s Canada’s corporate store network has made $245,000 worth of donations over the past few months to more than 75 food banks, hospital foundations and other charitable organizations in the communities that it serves. “With the pandemic causing new problems to emerge and exacerbating existing issues, we felt it was important to express our solidarity by supporting community organizations that are facing higher demand and declining resources,” said Lowe’s Canada’s Jean-Sébastien Lamoureux, senior VP, public affairs, asset protection and sustainable development.

ATLANTA — The Home Depot will open three new distribution centres in Georgia over the next 18 months to support a growing demand for flexible delivery and pick-up options. The expansion is projected to bring approximately 1,000 additional jobs to the Atlanta area. In 2017, Home Depot announced a $1.2 billion investment to expand its distribution network with approximately 150 new supply chain facilities across the U.S., with the goal of expanding the company’s same-day and next-day delivery options to 90 percent of the country’s population.

MISSISSAUGA, Ont. — Walmart Canada began requiring staff and customers to wear masks inside all stores last week, even where local and provincial regulations do not call for such measures. Felicia Feder, corporate affairs manager, told CBC News that 60 percent of Walmart Canada’s stores are in jurisdictions with a mandatory mask rule, and that the company’s move is meant to “help bring more consistency across our store network.”

ATLANTA — With its Kids Workshop classes on hiatus in stores, The Home Depot has donated 500,000 Kids Workshop kits over the past four months to more than 100 non-profit organizations and schools across the U.S., including Boys & Girls Club of America, ToolBank and the YMCA. The company will continue to donate kits until workshops resume in person. 

SUPPLIER NEWS

MONTREAL — Intertape Polymer Group reported that its Q2 net income rose by $8.3 million to $14.8 million ($0.25 per share), due in part to lower travel expenses and an adjustment to contingent consideration in its acquisition of Nortech Packaging. Adjusted net earnings fell by $1.4 million to $13.2 million ($0.22 per share) as gross profits declined. Revenue decreased by 9.4 percent to $267.8 million, primarily due to lower selling prices and a pandemic-related decline in volume/mix.

MONTREAL — IT firm ACCEO’s Home, Garden and Building Supply division will hold its first virtual user event in the fall. Open to all ACCEO customers in the LBM and hardware sector, it will feature training and networking opportunities. Over two days, October 21 and 22, participants will be offered product launches and demos, software training and industry discussions. The event will be offered in two installments: one English and one French. Click here for information and registration.

WINNIPEG — The Western Retail Lumber Association will hold a webinar on recruitment and personnel matters on August 18 at 11:30 MT. Glow Leadership’s Diane Taylor will cover best practices to help managers ease their people’s challenges and move towards aligning staff with business objectives. Also on the agenda: dealing with post-COVID-19 challenges and how to effectively navigate a successful return to work. Click here for more details and free registration.

VANCOUVER — CanWel Building Materials saw Q2 revenues increase by 7.1 percent to $412.9 million, from $385.7 million during the same period in 2019. Despite the pandemic’s economic impact, sales for the distribution segment rose by $31.3 million, or 8.4 percent. The year-over-year sales increase was attributed to improvements in both sales volumes and pricing. Net income for the quarter increased 62.8 percent to $12.7 million.

OTTAWA — The Canada Revenue Agency has a new tool to help employers estimate what kind of assistance they can expect from the Canada Emergency Wage Subsidy. Employers can punch in business information into an online calculator and receive an instant estimate. The agency said that companies, armed with this info, will be able to make informed HR decisions. It will hold a series of information sessions over the coming weeks.

GLEN ALLEN, Va. — Hamilton Beach reported its Q2 revenue rose by 5.5 percent compared to Q2 2019, due to strong demand in the U.S. and Canada consumer markets. Operating profit increased more than threefold on higher revenue, a benefit of $1.6 million from tariff relief and lower expenses. Consolidated net income was $7.8 million, or $0.57 per diluted share, compared to a net loss of $0.6 million, or $0.04 per diluted share, a year ago.

ECONOMIC INDICATORS

The seasonally adjusted annual rate of housing starts was 245,604 units in July, an increase of 15.8 percent from 212,095 units in June. The SAAR of urban starts rose by 17.4 percent in July to 231,995 units. Multiple urban starts increased by 18.8 percent to 184,431 units in July while single-detached urban starts increased by 12.3 percent to 47,564 units. Rural starts were estimated at a seasonally adjusted annual rate of 13,609 units. (CMHC)

NOTED

CHHMA is moving ahead with the golf tournament portion of its Industry Day event on September 9th with a few modifications to comply with COVID-19 safety guidelines. This year’s event includes a power cart that has social distancing dividers, breakfast on the cart, lunch and ice cream on the course, plus two drink tickets per golfer and a charitable donation. There will be no cocktail hour or dinner. (Click here for more information and to register.)

OVERHEARD…

“I’ve been to British Columbia. It’s not very British—or Columbian. Vancouver was like a rainy Seattle.”

“Ontario and Quebec. Those are like the two brothers that run the family business after the parents died. But they had different mothers.”
—Jim Gaffigan, an American comic, who enjoys taking gentle pokes at Canada. (With thanks to our friend Roy Prevost, retail consultant and business coach, for sending us this one.)

BOLTON, Ont. — LBM buying group TORBSA has secured a new member, its first in Quebec after an absence from that province over recent years.

Matériaux de Construction Létourneau Inc., with two locations in the Sherbrooke area of Quebec’s Eastern Townships, is now part of the group, whose members specialize in contractor-oriented and commercial dealers. The principals of Létourneau are Jocelyn Létourneau and Yannick Godbout.

Létourneau, which was founded in 1974, is already a member of hardlines buying group OCTO through its affiliation with Evolution Distribution, which joined OCTO at the beginning of the year. That regional distributor, located in St-Jérôme, is headed by Geneviève Gagnon, who also helms Groupe Yves Gagnon, a chain of five stores in smaller centres in Quebec.

According to an internal memo from TORBSA, it has been processing payments for Létourneau through the group since June 19. The new member has been getting products and programs aligned through TORBSA’s vendors. Where Octo programs are already in place—for product categories including plumbing, electrical and safety products—purchases will continue to be processed by OCTO through its affiliation with Evolution Distribution.

TORBSA has a dozen members representing about 45 locations. The last big addition to its ranks was in 2015, when Crown Building Supplies, based in Surrey, B.C., joined the group. Owned and operated by Gary and Gurpreet Sangha, it is the group’s largest member—and its only one west of Ontario. Last year, TORBSA lost its last member serving the Quebec market when Morin Bros. Building Supplies in the National Capital Region left to join TIMBER MART.

WINNIPEG — Sexton Group has recruited Rosenort Co-operative Ltd. in Rosenort, Man., as its newest member. The co-op provides building materials, hardware, farm supplies and a selection of athletic gear to a mix of agricultural and industrial customers.

“We joined Sexton Group because we feel it will give us greater buying power with a broader scope of vendors and manufacturers,” said General Manager Joe Rempel, “as well as better access to the quality products that our members are looking for.”

Sexton has been very proactive in recent years in terms of recruitment and brand awareness. For the first decades of its existence, it worked largely behind the scenes to find dealers who fit best with the group’s mandate to support independents. But it has been investing in raising its profile in recent years, and its expansion has followed suit.

And the dealer-members have also been keeping active.

Besides bringing on Rosenort, Sexton has seen another member, Sunshine Building Products, open a new location in Edson, Alta., recently. The 15,000-square-foot building includes a storefront, office space and a paved yard. Since 1993, Jerry and Marya Kielstra have been building their family business. Today, the second generation is also involved in running the business.

These latest expansion efforts follow changes at head office at the beginning of the year, when Eric Palmer was put in charge of the buying group, as vice president and general manager. He stepped in after Steve Buckle, who had been president of Sexton Group since 2014, moved into the role of CEO for the Sexton parent company.

WINNIPEG — The Western Retail Lumber Association (WRLA) has launched a “shop local” campaign on social media and through its member dealers. The public awareness campaign urges people to “build up” their community by shopping at their local building supply store.

WRLA President Liz Kovach says this kind of awareness is more important than ever. While the industry is seeing a boost from sales during the COVID-19 pandemic, she warns that this situation may not last. “There’s so much activity in the industry right now, with a lot of disruption, but I expect it to decline in the fall,” she says. “So I think it’s really important to educate consumers on the importance of supporting our members.”

She adds that the initiative has been important to helping dealers understand the importance of belonging to an association. “This is an important issue and it’s engaging members, regardless of their banner.” And it’s helped the WRLA bring in some new members as well.

“Local businesses are the foundation of our community,” adds Kovach. “When we shop local, we are not just giving money to a giant corporation, but we are helping people in our community. And these local businesses in turn give back to their neighbourhoods through sponsorships, fundraisers and volunteering.”

FROM THE ARCHIVES: Big box faces slowdown, Atlantic dealers make news

SPECIAL REPORT — The year was not a great one for the economy. Housing starts were down 15 percent and mortgage rates were going through the roof, all factors that did not make 1995 a good year for home improvement dealers. Nor, for that matter, was it a great time to start a newsletter for said dealers. But 25 years ago, Hardlines was in its first months of existence—and keeping track of this industry did not always mean good news.

That news included a slowdown of the expansion of big box stores, including one homegrown banner, Revy.

A spinoff of Revelstoke Building Centres, a chain of home centres based in Western Canada, the Revy banner was quickly proving to be the main competitor to the Home Depot’s ascendancy in Canada. The company was opening big boxes in major cities, with a total of seven planned by the end of 1995. But the slowdown in the Canadian economy was slowing expansion. However, despite the slowdown, Revelstoke’s big boxes were faring well, while its traditional home centres were down 20 percent by mid-year.

In Atlantic Canada, some large independents were also making the news in Hardlines that week. Hickman’s in St. John’s was enjoying strong contractor activity in Newfoundland. General Manager Sid Wells reported that contractor business had grown from less than one-third of his company’s sales to more than half over the past year and a half. Six years later, Hickman’s three stores would be acquired by another St. John’s dealer, Chester Dawe, which had four stores of its own.

In 2006, RONA would get its first foothold in Newfoundland by buying up Chester Dawe.

At Ace Hardware Corp., Alison Dowell, currently VP of Operations, has been promoted to the role of president and general manager of Emery Jensen Distribution, a division of Ace Wholesale Holdings LLC. She will report to Ace Chief Merchandising and Sales Officer John Surane. She joined Ace Hardware in 2017.

… that the 2020 Hardlines Retail Report, your definitive guide to the state of the industry, is now available? The report includes valuable proprietary information you won’t find anywhere else, including in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent on pricing, so be sure and take advantage of this! Click here now to learn more and order yours!

MISSISSAUGA, Ont. — Castle Building Centres has welcomed its newest member in the Maritimes. Homestar Group is located in Quispamsis, N.B., a suburban community outside Saint John. Homestar began as a small operation back in 2002 and grew over the years into a full-service residential and commercial home improvement company with more than 100 staff. Founder and CEO Mark Hatfield said he chose Castle based on positive feedback from his suppliers.

NATIONAL REPORT — With several Canadian locales requiring masks to be worn indoors, and more U.S. retailers adopting similar policies banner-wide, confusion reigns over who is responsible for their enforcement. Reports of harassment and assault against employees have made retailers even more reluctant to add even more to the demands of their front-line workers. In the event that a customer refuses outright to abide by the rules, retailers have few options beyond calling the police or refusing service.

SUPPLIER NEWS

ST. PAUL, Minn. — 3M Co.’s Q2 earnings reflected a plunge in demand only partially offset by sales of N95 respiratory masks. Net sales for the quarter fell to $7.2 billion, compared to $8.2 billion in Q2 of 2019. Net income increased to $1.29 billion, from $1.13 billion a year ago. In the consumer goods segment, sales declined by 6.2 percent to $1.2 billion, but earnings rose by 4.8 percent to $287 million.

VANCOUVER — West Fraser Timber reported Q2 sales of $1.28 billion, down from $1.32 billion a year ago. Earnings of $0.70 per share reversed a loss of $0.85 per share in Q2 of 2019. Operating income came to $83 million, compared to an $84 million loss in the previous Q2. In the lumber segment, operating income totalled $66 million.

MILKWAUKEE — Briggs & Stratton has entered into a sale agreement and initiated voluntary company reorganization under Chapter 11. The company is the world’s largest manufacturer of gasoline engines for outdoor power equipment and was founded in 1908. An affiliate of private equity firm KPS Capital Partners will acquire all of the company’s assets and certain liabilities.

CLEVELAND — Sherwin-Williams Co. reported Q2 earnings of $7.10 per share, up from $6.57 in the comparable quarter last year. Sales declined by 5.6 percent to $4.6 billion, topping estimates of $4.53 billion. Same-store sales in the U.S. and Canada were down by 6.9 percent.

LANCASTER, Pa. — Armstrong World Industries reported that Q2 sales fell 25 percent to $203.2 million, while operating income tumbled by 28 percent to $62.4 million. At the same time, the company announced its acquisition of Turf Design, Inc. The Chicago-based firm designs commercial interiors and makes custom felt ceiling and wall solutions.

NOTED

The electric performance of Shopify’s shares has solidified the e-commerce platform’s position as Canada’s most valuable company, surpassing RBC, the Globe & Mail reports. Founder Tobias Lutke is inching closer to becoming the richest Canadian, currently coming in at number three. According to the Bloomberg Billionaires Index, Alibaba co-founder Joseph Tsai is the richest individual Canadian.

OVERHEARD…

“Jeff Bezos [head of Amazon] is on his way to become the world’s first trillionaire. We should try and put the brakes on that.”
—Liz Kovach, president of the Western Retail Lumber Association. Her organization is currently working to encourage consumers to shop locally and support retailers within their communities.

TORONTO — The big just keep getting bigger. That includes the big box stores that comprise a significant portion of Canada’s retail home improvement industry.

According to the 2020 Hardlines Retail Report, sales by Canada’s big box home improvement retailers gained ground in 2019. In fact, the market share of this store format is at a record high, says the Report.

Big boxes are operated by only a handful of retailers, led by Home Depot Canada, which has 182 stores. Next is Lowe’s Canada, which operates stores under the Lowe’s, RONA Home & Garden/L’entrepôt and Reno-Depot names. Finally, Kent Building Supplies in Atlantic Canada has built a network of large-format stores over the past two decades that dominate in the East.

This year’s Hardlines Retail Report analyzes how much the industry grew last year and identifies how each retail format—hardware store, building centre, big box and Canadian Tire—fared. The Report also ranks the industry’s top retail groups, while giving the big players close scrutiny: Home Depot Canada, Lowe’s Canada, Canadian Tire and Home Hardware are all analyzed in depth, with forecasts for growth.

The Report also evaluates the strength of independents and their affiliations with the buying groups, including Castle Building Centres, TIMBER MART, BMR Group and Independent Lumber Dealers Co-operative (ILDC).

Designed to help retailers and suppliers alike develop their business plans for the year ahead, this year’s Hardlines Retail Report provides valuable forecasts for the industry for 2020 and 2021. Forecasts include estimated performance by the industry’s top home improvement retailers, plus growth forecasts for renovation and housing.

The 2020 Hardlines Retail Report fills almost 200 PowerPoint slides and is packed with dozens of charts, graphs and photographs. (For more information about the 2020 Hardlines Retail Report, please click here.)

NATIONAL REPORT — The issue of product shortages is being felt by dealers across the country. And the shortages cut across a range of categories.

On one hand, the availability of wood products has forced dealers to dig harder as a number of factors act against them. Mills cut back output early in the spring in anticipation of lower demand, based on the rise of the COVID-19 pandemic. Then, as demand increased, the ability of those mills to ramp up again has been hampered by the need to maintain safety measures onsite. Sanitizing practices can result in shorter shifts so that cleaning can be done before the next shift. And fewer people can be on the line, to maintain physical distancing.

On the other hand, the rise in demand took the industry by surprise. That started with paint and plumbing projects back in March, as people found themselves with extra time on their hands and extra discretionary income, unable to go on vacation, send their kids to camp or just sit in a restaurant and run up a tab.

Increased demand is coming from the contractor side, as well. As many projects enjoyed essential service status, infrastructure continued and to a lesser degree so did new housing, especially for condos and other multi-unit starts.

“The market just took off in June,” says Bob Holmes, general manager of TORBSA, a buying group whose members largely serve contractor and commercial accounts. As manufacturers ran out of capacity, they had to decide what to make, he says, restricting supply—and diversity of product.

He says his dealers in Ontario, where non-residential construction projects were reopened on May 4, are busy again, while one large TORBSA member in British Columbia’s Lower Mainland never really slowed down.

The demand among consumers runs to recreational and outdoor living products as well. As people were stuck in their homes, that is where they have been busy investing and developing ways to make their time there more interesting. As a result, dealers have run out of everything from patio furniture to outdoor playsets for kids, while seeds, especially for vegetables, are also in demand, as are large appliances. Following several days of record high temperatures, portable air conditioners are sold out in markets like Montreal and Toronto.

“We’ve seen a great party started in every backyard in North America,” says Dave McNeil, VP allied products and national accounts at Taiga Building Products. “People are spending money where they spend their time—near their homes.”

The Burnaby, B.C.-based wholesaler has seen the demand for products shift in May and June to more substantial projects around the house. That increase in demand, coupled with tighter supply, has driven up prices for lumber. Flooring, mouldings, decking and related products are being snapped up by both contractors and DIYers. Treated wood and composite decking are hard to find and harder to keep in stock.

Nor is one region better off than another. “All of North America is in the same boat,” says McNeil.

ATLANTA & MOORESVILLE, N.C. — The Home Depot says it’s accelerating its investments in resets of its outdoor power categories. It’s part of a process to refine and simplify its primary brands across this category.

“We have been extremely pleased by the customer response to our premiere outdoor power brands, as we improved the shopping experience with a simplified presentation,” said Ted Decker, executive vice president, merchandising. “Similar to prior resets in our power tool business, outdoor power equipment is being reset and positioned by brand, and we will complete this rollout to approximately 1,300 U.S. stores by year’s end.”

The enhanced assortment will include The Home Depot’s top brands of cordless outdoor power—Ryobi, Makita, DeWalt and Milwaukee—as well as its lines of gas-powered products under the Toro, Echo, John Deere, Cub Cadet, Honda and Troy-Bilt names.

As part of this merchandise reset, the company will discontinue the Ego line of outdoor power equipment. However, Lowe’s Cos. quickly announced it had picked up the Ego brand. Beginning in December 2020, Lowe’s will be the exclusive U.S.-wide home improvement retailer to offer Ego’s battery-powered mowers, blowers, trimmers, chainsaws and snowblowers. Products will be available online and in select stores in fall 2020 and will roll out to all U.S. stores nationwide by February 2021.

In addition, Lowe’s will begin offering select Skil battery-powered outdoor power equipment in late 2020, including push and self-propelled mowers, leaf blowers, string and hedge trimmers. Both Skil and Ego are brands owned by Chervon, a global power tool and outdoor power equipment maker.

Home Depot’s efforts to refresh the presentation of the outdoor power category began earlier in the year. According to the company, four brands—Ryobi, DeWalt, Milwaukee and Makita—provide common battery platforms across their power tool and outdoor power equipment products.

OTTAWA — While retail is trending higher in May and remains poised to realize continued gains in June and July as home improvement dealers remain busy, one question mark affecting the outlook for the industry for the rest of the year is the buoyancy of the new housing market.

Total investment in building construction increased 60.1 percent to $13.4 billion in May, StatCan reports, partially rebounding from large declines in April. Investment in residential construction rose 57 percent to $8.4 billion. Spending on single-unit construction bounced back 71.7 percent to $4.1 billion, exceeding multi-unit growth, which increased 45.2 percent to $4.3 billion.

Although Ontario and Quebec reported the largest provincial gains for the month, all provinces bounced back somewhat from sharp declines in April. Despite these strong gains, residential investment remained 22.7 percent lower than February, before COVID-19-related restrictions were put in place. And it remains well below spending in May 2019, when investment in single starts reached $4.97 million compared with $4.12 million in May 2020. Investment in multiple starts slipped as well, to $4.3 million from $5.5 million a year earlier.

At the end of May, CMHC released its Spring Housing Market Outlook, which anticipated continued softening of the housing market as the COVID-19 pandemic leads the country into a recession. Following declines in 2020, says the report, “housing starts, sales and prices are expected to start to recover by mid-2021 as the pandemic recedes.”

While Canada’s housing markets could start to rebound by the end of the first half of 2021, CMHC expects sales and prices to remain below their pre-COVID-19 levels right through to the end of 2022. But it concedes that “the precise timing and duration of the recovery is highly uncertain because the virus’s future path is not yet known.”

Dealers in this industry have been buoyed by the unexpected demand for home products, but for dealers selling into the new housing market, the future remains cloudier.

At TORBSA, the Bolton, Ont.-based buying group, Steve Guglietti of Pro Con Building Supplies Ltd. in Brampton, Ont., has been elected as the chairman of its board for the year 2020. Previously, he served as the board’s secretary for 2019. In addition to Guglietti, the 2020 board is composed of Past Chairman Greg Drouillard of Target Building Materials Limited (Windsor, Ont.), Vice-Chairman Dante DiGiovanni of Blair Building Materials Inc. (Maple, Ont.), Vice-Chairman of Operations Gary Sangha of Crown Building Supplies (Surrey, B.C.), Secretary Mike Burkart of Bernardi Building Supply Ltd. (Weston, Ont.) and Treasurer Len Hewson of Hewson Brothers Supply Limited (Brantford, Ont.).

Ace Hardware has dismissed The Grommet co-founders Jules Pieri and Joanne Domeniconi, along with VP of Operations Jason McCarthy, almost three years after acquiring a majority stake in the e-commerce site. Rooted in the artisanal, DIY-based “Maker movement,” The Grommet is a platform for the sale and marketing of products developed by independent entrepreneurs. Ace retained Pieri and Domeniconi when it acquired a stake in The Grommet in 2017.

… that the 2020 Hardlines Retail Report, your definitive guide to the state of the industry, is now available for pre-order? The report includes valuable proprietary information you won’t find anywhere else, including in-depth analysis of the industry’s key players, breakdowns by province and store format and forecasts for 2021. Hardlines subscribers save more than 20 percent on pricing, so be sure and take advantage of this! Click here now to learn more and pre-order yours!

MISSISSAUGA, Ont. — Walmart Canada will invest $3.5 billion over the next five years to improve the customer experience in stores and online. The investment will include measures to speed up e-commerce transactions and the construction of two new distribution centres. Reinvented stores will feature expanded electronic shelf labels and scanners and a new checkout process to reduce touchpoints.

MONTREAL — Amazon’s first Quebec fulfillment centre is now operational in the Montreal borough of Lachine. The e-retail behemoth’s 13th warehouse in Canada will employ 300 full-time workers to pack and ship items. Amazon, which has taken heat for its work conditions, said in a statement that full-time employees will receive “comprehensive pay ($16 and up)” and “industry-leading benefits, including medical, vision and dental coverage.”

BRENTWOOD, Tenn — Tractor Supply Co. reported that Q2 net sales rose by 35 percent to $3.18 billion, compared to $2.35 billion in the same quarter last year. Comp sales were up 30.5 percent. Gross profit increased by 41 percent to $1.16 billion, from $820.7 million in 2019. Net income of $338.7 million was up 54.5 percent from $219.2 million, and diluted earnings per share soared by 61.1 percent, rising from $1.80 to $2.90.

SUPPLIER NEWS

COLOGNE, Germany — The eighth Global DIY Summit is being postponed by one year. The new dates for Europe’s leading conference for executives in the retail home improvement industry are June 9 to 11, 2021 in Copenhagen, Denmark. This congress is jointly organized by the European DIY-Retail Association (EDRA), Home Improvement Manufacturers Association (HIMA) and Global Home Improvement Network (GHIN).

ECONOMIC INDICATORS

Retail sales rose by 18.7 percent in May to $41.8 billion. Motor vehicle and parts dealers led the growth, followed by an increase in sales in every other sub-sector except food and beverage sales. Sales of LBM and garden equipment and supplies amounted to $2.9 billion for the month, up 5.5 percent from April, but 7.6 percent below last May’s sales. Although sales increased across all provinces in May, retail sales remain 20 percent below February levels. (StatCan)

Retail sales in the U.S. climbed by 7.5 percent in June as businesses resumed activity. The gains followed on an 18.2 percent upwardly revised leap in May, the largest since the government began collecting the data in 1992. (U.S. Commerce Dept.)

U.S. housing starts soared by 17.3 percent in June to a seasonally adjusted annual rate of 1.186 million units. Building permits for the same period increased by 2.1 percent. (U.S. Census Bureau)

Sales of existing U.S. homes in May declined by 9.7 percent to a seasonally adjusted annual rate of 3.91 million units. That was the lowest rate of home resales since October 2010. On a yearly basis, existing home sales fell 26.6 percent, the largest annual decline since 1982. (National Association of Realtors)

NOTED

Several U.S. retail chains are imposing mandatory mask rules in their stores, regardless of local regulations. Walmart, Target, Best Buy and Costco are among those that have adopted the rule across their banners. In Canada, Quebec has required masks in public indoor places since earlier this month, while several Ontario municipalities have made similar moves.

OVERHEARD…

“Joanne and I are sad to abandon our Citizen Commerce mission and not see Grommet through to becoming a household name. But we feel nothing but a great deal of pride when we reflect on the hundreds of careers we shaped, the more than 3,000 small businesses we accelerated, and the thousands of jobs we created.”
—Jules Pieri, co-founder of internet site The Grommet, who, along with her partner Joanne Domeniconi, was ousted from Ace Hardware three years after that company acquired The Grommet.