TORONTO — This was supposed to be a year of celebration. After all, Hardlines has endured in this industry for 25 years. But, in just two months, the world has changed dramatically. Like all of you, our business has changed too. That’s why we’ve made the difficult decision to cancel the Hardlines Conference in 2020.

The 25th Annual Hardlines Conference was to take place in the third week of October. Some of the top retail leaders in Canada—and the world—had agreed to present as part of our birthday bash. We also looked forward to hosting leading dealers, retail head offices and industry suppliers, as we do every year, as delegates at the conference.

But the impact of the COVID-19 crisis has been too great, and that impact may persist for months to come. Even if it doesn’t (and we hope that’s the case!), the retail home improvement industry will be busy catching up and taking care of its customers and workers as we get used to a new kind of “normal.”

Through the rest of the year, we will stay focused on covering the industry and the current crisis. We will find stories about how dealers are coping around the country, while staying close to industry leaders for their input and insights.

We will also focus on updating our two key research reports, the Hardlines Retail Report and the Hardlines Market Share Report. We want these, like our other products, to help retailers and suppliers alike to understand the market and develop their strategies for 2021 and beyond.

Until that time, everyone here at Hardlines wishes you the very best as you do business in these challenging times. And on a personal note, we hope you and your loved ones are keeping safe and well through this crisis. We look forward to coming out the other end and will be here for you as we do.

Canadian Tire stores enjoy positive Q1 comps as online sales soar

TORONTO — Canadian Tire Corp. saw its first-quarter sales drop by 2.7 percent overall. Sales by CTC fell to $2.78 billion, from $2.83 in Q1 2019; revenue fell 1.6 percent to $2.85 billion.

However, sales through its Canadian Tire stores were up 2.2 percent. CTR’s comp sales for the period were up 0.7 percent, in spite of the impact of the COVID-19 crisis. In fact, an upside of the current situation was a spike in online sales for Canadian Tire dealers of almost 80 percent. 

“To date, we have seen a quantum leap in our e-commerce performance across all of our banners and we have accelerated our planned investments in our digital capabilities to meet our customers’ increased desire to shop online,” said Greg Hicks, president and CEO of Canadian Tire Corp.

And more people were putting those purchases on their Canadian Tire credit cards. In Q1, revenue for CTC’s Financial Services division increased four percent over the prior year due to higher credit charges resulting from growth of 4.2 percent in gross average credit card receivables.

The first-quarter results definitely saw impacts from the rise of the pandemic. Despite being up against a very strong quarter last year, comp sales trended well for the company right up until March 11. After that, “consumer spending patterns changed dramatically, with a focus on essential items, resulting in Canadian Tire experiencing growth in certain categories, such as household consumables and cleaning solutions, exercise and sports equipment and accessories and laundry solutions, while categories such as backyard living, tools and automotive saw declines,” the company noted in a release.

After an initial rush for essential items, customer traffic at Canadian Tire-bannered stores began to normalize as Canadians adopted self-isolation measures. Once confined to their homes, people began shopping online, driving CTR’s positive quarterly comps.

MILTON, Ont. — As dealers and managers across the country scramble to meet changing conditions under the siege of the COVID-19 pandemic, the suppliers that keep the stores filled have faced challenges of their own.

Dave McNeil, VP allied products and national accounts at Taiga Building Products, is someone who recognizes the chaos of the new normal. “I call it business as unusual,” says McNeil. “There is no such thing as a ‘real market.’ We’re all dealing with conditions on the fly—and then it may all change again overnight.”

The Burnaby, B.C.-based wholesaler, which has DCs across the country, quickly adapted to the changes, beginning in March. During the week of March 16, the company began rolling out a series of modifications to its workplaces. Workers were split into two cohorts and work hours were shifted. Where warehouse staff were once working 10-hour shifts, each cohort now works a five-hour shift.

“It reduced our capacity in the moment—as we paid our forklift truck drivers to stay home, for example—but demand was reduced too,” McNeil says.

Orders and deliveries have been spaced out, with staff picking orders on weekends now. This enables them to maintain physical distancing, without the whole shift being onsite—and at risk—at one time.

“We’re getting creative.” And, he adds, many lessons learned from this crisis will likely continue. “Some practices we’ll keep and some we’ll just smile about in two years.”

NATIONAL REPORT — Individuals and companies within the retail hardware and home improvement industry have been helping others throughout the current crisis. And suppliers have been no exception. Here are a few good news stories.

Jacobs & Thompson Inc., a Toronto-based manufacturer whose product lines include weatherstripping under the Polar Bear brand, has partnered with the federal government to supply 6,000,000 face shields. J&T’s 12 manufacturing facilities throughout North America, including its Polar Bear weatherstripping division, have added production lines to help various health agencies, first responders and retailers that may require the face shields.

Regal ideas, a maker of aluminum railing systems, donated 100 microwaves to the Atira Women’s Resource Society in Vancouver. The society is dedicated to supporting women and children affected by violence. The organization offers safe and supportive housing as well as education and advocacy aimed at ending all forms of gendered violence. “We hope to encourage many others to help those in need,” says Andrew Pantelides, vice president of marketing and business development at Regal ideas.

IPEX is doing its bit in the fight against COVID-19 by repurposing some of its manufacturing operations in Ontario. With the retooling, the plants can produce 50,000 face shields a week for health care workers and front-line employees. A dedicated group in the organization took the project from concept to execution in just 21 days. The company expects the first masks to come off the line in about two weeks.

Early on in the rise of the pandemic, Liteline Corp., a lighting manufacturer based in Richmond Hill, Ont., stepped up to help out. Mark Silverstein, VP sales and marketing led a campaign to donate a portion of Liteline’s sales during April and May to purchase equipment for healthcare networks locally and across North America. “We have committed to donating at least 10,000 masks, 10,000 sets of gloves and 15,000 bottles of hand sanitizer,” he says.

Workplace uniform manufacturer McCarthy Uniforms has provided uniforms for the likes of Home Depot, Canadian Tire and Walmart—as well as generations of young people going to private schools. During the current crisis, the company considered temporarily shutting its doors. Instead, it decided to keep its people employed, sourcing and making medical isolation gowns made of upcycled school uniform fabric. It’s also delivering masks to frontline workers. So far, McCarthy has delivered more than 100,000 units to hospitals throughout the Greater Toronto Area.

Daniel Beliveau has been named senior marketing activation manager – Canada at K+S Windsor Salt Ltd. A nine-year veteran with the company, he most recently held the title of national retail sales manager.

Gary Gill, national account manager for Canadian Tire at Apex Tool Group, is retiring. He started in the hardware business 35 years ago as the director of marketing at Minwax. In 1992, he moved to Sherwin-Williams, where he spent more than a decade, then spent another decade at Graham & Brown, this time as general manager of North America. Four years ago, he joined Apex Tool. Taking over from Gill is Randi Cox, formerly senior national account manager at Keter.

At SFA Saniflo Canada, a Cambridge, Ont.-based maker of drain pumps and macerating and grinding toilets, Jeremy Martin has been appointed Western regional sales manager. His background includes stints at Fastenal, Ace Hardware and RONA. Robert Marchio joins as Central Canada regional sales manager, overseeing Ontario, Manitoba and Saskatchewan. He was most recently general manager at Global Plumbing and Heating.

DID YOU KNOW…

… that dealers and managers can sign up at no charge for our sister publication, Hardlines Home Improvement Quarterly? But suppliers can also subscribe, for a small annual fee, to this important trade magazine. Click here to sign up today!

RETAILER NEWS

SASKATOON — Federated Co-operatives Ltd. has launched its Co-op Helps campaign to coincide with the online trend of Giving Tuesdays. In order to help communities and individuals in Western Canada impacted by the pandemic, the co-op is making a $250,000 donation to food banks in the region. It is also asking Westerners to submit the names of individuals who have gone out of their way for neighbours and friends. Up to 1,250 of them will be selected to receive a $100 Co-op gift card. Nominations are open until May 19 at www.wecare.crs.

BOUCHERVILLE, Que. — As the COVID-19 pandemic continues, Lowe’s Canada says it will extend its temporary $2 an hour wage premium for all eligible full-time, part-time and seasonal hourly employees through May. The policy applies to Lowe’s, RONA and Reno-Depot corporate stores, contact centres and supply chain facilities in Canada.

CALGARY — United Farmers of Alberta Co-operative Ltd. announced it is donating $60,000 for COVID-19 relief in support of vital services in rural areas. The amount includes $19,000 donated by UFA delegates on behalf of UFA, with funding directed to local food banks and other supports.

QUEBEC CITY — Canac-sponsored NASCAR driver Raphaël Lessard is raring to get back on the course as the organization adds some closed-door events to its schedule following a hiatus. “Simulations are well and good but there’s nothing like a real course,” Lessard told Le Journal de Montréal. NASCAR’s season was interrupted in March after its first four events.

SUPPLIER NEWS

MISSISSAUGA, Ont. —The Lumber and Building Materials Association of Ontario announced it has partnered with a software training support company to provide its members with virtual drivers’ education courses. Designed for vehicles from pickup trucks to cargo vans and flatbed trucks, the courses include defensive driving, fall protection and practical cargo securement. Click here for more info.

RICHIBUCTO, N.B. — Imperial Manufacturing Group has announced its recent acquisition of Pointe-Claire/Green Valley Steel Group Inc., a steel service centre offering warehousing, slitting, levelling and cut-to-length of flat rolled steel products. Its corporate head office is located in Hamilton, Ont., and it has facilities in Pointe-Claire, Que., and Bolton, Ont. “After working on this agreement for quite some time now, I am proud to say that it has finally come to fruition,” said Imperial CEO Normand Caissie.

CAMPBELLVILLE, Ont. — Goodfellow Inc. and Texas-based Fortress Building Products have expanded their partnership to deliver Fortress’s Evolution brand of steel deck framing to the Canadian market. “Goodfellow has been partnered with Fortress on their railing products and have found them to be a first-rate manufacturer,” said Ken Vanderwal, the wholesaler’s building materials product manager.

MOORESVILLE, N.C. — Simpson Strong-Tie will have an extended assortment in Lowe’s stores in both Canada and the U.S. this spring. Lowe’s is calling it the widest selection of Simpson Strong-Tie hardware products in the marketplace. Designed to serve contractor customers, the line includes framing hardware and fasteners. Lowe’s will offer localized Simpson Strong-Tie assortments in markets prone to earthquakes and hurricanes that have unique building code requirements. They will also be available on LowesForPros.com.

ECONOMIC INDICATORS

The public health crisis has taken a toll on activity in the Greater Toronto housing market. Realtors reported 2,975 residential transactions through the board’s MLS System. This result was down by 67 percent compared to April 2019. New listings for the month totalled 6,174, down on a year-over-year basis by a similar rate compared to sales. (Toronto Regional Real Estate Board)

NOTED

Castle Building Centres Group has launched a fund to support the family of one of its dealers. Kurt and Tina Gratto of Masstown Hardware Castle Building Supplies lost their daughter Jamie Blair and her husband Greg Blair in the tragic mass shooting in Nova Scotia in April. The Blair’s two sons, Jack and Alexander, managed to escape unharmed are now in the care of their stepbrother. Witnessing the outpouring of industry support, and hoping to offer the children a legacy of hope, Castle has established The Jack and Alexander Blair Trust. Contributions will go toward meeting their future needs for cost of living, education, health, as well as extracurricular activities such as sports and hobbies. For more information or to make a donation, click here.

OVERHEARD…

“UFA was built by farmers, for farmers. We know that communities are sustained by strong people, both physically and mentally. Now, more than ever, we believe it’s our co-operative’s responsibility to ensure our rural communities have access to the services they need to thrive even in the face of adversity.”
—Kimberly MacDonald, community investment manager for United Farmers of Alberta, on the co-op’s decision to donate $60,000 for COVID-19 relief in rural areas.

SPECIAL REPORT — As dealers get ready for some provinces to start reopening their economies, many are now able to look ahead to how the current crisis will affect their businesses in the longer term. Those dealers shared their outlook in this year’s Hardlines Retail Report Survey, which polls dealers across the country to gauge their business conditions and concerns.
 
After modest growth in 2019, many dealers in British Columbia are experiencing a tough first quarter, with sales skewed by the current crisis. In the middle of March, many retailers saw a rise in sales as consumers scrambled to ready themselves for the lockdown. Some were up as much as 10 percent year over year for the period, but as the year progresses, they are feeling nothing but uncertainty.

Alberta stores are getting hit hard as the impact of the COVID-19 crisis on retailers adds to the already weak conditions there. The pandemic’s downward pressure on oil prices has gutted an already ailing resource sector that drives the provincial economy. Most dealers in the survey anticipate double-digit declines this year, some by as much as 25 percent if they are not able to rebound from the current situation. That outlook is shared equally by hardware stores and building centres.

Across Manitoba and Saskatchewan, many dealers reported solid surges in recent weeks, some in the double digits, but overall, many are reporting they hope the year will end with sales up slightly or flat. Some even anticipate a 10 to 20 percent drop for the year.

Ontario turns out to be the toughest province to get a read on. Dealers’ responses here varied widely, likely reflecting both the uncertainty surrounding the current crisis as well as the range of markets that comprise Canada’s largest province. Many dealers anticipated mid-single to low double-digit growth, but the current situation has turned those forecasts around. Many now expect sales to drop overall in 2020 by up to 10 percent.

Quebec enjoyed some of the strongest results in 2019, with the province growing by high double digits last year. But now many are anticipating a big drop in 2020, some by as much as 20 percent.

The Maritimes are also feeling the impact of the COVID-19 crisis, which has been especially difficult considering many dealers here did not have a strong 2019. Some hardware stores in Nova Scotia and Prince Edward Island, for example, have been hit especially hard by the economic impact of the pandemic.

Newfoundland dealers, which generally did not see strong growth last year, are bracing for the worst now. Many are expecting their sales to be down by 10 to 20 percent at year’s end.

While conditions—and outlooks—varied somewhat from province to province, the overall direction for the industry will be negative growth for 2020. The impact of the COVID-19 crisis has already begun to flatten the expectations of most dealers for any positive growth for the remainder of the year.

Dealers face slowdowns as construction work stalls due to pandemic

NATIONAL REPORT — The impact of the COVID-19 crisis on dealers has been as varied as the dealers themselves. One thing is common for all, however: everyone is busier than ever as they cope with the “new normal” of physical distancing, ongoing sanitization procedures and curbside pickup.

Hardware stores in particular are faring well in many markets, especially in Central Canada, and these dealers are more optimistic about the year as a whole than their building centre counterparts.

That’s likely due to the fact that many building centres, particularly yards that are focused on contractor business, are reporting slower volumes. Bob Holmes is general manager of TORBSA, a buying group that consists mostly of dealers serving commercial and industrial markets, mainly in Ontario. He notes that these types of yards managed to stay busy earlier in March as the COVID-19 pandemic was on the rise and started hitting DIY business. But since then, many of the commercial or major residential construction jobs have been put on hold; the ones that are considered essential continue with strict physical distancing rules resulting in fewer workers on the job.

“It has slowed things down,” says Holmes. “I expect many dealers in April to be down by 30 to 50 percent. All we can do is wait for things to open up again.”

Steve Buckle, CEO of the Sexton family of companies, which includes Sexton Group, agrees—depending on the region. In the West, many construction projects remain in place, but at a significantly reduced output.

“Contractors are reporting the rate of progress to be anywhere from one-third to one-half of what it was prior to new work processes being implemented,” says Buckle. “This, of course, will result in slower construction material sales.”

He estimates that dealers in the West are facing downturns for the month of April ranging from 10 to 50 percent.

In Ontario, Buckle says more construction has been curtailed than in some other provinces, “so the situation temporarily was much tougher on our members there.”

However, he takes a brighter view of the months ahead. “We expect an improvement to business through the summer months, assuming there is a relaxation of government restrictions. I would also expect construction-site work to speed up to some extent as we adapt to, and become familiar with, the new work processes.”

NATIONAL REPORT — In what should be the busiest time of year for dealers, most of them are busy reinventing their business practices as the current pandemic stalls most major projects. And the impacts are flowing back through the supply chain.

From the distribution side, suppliers are seeing a similar picture. Boyden Moore, president and CEO of hardware distributor Orgill, Inc., confirms that there’s a split in how well different types of stores are faring. “Our pro-focused dealers are slowing a little more. Our hardware dealers are seeing increases.”

Ross Power is president of PowerHouse Building Solutions, which specializes in rainscreen, building envelope, insulation and specialty building products. He notes that the current conditions have given him more time to focus on how his business is run and how he can improve operations to prepare for an eventual upturn. Still, he’s seeing sales to his contractor-oriented dealers remain steady, as the market in B.C.’s Lower Mainland remains relatively healthy compared with other parts of the province.

“In general, commercial and residential have been much better than I expected,” Power says. His big concern is whether workers will stop showing up at the job sites, fearing for their health.

Power has made adjustments to accommodate the current circumstances. That included a 15-day extension for orders placed in March and through to April 15. He also created a fund to support his retail customers. PowerHouse is providing $2,500 toward the reimbursement of grocery delivery and service fees to all of the employees and immediate family members of the building centres that PowerHouse supplies.

Dave McNeil, VP allied products and national accounts at Taiga Building Supplies, says the markets are changing so quickly right now that businesses are dealing with conditions on a day-to-day basis. He doesn’t mince his words about the state of the construction markets in Ontario and Quebec. “They’re dead in the water.” He acknowledges that many dealers saw a lift in March, but April has been the month of reckoning. “Everyone is looking to [May],” he says.

He notes that “British Columbia has shown amazing resilience, not that it’s where it should be. But compared with Ontario and Quebec, it’s holding its own.” He observes that dealers closer to denser urban markets are feeling the pinch more than dealers in smaller centres. “Small projects have exploded,” he says. “There’s an unbelievable array of repair and reno jobs,” which help drive business for exurban and rural independents.

WORLD HEADQUARTERS, Toronto ― At Hardlines Inc., we are proud to announce the appointment of Geoffrey McLarney as Assistant Editor. While continuing his oversight of our Daily News updates and field reporting for the Quebec market, Geoff has taken on increased responsibility in the production of our weekly Hardlines newsletter and our monthly newsletter, Hardlines Dealer News. He remains a regular contributor to our print magazine, Hardlines Home Improvement Quarterly. Geoff reports to our Editor, Sigrid Forberg.

He has been involved with Hardlines since the age of seven when the newsletter began as a weekly fax publication sent from the basement of his family’s home. He joined the team formally as a freelance Editorial Assistant in 2012. Most recently, he held the title of Staff Writer.

Geoff graduated from Glendon College, York University, with a concentration in ethics and legal philosophy before studying theology at the University of Toronto. Geoff has been based in Montreal since 2013.

We look forward to watching Geoff grow in this role as he connects with dealers and executives across the country in his ongoing coverage of the retail home improvement industry.

Isabelle Laliberté has rejoined Lowe’s Canada as divisional vice president, operations for Quebec. She was previously at Lowe’s Canada a year and a half ago as a divisional vice president. In the interim, she served as general manager of the Pork Breeders of Quebec. Also at Lowe’s Canada, Chris West has joined as senior vice president, merchandising. He brings more than 25 years of merchandising, supply chain, category management and sourcing experience with major retailers including Walmart Canada and Canadian Tire Corp. He will lead the Canadian merchandising business unit.

John Hartmann, currently president and CEO of True Value Co., is leaving the Chicago-based company to join Bed Bath & Beyond as COO, as well as president of buybuy Baby, effective May 18. Hartmann may be best known to Hardlines readers as the closing keynote at last year’s Hardlines Conference.

DID YOU KNOW…

… that back issues of our sister publication, Hardlines Dealer News, are now available in a new archive? Check out past issues here of our monthly newsletter for Canada’s home improvement dealers and managers!

RETAILER NEWS

ST. JOHN — Kent Building Supplies, Irving Shipbuilding Inc. and the team at parent company J.D. Irving have donated $250,000 to the Canadian Red Cross “Stronger Together Nova Scotia” Fund. The fund was set up by the province of Nova Scotia on behalf of families and communities affected by the recent tragic mass shooting. In a release, the company said, “Our hearts go out to the families, friends and communities who have been affected by these senseless acts of violence.”

CALGARY — United Farmers of Alberta Co-operative Ltd. (UFA) has partnered with Zone Startups Calgary (ZSC) to collaborate and support early-stage agriculture technology companies with technical and commercial validation through UFA and ZSC’s program offerings. Zone Startups Calgary is an accelerator for pilot-ready technology start-ups. It’s operated by Ryerson Futures Inc., a Toronto-based global accelerator program. In addition to Calgary, Zone Startups programs are present on a global stage with operations in Toronto, India and Vietnam.

BOUCHERVILLE, Que. — Lowe’s Canada has partnered with Sico to launch the Colour Selector by Sico on rona.ca and renodepot.com. The new tool lets RONA and Reno-Depot customers view some 1,800 colours available in the Sico catalogue and purchase tinted paint online. It follows the “Stay safe, stay home” campaign launched earlier in April to encourage consumers to turn to e-commerce for their non-urgent needs.

SUPPLIER NEWS

WARWICK, Que. — Embassy Ceilings Inc. and Alexandria Moulding announced they have reached an agreement for the distribution of Embassy’s products to the Canadian retail building supply network. “We are very excited about expanding our product line with Embassy Ceilings,” said Donna Gerrits, VP of sales and marketing, Canada, at Alexandria Mouldings. “We carefully choose our product lines and work diligently to create true partnerships with our customers by providing them with the finest products, training, product knowledge and service in the industry.”

VANCOUVER — West Fraser Timber reported results for the first quarter of 2020 that included sales of $1.2 billion, up six percent from the prior quarter, but down 3.7 percent from $1.24 billion in the same quarter a year earlier. Earnings swung from a $5 million loss in Q1 2019 to positive earnings of $12 million in the latest quarter. The company cited improved prices, favourable foreign exchange and lower fibre costs for the improved Adjusted EBITDA for the quarter.

BURLINGTON, Ont. — Nicholson and Cates has announced a distribution agreement with Light Trim Siding Solutions, a Canadian trim and accessories manufacturer. Light Trim is an aluminum trim program that was specifically developed to work with James Hardie Siding. Nicholson and Cates will inventory the three most popular colours—black, white and bright silver—and provide colour matches for James Hardie Statement and Dream Collection colours through special order.

LIVONIA, Mich. — Masco Corp.’s Q1 sales rose 4.1 percent from a year ago, reaching $1.6 billion. Earnings came to $530 million, up from $116 million in last year’s first quarter. Operating profit for the quarter increased 14 percent to $225 million; adjusted operating profit increased 11 percent to $228 million.

LANCASTER, Pa. — Armstrong World Industries says its Q1 earnings remained unchanged from a year ago at $1.10 per share. Revenues amounted to $248.7 million, up from $242.1 million a year ago. Weaker sales in parts of the U.S. were only partly offset by stronger activity in Canada and Latin America.

ECONOMIC INDICATORS

In the Greater Toronto Area, sales of existing homes during the first 17 days of April were down by 69 percent compared to the same period in 2019. Year-over-year sales declines, in percentage terms, were greatest for the detached and condominium apartment market segments. The average selling price during the period was $819,665, down by 1.5 percent. (Canadian Real Estate Assoc.)

NOTED

Marvin Ellison, CEO of Lowe’s Cos., received a base salary of $1.45 million in 2019, up 68 percent from 2018. That base represented just 12.5 percent of his total compensation, which amounted to $11.62 million. His total compensation was 511 times greater than that of a median Lowe’s employee. Home Depot CEO Craig Menear had a salary of $1.3 million in 2019, which was down from $1.35 million in 2018. His total compensation package dipped to $10.89 million from $11.37 million, 481 times the median wage of a Home Depot employee.

OVERHEARD…

“This is our home, this is our community and these are our friends and family suffering and sacrificing. This community supports us, and this is a small moment in time when we can support them in return.”
—Canadian Tire Associate Dealer Ryan Jago. Jago, along with his wife Kurstie, donated the resources to construct a drive-through COVID-19 testing station to support their community in High River, Alta.

MISSISSAUGA, Ont. — With their combined offer of autonomy and purchasing power, buying groups can be the best of both worlds for independent retailers. One group that has seen its membership swell over the past months is Castle Building Centres.

Since the end of last year, Castle has added dealers across all regions, including as far east as Newfoundland. There, Randy and Phyllis Randell chose to continue a family tradition by affiliating with the buying group last fall. NRO, their store in Roddickton on the island’s Great Northern Peninsula, is their third business.

“We grew up watching family members proudly serve the community as a Castle Building Centre,” the Randells said. “When the opportunity for us to open a hardware and building centre presented itself, we knew it had to be Castle.”

In Moosonee, Mushkegowuk Development Corp. (MDC), which is owned by members of seven nearby First Nations bands, purchased MDC Supply GP. That business operates as Great North Builder’s Supplies. It had served the area’s First Nations communities for almost 40 years when it closed upon the retirement of founder and long-time Castle member Jack Hood in 2018. When MDC reopened the store a year later, General Manager Albalina Metatawabin explained that Great Northern chose to affiliate once again with Castle, “not only for the 35-year history in Moosonee, but because of the outstanding experience and recommendations from the previous owner.”

Farther south, the addition of Niagara Building Centres in Fonthill, Ont., was announced in late March. Partners Chris Baxter and Kevin and Gary Bolibruck are looking forward to a grand opening for the retail store and sprawling lumberyard in the fall.

In Quebec, Lac-St-Jean’s Quincaillerie Tremblay Laroche joined Castle at the end of last year. Marc Tremblay and Dominique Laroche have grown the small LBM store they bought in the late 1980s into a full-service home improvement destination.

Castle’s ongoing commitment to the Quebec market can be seen in the expansion of its recruitment efforts in the province. Richard Hamel, previously of Roland Boulanger & Cie, was named dealer development manager for eastern Quebec and northern New Brunswick. He works with Robert Legault, who has overseen the region as Castle’s manager of business development in Quebec for more than a decade.

Along with its growth in Eastern Canada, Castle has been active in the West. In January, the group announced it was welcoming Ruhr Valley Lumber in the Edmonton-area community of Thorsby, Alta. Matthew Ruhr grew up nearby, learning carpentry in his teens from his grandfather.

And most recently, Calgary’s Remuda Building joined the group. Remuda was founded in 2006 by owner and CEO Steve Schouten. “Our goal has always been to create a sustainable business that will be around for years to come, and one that our local community can trust,” he said. “Castle was the buying group that best shared our vision of growth and longevity.”

Peavey on track to bring Ace stores on board, despite current crisis

RED DEER, Alta. — The acquisition of the Ace Hardware license in Canada by Peavey Industries has offered good news for Ace dealers. The brand and support for the banner has fallen into the hands of a Canadian-owned company, after Lowe’s Canada made a deal to divest the business, which was part of its RONA business, earlier this year.

The entire deal, which was initiated by Peavey, confirms the Red Deer, Alta.-based retailer’s presence as a national entity. Peavey had already bought up London, Ont., based TSC Stores at the end of 2017. That acquisition now gives it added distribution strength to service the Ace deal.

But the onset of the COVID-19 pandemic was an unexpected wrinkle in the planned transition process. Nevertheless, Peavey President and CEO Doug Anderson says the shift to supply Ace dealers from Peavey’s distribution centres remains on track.

That conversion involves changing inventories and SKUs over from the RONA distribution business to Peavey’s own systems. The Peavey distribution centres already supply stores, which operate under the Peavey Mart, TSC and MainStreet Hardware banners.

“We’re starting the conversion process now, with only moderate delays because of COVID,” Anderson says. He notes that the company had to revise its plans, especially in light of the fact that Peavey put a freeze on hiring last month. “But based on our conversations with the dealers we’ve talked to so far, there’s interest and excitement out there.”

About 100 independents in Canada sport the Ace banner, consisting of a mix of hardware stores and building centres. Many of them are in smaller towns, with close ties to their communities, something that Anderson saw as a good fit with Peavey when he first began exploring the possibilities of a takeover.

Despite not being able to interact with dealers face to face, the conversion process is on track according to an internal schedule, and Anderson expects it to be completed by the end of August.

TORONTO — Most home improvement retailers have discontinued their paper flyer programs, including Canadian Tire, whose weekly specials are a Canadian tradition. Advertising on radio is directing customers to look online for weekly specials by retailers including Home Depot Canada and Lowe’s Canada.

Paper flyers have declined in popularity with the advent of digital alternatives. But concerns about the transmission of infection may be hastening their obsolescence.

While some hardware retailers have pulled flyers as a temporary measure to avoid driving up in-person store traffic, other retailers are doing away with the medium altogether. Loblaw Cos. Ltd. announced it is permanently transitioning to digital promotions online and through the PC Optimum app. Meanwhile, Canadian Tire has begun testing the waters, announcing earlier this month it has “temporarily paused” production of flyers in Ontario.

Retailers are weighing the need to move inventory against the possibility that they may be perceived as promoting products that are non-essential. That concern extends to how they position their flyer promotions, without jeopardizing the ability of hardware and home improvement stores to stay open in provinces where they are allowed to.

Home Depot Canada, for example, is taking a socially responsible approach to its messaging. The retailer has replaced its flyers with notices online that reinforce the importance of not just shopping online, but shopping for products needed to get through the current crisis.

However, a look at Canadian Tire’s online flyer, for example, reveals that it looks identical to the paper version, offering specially priced products in a wide range of categories. RONA’s promotional efforts are more in sync with the current situation: a recent flyer was geared to limited seasonal activities, while another flyer is actually a message to customers reminding them to stay home and order online, rather than shop in person, as much as possible.

The use of promotions that are deemed unwarranted also has an impact on retail workers. They must deal with larger volumes of customer traffic, putting them at greater risk. Case in point: the union that represents workers in Loblaw and Superstore grocery outlets in Manitoba issued a press release last week decrying the chain’s implementation of a “No Tax Sale” from April 24 to 30 on non-food items.

These include gardening supplies, clothing, barbecues and patio furniture. According to the release, issued by UFCW Local 832, “These events draw large crowds and potentially put the safety of our members, and the public, at risk.”

SPECIAL REPORT — Dan Tratensek, executive vice president and publisher with the North American Retail Hardware Association (NRHA) has met countless home improvement retailers over his multiple decades with the organization.

Drawing on consumer research and dealer surveys, the NRHA has determined consumers are looking for four things from home improvement shopping experiences: inspiration, discovery, selection and support. Tratensek sees independents as prepared to deliver on these desires—all traits that have come in handy for them amidst the rise of the COVID-19 pandemic.

“The thought that we can dismiss independent retailers and how they could possibly compete in this new paradigm of customers is really off-base,” says Tratensek.

“Independent retailers are really well-suited to address these new consumer needs.” When it comes to building a brand for themselves in today’s retail market, Tratensek says the most important factor for a retailer is to determine what differentiates their business. It’s hard to stand out today and he adds the modern consumer is arguably less brand loyal than they have been at any time in the past.

What is the key to good customer service? Tratensek argues it’s flexibility.

“It’s unsettling to talk to an independent retailer who has very rigid policies,” he says. And flexibility and the capacity to adapt, often daily, to new circumstances, has become the norm in recent weeks as dealers adjust to the current worldwide health crisis.

“As an independent retailer, you’ll say, ‘I know everybody in my community; I’m part of my community’ and then you greet them with a sign above your customer service counter that says ‘Absolutely no returns without a receipt.’ ”

According to NRHA research, the future for independents lies in identifying and serving localized niches. Tratensek says there’s no limit to the opportunities independent home improvement retailers have in that area—and it’s not just products. It can be services as well. Some stores that come to mind for him have invested in candles, birdseed, automotive, pet or even locally grown foods.

“You have to understand that if you’re going to be successful, you have to be different,” he asserts.

(This story is excerpted from a more in-depth article that appears in the latest issue of our sister publication, Hardlines Home Improvement Quarterly. HHIQ is being mailed to dealers and managers across the country this week. If you want to receive your own subscription to HHIQ, please click here for more info! —Editor)

Duncan Wilson, senior director of business development for Home Hardware Stores Ltd., has retired. A veteran of the retail home improvement industry, he got his start at Morgans in Ottawa in 1969, before joining F.W. Woolworth in 1970. From there, he moved to Ace Hardware in 1992 as director of inventory management and merchandise services. At that time, Beaver had adopted Ace as hardlines supplier of choice. There, he eventually earned the title of vice president of merchandising and marketing. Wilson left the company when Beaver was acquired by Home Hardware. In 2002, he joined Groupe BMR, where he led the dealer development team there. In 2008, he moved over to Home Hardware Stores Ltd. Wilson was put in charge of creating a dealer development team at Home Hardware, which resulted in solid growth within the company’s ranks. In 2019, Wilson was given the Lifetime Achievement Award by the Atlantic Building Supply Dealers Association.

DID YOU KNOW…

… that our sister publication, Hardlines Home Improvement Quarterly, is being mailed this week to dealers and managers across the country? But you can also access it online here! Read the latest articles on retail trends and best practices. And if you want to receive your own copy of HHIQ mailed directly to you, click here to subscribe!

RETAILER NEWS

ST. JACOBS, Ont. — Home Hardware hosted its first Virtual Market Presentations earlier this month. The day included presentations from CEO and President Kevin Macnab and CFO Sean MacCormack. Joel Marks, VP of merchandise hardlines, and Marianne Thompson, VP of merchandise LBM, also provided updates. The company will offer a Virtual Market trade show, beginning on April 28, with suppliers and dealers from across the country.

BOUCHERVILLE, Que. — In a new publicity campaign, Lowe’s Canada is telling consumers, “after years of taking care of your home, it’s time to let your home take care of you.” The 30-second spot includes branding from all Lowe’s Canada banners. “The thought was we wanted to deliver and amplify the government’s message in a relevant way,” said Brian Gill, creative director at ad agency Sid Lee, to Strategy magazine. “Being an enabler for helping people take care of their homes, it’s interesting for us to kind of flip that on its side.”

TORONTO — Canadian Tire Corp. has announced that its upcoming annual meeting of shareholders on May 7 will take place electronically, via audio webcast and teleconference. All shareholders of record as of the close of business on March 19 will be able to listen to the proceedings, vote and submit questions.

TORONTO — As online purchases of groceries and other essentials surge, Walmart Canada is accepting PayPal payments on Walmart.ca. A survey commissioned by PayPal in early April shows that 30 percent of Canadians are shopping online for groceries. This marks a 58 percent jump from a comparable survey conducted just four weeks earlier, before the novel coronavirus was declared a global pandemic. This is the first time PayPal has partnered with a Canadian retailer that sells groceries.

SUPPLIER NEWS

WINNIPEG — The Western Retail Lumber Association is soliciting nominations of its members to recognize them for their effective responses to the ongoing pandemic. Members chosen from the nominees will be recognized in the WRLA’s e-news and Yardstick magazine, among other platforms. Click here to submit a nomination.

ST. LOUIS — Energizer Holdings reported preliminary Q2 earnings of $0.20 per share, down from $0.45 a year ago. The company expects to report net sales of approximately $587 million, compared to $556 million in the prior year, driven in part by organic sales growth of approximately 2.7 percent. Final results will be released early in May.

ECONOMIC INDICATORS

Retail sales rose in February for the fourth consecutive month, up 0.3 percent to $52.2 billion. This marked the first time that retail sales grew for four months in a row since October 2018. Approximately 12 percent of retailers reported that both the rail blockades and COVID-19 had negatively affected their sales in February, but 1.6 percent saw sales increase, including many LBM and garden retailers. Overall sales in that sector were flat compared to January and up 6.7 percent from a year prior. (StatCan)

Total investment in building construction increased by 1.3 percent to $15.9 billion in February, the fourth consecutive month-over-month growth. Investment in residential construction rose 1.4 percent, including a 1.9 percent increase in single-unit construction. Multi-unit gains in British Columbia outweighed declines in seven other provinces. (StatCan)

Sales of existing U.S. homes fell by 8.5 percent in March to a seasonally adjusted annual rate of 5.27 million units. The decline was the largest since November 2015. As measures to combat COVID-19 continue, a steeper decline is anticipated in April. Prior to the implementation of those measures, the housing market was moving toward recovery after a soft period in 2018 and the first half of 2019. (National Association of Realtors)

OVERHEARD…

“I have been fortunate to have had a very interesting and satisfying career in retail spanning over 50 years. The last 12 years with Home Hardware have been truly special. They have given me the opportunity to work with wonderful people and companies, including several competitors and industry associations—many of whom have become close, personal friends.”
—Dunc Wilson, senior director of business development at Home Hardware Stores, on the announcement of his retirement.

NATIONAL REPORT — Hardware and home improvement retailers across Canada are working hard to provide needed products during the COVID-19 crisis. They are trying hard to fill a role as essential retail services, to ensure that provincial governments allow them to keep their doors open.

As people tackle projects while confined to their homes, dealers across Canada have seen increases in sales across a range of categories for seemingly less pressing projects, with many reporting spikes in areas like paint sales. The term “Isolate and Renovate” and is starting to catch on.

Quebec’s hardware dealers are seeing an uptick in demand for certain items during the ongoing pandemic, but overall sales for the important spring season may still fall short of past years, La Presse reports. “We’ve never sold so much paint,” said Sylvie Robert, who manages a RONA store in Montreal’s Villeray district. Patrick Dussault, assistant manager of a Patrick Morin store in the city’s east end, has observed the same trend, along with a push for garden supplies. “People want to something to do, so they come into the store,” he told La Presse.

Castle dealer Ivan Cottreau, of E&J Millworks in Yarmouth, N.S., says customers are “anticipating being stuck at home during the summer” and turning to DIY projects.

In Princeton, B.C., Susan Robinson, owner of Fletcher Home Building Centre, says she sees “a lot of repair stuff. People are just fixing things.” She notes that lumber remains her top seller, with paint, hot water heaters and plumbing all strong. “We’ve never sold so many toilets,” she laughs.

Darrin Noble, vice-president, store operations and Burford Paint and Home Products at Home Hardware Stores Ltd., confirms the company’s Beauti-Tone Paint division “is booming more than ever.” As people find themselves with free time, painting has become one of their top home improvement projects. “Paint sales have seen double-digit growth in the past period,” Noble says, adding that “as a manufacturer, Beauti-Tone has implemented physical distancing precautions and is producing at full capacity to keep up with demand.”

Robinson notes that another category that has gone through the roof has been seeds. “We’ve moved more seeds in the last month than we would over a whole season.” Flowers remain popular, but vegetable seeds are especially in demand now, she notes.

Amanda Fancy, co-owner of Gow’s Home Hardware and Furniture in Bridgewater, N.S., has also seen a rise in categories related to gardening, including soil. And she too cites paint as a big seller. But she questions how the definition of “essential” should be qualified.

At her store, people will even come in to buy a candle. And though it may not be considered “essential,” she says those things are becoming, in their own way, essential to helping people get through the anxiety and isolation of the current pandemic.

“We just need to be kind to people,” she says.

Online sales are booming. Isn’t it time for dealers to get serious about digital?

TORONTO — Indigo Books and Music is rehiring 545 of its workers as the retailer’s online sales have tripled since the advent of the COVID-19 pandemic. Walmart Canada has just added PayPal as a payment option for its online sales.

As people stay home and shop online more than ever, big retailers that already have a strong digital presence are finding ways to improve their offerings and ease access for customers. So, isn’t it time for independents who are not yet doing business online to seriously consider it?

The move to take calls or emails directly to the store for curbside pickup has been a difficult, but necessary, transition for many dealers. The plethora of micro-sites operated by some of the banners in this country do not do justice to the ability of local retailers to serve their markets.

There are options for small businesses looking to get going. eBay Canada has launched “Up & Running,” an accelerator program specifically designed to support retailers without an e-commerce presence to transition to selling online. The initiative will also help existing online businesses create a channel to reach customers worldwide.

Another service, “Virtual Downtown,” is engaging local chambers of commerce to aggregate their retail and service offerings behind one website that will drive engagement based on location. And as more and more customers buy online then head to their local stores for curbside pickup, the notion of shopping locally is gaining ground.

According to Jim Davidson, the mastermind behind Virtual Downtown, the platform is like visiting a shopping mall or downtown, only online. The service accommodates the shopping behaviour of many Canadian consumers, who often prefer to buy online and pick up their purchase at their local store. It can, he notes, create a synergy for retailers that are grouped together within Virtual Downtown.

Davidson says that grouping stores in one online “shopping mall” encourages impulse purchases as consumers can browse through the product offerings of other stores within a community that share the same digital platform. And, he adds, “each retailer retains and showcases its brand,” unlike a platform such as Amazon, which focuses on the Amazon brand.

At eBay Canada, the company will now waive selling fees and offer a free basic store for a three-month period to assist businesses with cash flow as they navigate the current crisis. And the national online platform has its own local angle.

“The majority of eBay Canada sellers are small businesses from across the country. They embody what it means to stay local and sell global,” says Rob Bigler, general manager of eBay Canada. “Up & Running reflects our sense of responsibility and a commitment to retailers whose physical stores are temporarily closed and who lack an international e-commerce channel.”

(Retailers who wish to check out eBay Canada’s new program can click here. For more info about Virtual Downtown, click here.)

SPECIAL REPORT — Boyden Moore, president and CEO of Orgill, Inc., along with Greg Stine, EVP, marketing and communications, took time to speak with Hardlines last week. (Shown here l-r: Greg Stine along with Brett Hammers, EVP, sales and purchasing; Boyden Moore and Randy Williams, EVP, distribution)

Stine, who took on his role at the beginning of the year, notes that the changes the company went through as it reorganized its executive ranks back in January helped position Orgill to face the ongoing COVID-19 pandemic. Finance, operations and communications have all become more streamlined within the company, which has further helped Orgill stay close to its customers. “We’ve been battle-tested a little quicker than we thought,” Stine says.

Despite that, Moore notes that year-to-date sales growth in Canada has been positive. Even with restrictions in various parts of North America, the Canadian market continues to be serviced out of the Orgill Canada distribution centre in London, Ont., and a DC in Post Falls, Idaho.

Moore stresses that both facilities are fully operational and continue to supply Canadian dealers. He says there have been no cases of COVID-19 at either distribution centre or within the sales team in Canada. “There have only been six cases across the board with our staff of 5,000—with no hospitalizations.” Strict procedures have been put in place, both at Orgill’s head office and at the DCs.

He notes that challenges do exist within the supply chain. Last week, 45 vendors from various countries were shut down, while about 200 customers have closed their doors due to the pandemic, especially among international customers (Orgill ships to dealers in more than 60 countries).

The company has been working to maintain relations with dealers that reflect the conditions of each region they serve. “We’ve seen the same kinds of patterns in Canada and in the U.S., but we’ve seen that some restrictions are greater in Canada, especially in Quebec.” That province has experienced the highest reported rate of infection in the country.

Stine adds that communications are being delivered in a timelier manner than ever, as conditions related to the crisis change so quickly. That includes getting information to Canadian customers in both languages, “so we’ve worked out how to shorten the cycles to get news to Quebec.” Dealers can find regular updates on the supply chain and the status of their suppliers on Orgill’s website.

Moore sees some positive signs. “Our China factories are back on at 99 percent production capacity.” Crossing the border to Canada has not proved a big challenge, either. However, store conversions are “on pause right now.” Orgill has 150 projects ready to go, including many in Canada, that are now on hold. Nevertheless, any dealer keen to get going on a project can get all the plans and direction from Orgill, and even receive virtual support via video conferencing.

Moore says he’s excited about the opportunities he sees emerging from this crisis, along with many of the changes taking place currently in the Canadian marketplace.

BOUCHERVILLE, Que. — Lowe’s Canada will invest $1 million to support its associates and communities during the ongoing pandemic. Within that amount, a contribution of $241,000 will allow Lowe’s, RONA, Reno-Depot and Dick’s Lumber corporate stores across the country to support, either in cash or in kind, initiatives to meet specific needs in their regions.

A further $228,000 will go to RONA’s affiliated dealers to support store associates and local community needs.

In addition, $1,000 will be earmarked for each Lowe’s Canada corporate store to create a food pantry for employees, for an aggregate amount of $241,000. To compensate for the cancellation of the annual in-store fundraising campaign for Children’s Miracle Network and Opération Enfant Soleil, a donation of $290,000 is being offered.

These measures are in addition to Lowe’s Canada’s existing charitable commitments and the steps already being taken for the protection of employees, including enhanced sanitation practices, marketing materials encouraging online shopping and the installation of protective shields at checkout stations.

DID YOU KNOW…

… that back issues of our sister publication, Hardlines Dealer News, are now available at no charge? Yup, now in its third year of publication, this monthly newsletter has become a valuable tool for dealers and managers across the country. Click here to start browsing now!

RETAILER NEWS

BRENTWOOD, Tenn. — Tractor Supply Co. announced it has expanded its partnership with the delivery service Roadie to offer same-day delivery from all of Tractor Supply’s 1,863 U.S. locations. The initial partnership with Roadie was launched three years ago. With the outbreak of COVID-19 and the ensuing surge in demand for home delivery, the two firms worked to accelerate the partnership.

NATIONAL REPORT — As the number of retail staff opting to stay home increases, retailers are looking for ways to keep people on the store floor. Loblaw has asked head office people, including executives, to help out in stores as staffing becomes more difficult. According to the National Post, about 400 corporate staff are now contributing by doing shifts at the stores. And at Walmart Canada, dozens of head-office staff have stepped up to devote time to serving customers in its stores.

SUPPLIER NEWS

MONTREAL — Richelieu Hardware reported Q1 sales of $249.4 million, up 10.2 percent from $226.4 million in Q1 of 2019. In the Canadian market, sales of $156.7 million represented a nine percent increase from a year prior. Net earnings rose to $0.21 per share, an increase of 23.5 percent from $0.17 per share for the comparable quarter in fiscal 2019. During the quarter, Richelieu completed three acquisitions. Decotec and Mibro, acquired in December, will bolster the company’s presence in the Greater Toronto Area, while the acquisition of O’Harco, finalized in early February, will bring Richelieu into new markets in Nebraska, Iowa and South Dakota. Together, these three businesses represent about $60 million in annual sales.

GUANGZHOU, China — The China Import and Export Fair (Canton Fair) will launch its 127th edition online in mid-June in response to the COVID-19 pandemic. The virtual event will create an international platform for products in 16 export categories, including home appliances, consumer goods, textiles, medical and health care.

ECONOMIC INDICATORS

Sales of existing homes in Canada fell by 14.3 percent in March compared to February. The economic turmoil surrounding the COVID-19 pandemic caused both buyers and sellers to increasingly retreat to the sidelines over the second half of the month. Actual (not seasonally adjusted) sales activity was still running 7.8 percent above a quiet March in 2019, although that was a considerable slowdown compared to the year-over-year gain of almost 30 percent recorded in February. (Canadian Real Estate Association)

More than one million people stopped working in March, a drop of 5.3 percent. The employment rate fell 3.3 percentage points to 58.5 percent, the lowest rate since 1997. The unemployment rate increased by 2.2 percentage points to 7.8 percent, the largest one-month increase since comparable data became available in 1976. (StatCan)

U.S. retail and food services sales for March were $483.1 billion, a decrease of 8.7 percent from the previous month. (U.S. Commerce Dept.)

NOTED

The mayor of Orange County, Fla., has declared that World Wrestling Entertainment (WWE) is an “essential business.” The ruling will allow the company to resume live tapings of its show in Florida, without audiences, during the COVID-19 outbreak.

OVERHEARD…

“Now, more than ever before, our customers are depending on us to get them their essential goods in a timely manner so they can continue to take care of their families, homes, land, pets and animals.”
—John Ordus, EVP and chief stores officer at Tractor Supply, a chain of farm and hardware stores in the U.S. The company has expanded same-day delivery to all 1,863 locations.

BOUCHERVILLE, Que. — In the midst of crisis, our ability to look out for each other is what helps us get through. And at this point in the rise of the COVID-19 pandemic, the focus of dealers and store managers on the well-being of their workers has become a priority.

That is something Pascal Houle, CEO of BMR Group, hears repeatedly as he talks with his group’s member-dealers.

“Naturally, BMR dealers are concerned about the performance of their business, which will inevitably be affected by this crisis,” he admits. “But what I am hearing from them the most is that their main concern is the health of their employees and their customers. They are committed to continuing to serve customers, who need them, but in a way that is safe for everyone. And I must say that I am very impressed with their dedication and creativity in achieving that.”

In a world where conditions change daily, getting a read on how the COVID-19 crisis is currently impacting the industry means chasing a moving target. With an eye to a time when some sense of normalcy returns, Houle is certain the impact will be lasting.

“The strength of the Canadian economy and the construction industry throughout the country are two key elements that will define the extent of the impacts on the industry, both short and long term,” he says.

He also expects some outcomes that could have a direct benefit for bricks-and-mortar retailers who find themselves filling orders online and by phone. “The current surge in e-commerce is unlikely to decline once this crisis is over and will certainly create ample opportunities for us.”

Another positive spinoff could be a boost for local dealers. “Buying local will also take on a whole new meaning for consumers, who will doubtless want to encourage local businesses, benefitting the Canadian economy as a whole.”

TORBSA general manager: Some opportunities for commercial dealers

BOLTON, Ont. — The impact of the COVID-19 crisis is being felt by dealers of all stripes, including outlets that supply large contractors and big commercial contracts. Those kinds of dealers make up the bulk of the membership of the TORBSA buying group. General Manager Bob Holmes observes that most of his dealers are faring pretty well.

Holmes (shown here, pre-pandemic, with board president Greg Drouillard of Target Building Materials) admits there’s “a lot of uncertainty out there” and more changes in coming days and weeks could have a negative impact. But for now, his members who are tied in with infrastructure projects, ongoing condo construction or even residential builds that have the foundations poured will continue to do business.

He anticipates some layoffs among his members, “but the guys are still busy serving customers,” he says. He worries as well about possible product shortages if infrastructure gets interrupted. “There could be some tightness of supply, but the market has also seen a slowdown, so there’s not been as big an impact. But it could happen down the road,” he warns.

Unless the housing and construction markets slow down quickly, Holmes believes there’s enough work out there to carry many of his dealers along for the near future. “I think most businesses are okay for the next couple of months.”

He adds that the role of buying groups is being put to the test under the current situation. The ability to get dealers together to share ideas and best practices in face-to-face situations has been severely undermined by the necessities of physical distancing. “As far as buying groups go, we’ve always prided ourselves on communication—and this has really hampered that,” he says.

TORBSA members have managed to overcome this to some extent. A recent directors’ meeting was conducted by telephone, while the group’s annual general meeting will be held online. “At least it allows people to hear what other people are thinking.”

That sharing of ideas is more important than ever, Holmes notes. “These days, you have to be open to share information.”

SPECIAL REPORT — With business activity restricted during the COVID-19 crisis, many provinces and U.S. states have made exceptions for at least some home improvement and building trades businesses. From plumbing to electrical, hardware and home improvement dealers offer a variety of supplies that homeowners may need urgently.

As Serge Blain, owner of Montreal’s RONA Beaubien Hardware put it, “if your fuse pops or toilet leaks, you have to fix them.”

In some cases, the increased traffic, at a time when we’re all trying to stay apart, has generated backlash. South of the border, Lowe’s Cos. took heat for going ahead with its Spring Black Friday sale, which attracted shoppers to stores with discounts on items from barbecues to mailboxes. Lowe’s promotions underscored that “affordability matters now more than ever,” but a store employee in Indiana who fell ill with COVID-19-like symptoms questioned the wisdom of drawing in crowds.

In Michigan, the state attorney general had to twice reprimand big box chain Menards for promotions deemed to undermine physical-distancing protocols.

The message is clear: even at an essential business, not all business activities are essential.

Retailers in Canada are taking action to prevent similar mishaps. Home Depot Canada made the decision in mid-March to cancel all its major spring promotions and put flyers on hold. Around the same time, Canac also pulled its popular promotional circulars. “Once we put something in the flyer, it’s hell!”, Canac President Jean Laberge explained to La Presse. “It creates monster traffic [in stores].” Lowe’s Canada has also eliminated all flyers until early May.

Meanwhile, one state and some local governments in the U.S. have gone a step further. Last week, Vermont barred big boxes from selling non-essential items in store altogether. Retailers like Walmart and Costco are required to pull those items from shelves or cordon off aisles to prevent customer access. Across the border in Quebec, the opposition Parti Québécois is calling on Premier François Legault to follow suit and order the closure of non-essential departments within big boxes.

Under the PQ’s proposal, only food, hardware and pharmacy departments would remain open, with other offerings available online. The party cited concerns about both store traffic in big boxes and their impact on smaller, locally owned businesses.

NATIONAL REPORT — The status of essential service has been a blessing for dealers nationwide. But the pressure that is putting on retail workers who must face the public has become something of a curse.

At Osoyoos Home Hardware in Osoyoos, B.C., co-owner Frances Sologuk notes that throughout the COVID-19 crisis, the store remains open given its status as an essential service, but the toughest thing for her has been providing support for her employees. “The stress on my staff is probably one of the hardest things to witness,” she notes.

Amanda Fancy, co-owner of a Home Hardware and Furniture in Bridgewater, N.S., is likewise wrestling with the impact the pandemic is having on her employees, many of whom have opted to stay home and collect Employment Insurance. “We’re struggling to find staff,” she says. “I’ve always had an appreciation for our staff, but that appreciation level has gone up 150 percent for those who have stayed on.”

Sologuk at Osoyoos Home Hardware says her employees are likewise working beyond the norm, servicing customers in new and innovative ways. “We have taken all precautions, like free delivery with no minimums—even if you need a Rogers Chocolates fix. We have the aisles cordoned off and we are doing the shopping for you,” to prevent customers wandering around the store. 

Most recently, the store has ordered wireless terminals from Moneris, “which we should have probably had a long time ago, especially for customers with disabilities,” says Sologuk. “This way we can hand customers the terminal or bring it to their car —kind of like in the restaurants.” She says the new system will make curbside pickups easier.

For Fancy at Gow’s, she has been personally working the checkout, even as she worries about the larger issues of financing the business through the downturn in sales, which have tumbled by 25 percent during the crisis. Exactly a year ago, she moved her business into a larger, 60,000-square-foot store with furniture and appliances. And large-ticket items like those aren’t on the top of most people’s lists right now.

“Certainly, this will change the way we do business. We’ll be leaner and meaner,” she says ruefully. “And we’ll pay it forward to the customers and staff who got us through this. But we’ll prepare a long-term plan as well.”

The Wooster Brush Company’s board of directors has elected Ben Maibach to succeed Bill Fagert as president, effective May 1. Since joining Wooster Brush in 2014, Maibech has served as vice president of national accounts, held a seat on the company’s board of directors and most recently led the team overseeing Wooster’s rebranding efforts. Fagert, who has been president since 2010, will become vice chairman of the board of directors.

DID YOU KNOW…

… that back issues of our sister publication, Hardlines Dealer News, are now available at no charge? Yup, now in its third year of publication, this monthly e-newsletter has become a valuable tool for dealers and managers across the country. Click here to start browsing now!

RETAILER NEWS

VAUGHAN, Ont. — TIMBER MART has announced the addition of Montreal-based RenoRun Inc. to the buying group. RenoRun is a building material delivery business that offers residential contractors and builders 20,000 building material products through its mobile app. It delivers to job sites on demand or in advance throughout the Montreal, Toronto and Austin, Texas areas. Launched in 2017, the company employs more than 100 staff members, including 60 at the Montreal headquarters.

BURLINGTON, Ont. — IKEA Canada will provide approximately $2.3 million in home furnishings to support vulnerable communities impacted by the COVID-19 pandemic. It will also support those leading COVID-19 relief efforts by making contributions to medical services and facilities, including donating 230,000 N95 masks to local hospitals and healthcare centres.

TORONTO — Canadian Tire Corp. has launched a $5 million Canadian Tire COVID-19 Response Fund to help Canadian communities. This fund consists of two donations of $1 million each to the Canadian Red Cross and United Way/Centraide Canada, as well as up to $3 million in personal protective equipment (PPE) and essential products from across Canadian Tire’s family of companies.  

SUPPLIER NEWS

TORONTO — Wolf Gugler Executive Search is offering one-on-one and group outplacement services to allow employers who have laid off personnel due to COVID-19 to assist in their new job searches. The firm will meet with professionals through virtual means such as videoconference and email. (You can reach Wolf directly by emailing him; or check out his website here.)

WASHINGTON — 3M Co. says it has reached an agreement with the U.S. federal government to continue supplying Canada and other countries with N95 masks. The Minnesota-based conglomerate reacted with dismay last week when U.S. President Donald Trump invoked an emergency statute to divert goods bound for export to the domestic market. Since then, however, 3M and the White House “worked together to ensure that this plan does not create further humanitarian implications for countries currently fighting the COVID-19 outbreak,” the company announced.

RICHMOND HILL, Ont. — Liteline Corp., a family-owned lighting manufacturer for architectural, commercial, industrial and residential spaces, has named Lande Associates Inc. to represent its lines across southwestern Ontario. 

QUEBEC CITY — The Quebec government has unveiled a new website, Le Panier bleu (Blue Basket) to facilitate online orders to Quebec businesses. Though not transactional, the site serves as a searchable clearinghouse directing shoppers to Quebec’s online merchants.

ECONOMIC INDICATORS

March’s housing starts declined by 7.3 percent to a seasonally adjusted annual rate of 195,174 units, from 210,574 units in February. The SAAR of urban starts decreased by the same percentage to 182,553 units. Multiple urban starts decreased by 13.4 percent to 124,073 units in March while single-detached urban starts increased by 8.8 percent to 58,480 units. Rural starts were estimated at a seasonally adjusted annual rate of 12,621 units. (CMHC)

NOTED

To help independent retailers who are dealing with uncertainty during the ongoing public health emergency, the North American Retail Hardware Association (NRHA) is waiving membership fees for the months of April and May. Retailers can now access the NRHA’s 10 online training courses at no cost. Click here for an overview of the courses and here to register for free.

OVERHEARD…

“The only problem is that people don’t understand just how hard this is on the retail workers who have been trained to give good customer service and are now working in this ‘twilight zone’ of unprecedented times.”
—Frances Sologuk, co-owner of Osoyoos Home Hardware in Osoyoos, B.C., reflecting on the impact of the current COVID-19 crisis on her staff.

SPECIAL REPORT — As dealers cope with how to manage their customers and staff in their local markets, retail leaders across the country are coping with the concerns of those dealers in a more generalized way.

From the outset, TIMBER MART President and CEO Bernie Owens has stressed the importance of maintaining the safety of staff. That includes considering how stores manage fewer hours or less traffic. But there’s more that must be taken into consideration. Decreasing hours for everyone, rather than laying off some workers so they can apply for employment insurance, could make more sense than decreasing the income of the entire team. Their overall well-being as they cope with isolation, reduced family income and kids stuck at home must be considered, Owens stresses.

Steve Buckle, CEO of the Sexton family of companies, which includes Winnipeg-based Sexton Group, notes that dealers are now facing issues that go beyond sanitation in their stores. The logistics of maintaining every aspect of a safe work environment are increasingly difficult. “The challenge becomes, how do you keep people safe,” Buckle notes. That process may not be overwhelming on its own, but it does require companies to implement a lot of smaller details “to live up to a commitment to safety.”

“A big challenge is that the dealers have to manage their trucks,” he says by way of example. “Managing the safety of staff in that kind of scenario is tough and raises all kinds of questions about best practices. How do you deliver to occupied homes?”

That concern, at least, is based on a renovation market that keeps going. But his commercial dealers, he notes, face the possibility that new construction will dry up as workers refuse to show up for work and governments shut down major projects. He says many of these dealers are still busy, as everyone works to get projects completed. “But the volume is bigger than the market would dictate.” He expects to see this drop off over the next several days.

Owens at TIMBER MART agrees. “Some job sites are starting to close down now,” he observes. “Workers are getting reluctant to show up on the site, and there are some supply issues.” He has also seen commercial dealers, especially in Ontario, face slowdowns, while the drop-off in Quebec has been even more dramatic after the provincial government there put a halt to some major construction projects.

Owens remains concerned about the financial health of independent dealers as the crisis drags on. “I’m really concerned about the industry over the long term.”

When it comes to the home reno market, Buckle remains hopeful, especially as people stuck at home begin to invest more in their living spaces. “I think there’s a renovation opportunity.”

But overall, he admits the country faces some tough economic challenges. “How deep and how long are we heading into a down cycle? And it’s pretty clear that this is happening. How do we ramp up to deal with that?”

Buckle is optimistic about the situation longer term, however. He anticipates that business will pick up again by as early as June, especially given the positive signs in the economy before the COVID-19 pandemic struck. “Aside from Alberta, things were looking pretty good ahead of this,” he says, noting that a pent-up demand will need to be met.

“I should say the second half of this year is going to be pretty good, because the first half will have been down so much.”

As some stores stay busy, big boxes ramp up COVID-19 safety measures

TORONTO — Canadians are staying home, except when they have to buy groceries or walk the dog. Now, add to that list the need to buy home improvement products.

Isolation and extra time have created the opportunity for many consumers to fix up their homes. And that has resulted in busy parking lots and steady store traffic at Canada’s large-format home improvement retailers.

But that traffic can put customers and staff at risk. Both Home Depot Canada and Lowe’s Canada have taken measures to increase sanitation with increased cleaning of surfaces and workspaces. They are also working to maintain physical distancing among customers.

Home Depot Canada is encouraging customers to limit store visits when possible. When they do show up at a store, customers find that a limit has been put on the number of people allowed inside at a time. Physical distancing signage with stripes marking the floor area are now in the stores to help everyone follow best practices.

As the situation continues to change from day to day, Home Depot Canada has been adjusting its policies accordingly. Most recently it has added these new measures:

• Curbside pick-up: Online orders made for in-store pick up will now be available for collection in designated parking spots.
• Van and large equipment rentals: Until further notice, Home Depot Canada is no longer renting vehicles or large equipment.
• Store checkout: Plexiglass screens are being installed in all stores to help with physical distancing.

In addition, associates who are 65 or older have been given more paid time off. Seniors employed on a full-time hourly basis received another 80 hours of paid time off in addition to the 80 already given to all full-time workers. Part-time hourly associates who are 65 or older received an additional 40 hours of paid time off, bringing up their total to 80 hours.

Like its competitor, Lowe’s Canada has made the health and safety of its employees—and customers—a priority. Its corporate stores, under the Lowe’s, RONA and Reno-Depot banners, have enhanced cleaning efforts and issued clear physical distancing guidelines. The stores have also implemented measures to ensure that cashiers and front-end teams are regularly cleaning their work areas and registers after each customer interaction.

Lowe’s in the U.S. has further committed $25 million to support the needs of its associates, customers and communities. This includes a $10 million donation in essential protective products to medical professionals on the frontlines of the health crisis. Nearly $4.5 million has been marked for Lowe’s stores in the U.S. and Canada to donate products in their communities.

QUEBEC CITY ― The independent retail chain Canac recently held the grand opening of its 30th store. It’s located in Prévost, Que.

According to Jean Laberge, president of Canac, this latest store is modelled after the chain’s Notre-Dame-des-Prairies store, which opened in May 2019. That location represented an investment of $8 million and employs 90 people. It was also Canac’s first store in the Lanaudière region of Quebec.

The main structure of the Notre-Dame-des-Prairies store is 42,000 square feet in size, with 28,000 square feet of selling space. Another building, which serves as the warehouse and is unheated, is 31,500 square feet in size. Laberge notes that the latest store, following the mould of its predecessors, represents no major changes in concept or merchandising.

However, that retail formula has been working well for Canac. The company has been expanding aggressively in recent years, adding about one store per year, and Laberge expects this kind of growth to continue. Construction is slated to begin on a new location on Montreal’s south shore in La Prairie, Que., he says. That store will be at the corner of Autoroute 30 and Route 104, between Candiac and Brossard.

Last fall, Canac acquired a one-million-square-foot property adjacent to its Drummondville distribution centre. According to Laberge, construction will begin there this fall on a large warehouse to handle distribution of the company’s building materials, including plywood, foam and all wood products.

The expansion of Canac’s back-end support keeps in step with the company’s expansion of its retail footprint. The chain has even made overtures to entering the Ontario market. In October 2018 Canac secured property in the eastern Ontario town of Hawkesbury. Laberge expects construction there to begin in 2021.

OTTAWA ― Figures from Statistics Canada indicate that total investment in building construction for the year increased by 3.4 percent to $181.8 billion. Investment increased in six provinces, with substantial gains in Quebec (+10.7 percent to $38.6 billion), British Columbia (+10.3 percent to $32.6 billion) and Ontario (+1.8 percent to $71.7 billion).

Prince Edward Island reported the highest percentage growth in 2019, increasing 50.9 percent to $851.7 million. The rising population contributed to a significant increase in the residential sector, in both multi-unit investment (+162.7 percent to $199.3 million) and single-unit investment (+34.8 percent to $475.0 million).

Construction spending in Alberta fell in 2019, dropping $2.5 billion from 2018. Declines in the residential sector constituted the majority of this, down $2.1 billion to $11.7 billion, while non-residential investment declined by $400.6 million to $8.9 billion.
Nationally, investment in residential construction increased 2.3 percent to $123.9 billion in 2019. Multi-unit investment continued to grow, up 11.8 percent to $62.6 billion, while single-unit investment declined, down 5.9 percent to $61.3 billion.

Increases in Ontario, British Columbia and Quebec led investment in multi-unit to surpass single-unit construction for the first time on an annual basis. Increased investment in apartments (+12.7 percent to $50.2 billion) and row homes (+9.8 percent to $8.2 billion), along with decreased investment in single homes (-6.5 percent to $57.5 billion), broadly reflected a national shift toward the intensification of urban areas.

Dan Giansante is the new director of marketing, R&D and regulatory for Rust-Oleum Canada. He was most recently director, marketing for ROCKWOOL North America.

James Feere has joined L.S. Starrett as the new Canadian sales manager. He comes over from Karcher North America, where he was director of sales, Canada.

DID YOU KNOW…

… that we’ve made the Hardlines newsletter free to everyone during this crisis? And any Faithful Subscriber who is coming up for renewal will have their subscription extended by one month. If you know anyone who would benefit from our info each week, please pass this link along to them. We have to take care of each other through these difficult times!

RETAILER NEWS

MISSISSAUGA, Ont. ― Calgary’s Remuda Building Ltd. is the newest independent retailer to join the Castle Building Centres group. Remuda was founded in 2006 by owner and CEO Steve Schouten, who had been looking to expand his product offerings. “Our goal has always been to create a sustainable business that will be around for years to come, and one that our local community can trust,” he said. “Castle was the buying group that best shared our vision of growth and longevity.”

QUEBEC CITY ― Most Quebec businesses, including hardware and grocery stores, will close on Sundays during the month of April so that strained workers can have a break, Premier François Legault has announced. Gas stations, pharmacies and convenience stores will remain open on Sundays, while restaurants will continue to offer take-out and delivery services.

CHICAGO — True Value Co. is converting parts of its Cary, Ill., paint manufacturing facility to handle production of hand sanitizer to help combat the COVID-19 pandemic. After registering with the U.S. Food and Drug Administration, the company will produce hand sanitizer alongside other essential products like hand soap, degreasing cleanser and all-purpose cleaners. The first several thousand gallons will be donated to True Value hardware stores across the U.S. for use by its employees while serving customers. The product is scheduled to be shipped to stores in early to mid-April.

MONTREAL ― Dollarama’s Q4 sales increased by 0.5 percent to $1.07 billion, while operating income grew 1.4 percent to $266.1 million. Net earnings increased by 7.5 percent to $0.57 from $0.53 a year ago. For the fiscal year, sales rose by 6.7 percent to $3.8 billion with operating income up 2.7 percent to $868.1 million. Comparable store sales rose two percent for the quarter and 4.3 percent for the year.

QUEBEC CITY ― Canac is responding to concerns about a shortage of medical supplies with a donation of $90,000 worth of equipment to health care institutions. A major benefactor of the gift is Centre hospitalier universitaire de Québec, a network of three teaching hospitals linked with Laval University in Quebec City.

SUPPLIER NEWS

MONTREAL — The management of Richelieu Hardware will hold its annual general meeting as scheduled on April 9 at 10:30 a.m. However, in accordance with government health guidelines and in light of the need for physical distancing in respect of the COVID-19 virus, the company has asked its shareholders not to attend in person, but to participate by voting by proxy in advance of the meeting.

ECONOMIC INDICATORS

Total construction spending in the U.S. for February reached $1,366.7 billion, 1.3 percent below January’s level of $1,384.5 billion. (U.S. Commercial Dept.)

NOTED

Businesses and non-profit groups whose revenues fall by 30 percent or more as a result of COVID-19 will qualify for a wage subsidy of 75 percent, Prime Minister Justin Trudeau has announced. Eligibility does not depend on an organization’s number of employees. The subsidy will cover up to 75 percent of salaries on the first $58,700, a weekly payment of up to $847.

OVERHEARD…

“We can only succeed working as a team.”
—Bernie Owens, president and CEO of TIMBER MART, who has been busy fielding a variety of concerns from his members in recent days.

“To really help is to recognize that we’re all in the same boat, that we all have a role to play. I hope this gesture will inspire others to put their shoulders to the wheel in these exceptional times.”
— Canac President Jean Laberge, on his company’s donation to support health care institutions working on the front lines of the battle to combat the COVID-19 pandemic.

NATIONAL REPORT — Across the country, dealers are responding to the COVID-19 pandemic by working smarter to preserve sales and ensure the health of both their staff and customers.

In Osoyoos, B.C., Carla Jorgens, manager of Osoyoos Home Hardware, explains how her store has adapted. Tape has been put on the floors to mark out six-foot distances and the aisles down the side of the store have been cordoned off. Customers can come in and stand in the main aisle, “then our staff members go and grab the products for them. It’s awful because we can’t deliver the kind of customer service we’d like.”

The store has also added a free delivery service during specific times of the day. “Lots of people are taking us up on this.”

The store usually benefits from increased business during spring break, but that didn’t materialize this year. “I’ve been looking at our sales and it’s not even worth it for us to stay open,” she admits. “But we’re remaining open as a service to the community.”

Severn TIMBER MART in Coldwater, Ont., has taken more extreme steps. Heather Mallard Houle, co-owner, has closed the retail area of her store to walk-in customers. An intercom has been set up in front of the store, along with a payment terminal. Customers are instructed give their orders by phone or text. They are then instructed to drive around to the back of the store, where they must wait at a stop sign while their order is loaded into their vehicle for them.

At Matériaux Lavoie in Gatineau, Que., General Manager Chantal St-Pierre has seen a hike of about 25 percent in paint sales during the COVID-19 crisis. Customers are steered around the store by staff at a safe distance, using gloves to handle merchandise and expedite their visit as much as possible.

At Dwight Lumber, a Sexton dealer in Dwight, Ont., co-owner Debbie Monson says the store is still letting people inside, “but we strongly suggest to anyone with compromised health that they stay outside and we’ll come out to the parking lot.” Like Jorgens in Osoyoos, she has put tape on the floors, while barriers have been set up between the cashiers and customers.

The store does most of its business with contractors. Monson says her pro customers continue to place orders, with sales of lumber staying strong. “And in the store, most of what we are selling now is cleaning products and disinfectants.”

At Star Building Supplies in Winnipeg, management has taken measures to protect staff and reassure customers. Now, deliveries to residential jobsites, which were formerly taken right into the house, are being left in the garage or at the curb.

Canac stores are operating at reduced hours but President Jean Laberge is seeking to avoid closures for the time being, Le Journal de Québec reports, to keep his staff off unemployment. Both the safety and the financial security of Canac’s employees remain his top concern, he said. In the meantime, Canac stores are limiting the number of customers admitted at a time and sticking to debit and credit payments.

Atlantic association recognizes industry achievement at gala

HALIFAX — The Atlantic Building Supply Dealers Association (ABSDA) capped off day one of its 2020 buying show with its annual gala dinner earlier this month. The sold-out event brought together nearly 650 show delegates (before the impact of the COVID-19 crisis had fully hit) to celebrate some of the association’s achievements of the past year.

It also included the presentation of awards recognizing individuals who’ve gone above and beyond supporting the association and the entire building supply industry.

Three new awards were introduced at this year’s event: Salesperson of the Year, presented to Kevin Arseneau of Building Products of Canada Corp; Young Leader of the Year, which was awarded to Duane MacDonald of Callbecks Home Hardware Building Centre; and Pleasant Building Supplies was recognized as Retailer of the Year.

Additionally, two Lifetime Membership Awards were presented along with the 2020 Industry Achievement Award. Lifetime Membership awards were given to Harold Mills from Nova Scotia Building Supplies and Gary Sullivan from PPG Architectural Coatings. And the 2020 Industry Achievement Award was presented to Vince Poirier of CertainTeed Canada.

After dinner, entertainment was provided by legendary Canadian rockers April Wine.

“We keep it light, try not to have too stuffy of a night,” says ABSDA President Denis Melanson. “People loved the entertainment. April Wine put on a good show and people had fun.”

RED DEER, Alta. — Peavey Industries is working to be able to service the national network of Ace dealers following the acquisition of the license for Ace Hardware in Canada from Lowe’s Canada.

The deal transfers to Peavey the agreements with 104 independent Ace Hardware stores in Canada, which have been supplied through the wholesale business of RONA. Peavey already owns 92 farm and hardware stores from Ontario to British Columbia.

While that transfer will take place over a six-month period, the buying function for Ace has already been moved to Peavey’s head offices in Red Deer, says Peavey CEO Doug Anderson. Peavey has put product specialists in place who are focused on the Ace lines, but general category management remains unchanged, he adds. Anderson expects to see some line changes as supply shifts from Lowe’s Canada’s DCs to Peavey’s and his team gets more commitments for orders from Ace dealers in coming months.

Product will be supplied to dealers through either the Red Deer distribution centre or the one in London, Ont. That location is the former head office of TSC Stores, which Peavey acquired outright at the end of 2017.

One thing many Ace dealers will need that Peavey doesn’t have yet is lumber and building materials. Anderson says Lowe’s Canada will continue to supply those lines over the next 24 to 36 months. “We need systems and agreements in place, so this gives us time to build out those systems and agreements to support the dealers. It gives us some breathing room.”

Peavey has also managed to secure Ace’s dealer support team. Guy Lichter, formerly director of dealer conversion for Ace at Lowe’s Canada, has moved over to Peavey as national sales director for Ace. He brings with him a team of eight territory support managers. However, says Anderson, “Our focus for the next six months to a year is the standardization of the existing Ace network.”

He adds that Peavey is now closely aligned with Ace International and will leverage Ace’s know-how and systems.

TORONTO ― Despite concerns in the early days of the coronavirus’s spread worldwide, hundreds of people, including marketers, online content developers and IT managers, gathered in Toronto on March 10 for Dx3 Canada.

The purpose of the event was to present expert insights from leaders who shape the retail industry. Attendees had the opportunity to hear from some of the most innovative retail professionals in North America, along with the tech experts who help retailers become more effective.

On day one, keynote speakers and panel discussions were held at two stages simultaneously throughout the day. The stages flanked a large trade show area for sponsors to share products and services.

One session even featured digital marketing managers from two of Canada’s biggest home improvement retailers on the stage together.

Robert Allan of Lowe’s Canada (centre, left) and Andrew Go of Home Depot Canada were joined by Erika DeHaas of Sobey’s (far left) and Tara Wickwire of National PR to talk about how a retailer can rebuild trust with customers by telling an effective, and authentic, brand story.

In another session, representatives from other retailers talked about the challenges of creating an effective environment for customers. Amina Mattern, head of strategy for Loblaw Media, talked about one effort that failed, even though the retailer had worked hard to listen to shoppers. “Customers didn’t like self-checkout. It turns out they liked the in-store experience.”

To be successful, a retailer has to stay in sync with the needs and expectations of customers, Mattern noted.

Unfortunately, the conference and trade show at the Metro Toronto Convention Centre was cut short the morning of day two. This followed a report in the Globe and Mail that a case of coronavirus had emerged from a large mining conference held at the same location a week earlier.

Cornerstone Building Brands has announced the appointment of Richard Hill as VP of marketing–Canada. Hill was most recently director of marketing at Ace Canada. Prior to that, he helped lead the marketing efforts for Home Hardware Stores Ltd. with partner Morris Saffer. Cornerstone manufactures windows, vinyl siding, insulated metal panels, metal roofing and wall systems under such brands as Ply Gem and North Star Windows.

DID YOU KNOW…

… that our mandate at Hardlines is to keep the home improvement industry connected? In light of the recent developments in relation to the spread of COVID-19, we’re committed to making the Hardlines newsletter free to everyone during this crisis. If you, as one of our Faithful Subscribers, know someone who would benefit from our info each week, please pass this link along to them. We have to take care of each other through these difficult times!

RETAILER NEWS

ST. JACOBS, Ont. ― Home Hardware Stores Ltd. says it’s taking special measures to ensure continued service during the COVID-19 crisis. Team members are working diligently to replenish inventory, putting top priority on delivering essential goods to customers. Many stores are offering specialized services, including customized in-store hours, online orders and deliveries for customers at home. All company events have been cancelled until further notice, including the company’s Spring Market, which is being retooled as a Virtual Online Market.

MISSISSAUGA, Ont. ― Niagara Building Centre is the newest independent LBM retailer to join the Castle Building Centres group. Located in Fonthill, Ont., the brand-new Castle location will be a full-service home improvement store with a lumberyard. Partners Chris Baxter, Kevin Bolibruck and Gary Bolibruck were looking for a well-supported, member-centered relationship. Construction is underway with the targeted grand opening set for early September.

BOUCHERVILLE, Que. — The owners of Vermilion RONA in Vermilion, Alta., are preparing to open a second store. James and Patrick Willis, the father-and-son team who own the business, will hold an opening in early April of their new 3,000-square-foot store in Goodsoil, Sask. The latest location will create eight new jobs.

MOORESVILLE, N.C. — Lowe’s Cos. is refinancing debt with the sale of a portfolio of notes worth about $3.95 billion. The notes were sold at rates ranging from four percent to 5.125 percent. The notes come due in 2050. Lowe’s plans to use the net proceeds from the sale to repay the principal. Any remaining proceeds will be used for general corporate purposes, which may include the repayment of other indebtedness.

SUPPLIER NEWS

MINNEAPOLIS ― 3M and Ford will partner to manufacture air-purifying respirators for health care facilities. As the Big Three auto makers seek to revive their businesses during the coronavirus outbreak, Ford is “going into our parts bin to see what can be done” to help 3M make its hooded respirators, Ford Executive Chairman Bill Ford told the Today show. 3M is facing high demand for its powered air-purifying respirators during the pandemic.

VANCOUVER — West Fraser Timber is taking steps in response to the continuing COVID-19 pandemic. Starting today, lumber production at all British Columbia sawmills is being curtailed for one week. This will result in the elimination of an additional 24 million board feet of production for the week in addition to previously announced curtailments. In addition, plywood production at West Fraser’s Alberta plywood and Slave Lake veneer facilities will be temporarily suspended until at least April 6.

ECONOMIC INDICATORS

Sales of existing homes in the U.S. rose by 6.5 percent in February. The seasonally adjusted annual rate of 5.77 million was the strongest increase since February 2007 and was 7.2 percent above last February’s rate. Single-family home sales rose from a SAAR of 4.82 million in January to 5.17 million in February, 7.3 percent above the rate a year prior. (National Association of Retailers)

OVERHEARD…

“We have a vacation home in Goodsoil and thoroughly enjoy spending time there. We had been looking to expand our business for some time, so when we heard that there was an opportunity in the area, the decision was easy to make.”
—Patrick Willis, who, with his father James Willis, is preparing for the grand opening next month of their second RONA store. 

NATIONAL REPORT — Both The Home Depot Canada and Canadian Tire shortened store hours this past weekend, while expanding their paid time-off policies to protect workers’ incomes.

These are excellent leadership moves by two of the country’s leading hardlines retailers. Unfortunately, these kinds of options are not typically available to most smaller dealers. Nevertheless, across the country, stores are coping with the pandemic in their own ways to accommodate the needs of both their customers and their employees.

Mark Westrum, a partner at Westrum Lumber, a TIMBER MART dealer in Roleau, Sask., posted on Facebook one morning last week the simple message, “The plain and simple of it is … We Are Open.” Westrum admits the store is somewhat less busy than usual, as many customers are practising social distancing. But a lot of his customers, who are mainly contractors, are sending in their orders by text, email and phone, and making payments over the phone.

At Star Building Supplies, an ILDC member in Winnipeg, Vice President Mark Kennedy also finds that online options for customers are helping. Traffic is down slightly for the contractor-oriented dealer, but business remains strong with pro customers. “You can still do a lot of business over the phone and via email,” he notes.

In fact, more and more dealers that specialize in the back end are reporting that they are closing their retail areas to walk-in customers, but taking orders by phone, fax and email.

Serving a very different customer base in a well-heeled neighbourhood in Toronto’s west end, Joe Valenza at Baby Point Hardware says the crisis has not hurt business. With many people working from home in Toronto, Valenza sees them coming in with projects to undertake. “They’re home and they get bored.” He is seeing a lot of sales of paint, furnace filters and toilet-repair products.

In northern British Columbia, Marilyne Laferriere and her husband Sylvain serve the town of Mackenzie with their store, Ace Victory Building Centre. She reports that business has slowed somewhat. “We’re pretty isolated in Mackenzie so people are divided as to whether or not to self-isolate and we are considered an essential service so we’re still open. We are offering delivery to people’s homes for those self-isolating.” She adds that she and Sylvain have considered cutting hours but haven’t done so yet.

A building centre in the Lower Mainland is finding business is actually up slightly. However, one store employee, who asked not to be identified, reports that her store has lost staff due to concerns over COVID-19. Two of them felt uncomfortable taking the bus to work, while another has a compromised immune system and would be at risk if exposed to the virus.

And despite—or perhaps because of—shortened hours, the Home Depot store in Toronto’s Stockyards retail power centre remains busy. A visit there last week found the store filled with both DIYers and contractors. According to one employee, people continue to come in for home needs, everything from cleaning products to furnace filters.

The paint department was especially busy. “I figured I’d break quarantine for this,” said one woman who headed to the checkout with five cans of paint and an armful of roller trays. “It’s got to get done anyway.”

ABSDA Building Supply Expo sees good turnout to Halifax

HALIFAX —The 2020 Atlantic Building Supply Dealers Association (ABSDA) Building Supply Expo drew hundreds of Canadian dealers and vendors to Halifax earlier this month.

The show kicked off the evening of March 10 with an ice-breaker event at the Halifax Convention Centre, complete with entertainment from a live-band karaoke set-up. Dealers and vendors had a chance to network and enjoy themselves before the show began in earnest the next morning.

Dealers arrived bright and early, ready to buy. Attendance was good despite concerns and increased vigilance surrounding the spread of COVID-19, which the World Health Organization has officially named a pandemic. Many dealers and vendors took precautions such as avoiding shaking hands and maintaining a safe distance.

Representatives from many of the major banners—Home Hardware, Lowe’s Canada and RONA, Castle, BMR, TIMBER MART, Sexton Group and TORBSA—were in attendance to support their members.

A number of the banners, including Sexton, held meetings and receptions for their dealers in advance of the show. Tom Bell, VP of business development for Sexton Group, said he was very pleased with the results of day one for his group.

Despite a slow-down on the second day, most vendors were happy with the traffic and business they generated on and off the show floor. In fact, a number of them mentioned that the opportunity to interact with customers in a more casual, informal setting was one of the best things about a show like this.

ABSDA President Denis Melanson was pleased with the show’s success. Having engaged some members as ambassadors this year, the association also created a leadership team to promote the show and encourage industry peers to attend.

“We’re very happy. Participation was good and strong, both on the vendor side and dealer side, so everybody seems to be happy,” says Melanson. “We’re grateful that we have a really strong vendor community and dealer support for our show.”

While concern around the COVID-19 pandemic didn’t seem to prevent anyone from attending, it was one of the most-discussed topics on the show floor. Many correctly anticipated it may be the last show they’d attend for the foreseeable future: Home Hardware announced the cancellation of its Spring Market the day after the show wrapped, with the National Hardware Show’s postponement notice coming through just hours later.

Melanson acknowledged the seriousness of the situation, but says timing and the fact that the virus had only begun to reach Atlantic Canada worked in the show’s favour.

“We really didn’t hear about anybody not coming because of it,” says Melanson. “I think people need to pay attention to it, especially if they have compromised immune systems.

“But put it this way: I’m happy our show wasn’t in another two to three weeks.”

SPECIAL REPORT — Head offices are taking steps to protect their staff and looking for ways to direct their dealers.

At the BSIA of British Columbia, association President Thomas Foreman is concerned about how his members are reacting to the COVID-19 pandemic.

He says everyone has to take this situation seriously and avoid what he calls a “seat-of-the-pants approach.” He recommends any company, whether a dealer or a supplier, consider their options for working at home and how teams can effectively stay connected if that happens. Even routine tasks like getting cheques into the bank can become problematic. “Can your operation be set up to operate remotely?” he asks.

Bolton, Ontario-based TORBSA announced last week that it would close its office to all visitors. However, day-to-day duties in the office are continuing, to maintain support for the buying group’s member-dealers and their suppliers.

Other head offices are watching out for their members as well. Bernie Owens, president and CEO of TIMBER MART, shares his members’ concerns over the challenges they’re facing as stores try to cope with the pandemic. “Now is the time to get behind your solid clientele and service them,” he says. “But don’t extend more credit to customers who are already slow. The credit side is an imperative right now. Now is the time to chase your receivables.”

He says dealers must also make decisions that are best for their staff, such as whether to reduce store hours or staff. However, he adds, such measures could affect the incomes of families already impacted by the crisis. “In these extraordinary times, the health and well-being of our employees is of paramount importance. With any changes to the business—whether it’s hours or staffing—we must make them keeping in mind not just their health, but their well-being,” he says. “We can only succeed by working as a team.”

Foreman at the BSIA agrees that communication and collaboration are key. “I think it’s really important that dealers talk to their staff—not to instill fear, but to lead and assure them.”

SASKATOON — Weathering the downturn that persisted throughout much of the Prairies last year, Federated Co-operatives Ltd. reported a drop in sales to $325 million in 2019 from $359 million the year before.

According to the company’s annual report, challenges facing the co-op included poor weather that impacted the ag side of the business, economic conditions that pressured the home and building sector and stiff competition within the food sector.

However, despite this adversity, the Ag and Consumer Business Unit, of which the Home and Building Solutions Department (HABS) is a part, made improvements internally to minimize the economic impacts. The increased use of technology was one of them.

“Overall, 2019 was a challenging year, with a soft economy and lumber depreciation having a significant impact in the Prairie provinces,” says Cody Smith, director of HABS. “Specific to the Home and Building Solutions business, FCL and the Co-operative Retailing System has not been immune to these headwinds and it had an impact on our sales, reducing them to $325 million from $359 million.

“We continue to remain excited about our Home and Building Solutions’ long-term vision, investing in several key areas that make our business viable well into the future,” Smith says. “The first area was a new POS platform, from Mi9, that is currently being rolled out to local Co-op stores and is expected to be completed in 2021.”

The initiative is expected to make procurement easier and more secure through handheld mobile devices. “This transition is vital to us gathering more information and better utilizing our data for business decisions.”

Over the past year, the Home and Building Solutions business was restructured to increase its focus on lumber, Smith notes. “We continue to build value for the Co-op retailing system by adding lumber personnel to centrally procure lumber on behalf of the stores.”

That focus on building materials is also being reflected in the stores with new merchandising. “Another area of investment in 2019 was new LBM selling centres that fit an eight-foot bay, showcasing core building material categories that are typically difficult to display,” Smith adds.

Local Co-ops continue to grow their businesses and become more sophisticated. That includes amalgamations and the acquisition of Hanna Building Supplies by Westview Co-op in Olds, Alta., in early 2019. There are now 111 Co-op home centre stores in the West. 

Dany L’Heureux has joined OCTO Purchasing Group as director-Industrial Safety Segment. Most recently, he was with Stelpro as director of sales. Before that, he was category manager for tools at Lowe’s Canada.

Martin & Associates/Dover Finishing Products has added Tamirah Fairbarn as the company’s new regional rep in Ontario. Fairbarn comes over from Sherwin-Williams, where she spent 21-plus years in a variety of roles. She will call on independent paint, hardware, industrial (OEM) and regional chains.

DID YOU KNOW…

… that in light of the recent developments in relation to the spread of COVID-19, we’ve decided to make the Hardlines newsletter free to everyone for the next month? If you, as one of our Faithful Subscribers, know someone who would benefit from our info each week, please pass this link along to them. We have to take care of each other through these difficult times!

RETAILER NEWS

SASKATOON ― Federated Co-operatives Ltd. kicked off its annual Fuel Up to Win contest earlier this month. Now in its eighth year, the event gives Co-op members and customers in Western Canada an opportunity to win more than $8.5 million in prizes and discounts. Customers will receive a game ticket for each purchase from participating Co-op stores until April 29.

TORONTO ― The Home Depot Canada is temporarily adjusting store hours in response to COVID-19. Stores will now close daily at 6 p.m.; they typically close between 8 and 10 p.m., depending on the day. All hourly full-time associates will receive an additional 80 hours of paid sick or personal time, and part-time workers will receive an additional 40 hours. And if any staff are diagnosed with COVID-19, Home Depot Canada will continue to pay them during that time.

LONGUEUIL, Que. ― BMR Group has announced the addition of Ferronnerie Meilleur in Ferme-Neuve to its Quebec network. Father-and-son team Normand and Jérémie Lachaîne have owned the store since 2001.

TORONTO — Canadian Tire Corp. has reduced store hours at its Canadian Tire Retail stores and temporarily closed its other stores, Mark’s/L’Équipeur, SportChek, Atmosphere, Party City, Pro Hockey Life, National Sports and PartSource, until April 2. Operations will be reassessed at that time. During the closure period, full- and part-time employees will continue to be paid.

QUEBEC CITY ― Canac is sponsoring Raphael Lessard and Kyle Busch Motorsports in the NASCAR Gander RV & Outdoors Truck Series. Lessard’s Toyota Tundra bore Canac’s colours last week at Homestead-Miami Speedway. “Raphael is a young man from our region, and it is important for Canac to encourage the next generation of major sports in Quebec,” said Canac President Jean Laberge.

ATLANTA — Home Depot says it’s in the process of resetting its outdoor power equipment segment to showcase products by brand. The company will be highlighting EGO, Toro, Milwaukee, Ryobi, Dewalt and Makita assortments for the spring.

BURLINGTON, Ont. ― IKEA Canada has temporarily closed all stores nationwide, effective immediately. The retailer had already closed its dining facilities and children’s play areas.

SUPPLIER NEWS

NORWALK, Conn. ― The National Hardware Show has new dates after postponing its May time slot due to the COVID-19 outbreak. The 75th anniversary of the show will now take place from September 1 to 3, 2020, at the Las Vegas Convention Center. The third day of the event will be shortened, ending at 1 p.m. All amounts paid to attend the show in May will roll over for participation in the rescheduled event.

MONTREAL ― Intertape Polymer Group reported net income of $11.68 million for Q4, up from $10.61 million a year earlier. Total revenues came to $291.48 million, up from $287.65 million, largely on the strength of an acquisition in 2018. For the full fiscal year, IPG posted profits of $41.22 million, a decline from $46.64 million, due to higher interest and tax expenses. Revenues for the year rose 9.5 percent to $1.15 billion.

ECONOMIC INDICATORS

Sales of existing Canadian homes rose by 5.9 percent in February 2020, marking one of the larger month-over-month gains of the past decade. The increase was largely the result of a 15 percent jump in activity in the Greater Toronto Area (GTA). Actual (not seasonally adjusted) sales activity stood 26.9 percent above February 2019. (Canadian Real Estate Association)

U.S. housing starts fell by 1.5 percent in February to 1.6 million units. Single-family starts dropped to 1.01 million. Building permits for February declined by 5.5 percent to 1.46 million. (U.S. Census Bureau)

U.S. retail sales fell by 0.5 percent on a monthly basis in February. On a yearly basis, sales rose by 4.9 percent. The monthly decline almost negated January’s upwardly revised 0.6 percent gain. (U.S. Census Bureau)

SPECIAL REPORT — The hardware and home improvement industry, like the world at large, is coping with concerns around the coronavirus pandemic worldwide. A slew of cancellations and postponements of conferences and trade shows has occurred everywhere, and now both the Home Hardware Spring Market and the National Hardware Show have been added to that list.

Home Hardware Stores Limited announced last Friday the cancellation of its show, set to be held in the Waterloo region from April 5 to 7. Reed Exhibitions, which owns the National Hardware Show, postponed its event just hours later. It was to be held in Las Vegas from May 5 to 7.

“The health and safety of the Home Hardware community, our dealer-owners, team members, suppliers, business partners and customers is, and will always be, our number-one priority,” said Kevin Macnab, Home Hardware’s president and CEO.

“We understand that this is the first time in Home’s 56-year history that a Market has been cancelled. This event hosts over 7,500 attendees from across the country and we believe this precaution is necessary.”

Meanwhile, south of the border, North America’s premier show for the industry, the National Hardware Show, has been postponed. That event, which is marking its 75th year, typically attracts delegates from all over the world to see upwards of 2,500 exhibitors across 15 product categories.

The decision was made after consulting customers, closely monitoring developments and reviewing guidance from public health officials, including the United States Centers for Disease Control (CDC) and the World Health Organization (WHO). Reed will establish new dates for the show later this year.

“As we face challenging times, we feel it even more important to band together as an industry to continue the long tradition of networking, sourcing new products, education and learning best practices at a common time and place,” said Rich Russo, industry vice president for the National Hardware Show.

Eisenwarenmesse, the International Hardware Fair, in Cologne, Germany, was cancelled just days before it was to begin on March 1. The Ace Hardware Spring Convention has been cancelled. It was scheduled to take place March 12 to 14 in Chicago. The National Housewares Show, which was also scheduled to take place this week in Chicago, has likewise been cancelled.

Dealers respond to double whammy of coronavirus, rail blockades

SPECIAL REPORT — A hardware store in Brooklyn charging $80 for hand sanitizer came to the attention of the city’s tabloid newspaper—and the city police. But the “variable pricing” related to the coronavirus, for everything from hand sanitizer and toilet paper to bottled water and dust masks, is becoming a reality for retailers in all channels.

Closer to home, Andrew Rothblott owns Rotblott’s Discount Warehouse, a hardware store in downtown Toronto. Two weeks ago, he was selling a package of 20 N95 dust masks for $60. They are usually priced around $25, he says, but reflected pricing among competitors around town. And now, if he can get his hands on any, his cost is $50 a box.

Here in Canada, the added challenge of sporadic rail blockades, which continue to appear across the country, is adding to the disruptions to business dealers are facing.

While some products are flying off the shelves, others aren’t even making it into the stores. Lee Harney, vice president of operations at Moffatt and Powell, a six-store chain of RONA stores in southwestern Ontario, has been watching the situation closely. “We’ve experienced delays in some lumber products—and everything shipped by rail from out West. That’s having an impact.” He cites products such as nails, some hardwoods and underlay.

Liz Kovach, president of the Western Retail Lumber Association, was interviewed late last month on Global News in Winnipeg concerning the blockades. “A big part of what is being impacted is the ability to transport goods, particularly to Eastern Canada, when you’re speaking about lumber.” Kovach says her comments found their way to the Office of the Premier in Alberta, “indicating the premier has been made aware of our comments,” she says.

And while most of the rail blockades have been removed, just a week ago, Thomas Foreman, president of the Building Supply Industry Association of British Columbia, could look out into Vancouver Harbour and see upwards of 60 ships that could neither load nor unload.

The industry shutdown in Asia has added an even bigger challenge as freight coming from China has nearly stopped completely. Talking to his dealers, Foreman reports that some of them are looking for alternative sources of supply. But, he notes, it’s difficult to replace products with the same, or similar specs. Even as the lines of supply open up, Foreman expects it will take another three to five weeks to re-establish a consistent flow of products and fulfill his dealers’ needs. 

Like Kovach, his colleague at the WRLA, Foreman has connected with various government agencies for input and direction, pushing them to understand the need for unobstructed transportation for building supply dealers.

“We have been assisting our members with crisis management plans in preparation for further threats that could potentially harm their businesses, now and into the future,” Foreman says. 

Rothblott at Rotblott’s Discount Warehouse calls the combination of events “a perfect storm.” Nor does he see an end in sight. “I predict that there will be shortages that continue for at least the next three months.”

RED DEER, Alta. — In one fell swoop, Peavey Industries has added 104 new stores to its network. It already has almost 100 of its own, but the difference is that those are all corporately owned, while the Ace stores represent independent dealers and every part of Canada.

Nevertheless, Peavey CEO Doug Anderson says he’s ready. Part of what he bought when he took over the license to Ace in Canada from Lowe’s Canada’s RONA division was a number of key people from the Ace team. They will join the Peavey team in Red Deer to ramp up services for the Ace dealers.

“We have a lot of skilled people with the right experience,” Anderson says.

The Peavey distribution centres in Red Deer and London, Ont., already supply stores under the Peavey Mart, TSC and MainStreet Hardware banners. In addition, TSC had experience as a distributor supplying builder and pro accounts. Derek Smith, who was overseeing the MainStreet Hardware banner, was previously both a RONA dealer and a buyer at head office. He will now serve as vice president of the Ace Canada division.

Guy Lichter, formerly director of dealer conversion for Ace at Lowe’s Canada, has been named national sales director for Ace at Peavey. He leads a team of eight territory support managers—all former regional managers at Lowe’s Canada. Bill Morrison, who ran Ace Hardware out of Winnipeg and then led the Ace licensing initiative when it became part of RONA and Lowe’s Canada, is Anderson’s lead consultant to oversee the transition.

“We’ve retained a lot of knowledge so there’s a lot of depth to what we’re doing,” Anderson adds.

ST. JACOBS, Ont. ― Home Hardware welcomed two new members in Quebec in February, while a third location is rejoining the banner in April after being sold to another group under a previous owner.

Quincaillerie Limoilou in Quebec City was founded in 1992 by current dealer-owner Dominic Poulin’s parents. Today, he operates it with his wife Audrey Gendron and their son Mathieu. In Baie-Comeau, Élise Caron and her husband Michel Charette have made the decision to transfer Matériaux Manic in Baie-Comeau, which they have owned since 2012, to the Home Hardware Building Centre banner.

In April, Réno Mat St-Etienne will reopen its doors in St-Etienne-de-Lauzon under the Home banner.

The wave of new dealer-owners is a significant gain for Home Hardware in Quebec, where Lowe’s Canada’s banners dominate the market, trailed by Canadian Tire and BMR. It also fits with the Canadian franchise’s efforts to respond to Quebec consumers’ support of domestic businesses.

Duncan Wilson, senior director of sales for Home Hardware Stores, says the business is ripe for expansion in Quebec. “We consider the province of Quebec a very, very strong growth potential for us,” he says. “We’ve grown substantially in the last five years.

“It’s underexposed as far as I’m concerned,” he adds, contrasting the situation with Home’s 400-plus stores in Ontario. “Quebec is 25 percent of the whole [Canadian] industry, so we’ve got room to grow. The Quebec market is important to us: we’re planning to grow and looking forward to introducing new dealers there.”

The banner reached its 100-store milestone in Quebec 10 years ago with the addition of a store in Ste-Brigitte-de-Laval outside Quebec City. Today, it has more than 130 stores across la belle province.

At Canadian Tire Corp., Greg Hicks has been named president, CEO and member of the board of directors, effective immediately. Hicks most recently served as president of the company’s largest division, Canadian Tire Retail (CTR). His predecessor, Stephen Wetmore, is stepping down from both the CEO position and the board of directors. He will remain on in an advisory capacity through the end of this year as honorary director to support Hicks during the transition.

DID YOU KNOW…

… that the Hardlines Retail Report is your single best marketing tool for understanding the size and growth of the retail home improvement industry in Canada? Who are the top players? What are their strategies? How much has the market grown year over year and which provinces are winning in market share? With 175 PowerPoint slides and dozens of charts and graphs, this report is a must-have for every marketer. Click here for more info and to order your copy!

RETAILER NEWS

TORONTO ― Canadian Tire Corp. and Home Hardware Stores Ltd. are among the companies named to the Platinum Club of Deloitte’s Canada’s Best Managed Companies awards. These firms have maintained their place on the Best Managed roster for seven years or more. Applicants are evaluated by an independent judging panel composed of representatives from program sponsors in addition to special guest judges.

BOUCHERVILLE, Que. ― A team of women volunteers from Lowe’s Canada kicked off the renovation of a five-plex located in Montreal’s Côte-Saint-Paul neighbourhood. The event was part of the International Women Build Week, an initiative carried out by Lowe’s Cos. and Habitat for Humanity. It brought together 6,000 women volunteers in more than 235 communities in Canada and the U.S.

LONDON, Ont. ― Moffatt & Powell has purchased the RONA store in Hanover, Ont. RONA Hanover, an independently owned dealer store within the RONA family, was owned by Jane and Brian Haack, who have retired. Their son Steve will continue to work in the business. Moffatt & Powell has been in business since 1956 and has carried the RONA banner since 2010. The company now owns and operates six stores in southwestern Ontario in Strathroy, London, Exeter, Tillsonburg, Mitchell and Hanover.

SAINT-GEORGES, Que. ― A youth employment organization has honoured a local Canac store for its commitment to hiring young students. Carrefour jeunesse-emploi de Beauce-Sud awarded the store a prize for its commitment to educational success as part of the organization’s School Retention Days, held last month. It cited the store’s proactive involvement with youth and respect for their limits in granting the award.

SASKATOON ― Over the past year, Federated Co-operatives has developed a program to nurture strong, forward-thinking leadership within the organization. “Inspire: The Co-op Leadership Experience,” is a self-directed opportunity for team members to develop and refine their leadership abilities. The Personal Leadership Stream offers development opportunities for all team members, while three other streams offer development opportunities for those already in leadership roles.

SUPPLIER NEWS

HALIFAX ― The Atlantic Building Supply Dealers Association (ABSDA) celebrated the past year at its annual dinner last week during the Atlantic Buying Supply Expo. More than 640 delegates attended the sold-out event, which highlighted some of the association’s achievements over the last year.

MONTREAL ― More than 450 industry members gathered at Montreal’s Fairmont Le Reine Elizabeth earlier this month for AQMAT’s eighth Gala Reconnaissance. A five-member independent jury panel selected the winners from 55 nominations voted by the association’s membership. A total of 12 companies and 15 employees or groups of employees were honoured. (Full list of winners here!)

VANCOUVER ― Fourth-quarter revenues at CanWel Building Materials increased 11.1 percent to $293.4 million, compared to $264 million in the same period in 2018. Net earnings rose to $3.4 million in 2019, from $370,000 in 2018. For the full year, revenues increased by 3.3 percent to a record $1.33 billion, compared to $1.29 billion the previous year. Net income fell to $17.2 million from $30 million in fiscal 2018.

CAMBRIDGE, Ont. ― Bunzl announced it has completed the process of bringing all its safety companies together under the Bunzl Safety banner. The national brand transition began last year. Previously, the business consisted of three separate companies for workwear, safety equipment and lifting and rigging products. Bunzl’s WorkHorse brand is unaffected by this integration.

ECONOMIC INDICATORS

The seasonally adjusted annual rate of housing starts in Canada was 210,069 units in February, a decrease of 1.9 percent from 214,031 units in January. The SAAR of urban starts for the month also declined by 1.9 percent to 199,304 units. Multiple urban starts fell by 6.1 percent to 146,072 units while single-detached urban starts increased by 11.9 percent to 53,232 units. Rural starts were estimated at a seasonally adjusted annual rate of 10,765 units. (StatCan)

NOTED

Consumers spent $601.75 billion online with U.S. merchants in 2019, up 14.9 percent from $523.64 billion the prior year, according to the latest figures from the U.S. Department of Commerce.

OVERHEARD…

“We share our profits with local co-ops and they have a direct, positive impact on the millions of members and hundreds of communities that support their local co-ops—it’s a virtuous circle.”
―Scott Banda, CEO of Federated Co-operatives, on the co-op’s 2019 year-end results.

BOUCHERVILLE, Que. ― Lowe’s Canada continues to streamline its business with the announced sale, through RONA Inc., of the assets of the Ace Canada business to Peavey Industries. As part of the transaction, RONA, which is part of the Lowe’s Canada group, will assign to Peavey the licence and distribution agreements between RONA and Ace Hardware International Holdings, Ltd., which is in turn a subsidiary of Ace Hardware Corp.

Peavey, which is headquartered in Red Deer, Alta., with 92 farm and hardware stores from Ontario to British Columbia, will take over the Ace Hardware brand in Canada, plus a corporate Ace Hardware store in The Pas, Man. The agreement also transfers to Peavey the agreements with 104 independent Ace Hardware stores in Canada, which have been supplied through the wholesale business of RONA. Peavey will gradually assume responsibility for those stores over a six-month transition period to ensure no interruption of service. In addition, Peavey will take over the Ace Canada retail operating systems and the Ace Canada website.

Lowe’s Canada, which inherited the Ace licence when it acquired RONA in 2016, will continue to act as a wholesaler of lumber and building materials for the Ace dealers that carry those products.

The financial terms of the transaction are not being disclosed.

Despite the number of stores involved in the deal, the Ace business represents less than 10 percent of the total sales volume of Lowe’s Canada’s affiliated dealer division, says Tony Cioffi, executive vice-president, finance, affiliate dealers, Dick’s and real estate for Lowe’s Canada. Those stores tend to be smaller, with a different product mix than RONA stores. He admits that the Ace stores will make a better fit with Peavey.

“The sale will also help the company focus more directly on the RONA-affiliated dealer base,” Cioffi added. “This transaction is in line with our plan that was announced last November to simplify our multiple store banners in order to drive efficiency and reduce operational complexity.”

Jean-Sébastien Lamoureux, senior vice-president of communications, public affairs and compliance at Lowe’s Canada, reinforced that message. “We believe in the RONA dealer network and will continue supporting it.”

He adds that the six-month transition will give Peavey time to take over the new business effectively, “to allow for a smooth transition so dealers will see no difference in the service they’re getting, whether from RONA or Peavey.”

Why the Ace brand will make a good fit for Peavey’s small-town roots

RED DEER, Alta. ― The acquisition of the license and distribution business for Ace Hardware in Canada by Peavey Industries will provide a good fit, and a powerful growth generator, for the Red Deer-based farm and hardware chain.

“I believe it’s the right fit and makes a lot of sense for Peavey and for Ace Hardware, quite frankly,” says Doug Anderson, president and CEO of Peavey Industries. Peavey owns three banners totalling 92 retail stores across five provinces: 49 TSC Stores in Ontario, 40 Peavey Mart stores across Manitoba, Saskatchewan, Alberta and British Columbia and three MainStreet Hardware stores in Alberta.

Peavey’s head office and distribution centre is in Red Deer, Alta., with a second distribution centre and regional office in London, Ont., that had been the head office for the TSC business.

Anderson had already proven himself a canny acquisitor. His company began the takeover of TSC Stores back in July 2016, gradually increasing its stake in the business before taking over completely within two years. By the end of 2019, Peavey had completed integrating systems between the two businesses, rolling buying functions and systems into the Red Deer office.

Taking over the Ace business in Canada turned out to be the next step—and yet another good fit. And it was something Anderson began working on about nine months ago. He also wants to stress that Peavey approached Lowe’s Canada about this deal. “Lowe’s wasn’t out shopping this around to dump it,” he says emphatically. “This is something we see real value in.”

The Ace stores tend to be smaller than RONA stores, with more emphasis on categories such as farming and convenience hardware—something that Peavey already specializes in. He says both sides spent about six months making sure the fit was a good one. “RONA and Peavey spent a lot of time making sure this transaction would have the best interests of the Ace dealers in mind.”

Anderson notes that the Ace stores share a dedication to their local markets, backed by strong customer service. “Also, it is a great opportunity for us to serve new markets with the addition of this great brand.”

Ace in Canada is managed, as it is in other markets outside the U.S., through Ace Hardware’s Ace International division. “This is an exciting new chapter for Ace Hardware International and the Canadian Ace Hardware retailers,” said Jay Heubner, president and general manager of Ace Hardware International. “We are thrilled to team up with Peavey Industries, an organization that shares our values and has a strong commitment to service and community.”

ORLANDO — In the midst of a snowstorm north of the border in Central Canada, Canadians found warm weather and hot deals in Orlando at this year’s Orgill Spring Dealer Market. The market took up nearly one million square feet at the Orange County Convention Center and ran from February 27 to 29.

The show got off to a busy start the first morning, as the dealer registration line stretched across the convention centre’s main entrance. Canadians, in colour-coded badges, could be found in groups in the Door Busters, Canada Coupons and Canada Market Busters areas browsing the many show deals on offer.

New this year was the Impulse Showcase, an area on the perimeter of the show floor that displayed the latest best practices and products for dealers to try in their check-out lines.

Canadian vendors were generally pleased with show turnout. Dave Pestill of CashierPro was happy with business on the first morning. He doesn’t typically see his customers until the second day of the show, once they’ve already investigated the show deals, but noted that a number of dealers had stopped by early in the day.

Pestill says his company started attending the show to reach Canadian independents but has found in recent years that he’s been able to pick up some U.S. dealers as well.

Richard Defee, who was representing Oatey at the show, echoed Pestill’s positivity about the first morning. He said he had nearly surpassed the number of customers he typically sees at the show overall by mid-morning the first day.

In Orgill’s continued efforts to appeal to Canadians, a number of booths indicated where customers could be served in both official languages and the Memphis-based company even had a French customer service desk.

Capping off the first day, Hardlines hosted its popular Canada Night event at B.B. King’s, a nearby nightclub. About 150 Canadian retailers and vendors turned up for drinks, snacks and a live band.

The next Orgill Dealer Market will take place in at the Las Vegas Sands Expo and Convention Center from August 27 to 29, 2020.

BOUCHERVILLE, Que. ― Against a backdrop of positive annual sales from its parent, BMR Group has tied its dealer-members even tighter into the co-op structure.

Sollio Cooperative Group (formerly La Coop fédérée) reported a record $7.282 billion in consolidated sales in 2019, up $766 million from the previous year. Earnings before refunds and taxes were $79.4 million, a decline from previous years as global geopolitical and trade tensions marked 2019.

BMR Group, which comprises Sollio’s retail division, posted annual earnings of $16.7 million, down slightly from $16.9 million last year. Tighter controls and more advantageous trade agreements were tempered by an increase in some operating expenses. These included transportation costs (the result of a labour shortage) as well as storage costs due to a need for additional space.

However, 2019 marked the first year the BMR dealer-members received a dividend from Sollio. The co-op returned a patronage refund of $3.5 million to the dealers that will be shared based on their purchase volumes. The patronage refund was made possible by a change in the co-operative’s by-laws.

DID YOU KNOW…

… that dealers can now enter this year’s Outstanding Retailer Awards? The nomination forms are available online. We look forward to celebrating the country’s top hardware and home improvement dealers at the 25th annual Hardlines Conference on October 27. Meanwhile, check out the party we had last year with this brief video featuring last year’s amazing winners, on Hardlines TV!

RETAILER NEWS

JONQUIÈRE, Que. ― BMR Group and appliance retailer Corbeil are launching a pilot project to integrate their product offerings under one roof. The store-within-a-store will consist of a Corbeil space within BMR’s Potvin & Bouchard store in Jonquière. The store is being remodeled to accommodate the Corbeil section, with a new storefront and redesigned aisles. Corbeil has 30 stores in Quebec and Ontario.

SASKATOON ― At its recent AGM, Federated Co-operatives Ltd. announced revenues of $9.2 billion, down four percent from $9.6 billion the previous year. From those revenues, it realized earnings of $959 million, with $649 million returned to local co-ops and their communities in Western Canada. “Last year was one of our best financial years ever,” said CEO Scott Banda.

QUEBEC CITY ― On February 28, the independent retail chain Canac held the grand opening of its 30th store. The company has been expanding aggressively in recent years, adding about one store per year. The new store is in in Prévost, Que. According to Jean Laberge, president of Canac, this latest store is modelled after the previous store, which opened in May 2019 in Notre-Dame-des-Prairies. 

BOUCHERVILLE, Que. ― Lambton BMR Pro of Petrolia, Ont., is its newest store to come under the BMR Pro banner. Dave and Kristen Van Stempvoort have owned the store for the past five years, and it had been with its previous banner for almost a decade.

SUPPLIER NEWS

LÉVIS, Que. ― Maibec has reached an agreement to purchase LP Building Solutions’ East River, N.S., factory along with assets and brand rights for CanExel, the fibre-based siding product manufactured there. The transaction is expected to close in the second quarter.

MONTREAL ― Intertape Polymer Group has announced a series of measures designed to enhance the sustainability of its product offering, operations and supply-chain management. In addition, IPG is launching the Curby line of recyclable shipping materials.

COLOGNE, Germany ― The European Federation of DIY Manufacturers is renaming itself the Home Improvement Manufacturers Association (HIMA). Its new mission statement is to “enable our members to face the future,” on the three pillars of networking, knowledge and lobbying.

LANCASTER, Pa. — Armstrong World Industries reported Q4 profits of $51.5 million, a 40.7 percent hike from $36.6 million a year prior. Sales of $246.9 million represented a 3.3 percent gain from Q4 2018. For the fiscal year, profits of $242.3 million were up 27.8 percent. Sales for the year totalled $1.04 billion, a 6.4 percent increase.

ECONOMIC INDICATORS

Construction spending in the U.S. in January reached $1,369.2 billion seasonally adjusted, up 1.8 percent from the previous month. The January figure is 6.8 percent above the January 2019 rate of $1,282.5 billion. (U.S. Commerce Dept.)

NOTED

Eisenwarenmesse, the International Hardware Fair,  in Cologne, Germany, has been rescheduled for February 21 to 24, 2021. The postponement of this year’s event was announced at the end of February, a week before the show, after major buyers from North America, along with several European exhibitors, pulled out due to concerns about the spread of the SARS-CoV-2 virus in Europe. The show, which usually runs in alternate years, will take place in both 2021 and 2022.

OVERHEARD…

“While it will allow Lowe’s Canada to focus its energy exclusively on the RONA banner for its affiliated dealer network, Ace affiliated dealers across the country will find in Peavey Industries a partner whose value proposition is better adapted to their operating reality and customers’ needs.”
―Tony Cioffi, executive vice-president, finance, affiliate dealers, Dick’s and real estate for Lowe’s Canada, on the sale of the Ace Hardware license in Canada to Red Deer-based Peavey Industries.

OUT AND ABOUT

Our Editor Sigrid Forberg and VP and Publisher David Chestnut are off to Halifax this week for the ABSDA Building Supply Expo. Got a new product or a story scoop? Be sure and stop by Booth 117 and fill Sigrid in! And if you need help promoting your company and products, David is the person to connect with!