One of the main things delegates look for at the Hardlines Conference—aside from the great networking opportunities—is insights into the latest trends in products and customers behaviours. This year, we’ll deliver that in spades, by bringing the experts themselves.

The 29th annual Hardlines Conference is being held at one of Canada’s outstanding venues, Fairmont Le Manoir Richelieu, in the Charlevoix region of Quebec, on Oct. 22 and 23.

A panel of buyers from some of the country’s top retail home improvement groups is being assembled to share their tips and insights this year. Our panelists will include some of this industry’s top merchants, with expertise in both LBM and fashion and décor products. It’s their job to be on top of the latest product innovations and consumer tastes.

We’ve confirmed the following expert panelists so far:

• Kelvin Johnston is the senior buyer for commodity lumber and panels at Castle Building Centres Group. This buying group represents more than 300 dealer locations across the country. He keeps his finger on the pulse of changing LBM buying cycles and pricing to ensure best pricing for Castle’s dealers.
• Shawn Ettinger is national hardware procurement manager for TIMBER MART. As that group’s lead hardlines buyer, he uses his merchandising, sourcing, and product development skills to fulfil the hardlines needs for his group’s building supply and GSD dealers nationwide.
• Alex Burcham is the senior category manager at Orgill, Inc. He oversees plumbing, electrical, heating, and cooling for the giant North American hardware wholesaler. With a keen understanding of the styles and trends driving these categories, he brings valuable insights into the areas of product cost, freight cost, and payment terms.
• Natacha Laurin is category director, projects and appliances, at RONA inc. As part of RONA’s buying team that works on behalf of its affiliate dealers, Laurin is an expert in the categories of paint, flooring, kitchen and bath, décor, lighting, and appliances.

Each of these individuals is a top merchant for their respective retail organizations, which together represent some 2,500 hardware and home improvement dealers nationwide. The panel will be hosted by Sherri Amos, director of dealer support at Home Hardware Stores Ltd. A skilled presenter, Amos works with dealers across Canada and is familiar with their concerns and achievements on a daily basis.

If you’ve never been to the Hardlines Conference, make this the year you join us. As the key annual gathering point for top retail executives, leading dealers, major vendors, it will provide tremendous networking and career opportunities.

IMPORTANT NOTE: As a Premium Member (thanks to your subscription to this newsletter), you have front-of-the-line access to this year’s conference and registration that’s 20 percent off the regular price. For more information and to reserve your spot, click here.

TIMBER MART has announced some changes in its executive ranks. John Morrissey (shown left), long-time stalwart of the LBM scene in Atlantic Canada, will leave his post as vice-president of TIMBER MART by the middle of next year. He plans to engage in residential development opportunities with family members in the Halifax area. Long-time TIMBER MART distribution exec Jeff Campbell, formerly director of operations, was named vice-president of distribution at the group, in Morrissey’s stead, on July 15.

Morrissey has worked in the LBM industry for 42 years, commencing work at Dartmouth Building Supplies, in Nova Scotia, in 1982. In 2005, as president and COO of Award Group, he merged that (then) Atlantic buying group with TIMBER MART and Homecare Building Centres, an LBM buying group in Ontario, to form a national organization. Shortly thereafter, he spent three years as GM Atlantic Canada of AFA Forest Products before rejoining TIMBER MART in 2010.

“He’s been an absolutely excellent part of the team,” Bernie Owens (shown right), president and CEO of TIMBER MART, told Hardlines. “His decisions are based on what’s best for the dealer. He’s always thinking about the dealer, about what’s best for our member shareholders.”

Of Jeff Campbell, Morrissey’s replacement as vice-president of distribution, Owens said, “Jeff has really proved himself. I have full confidence in his abilities and his commitment to our company.”

Asked what has changed the most about the building supply industry in his more than four decades in it, Morrissey said technology. “And Bernie’s put us in a good position with it, in terms of cybersecurity. It wasn’t even a thing about 10 to 15 years ago—and now you’ve got to be watching every transaction you do.

“But I do think that, from a base perspective, it’s still a person-to-person business. Our industry is still based on personal relationships—more than other industries… That hasn’t changed. That’s still the most important part.”

“I am very grateful to the industry, and to the dealers and the suppliers—the partnerships we’ve gained. Quite honestly, most of my best friends in the world are dealers—and people that I’ve worked with and I feel grateful for their friendship.”

Federated Co-operatives Limited (FCL) has joined the ranks of retailers opening value-based storefronts across Canada. In partnership with Otter Co-op, FCL opened the inaugural Co-op Essentials store in Surrey, B.C., in June. The grocery outlet features Co-op branded products and everyday staples.

“FCL is proud to have partnered with local Co-ops to design this new concept,” said Rick Fernandes, FCL’s vice president of consumer products. “What makes Co-op a different kind of business is that each local Co-op and their community are distinct, and we want to celebrate that. This new format allows us to extend the Co-op food offering to new customers and communities and provide everyday savings to the consumer.”

Fernandez noted that, unlike conventional Co-op stores, Essentials will have a smaller footprint. He added that the new stores will deliver a unique shopping experience in an engaging store environment designed to facilitate customers’ access.

“Otter Co-op is excited to bring Co-op Essentials to the Cloverdale community,” said Jack Nicholson, CEO of Otter Co-op. “This new format is designed to understand and quickly adapt to customers changing lifestyles to meet their unique needs.”

Other retailers have taken similar steps to provide shoppers with smaller, more targeted shopping experiences. Beginning this month, Loblaw is piloting discount stores under the “no name” banner in three Ontario markets: Windsor, St. Catharines, and Brockville. The stores offer a targeted assortment of budget-friendly products.

A recent Deloitte report titled “The Retail Evolution’s Great Acceleration” found that the financial fallout of the pandemic has more consumers seeking convenient shopping alternatives. The report noted that before the pandemic many retailers faced challenges such as increasing debt burdens, moderating revenue growth, compressing margins, increasing SG&A, and slowing asset turnover.

In response, many retailers have pivoted to offer store-within-a-store shopping experiences. Last year Hudson Bay announced it would add Zellers pop-ups at all remaining store locations across Canada, offering a limited selection of discount merchandise under the nostalgic moniker.

It’s expected that more retailers will launch value-based stores across Canada as the retail industry moves towards intentional or ‘slow shopping’ with retail spaces that focus on cost and value and away from impulse buying.

Canadian Tire Corp. continues to push its private-label offerings as an integral part of its growth strategy. Owned brands currently account for 39 percent of product sales, closing in on the target of 43 percent, which the retailer aims to reach by year’s end.

“Our merchant teams continue to adapt to a cautious discretionary demand environment,” CEO and president Greg Hicks told analysts last month on an earnings call. “This is why we are leaning into essentials through our privileged owned-brand capabilities and key businesses like auto service.”

Even as inflation obliged CTC to slow down the pace of product launches last year, its goal hasn’t changed: to increase the share of private-label products in its customers baskets.

“A bit of that you can do through driving more sales of what you have,” Bobby Singh-Randhawa, senior vice-president of consumer brands, told The Globe & Mail early this year. “And some of it is going to be, we’re going to continually add product where it makes sense.”

In addition to its house brands, CTC is leaning on sales to its loyalty customers.

“Starting with Triangle Rewards, our Q2 loyalty sales were more resilient than non-loyalty sales, and [electronic Canadian Tire Money] redemption was up more than eight percent over last year, continued proof of the appeal of Triangle Rewards,” Hicks said last month.

In May, CTC’s Max Stack Event promotion allowed consumers to combine offers across the Canadian Tire, Mark’s, and Sport Chek banners and multiply their savings. Hicks said, “it was the first time we’ve coordinated a loyalty campaign of this magnitude across our multi-category banners, further establishing Triangle as the strategic system that binds our retail businesses together.”

Nearly 75,000 new users signed on to Triangle Rewards ahead of the event, he added, of whom 40 percent “remained active purchasers” after its conclusion. Growth in Triangle Rewards was one of three “points of leverage” for the fiscal year, along with “maximizing value from our existing assets, and driving operating leverage.”

PEOPLE ON THE MOVE

LP Building Solutions’ new VP of oriented strand board (OSB) sales and marketing is Jeremy Sellers, a 15-year veteran of the building products industry. Sellers started his career as product specialist at Wolf Home Products, where he was SVP of sales since 2022. His new role will include oversight of the company’s LP Structural Solutions portfolio.

DID YOU KNOW…?

… that the Hardlines Retail Report is ready to make your marketing plans for 2025 way easier? Yup, this incredible piece of research quantifies the size of the industry and breaks out the sales and market shares of your biggest customers—or competitors! Home Depot Canada, Home Hardware, RONA inc., and Canadian Tire are analyzed in depth, while all the key home improvement banners in Canada are assessed and measured. Plus: sales forecasts and retail trends for the year ahead, all crammed into 140 PPT slides. Proprietary to Hardlines, this info is simply not available anywhere else. Click here to order your copy today. (And yes, as a Premium Member of the Hardlines Family you get a big discount on your order!)

RETAILER NEWS

The RONA Foundation has launched its second “Home Sweet Home” fundraising campaign. Its goal, says the company, is to “to revitalize living environments or facilitate access to housing for Canadians in need.” The campaign will run until Sept. 30 in all RONA inc. corporate stores, as well as in participating distribution centres and affiliated stores.

Lowe’s has announced the renewal of its contract with the National Football League in the U.S. for the 2024-25 season and the continuation of its longstanding partnership with the Carolina Panthers and Dallas Cowboys. This is the retailer’s sixth consecutive renewal of the partnership.

Gypsum Management & Supply, based in Tucker, Ga., has acquired R.S. Elliott Specialty Supply. The Florida-based stucco and exterior insulation and finishing systems supplier is a regional distributor servicing markets across the state. GMS also posted its first-quarter results recently, with adjusted earnings of US$77.6 million, down from $103.2 million. Sales of $1.4 billion represented a 2.8 percent increase from the comparable period of last year.

Costco Wholesale Corp. has received approval for the construction of a 160,000-square-foot store in the west end of Regina, its second in Saskatchewan’s capital. Costco’s other Regina location, near the Sakimay First Nation reserve, opened its doors in 2018, replacing a smaller store.

Loblaw has concluded a test project allowing cashiers to work while seated, according to Retail Insider. The parent of the Loblaw, Provigo, and Real Canadian Superstore banners confirmed in a statement to the magazine that it had “piloted a four-month program in 10 of our stores across the country that provided cashiers with the option to sit.” Loblaw wound down the experiment in early August and is now gathering feedback.

L.L. Flooring, formerly known as Lumber Liquidators, the U.S. flooring retailer, has filed for Chapter 11 bankruptcy, at the same time announcing it will close about 25 percent of its 400 stores nationwide.

Unifor has applied to the Ontario Labour Relations Board to represent workers at Walmart in Mississauga to form a union in their workplace. Unifor is Canada’s largest union in the private sector, representing 315,000 workers. If the cards submitted by Unifor represent at least 40 percent of the eligible workforce at a facility, a vote will be called within five business days.

All Weather Windows is rebranding after nearly 50 years to become All Weather At Home. The company describes the move as “part of a broader effort to modernize its look and position the company for future growth, supported by the brand architecture of the recently formed All Weather Group.”

Theft from hardware stores has doubled in the past decade, according to data collected by AQMAT, the Quebec hardware and building materials association. AQMAT president Richard Darveau told Radio-Canada that tools, including power tools, are particularly appealing to shoplifters, as is anything containing copper.

The latest instalment of our podcast series What’s In Store is live! In this episode, Hardlines president Michael McLarney takes us behind the scenes of the creation of the 2024 Hardlines Retail Report. Find out how we gather our data, why it matters, and what we forecast for the coming year in the industry. Sign up now to get updates about the latest free podcasts in your inbox!

It’s a great way to learn what the best retailers in this industry are doing to win. It’s an important platform for finding out what’s new in hardware and home improvement retail. It’s a valuable opportunity to meet and network face to face with key dealers and retail executives who make up this industry.

Oh, yeah, and it’s a heck of a lot of fun.

These are just some of the reasons why people attend the Hardlines Conference every year. They help explain why so many familiar faces return year after year. We invite you to become part of this group of forward-thinking individuals who want to make their companies—and themselves—better through learning and knowledge.

The 29th annual Hardlines Conference is being held at one of Canada’s outstanding locations, Fairmont Le Manoir Richelieu, in the Charlevoix region of Quebec, from Oct. 22 to 23.

Just look at the lineup of speakers we have for you this year:

• Michelle Chouinard-Kenney, CEO of Gibson Building Supplies, a chain of yards throughout southern and central Ontario that sells roofing and related materials.
• Alain Ménard, vice-president at RONA inc., who heads up the affiliate dealer division and will explain how RONA is investing in independents.
• Charles Grégoire-Béliveau, vice-president merchandising at BMR Group, will discuss how the Quebec-based wholesaler and buying group is rolling out services and support for dealers in new markets.
• Jason Tasse, president and CEO of Lee Valley Tools, the innovative head of a very innovative niche hardware and tools company.
• Heléne Loberg, sustainability manager for IKEA Canada. We are thrilled to have IKEA join us this year: the company’s dedication to sustainability goes way beyond lip service.
• Richard Darveau, president of AQMAT and head of “Well Made Here.” His message about the importance of buying Canadian will resonate with dealers and vendors alike.
• Pierre Battah, nationally recognized HR advisor and workplace expert. This guy rocks. Want to hear about how best to take care of your people? Pierre will keep you riveted.
• Sherri Amos, director of dealer support, Home Hardware Stores Ltd., will moderate a panel of retail merchants from some of this industry’s top retail groups. Not to be missed.
• Peter Norman, vice-president and chief economist at Altus Group, our favourite housing and numbers expert—and truly one of the country’s top housing economists.

If you’ve never been to the Hardlines Conference, make this the year you join us. As the key annual gathering point for top retail executives, leading dealers, major vendors, it will provide tremendous networking and career opportunities. For the first time, we’re offering simultaneous translation in English and French.

You will save money as a Premium Member. Thanks to your subscription to this newsletter, you have front-of-the-line access to this year’s conference and registration that’s 20 percent off the regular price. For more information and to reserve your spot, click here.

United Farmers of Alberta opened a new UFA Farm & Ranch Supply store and Cardlock on Aug. 23. It’s located in Gasoline Alley West just outside the city of Red Deer, making it accessible for highway traffic in the area.

This outlet replaced an existing store nearby. That store remained open during the construction of the new location, closing its doors when the grand opening took place at the new store. UFA has been operating in Red Deer since 1961.

The new location features a 16,000-square-foot store with an expansive yard, a chem shed on site, and a three-bay drive-through warehouse. The cardlock features state-of-the-art high-speed pumps offering both clear and dyed fuel, including UFA’s own premium diesel fuel, Dieselex. This brings the number of Red Deer UFA cardlock locations to four.

UFA considers this newest project a powerful example of how the
co-op reinvests in the communities where members live and work. UFA is also giving back to the areas where it does business through a community investment program. In Red Deer, UFA supports Ronald McDonald House Charities and UFA said it would match all cash donations made on site at the UFA grand opening event, up to a maximum of $5,000.

“We look forward to opening the doors to our newest UFA location in the heart of the Red Deer community and continuing to deliver exceptional customer service that goes above and beyond,” said UFA president and CEO Scott Bolton. “It’s what sets our co-operative apart from our competitors.”

As the industry continues to wade through a sluggish time, Lowe’s Cos. reported in August that its second-quarter sales were down 5.6 percent. Like its rival Home Depot, which reported a week earlier, it was impacted by interest rates and consumer hesitancy around discretionary spending. Revenues took a hit from high borrowing costs, falling to US$23.59 billion.

Same-store sales for the quarter declined by 5.1 percent, a larger drop than the 4.43 percent expected by Wall Street. The retailer however reported positive comps in pro sales and e-commerce. Earnings fell by 10.1 percent to $4.10 per share, topping estimates of $3.97 per share.

Contractor and loyalty customers were critical to Lowe’s performance in the quarter. “We’re very pleased with our MyLowe’s Rewards loyalty program which just launched nationwide in March,” CEO Marvin Ellison said on an analyst call.

“Through this program, we’ve learned more about our customers’ lifestyle and purchasing trends, which will allow us to curate meaningful offers for them now and in the future.”

Joseph McFarland, executive vice-president of stores, said, “We continue to gain momentum with our core small-to-midsize pro customer as we delivered mid-single digit positive pro comps this quarter,” stressing the importance of the smaller contractor to the company. “The recent investments we’ve made in jobsite delivery and high-velocity pro SKUs are paying dividends, making easier for us to fulfill larger orders and quickly replenish inventory within our store.”

For William Boltz, EVP of merchandising, Lowe’s strong pro sales are evidence that “our efforts to transform the pro customer experience are working.” According to him, growth in comp sales of building materials was “driven by continued growth in pro across all building materials subdivisions.”

Lowe’s private labels also played a key role, said Boltz. “In tools, we’re expanding our collection of private-branded Kobalt tools with a 24-volt paint sprayer, multi-material cutter, and finish nailer.”

In summing up, Ellison was cautious but upbeat, saying the “core drivers of our business remain strong,” adding that “we remain optimistic about the medium- to long-term outlook of the home improvement industry.”

Last week, Hardlines went south to attend the Independent Home Improvement Conference in Marco Island, Fla. The event was presented by the North American Hardware and Paint Association (NHPA), in partnership with The Hardware Conference.

About 800 dealers from across the U.S. were in attendance. In addition, some Canadian dealers were there, including a contingent of Home Hardware dealers from Canada. They joined the conference, along with dozens of suppliers, many of whom had exhibition space on the conference floor.

The biggest news from the conference was that Joel Pletch of Walkerton Home Hardware in southwestern Ontario was the Canadian recipient of the NHPA’s Young Retailer of the Year award. Under his guidance, the store saw big increases. These included 426 percent growth in the store’s tool category and a 300 percent increase in overall store transactions—all from a store that’s only 3,300 square feet in size. Pletch was store manager when he got the news of the award in the spring. Since then, he has also become owner of the store.

The first day, Aug. 27, featured a series of information seminars from sponsors, including hardware distributor Orgill. Day two featured a series of breakout sessions and keynotes. Themes included effective marketing on a shoestring budget and how to keep good staff and cultivate top talent.

A keynote by business expert Al Comeaux (shown here) focused on how to master and implement change. Comeaux said business history is strewn with the long line of failed companies. They may have had an effective strategy and execution, but the winning companies back that strategy and execution with a mindset. “The attitudes of the company’s leaders are what set the winners apart.”

The mood at the conference and the prospects for dealers looking forward were summed up by Orgill CEO Boyden Moore. In conversation with Hardlines, he said that indicators such as falling interest rates are good signs for the industry.

“We think that’s good news. The challenge now is to make sure your business is ready for the good times. This is important,” Moore said. “We see good things ahead. Things are going to get better.”

PEOPLE ON THE MOVE

Simpson Strong-Tie has promoted Scott Lang to the newly-created role of VP of market development for residential digital solutions. Lang has been with Simpson Strong-Tie for seven years, most recently as technology sales manager for national builder/pro supply.

Stanley Black & Decker has appointed Deborah Wintner as SVP and chief human resources officer (CHRO). Wintner, previously SVP of HR operations and CHRO for tools and outdoor, is now part of the executive team. In her new role, she reports to CEO and president Donald Allan, Jr., and succeeds John Lucas.

DID YOU KNOW…?

… that you can register now for this year’s Hardlines Conference? The 29th annual Hardlines Conference is being held at the Fairmont Le Manoir Richelieu, in the Charlevoix region of Quebec, from Oct. 22 to 23. For more information and to reserve your spot,
click here!

RETAILER NEWS

A RONA Inc. affiliate dealer has purchased an existing store in Charlottetown, representing the introduction of the RONA brand to the province of Prince Edward Island. The business was acquired by Adam Barrett of Terraine Capital, a property development and investment company that already has three RONA stores in Nova Scotia. The latest store is 33,000 square feet in size, with an indoor LBM section and a large outdoor lumberyard.

Matériaux Pont-Masson celebrated its 45th anniversary with a private event on Aug. 15. More than 500 guests joined the BMR member’s founding family, Monique, Richard, Éric, and Stéphane Bailey. The event featured a sale for contractor clients and anniversary festivities.

The Home Depot launched its 2024 Halloween lineup online last month. “This year we increased our realism, created some impressive, licensed [NBCUniversal] characters and even brought back some fan favorites,” Lance Allen, senior merchant of decorative holiday, said in a release. “Skelly,” the perennially-popular 12-foot skeleton, is also back, complete with a “haunted” accessory kit that includes a wig.

Costco Wholesale Corp. has received approval for the construction of a 160,000-square-foot store in the west end of Regina, its second in Saskatchewan’s capital. Costco’s other Regina location, near the Sakimay First Nation reserve, opened its doors in 2018, replacing a smaller store dating to 1993.

Loblaw Cos. Ltd. is rolling out a new concept of value-based “no name” stores this month in three Ontario markets: Windsor, St. Catharines, and Brockville. The no name store will have lower operating costs and carry only a targeted assortment of products. The company plans to keep costs down by shortening hours, offering limited selection, no refrigeration, and reduced logistical costs.

Luxury banner Perigold, which falls under Wayfair Inc.’s brand portfolio, announced that it has plans to open its first physical retail store. The first opening is slated for 2025 in West Palm Beach, Fla., within the CityPlace shopping centre. The store’s total square footage will be nearly 30,000 over two floors.

Severe storms across southern Ontario damaged a Home Hardware in Ayr, Ont., outside Cambridge, late last month. Environment Canada issued a region-wide tornado warning that morning and staff were quick to respond, moving customers to safety. According to a statement from Waterloo Regional Police, the roof of the store was partially torn off. The business was evacuated, and all employees and customers were able to exit safely. Earlier in August, the Home Hardware store in Jasper, Alta., was destroyed by the wildfires in that area.

PrimeSource Brands has acquired Cobra Anchors, the Montreal-based fastener maker. Cobra has over 1,000 SKUs of hollow-wall, universal, and masonry anchors. The transaction is PrimeSource’s fifth acquisition since partnering with investment firm Clearlake Capital Group in December 2020. Financial terms were not disclosed. PrimeSource Brands owns a portfolio of branded products including Grip-Rite, Pro-Twist, Top Knobs, Hardware Resources, Atlas Homewares, North Pointe Cabinets, and Wolf Home Products.

Retail sales declined by 0.3 percent in June from the previous month, dragged by lower automotive sales. LBM and garden sales however bucked the trend with a 0.6 percent increase. Seven provinces logged declines, with the steepest in Ontario. Core retail sales, which exclude fuel and automotive categories, rose by 0.4 percent. (StatCan)

The annual rate of inflation fell to 2.5 percent in July, signalling a possible interest rate cut in September. The Consumer Price Index (CPI) rose 2.5 percent on a year-over-year basis, the slowest rate of increase since March 2021, and down from a 2.7 percent gain in June 2024. On a monthly basis, the CPI rose 0.4 percent in July, after falling 0.1 percent in June. (StatCan)

NOTED

The latest instalment of our podcast series What’s In Store is live! In this episode, Hardlines president Michael McLarney takes us behind the scenes of the creation of the 2024 Hardlines Retail Report. Find out how we gather our data, why it matters, and what we forecast for the coming year in the industry. Sign up now to get updates about the latest free podcasts in your inbox!

The latest addition to Castle Building Centres Group is a brand-new company, but with a familiar face at the helm. Encore Drywall Material Supplies, which is weeks away from being operational from two locations, has joined Castle’s commercial division, Commercial Building Supply (CBS).

Doug Skrepnek is a partner at Encore Drywall, aptly named as he was formerly the head of Watson Building Supplies in Vaughan, Ont., and CEO of the buying group it belonged to, WSB Titan. WSB Titan was sold to Georgia-based Gypsum Management & Supply (GMS) in 2018.

From there, Skrepnek also got involved in other businesses, including Drain-Tite Industries, which provides waterproofing, insulation products, and installation services for residential and commercial construction.

But Drain-Tite has, Skrepnek notes, the same customers as the GSD world he comes from.

The Canadian landscape has seen the entry of major U.S. dealers over the past decade. GMS and the Titan acquisition was only the beginning of an ongoing growth strategy for GMS that has since included dealers like Rigney Building Supplies in Kingston, Ont., Jawl Lumber on Vancouver Island, and most recently, Yvon Building Supply Inc. That company, which sells drywall, insulation, steel, and ceilings from seven locations across Ontario is a major GSD in that province—with some $200 million in revenues.

Another major U.S. company is Foundation Building Materials, based in Santa Ana, Calif., with more than 300 locations, including almost 30 in Canada. FBM made its entry into Canada even earlier than GMS when it purchased Calgary-based Allroc from Superior Plus, a Toronto chemical firm, in 2016.

With this kind of GSD consolidation occurring, Skrepnek feels there is room for a GSD that can maintain a personal connection with its customers, something he feels can be lost in a bigger company. In a letter to vendors, he laid out his vision: “We believe that the importance of relationships both up and down the channel has been somewhat lost and diluted to a more transactional exchange and our mission is to go back to the days where loyalty was long-lasting, and a commitment meant everything.”

Speaking with Hardlines, Skrepnek added to that: “More dealers are no longer owner-operated businesses and, truth be told, I feel a lot of that personal contact has been lost.”

Skrepnek says the decision was made recently—and quickly—to re-enter the drywall business. With his business partners, he acquired one location from CSR Building Supplies, a dealer with two outlets. The outlet in Concord, Ont., immediately north of Toronto, was purchased while CSR’s other location, in Barrie, Ont., along with its tool business, were not part of the deal. In addition, Skrepnek is working on a greenfield location in Trenton that will be open next month.

CSR was already a Castle member, and Skrepnek saw the value of remaining with that group. In fact, Castle president and CEO Ken Jenkins worked with Skrepnek at CGC before Jenkins left to become president of Castle in 2007, so they have a connection that goes back decades.

Skrepnek has a strong sense that his roots in the industry will give him the credibility and connections to make a fresh start. Recently, he spent a week buying up nine new trucks to support the two stores. “I want to make sure we have a fleet that can handle our projected growth,” he says.

He expects the partnership with Castle to provide good growth for that group’s GSD business through CBS—and hints at further growth across the country over the next two years. “I’m excited about the future and we’ll be open in 30 days,” Skrepnek adds.

Ken Jenkins recognizes the growth opportunities for commercial dealers as Canada increases its commitment to more housing over the next five years. The president and CEO of Castle Building Centres Group recognizes that the strength of his organization still rests firmly with the group’s traditional building supply dealers. But the addition of a new member to Castle’s GSD side, Commercial Building Supply, represents a tremendous growth opportunity for that division.

That potential is underscored by the fact that the new addition, Encore Drywall Material Supplies, is owned by Doug Skrepnek (see this week’s top story.—your well-read Editor). Skrepnek looms large in the GSD world as the former owner of Watson Building Supplies and CEO of its then-parent group, WSB Titan.

Jenkins points out that the role of the traditional LBM dealer is changing in the big urban centres. In those major markets, commercial construction relies more and more on specialized suppliers, dealers that offer narrow assortments of products such as roofing, drywall, and foundation products. He says there is a growing distinction between traditional yards and GSDs. “They are two different businesses.”

However, he sees a future for both models in parallel. “Castle remains committed to bricks-and-mortar LBM generalists, but the commercial piece allows us penetration into the large urban markets,” he says. “There’s significant volume to be had in those larger urban markets.”

Jenkins expects the commercial industry to experience even more consolidation in the future, which means Castle is well-positioned for growth on the CBS side as Canada ramps up for increased housing in the coming years. And the deal with Encore Drywall Material Supplies fits right into that strategy.

“There’s a win-win opportunity for Castle and Encore down the road,” says Skrepnek.

Canadian Tire Corp. reported Q2 earnings of $198.8 million, or $3.56 per diluted share, up from $99.4 million or ($1.76) a year earlier. Revenues fell to $4.13 billion, from $4.26 billion in the previous Q2. Comp sales declined by 4.6 percent, down 5.6 percent at the Canadian Tire banner and 0.8 percent at SportChek.

Consolidated comparable sales were down 4.6 percent. The consumer demand environment remained challenging, compounded by cold and wet weather, contributing to sales declines in all regions outside Atlantic Canada. Canadian Tire Retail (CTR) sales were down 5.5 percent and comparable sales were down 5.6 percent, compared to growth of 0.1 percent in Q2 2023. The top performers for CTR were automotive maintenance, auto parts, and toys. The retailer continues to push its private labels, with owned brands now accounting for 39 percent of product sales.

Greg Hicks, president & CEO of Canadian Tire Corp., acknowledged the pressure on Canadian consumers in a call to analysts last week. However, that pressure differs by region and demographic. Customers in the country’s largest cities (Vancouver, Edmonton, Calgary, Toronto, Ottawa, and Montreal) “have tightened their belts considerably, more than most other Canadians.” Those cities, which represent about one-third of Canadian Tire’s total sales, have, said Hicks, “trailed the rest of the country by about four percent in the first half of the year.”

The company continues to make gains with its loyalty customers, those who shop online and in-store with Canadian Tire’s Triangle points card. Loyalty sales outperformed non-loyalty sales, with record penetration rates at each banner, the company reported. Incremental Triangle promotions across CTC banners and its partnership with Petro-Canada partnership were competitive differentiators.

“I’m also pleased to report that more than a quarter of a million Canadians have now linked their Petro-Points and Triangle Rewards accounts,” said Hicks. “More importantly, these linked members spent nine percent more across our retail businesses than in Q2 of last year, demonstrating the value for everyday needs that this partnership provides.”

During the quarter, Canadian Tire continued its efforts to integrate its customers’ shopping experience through its “Better Connected” strategy. Efficiencies included more in-store technology to improve access to assortments. That was done by upgrading or replacing another 18 Canadian Tire Retail stores.

The Home Depot’s latest sales figures were boosted by its acquisition this year of SRS Distribution. The contractor supplier garnered about $1.3 billion in revenues for North America’s largest home improvement retailer. Still, the company is taking a cautious tone at a time when discretionary spending is softening.

Home Depot’s sales for the second quarter came to $43.18 billion, up 0.6 percent from the comparable period of fiscal 2023 but below expectations of $43.79 billion. Adjusted earnings of $4.67 per share exceeded the estimated $4.52 per share but fell short of the previous Q2’s $4.65.

Same-store sales fell by a greater than expected 3.3 percent. In the U.S., they were down by 3.6 percent. Still, Home Depot performed better than it had in the previous quarter, when higher borrowing costs and a tardy spring contributed to a 2.3 percent downturn in sales.

“Pros outperformed the DIY customer, but both were negative for the quarter,” Billy Bastek, executive vice-president of merchandising, noted on an earnings call. “We saw positive growth with pros who engaged in our Pro Xtra program, deliveries to the jobsite, and our B2B website.”

“In paint, we continue to see the benefits of the investments we are making around our products and our fulfilment options, including our in-store service and jobsite delivery capabilities, with the pro who paints driving continued share gains in the quarter.”

The strength of HD Supply, another subsidiary, in maintenance, repair, and operations has complemented Home Depot’s appeal to the contractor customer, solidifying its position in that market. Richard McPhail, executive vice-president and CFO, told analysts that “HD Supply has had an exceptional track record as of late, even penetrating through to generate positive sales growth in the second quarter.”

PEOPLE ON THE MOVE

Hardware + Building Supply Dealer magazine has unveiled its list of the industry’s Top Women of 2024. Among them is Canada’s own Sarah Hounslow, president of Burlington Merchandising & Fixtures. Along with the other chosen professionals, she will be honoured at the fourth annual Top Women in Hardware & Building Supply event in Chicago on Nov. 20 and 21.

Western Forest Products has promoted Glen Nontell to the role of CFO, effective Aug. 1. He has been with the firm since 2018, most recently as VP of corporate development. Outgoing CFO Stephen Williams will stay on as EVP through the end of this calendar year and in an advisory capacity to the end of 2026.

DID YOU KNOW…?

… that the latest edition of Hardlines Dealer News has hit inboxes? In this issue, we explore how retailers responded to the wildfires near Jasper, Alta.; a B.C. store gaining attention as a “living museum;” and a Toronto big box’s furniture store-within-a-store. Hardlines Dealer News is monthly and it’s free: click here to subscribe now!

RETAILER NEWS

RONA inc. has added AMS Building Centre in British Columbia’s Haida Gwaii to its network of independent affiliates. The business has served the archipelago formerly known as the Queen Charlotte Islands for nearly 40 years and is currently owned by Mark Goetzinger. The store’s retail space totals 5,000 square feet and is complemented by a 2.5-acre lumber yard. As part of the banner conversion, it will be remerchandised to offer 350 new products.

RONA inc. celebrated the grand opening of the RONA+ Waterdown store in the Dundas district of Hamilton, Ont. The conversion of the former RONA Home & Garden store was originally announced in May. The new features include stores-within-the-store for the DeWalt and Bouclair brands. Eleven RONA+ stores in the province have adopted the store-within-a-store model in celebration of the banner’s one-year anniversary. The conversion of this store is another step towards RONA’s goal of standardizing its big box stores under one cohesive banner.

Flexiti Financial Inc., a provider of POS consumer financing for retailers, has partnered with RONA inc. to become its primary financing provider for in-store purchases. Customers can avail themselves of Flexiti financing at any corporate RONA or RONA+ location and at participating RONA affiliate dealers. They can use an existing FlexitiCard or apply for a new one on the spot.

AD reports that member sales in the first six months of 2024 increased by 7.0 percent to a record US$40.4 billion. Same-store sales increased by 4.0 percent in the U.S. and 1.0 percent in Canada. Member purchases from AD suppliers grew 4.0 percent to $10.1 billion.

W.W. Grainger reports its Q2 earnings were $649 million, down 1.8 percent from a year earlier. Adjusted for one-time restructuring costs, earnings edged up 0.6 percent to $665 million. The industrial supplies distributor’s sales for the quarter rose by 3.1 percent to $4.31 billion.

Red Apple Stores has taken over four The Bargain! Shop locations and converted them to the Red Apple banner. The new stores are in Wynyard and Rosetown, Sask.; Oliver, B.C.; and Timmins, Ont. They will have grand openings on Aug. 23. Red Apple is a Mississauga, Ont.-based retail chain with 143 general merchandise stores, all located in smaller markets across the country. Earlier this month, the retailer opened a store in Thunder Bay, Ont., in a former The Bargain! Shop location.

Menards is a top performer among U.S. home improvement retailers, according to a new report by Market Force Information. The banner excels in value for dollar, scoring 58.1 percent compared to the 39.8 percent average. Key decision drivers include convenience, value, and positive experiences. Menards leads in overall brand satisfaction, cleanliness, and merchandise variety, and captures 77 percent of customers’ next 10 purchases, outperforming Lowe’s and Home Depot.

Taiga Building Products reported second-quarter sales of $427.8 million, a decline of $19.1 million or 4.0 percent from $446.9 million a year earlier. Net earnings fell to $13.9 million, from $17.0 million in the previous Q2. Sales for the first half of the fiscal year amounted to $821.5 million, compared with $855.4 million in the comparable period last year, while profits slipped to $26.7 million from $30.5 million.

Weyerhaeuser Co.’s Q2 profits fell to US$173 million, down from $230 million a year earlier. Revenues of $1.94 billion were down by 3.0 percent. The Seattle-based lumber firm also announced that during the quarter it acquired 84,300 acres of timberland in Alabama for $244 million.

Western Forest Products Inc. reported a Q2 loss of $5.7 million, narrowing the $20.7 million loss it posted a year earlier. Revenues of $309.5 million were up from $276 million during the comparable period of last year.

WernerCo will now be called ProDriven Global Brands. The company manufactures and distributes construction equipment, fall protection equipment, and aluminum and fibreglass ladders.

Stanley Black & Decker reported a Q2 loss of $11.2 million, or $0.07 per share, compared to earnings of $177.5 million a year earlier. Adjusted for one-time costs, earnings amounted to $1.09 per share. Total revenues of $4.02 billion were up from $4.16 billion in the comparable period of 2023.

The total value of building permits in Canada fell 13.9 percent to $9.9 billion in June. Declines were reported in 11 provinces and territories, and in both residential and non-residential sectors. The total value of residential permits decreased 11.5 percent to $6.5 billion. Construction intentions in single-family homes, however, rose by 4.0 percent to $2.6 billion. (StatCan)

NOTED

The number of available workers in construction trades is at an all-time high, but there aren’t enough projects to keep them employed, the Financial Post reports. Canada Mortgage and Housing Corp. recently noted that even with “a record high 650,000 construction workers” last year, the country saw just 240,267 new homes built. That specific data turns on its head what until recently had been conventional wisdom: that a shortage of skilled workers was limiting the pace of construction. Observers contend, however, that there is indeed a shortage of skilled trades on residential construction sites and that the data is misleading.

This is a big year for our annual Hardlines Conference. This year’s event is being held at one of Canada’s outstanding locations, Fairmont Le Manoir Richelieu, in the Charlevoix region of Quebec, from Oct. 22 to 23.

This week, we shine the spotlight on two more retail leaders who will take to the Hardlines Conference stage this fall …

Alexandre Lefebvre is the CEO of the giant Quebec-based retail and wholesale organization BMR Group. Lefebvre has been involved in the construction and renovation industry for many years. Very early in his career, he joined the family business, Lefebvre & Benoit, which dates back nearly 60 years and is a true leader in the commercial building materials industry. In 2012, he became president and nine years later he was appointed CEO of BMR Group as well as executive vice-president of its parent company, Sollio Cooperative Group, previously La Coop fédérée.

A seasoned manager known for his passion, leadership, and commitment to the community, Lefebvre sits on the board of the Independent Lumber Dealers Co-operative, a buying group that represents sales of over $7 billion. He was also a member of the board of governors of the Conseil du patronat du Québec (CPQ) and was honoured as one of Canada’s Top 40 Under 40 in 2017.

Jason Tasse is the president and COO of Lee Valley Tools, a family-owned Canadian business that has been serving the needs of woodworkers and gardeners since 1978. It’s a niche retailer, but an important one that has led the way in retail and online innovation for many years.

Founded on the guiding principles of customer-centricity, integrity, and treating the customer as a friend, Lee Valley Tools has earned its reputation as retail’s ethical capitalist. Lee Valley Tools has been recognized as one of Canada’s best-managed firms, top-ranking for in-store experience, and a leader in job creation for both manufacturing and retail.

Tasse graduated from Queen’s University’s MBA program and the Stagen Leadership Academy. He has spent three decades as a key contributor in shaping both culture and strategy at Lee Valley Tools, including shaping the company’s successful digital and succession transformations. His company’s story is one you won’t want to miss!

If you’ve never been to the Hardlines Conference, make this the year you join us. As the key annual gathering point for top retail executives, leading dealers, major vendors, it will provide tremendous networking and career opportunities.

IMPORTANT NOTE: As a Premium Member (thanks to your subscription to this newsletter), you have front-of-the-line access to this year’s conference and registration that’s 20 percent off the regular price. For more information and to reserve your spot, click here.

RONA inc. continues its support of its affiliate dealers as they expand their own businesses through acquisition. Two major deals in recent days reflect that support.

RONA inc. has announced that its affiliate dealer, Doidge Building Centres Ltd., has acquired two stores in the Ottawa. region Located in Carp and Woodlawn, rural villages within the city’s limits, the stores, under the Deka name, will be converted to RONA’s colours.

It’s the first foray into the National Capital Region for Doidge’s network of RONA stores, which will now number 12. Former owner James Roy (pictured right) will stay on as a shareholder partner in the business. Andrew Doidge (left), CEO and president of Doidge Building Centres, said in a release, “James built such an incredible business and is well respected among his community. We are very lucky to continue to build this business together.”

This acquisition represents a major step for the group, historically centred in south-central and southwestern Ontario, toward its objective to grow its footprint across the province. With their hardware selection and lumberyards, the Carp and Woodlawn locations are equipped to deal with both DIY and pro customers. The new ownership also plans on undertaking renovations at the newly-acquired stores.

“As a family-owned business our goal is always to work closely with local communities and keep those ties with the local population to support them in every stage of their home improvement and renovation projects,” said Doidge.

The Doidge acquisition follows on the heels of a similar deal by two other RONA affiliates a week earlier. A partner deal between Coop Embrun and Groupe Matériaux Godin inc. has resulted in those dealers investing equally in the acquisition of the RONA store in Oka, Que. Both companies are joining forces with RONA to ensure the Oka location remains viable after serving the community for nearly 70 years.

With this acquisition, Groupe Matériaux Godin now owns five RONA affiliated stores, and Coop Embrun counts two RONA stores.

Cloverdale Paint Inc., headquartered in Surrey, B.C., has made two announcements with regard to its industrial coatings business, one that expands its specialty coatings offerings, the other a range of appointments to support the increased industrial focus.

Cloverdale has forged an exclusive distribution agreement with Tnemec Co., a manufacturer of heavy-duty industrial coatings based out of Kansas City, Mo. Founded in 1921, Tnemec offers a full range of protective coating products, with facilities in North Kansas City, Mo.; Baltimore, Md.; Garland, Texas; and in Panama City and Hollywood, Fla., plus operations in Shanghai.

Cloverdale will have exclusive distribution rights for the western provinces, Yukon, and the Northwest Territories.

Cloverdale Paint boasts that it’s the largest family-owned coatings company in North America. Both directly and through a Portland, Ore.-based subsidiary called Rodda Paint, Cloverdale has manufacturing plants in Surrey (pictured), Calgary, Montreal, and Winnipeg, as well as London, Oakville, and Mississauga, Ont. The company does a big business in architectural and industrial coatings and sells through 139 corporate outlets and over 250 independent dealers throughout Canada and the U.S. Pacific Northwest.

As Cloverdale expands its capability in heavy-duty industrial coatings for petrochemical, pipeline, water treatment, and water storage segments, it has added to its team to support that expansion. Norm Walline has been named industrial sales manager. Shawn Tripp and Mike Johnson will join the company’s existing industrial coatings national sales team as reps.

“We are investing in our core capabilities to serve these key industrial segments and we are pleased to bring broader solutions and expertise to our customers,” says Darrin Noble, president and COO of Cloverdale Paint. “We are excited to be working with Norm Walline and his talented team.”

Ace Hardware is celebrating 100 years in business in 2024, and in the first half of the year, has already opened over 100 new stores, including its 5,000th location in the U.S. But the giant retail group is not done yet. It plans to open more than 200 new stores by the end of the year.

In the first six months of the year, Ace Hardware activated 111 new stores. One of these new stores, Fixit Ace Hardware in Roswell, Georgia, is also recognized as Ace’s 5,000th domestic location. Globally, Ace has opened more than 900 new stores in the past five years, including 203 last year.

Like many retail groups in Canada, Ace’s new store growth has been fueled by existing retailers opening additional locations, competitor stores converting to Ace and new investors opening their first Ace Hardware store.

However, its presence in Canada, where it has about 72 stores carrying the Ace banner, has been disrupted by the news that the Ace licensee for Canada, Peavey Industries, is terminating its agreement effective Dec. 31. Peavey will continue to support the Ace dealers until then, when the management of Ace in Canada is reportedly being handed back to Ace Hardware and Ace International, which manages Ace’s international dealer services. However, Ace Hardware has not yet responded to requests for more information or to confirm this.

Ace plans to celebrate its centenary milestone during its Fall Convention, coming up Aug. 8 to 10 in Chicago.

PEOPLE ON THE MOVE

Doug Graham, vice-president of e-commerce and marketing at Home Depot Canada, has been named chair of The Home Depot Canada Foundation’s board of directors. He’s been with Home Depot Canada since 2010 and has been on the foundation’s board for six years. He replaces Pamela O’Rourke, Home Depot Canada’s former vice-president of merchandising, who left the company early in June.

At Canfor Corp., CEO and president Don Kayne will step down at year’s end. Susan Yurkovich, currently SVP of global business development, has been named as his successor, effective Jan. 1, 2025. Kayne will stay with the company through the end of next year in an advisory role. Yurkovich is a past president and CEO of the B.C. Council of Forest Industries.

DID YOU KNOW…?

… that the latest instalment of our podcast series What’s In Store is now live? In this episode, we meet Jim McConnery, a tax and estate practitioner at accounting firm Welch LLP. He talks about new rules around the Capital Gains Tax, its affect on independent business, and how to minimize your tax burden when it’s time to sell. Sign up now to get updates about the latest free podcasts in your inbox!

RETAILER NEWS

Walmart Canada has introduced hydrogen fuel cell electric semi-trucks to its fleet, becoming the first major retailer in Canada to do so. Operating with zero tailpipe emissions, the Nikola Hydrogen Fuel Cell EV Class 8 tractor has a range of about 800 km and on average can avoid 97 tonnes of carbon dioxide tailpipe emissions annually.
Quebec’s construction holiday continues through to Aug. 5. It will impact 28 percent of the province’s workforce, though exceptions are built in for work such as civil engineering and emergency projects. AQMAT president Richard Darveau told Montreal’s 98.5FM that hardware sales will nevertheless be “pretty good” during the period. Many homeowners, he explained, will use part of their vacation time to pursue renovations.

Loblaw Cos. Ltd. reported second-quarter results that included a 1.5 percent increase in revenue to $13.95 billion. Operating income fell by 6.4 percent to $868 million, as consumers continued to search for lower-priced products amidst persistent inflation and higher prices, which resulted in stronger sales through the company’s discount banners, Maxi and No Frills. Retail segment sales were $13.66 billion, an increase of 1.4 percent. The company said Q2 results “reflected strong operational performance and the impact of the settlement of the bread price-fixing class actions commenced in 2017, which negatively impacted net earnings by $121 million.” E-commerce sales increased by 14.2 percent.

Sleep Country Canada has reached a deal to be purchased by a subsidiary of Fairfax Financial Holdings for about $1.7 billion. The terms of the deal leave Sleep Country free to accept a better offer, but Fairfax has the opportunity to match it. It also receives a $36.5 million termination fee if Sleep Country goes with another buyer. Barring such a development, the mattress retailer expects the transaction to close during Q4 of 2024.

U.S. farm and hardware retailer Tractor Supply reported a 1.5 percent increase in net sales for the second quarter of 2024 to US$4.25 billion. The increase was driven by new store openings, and partially offset by a 1.5 percent decline in comparable store sales. Gross profit increased 2.7 percent to US$1.56 billion.

SUPPLIER NEWS

West Fraser Timber Co. Ltd. reported second-quarter sales of US$1.71 billion and earnings of $105 million. Second-quarter adjusted EBITDA was US$272 million, compared with US$200 million in the first quarter of 2024.

A recent KPMG survey reveals that most Canadian companies are feeling the financial impact of climate change, prompting them to climate-proof their operations. Over 90 percent of business leaders believe extreme weather is now the new normal. The survey of 350 leaders found that 56 percent experienced reduced profitability and 49 percent faced rising costs due to last year’s weather events.

“Once again, our North American OSB, plywood, and other engineered wood products demonstrated strong results and the value of our product diversification strategy. Q2 2024 benefited from relative strength in new home construction demand that carried over from the prior quarter. Conversely, we continued to experience demand softness in our North American lumber business, particularly for SYP [southern yellow pine] lumber with its greater relative exposure to repair and remodelling applications.”
—Sean McLaren, president and CEO of West Fraser Timber, on the company’s latest quarterly results, which reflected near-term demand uncertainty across some of the company’s end-markets.

If you’re thinking of heading to Quebec this fall for the Hardlines Conference (and believe me, you should be planning for this one!—your ever-enthusiastic Editor), you will learn from (and network with) a truly unique lineup of retail experts. This year’s event, our 28th annual conference, is being held at one of Canada’s outstanding locations, the Fairmont Le Manoir Richelieu, in the Charlevoix region of Quebec, Oct. 22 to 23.

Here are some details about just two of the people who will take to the podium this fall …

Michelle Chouinard-Kenney is the CEO of Gibson Building Supplies, a chain of yards throughout southern and central Ontario that sells roofing and related materials. Chouinard-Kenney has been responsible for running all facets of the business since 2004. Prior to taking on that role, she was the residential business manager for Chouinard Brothers for almost a decade. She will have an incredible story about driving this business amidst recent headwinds.

David Collas is the CEO of Les Mousquetaires, a buying and marketing organization in Europe. Collas is the head of one of the group’s members, ITM Equipment de La Maison France, a true retail powerhouse. There, he oversees a retail home improvement organization whose banners include Bricomarché, Bricorama, and Brico Cash. Together these stores represent $5 billion in sales with more than 15,000 employees. His background with ITM includes overseeing buying, imports, and quality control.

Other superb speakers are:

• Alain Ménard, vice-president at RONA inc.
• Alexandre Lefebvre, president and CEO of BMR Group
• Jason Tasse, president and CEO of Lee Valley Tools
• Helene Loberg, sustainability manager for IKEA Canada
• Richard Darveau, president of AQMAT
• Pierre Battah, nationally recognized HR advisor and workplace expert
• Sherri Amos, director of dealer support, Home Hardware Stores Ltd.
• Peter Norman, vice-president and chief economist at Altus Group

The Hardlines Conference is a key annual gathering point for top retail executives, leading dealers, major vendors, and, well, just plain fun.

IMPORTANT NOTE: As a Premium Member (thanks to your subscription to this newsletter), you have front-of-the-line access to this year’s conference and registration that’s 20 percent off the regular price. For more information and to reserve your spot, click here.

After the recent news that Peavey Industries will terminate its licence for the Ace brand in Canada at the end of the year, the team at Peavey intends to double down on its efforts to make its own store network stand out.

That network consists of almost 90 Peavey Mart farm and hardware stores, along with three MainStreet Hardware locations and three corporate Ace stores. Doug Anderson, CEO of Red Deer-based Peavey Industries, says having to drop the Ace Hardware business was a big disappointment for him and his company. He expects the Ace banner to remain in good hands—Ace International will reportedly take over at the end of this year, though that company has yet to confirm the claim (see last week’s issue of Hardlines Weekly Report for more in-depth conversation with Anderson—Editor).

Now, he says, without Ace—the agreement ends Dec. 31—his company can focus more on its own stores, while taking some lessons from the Ace experience to the corporate network. “That is our base competency,” he says of the corporate stores, “and being able to focus on where we know we can win is a pretty important part of this whole [Ace] decision.” Anderson intends to grow the store base into a truly national chain. “The future and the possibilities for the Peavey brand are unwavering and we still see tremendous potential for growth and brand awareness in other parts of the country.”

Still, he doesn’t hesitate to share how much inspiration he draws from having worked with independents in small communities.

“The entrepreneurial spirit is certainly something that I admire tremendously,” he says. “That’s something we want to make sure that we never lose at Peavey, as well. [Independents’] ability to find unique ways to serve the needs of their customers is something that really allows them to stand out. And that’s certainly a very strong takeaway.”

Can those lessons be applied to Peavey’s own small-town concept, MainStreet Hardware?

“One of the things we pride ourselves on is that we love the idea of supporting small-town, rural Canada. We’ll always be open to finding ways to do that, so we will not close the door on more MainStreets in the future. We’ve been very successful with our small-town hardware concept and feel there’s opportunity there—we just want to be smart about it.”

In conclusion, he turns back to the Ace dealers he and his team worked with for more than four years. “I’m grateful for the opportunity to learn from many of them.”

The option to make a purchase online and then spread payments out over time has emerged quickly and is available from an ever-growing list of retailers, including RONA inc.

That retailer has made a deal with a new partner to manage its online payment services and offer buy-now-pay-later (BNPL) options. Affirm is a San Francisco-based payment network and a publicly-traded company founded by PayPal co-founder Max Levchin in 2012. Affirm Canada Holdings Ltd. is based in Toronto.

Affirm announced its partnership with RONA on July 11.

The new platform means eligible RONA shoppers can use Affirm to pay for their online purchases in bi-weekly or monthly payments for terms of up to 12 months, with no hidden or late fees. Annual percentage rates can vary from no interest up to 31.99 percent, depending on provincial regulations. Payment options through Affirm Canada are subject to an eligibility check and depend on the purchase amount. RONA joins Affirm’s network of 292,000 retailers, which includes partnerships in Canada with Apple—which signed on last month—along with Amazon, Samsung, Hudson’s Bay, Browns Shoes, and CheapOair.

A release from Affirm states that “consumers are shown the total cost of their purchase and will never pay more than they agree to upfront, as Affirm does not charge any late or hidden fees.”

“Many Canadians now prefer to use online solutions for making their purchases and we wanted to offer them the same payment flexibility we offer customers who shop our stores through other flexible payment solutions, which is exactly what Affirm allows us to do,” said Adam Powell, chief digital officer at RONA inc., noting that consumer shopping habits have evolved.

“We’re thrilled to offer greater choice at checkout to help our customers bring their projects to life.”

On June 25, new Capital Gains Tax rules were put in place by Ottawa. Fundamentally, the 50 percent tax-free status on capital gains was replaced by tax-free status on only one-third of those gains. At the same time, the lifetime capital gains exemption was increased from $1.0 million to $1.25 million.

What is a capital gain? It is a gain from the sale of a business, a property (not including a principal residence), or shares or any other asset.

The reason that farmers, doctors, and business groups are upset about the change is that the portion not included in the capital gains tax-free percentage is considered income—and is taxed at your marginal rate. That means that those dealers who have planned to sell their stores to fund their retirements are going to be taxed at a much higher rate than they were before.

Yet the federal government has claimed that only a fraction of a percent of Canadians will be affected—and they are the ultra-rich.

Not so, says Jim McConnery (pictured), partner at Welch LLP, a national accountancy firm in Ottawa, whom we interviewed extensively about the Capital Gains Tax rule changes for a Hardlines Podcast deploying on July 24. (Click here to sign up, then scroll down to see all of our podcasts. They’re free to everyone—your thrifty Editor)

“The government has indicated that the change only impacts the very wealthy, i.e., not many individuals will be impacted by the change. This is misleading because many people will hold their wealth in corporate entities and will be the impacted by the change,” McConnery said. “It is also the case that a person may not normally have capital gains in excess of $250,000.”

Yet dealers who sell their stores profitably will likely have gains well in excess of the increase in the lifetime Capital Gains Tax exemption, McConnery added.

(Learn more about how the new rules can affect your business. Listen to the podcast—it’s the latest in our “What’s in Store” series. Click here to sign up now.)

PEOPLE ON THE MOVE

TIMBER MART has announced the promotion of operations director Jeff Campbell to the position of VP of distribution, effective immediately. He succeeds John Morrissey, who plans to leave the company by the middle of next year “to pursue other career opportunities,” according to a release. Campbell will continue to be based out of TIMBER MART’s distribution centre in Langley, B.C., reporting directly to CEO and president Bernie Owens.

Christine Joannou has joined Snowmelting.ca as director of business development. She was most recently at Luxo Marbre, and her CV includes companies such as Maax Bath and Globe Union.

Castle Building Centres Group has announced the hiring of Scott Kaluzny as VP of finance, effective Sept. 3. He is currently concluding his role as CFO for Imperial Metal. Kaluzny is a graduate of the DeGroote School of Business at McMaster University and has his CPA designation.

Yvon Manny has been appointed director of sales for the Hearth Division of Powrmatic, a residential, commercial, and industrial supply distributor. A hardware industry veteran, Manny was most recently for Powrmatic’s DuraVent business, where he’d served as national retail sales manager for Canada.

DID YOU KNOW…?

… that Hardlines Inc. will add a new member to its family of trade magazines in October with the inaugural edition of its PRO DEALER magazine. Specializing in the information needs of GSDs, lumberyards that do mostly contractor sales, and dealers serving the ICI market in Canada, PRO DEALER will be a quarterly magazine in 2025. It will complement Hardlines Home Improvement Quarterly (HHIQ), our quarterly dealer magazine since 2000. Contact publisher David Chestnut for more information on being a part of this exciting new trade magazine: david@hardlines.ca.

RETAILER NEWS

Federated Cooperatives Ltd. announced last week that its corporate website, fcl.crs, and all local co-op websites, are back online following a “cyber incident.” On June 27, the company experienced significant system outages which affected much of their internal and customer-facing systems, including cardlock fuel locations. In response, the company shut down many of its systems as a precaution. In a statement, the company noted it will continue to provide updates on its social media platforms as it brings its systems back online.

The RONA Foundation, the philanthropic arm of RONA inc., will present $1 million in total to seven non-profits through its Build from the Heart program. This is the second instalment of the initiative, which was launched in May 2023. Build from the Heart focuses on victims of domestic violence and their children, low-income families, and people with disabilities or mental health issues.

A rezoning application for Lake Country Home Hardware in Kelowna, B.C., has been submitted to turn a portion of the property into rental housing. However, store general manager Madeline Melin said the store won’t be going anywhere anytime soon—even if council approves the application. The proposed housing development would be built on the back half of the property and would allow the store to remain open during construction.

U.S. customers are looking beyond hardware stores for their home improvement needs, according to market research firm TraQline. Over the past 10 years, Americans’ hardware spend on Amazon has tripled and continues to grow. Walmart has also benefited, to a lesser extent, from an increase in its share of revenues in the sector.

SUPPLIER NEWS

Richelieu Hardware reported Q2 sales of $481.4 million, up two percent and including $276.3 million in Canada and US$150.5 million in the United States. Net earnings totalled $23.4 million, a decline of 23.6 percent from a year earlier. During the quarter, Richelieu closed the acquisition of the main net assets of Allegheny Plywood, a distributor specializing in panels and decorative surfaces.

The annualized rate of housing starts fell by 9.0 percent to 241,672 units between May and June. The actual number of urban starts declined by 13.0 percent to 20,509 units in June compared to June 2023, though single-detached starts were flat. Rural starts were estimated at an annualized rate of 18,438 units. (CMHC)

The value of building permits issued by Canadian municipalities was $11.7 billion in May, down 12.2 percent from a record high of $13.4 billion in April. British Columbia led the national decline in May with a significant drop of 50.7 percent after experiencing a record high for the total value of building permits issued in April. The value of residential building permits fell 16.3 percent to $7.1 billion in May. (StatCan)

Housing starts in the U.S. rose by 3.0 percent in June to 1.35 million units. That followed a 4.6 percent decline in May. Building permits rose by 3.4 percent after falling by 2.8 percent in May. (U.S. Census Bureau)

The latest issue of Hardlines HR Advisor hit inboxes last week. In this edition, we explore how to protect workers from extreme temperatures, one big box’s support for its team during the pandemic, and the importance of active listening. HR Advisor is monthly and it’s free: click here to sign up today!

Until two weeks ago, the Ace banner in Canada had a home with Peavey Industries. But a range of unforeseen circumstances—including the arrival of Covid—plus the challenging nature of hardware wholesaling in general in this country, led Peavey to terminate the Ace licence.

“I think definitely there were a lot of headwinds that we didn’t anticipate when we first entered into this venture,” says Peavey CEO Doug Anderson (shown here at the 2022 Peavey trade show). But he stresses that his Red Deer, Alta.-based retail hardware company put a serious effort into the Ace venture. That included developing a wholesale hardware business to service the Ace stores.

But that business encountered plenty of headwinds, as well. “We spent a lot of time and money trying to navigate through them and we closed a lot of gaps,” he adds, suggesting that the Ace team at Peavey was able to make great strides in developing the Ace supply chain.

“The dedication of the Ace team in our company was exceptional and unwavering. They fought hard to make things work. From our admin team to customer service teams to territory managers, everyone wore the Ace brand with pride and were very dealer-focused and dealer-oriented. They should all be proud of the work they did.”

Those smaller independent Ace stores tend to thrive on providing a range of products that’s carefully aligned with the towns they serve. Fulfilling such diversified orders put stresses on the system from early on. Anderson and his team continued to work on improvements, then finally had to decide whether to continue, even after making big gains in setting up the Ace business.

Those gains included coping with the technology challenges of building an online portal, establishing connectivity with suppliers, invoicing processes, and managing supply chain disruptions and increased costs, especially around transport and products. Peavey had to build a whole new supply chain for Ace—and all during Covid. As all of this was being developed on behalf of the Ace dealers, Peavey had to do it in a way that was profitable. “We also had to have a productivity level that made sense for us.”

Peavey’s efforts paid off and its connection with the dealers stayed solid, at least for a while. “Our relationship with Peavey in the last year has been stronger than ever,” says Barry Eidt, co-owner of three Ace stores in southwestern Ontario. “But in the last few months supply started to become an issue,” he adds. However, he remains positive about the relationship. “I can’t say enough good things about Peavey and I really wish them well.”

When all the pieces did not end up coming together as intended, the decision was made to  terminate the Ace agreement and focus on Peavey’s own retail strategy and maintain the strength of the Peavey Mart and MainStreet banners.

Anderson admits with regret that this was a very tough decision, “especially given the great relations that were built with dealers over the past four years.”

Another dealer, who switched from Ace last year, believed the Ace Canada team had a tough challenge, but adds that all the people involved at Peavey were very well-intentioned and really great to work with.

Eidt, along with other dealers Hardlines spoke to, say that the Ace licence will be taken over by Ace International when Peavey officially exits at the end of the year. Canadian supply will come out of Ace’s U.S. distribution centres and there will be support from Ace’s headquarters in Chicago. (Ace Hardware and Ace International did not respond to multiple requests from Hardlines for information.) Eidt says he and the other Ace dealers will get more info sometime this month.

“It’s unlikely customers even knew we’ve been with Peavey for four-plus years, so the main thing I told my store managers is that I want to keep it ‘business as usual.’ We’ll continue getting information in the coming months that will solidify a decision for each dealer across Canada, but as of right now Ace isn’t going away.”

The adoption of the Ace portfolio was a good fit for Peavey Industries when it bought the Ace business from Lowe’s Canada (now RONA inc.) four years ago. Peavey was already focused on farm and hardware retail for smaller communities across the country. And the commitment to those communities by the Ace dealers is something that reflects the business values of Peavey.

But a big part of taking over the Ace licence and deciding to serve Canada’s independent Ace dealers involved creating a brand-new hardware wholesaling business. Peavey CEO Doug Anderson admits that proved to be a struggle. Shipping hardware in this country to small accounts poses a big challenge.

“The luxury Ace dealers have as independents—and the strength they have—is that they can tailor their product mix to their local communities. Where that gets challenging from a distribution perspective is that it’s hard to tailor the same level of responsiveness and reliability to all those dealers based on their regional preferences,” Anderson says. “That certainly is a challenge, for sure.”

Anderson commented on the challenges of supplying a varied product mix to a marketplace that is widespread and thinly populated, especially compared to markets like the U.S.

However, he was pleased with Ace International and worked closely with that group to meet the needs of the Canadian dealers. “We’ve had a very transparent relationship with Ace International throughout the four years and at no time did I feel there was any contention or lack of support to find a solution.”

That support extended even as Peavey began the process to exit the relationship, “trying to find the best solution and outcome—a disappointing outcome but trying to find the best solution,” Anderson says.

“I still believe in the strategy but the reality of where retail is at in Canada, where we feel we need to focus going forward, is in our corporate retail strategy.”

Anderson’s personal disappointment in the outcome is clear when speaking with him. And he recognizes that this latest change is yet another distraction for the Ace dealers, one that Peavey will support them through. “We stand by our commitments 100 percent and we will stand by the dealers through the entire transition.”

The combined international association for home improvement retailers, EDRA/GHIN, based in Cologne, Germany, established a task force last year to tackle carbon emissions with its member companies. It partnered with Ricardo, an international strategic, environmental, and engineering consultancy, to help the task force—and the industry—develop its goals.

The task force has worked hard to develop a set of recommendations on how carbon data is treated through the supply chain, sharing best practices in both the reporting and refining the home improvement sector’s progress in reducing Scope 3 emissions (those not resulting from a company’s own activities).

Now, European retailer and wholesaler OBI, one of the founding members of the EDRA/GHIN Scope 3 Taskforce, has shared its commitment to both the Scope 3 Taskforce Targets and Science Based Targets Initiative (SBTi is considered the gold standard in terms of decarbonization), which involves setting decarbonization targets within the next two years. For retailers, the majority of Scope 3 emissions stem from purchased goods and services and the use of sold products.

OBI aims to meet hose targets working through SBTi, as well as collaborating with suppliers to set targets themselves within five years.

Two other major home improvement retailers, Kesko and Kingfisher, have already set near-term targets for carbon reduction and had these approved by the SBTi. Three other association members, Intergamma, Lowe’s Cos., and Maxeda DIY Group, have also committed to setting science-based targets.

“Only through working together can we begin to tackle the accelerated climate change we are seeing across our planet,” said John Herbert, general secretary of EDRA/GHIN. “This is a call to action to the entire industry to come together now and engage, challenge, and inspire one-another.”

(Any retailer or supplier in the home improvement industry who is interested in joining the EDRA/GHIN Scope 3 Taskforces should reach out to info@edra-ghin.org.)

At the latest annual general meeting of the Atlantic Building Supply Dealers Association, Tanya Hanson Rocca of Roblynn Home Hardware Building Centre in Oromocto, N.B., was appointed as the new chair of the board of directors. She is only the second female chairperson in the association’s history. She replaces Peter Merrill of KM Agency, who remains on the board for another year as past chair. Merrill was the first associate member to be named chair of the board.

At the North American Hardware and Paint Association, Scott Wright has been promoted to the role of NHPA’s executive director of content development and executive editor for its media brands. Kim Peffley, who has been serving as NHPA’s director of organizational development and consulting, steps into a new position as executive director of educational development and consulting. Katie McHone-Jones, who most recently served as NHPA’s director of member services and events, will move into the role of executive director of retail engagement and events. Additionally, with the hiring of Greg Cole as NHPA’s national sales manager, Whitney Mancuso has been named executive director of marketing and industry relations. Lindsey Thompson has been promoted to the role of managing editor for the association’s media properties.

DID YOU KNOW…?

… that the latest edition of Hardlines Dealer News has hit subscriber inboxes? In this issue, we look at one dealer’s musical tribute to youth mental health, why merchandising isn’t just for the front end, and what to know about changes to the rules around Capital Gains Tax. Hardlines Dealer News is monthly and it’s free: click here to subscribe now!

RETAILER NEWS

Princess Auto has made a deal with the Canadian Football League that names the hardware and automotive retailer as the CFL’s official provider of tools and equipment. “This partnership represents the next step for the league and Princess Auto as they come together to provide unique experiences for their biggest fans,” the CFL said in a release. The partnership covers the entire regular season, the Grey Cup playoffs and the 111th Grey Cup game.

Big Box Outlet Store has opened its 19th location, this time in Sherwood Park, Alta. The Abbotsford, B.C.-based retailer’s offerings include electronics, apparel, hardware, appliances, furniture, and groceries. A 20th store, under construction in Lethbridge, Alta., is set to open later this summer.

Housewares are appearing on the shelves of Toys “‘R” Us stores bearing labels from the Rooms + Spaces banner. That chain got its start last year when the toy seller’s parent, Putman Investments, acquired a collection of properties vacated in the bankruptcy of Bed Bath & Beyond. In the past year, according to the Canadian Press, its footprint has shrunk from 24 standalone stores to just two, but Toys “R” Us outlets are carrying its merchandise in categories ranging from bedding to stemware.

The city of Wilsonville, Ore., has rejected Home Depot’s application to move into a former electronics store, accusing the retailer of bribery and intimidation. Home Depot in turn alleges the city’s decision did not comply with its own regulations and state law. It will appeal to the Oregon Land Use Board of Appeals and seek an enforcement order with the state’s Land Conservation and Development Commission.

SUPPLIER NEWS

Timber-Tech Truss LP, a portfolio company of Westcap Management Ltd., has acquired Calgary-based Brydon Stairs Ltd. The company designs and manufactures for multi-family homes and high-volume production and custom homes. Westcap completed its initial investment in Timber-Tech in December 2023, through buyout fund Westcap MBO III Investment LP.

Small businesses in the U.S. hit the highest level on their Optimism Index in June, rising by one percentage point to 91.5. (—U.S. National Federation of Independent Business)

Mental illness among youth shouldn’t be glossed over or buried, says Rob Faries. Besides being a RONA dealer with two stores on the edge of James Bay in northern Ontario, he’s also the front man for a rock and roll band called the Relic Kings. The band’s latest song, “Hey Good Night,” tackles the theme of teen addiction and mental health. “I think it’s a good story to tell. It’s better that we talk about it, so everyone can learn from it and console each other. Because we’re all going through the same thing,” says Faries. (And it’s a hell of a great rock and roll song. Click here and take a few minutes on this Monday morning to experience it. —your seriously impressed Editor)

Sexton Group Ltd. has become the latest member of Octo Purchasing Group, the Montreal-based hardlines, electrical, and plumbing buying group. The arrangement will begin Jan. 1, 2025. In a release, the companies stated that the deal “unites two Canadian-founded entities dedicated to supporting their independent members through the robust industry relationships they have cultivated.”

Octo is a buying group for hardlines. Its specialties include hardware, plumbing, electrical, HVAC, industrial safety, and paint. The group was founded in 1982 in Quebec and now has over 70 members representing 2,500 outlets across the country. Members include traditional hardware and home improvement groups like Castle Building Centres and Peavey Industries, as well as independent dealers such as Canac in Quebec, E.G. Penner Building Centre in Steinbach, Man., and Ottawa’s Preston Hardware.

But the buying group also counts industrial suppliers and commercial distributors in its membership, such as MacMor Industries in Winnipeg, Campbell’s Concrete in Charlottetown, and Stratford, Ont.-based Rideau Supply.

Octo connects with 448 suppliers and says it represents some $8 billion in member sales.

Sexton Group, based in Winnipeg, has dealer-members across the country, with a mix of commercial yards and building centres. Eric Palmer, president of Sexton Group (shown here at the 2023 WRLA Building and Hardware Showcase), says that Octo’s model of a dedicated distribution model for hardlines fits well with Sexton. “Increased pricing is a concern, while volume sales are more and more important to vendors, so it certainly made sense to our members.”

Palmer adds that the Octo partnership fits well with Sexton’s strategy to offer an opportunity for upgraded front-end sales. “We have plans to add another 100-plus vendors in new categories over the next couple of years, and this will help us to fast-track the process. We would have a big challenge internally to accomplish this on our own.”

He says that many of the member yards in the west, where Sexton got its start, are heavily GSD- and commercially-oriented. But with increased expansion eastward, more dealers in Ontario, and especially in Quebec, Palmer says, tend to have bigger front ends. “Even for our contractor yards, the front-end programs are important. But as we move east, a lot more of the lumberyards have a strong front-end presence.”

“We are thrilled to welcome Sexton Group Ltd. to Octo Purchasing Group. As a strategically run, growing organization that is dedicated to its members, Sexton shares our commitment to excellence,” adds Frédéric Perrin, executive director of Octo.

Castle Building Centres Group is running a contest that gives customers the chance to win prizes totalling $40,000 in value. Called “The Four Seasons of Fun Contest,” the promotion will award one prize for each season of the year to a total of four winners. Prizes include a riding lawnmower, a snowmobile, and an all-terrain vehicle.

The contest, which began in April and runs until Sept. 30, is being advertised widely through a range of media. “We are currently advertising the contest in Canadian Home Trends magazine, [Castle’s own] Contractor Advantage magazine, and on Castle web and social channels,” says Jennifer Mercieca, director of communications for Castle.

But to make the most of the summer home improvement season, Castle has stepped up its advertising efforts even further. “We also advertise on cable TV, with a commercial on The Weather Network and HGTV all summer long.”

According to Mercieca, Castle members across the country are participating in the promotion and all four prizes will be awarded at the end of the contest period. No purchase is necessary, she adds, but to enter, customers must visit a participating Castle building centre to fill in a ballot or go online.

“The contests are a great way to create more awareness and to support our members. The contest advertising often brings new customers into the store, and locations that have been lucky enough to have a winning ballot enjoy lots of community excitement for months to follow.”

Mercieca adds that the sheer scale of this promotion makes it a big event for the group. “It’s one of the largest, if not the largest, home improvement store contests of the summer.”

Federated Co-operatives Ltd. continues to deal with the fallout of what the company calls a “cybersecurity incident” recently that affected its retail locations in western Canada.

FCL is a $12.46 billion diversified business based in Saskatoon, supplying everything from groceries and agro products to building materials and fuel through a network of 1,600-plus retail locations in more than 650 communities. It counts 2.2 million members across western Canada.

On June 27, the co-op posted on social media that it was experiencing a cybersecurity incident that was impacting some internal and customer-facing systems at local retail co-ops and cardlock fuel locations. The impacts included disruption to product flows through FCL’s distribution centres and stock outages on store shelves, especially of fresh produce. As of press time, the FCL website appeared to be down, as well.

As a precaution, the company shut down some of its systems and brought in third-party experts to determine the cause of the incident. The company provided customers with a list of locations where cardlock services were still active across western Canada.

FCL later announced that there was no evidence that consumer data was compromised, but if an investigation did determine that consumer data was compromised, appropriate action would be taken, the company said.

Air Miles has announced a series of new benefits that the company says will “reshape the future of loyalty programs in Canada.” Called “Collect more points,” it’s a platform that Air Miles says “marks a fundamental shift in how the program operates and functions to reward collectors almost everywhere they shop and allow them to get more from what they want.”

According to a release (one of the longest, most confusing press releases we’ve received in years—your perplexed Editor), “These enhancements include a new travel platform with improved earning opportunities and more flexibility on booking, the introduction of the innovative Air Miles Receipts offering Canadians a new way to earn Miles and stack on the value while grocery shopping, and new Card Link Offers (CLO) partners….”

Some of the benefits:

• Gold and Onyx collectors can convert Dream Miles to Cash Miles and vice versa. Onyx collectors enjoy unlimited transfers, while Gold collectors can transfer up to 1,000 Miles per year
• the ability to convert Cash Miles to Dream Miles and vice versa
• the opportunity to earn more ways at more places, including at over 94 percent of grocers nationwide and on eligible liquor purchases through Air Miles receipts
• New card-linked offers with Turo, Instacart, Moroccanoil, and Porter Airlines

The world of loyalty programs is an important, and competitive, aspect of retail today. But as an adjunct to the selling process, it requires clarity to make it resonate with customers.

PEOPLE ON THE MOVE

Lowe’s Cos. chairman and CEO Marvin Ellison has received the 2024 William McGowan Ethical Leader of the Year. The annual honour is presented by the William McGowan Charitable Fund, dedicated to fostering ethical leadership, in partnership with human resources firm SHRM. It includes a $25,000 grant to a non-profit organization of Ellison’s choosing.

DID YOU KNOW…?

… that the 2024 Hardlines Retail Report will be released later this month? This massive research breaks out the size and growth annually of the industry, identifying which retail sectors and which banners are winning and losing from year to year. It features more than 150 slides in a handy PowerPoint format. Click here for more info and order details—and remember, as a Premium Member (if you are subscribing to this newsletter, you are one!) you will get a big discount on the price!

RETAILER NEWS

RONA affiliate dealers Al Tsuchiya and Michael Trentalance, owners of T & T Hardware Group, have celebrated the grand opening of their new RONA Walnut Grove Urban store in Langley, B.C. Leaders from the RONA dealer support team, partners, and store employees gathered for a traditional board-cutting ceremony. Over the past year, Tsuchiya and Trentalance have added 2,200 square feet to their hardware store. This new space, now offering a total sales area of 5,500 square feet, has allowed them to increase their selection of building materials and plumbing products.

The Home Depot Canada has been named the Energy Star Canada National Retailer of the Year for the sixteenth time. In a statement, the company said it is dedicated to environmental and social governance, offering 5,000 Energy Star certified products in its 182 stores and online.

The Weather Network (TWN) has launched an ad campaign using an AI-powered avatar of presenter Rachel Schoutsen. TWN partnered with Home Hardware Stores Ltd. to promote local stores during Ontario summer forecasts, including highlighting summer sales. “This partnership puts Home Hardware front and centre when Canadians are engaging with weather content and planning for the summer ahead,” said TWN chief revenue officer Simon Jennings.

Hudson’s Bay Co. has reportedly concluded a deal to buy Neiman Marcus, the Dallas-based luxury department store chain. HBC also owns Saks Fifth Avenue and Saks Off 5th. The deal has been reported to be worth US$2.65 billion. Neiman Marcus has 36 stores in the U.S. According to the Dallas Morning News, the combined company would represent sales of US$10 billion.

The Washington Department of Ecology has issued a US$1.6 million penalty to The Home Depot for selling prohibited hydrofluorocarbon (HFC) products. HFCs are powerful greenhouse gases used mainly for refrigeration and air conditioning. “Restricting HFC products and equipment is key to achieving the state’s statutory greenhouse gas emission limits and ultimately getting to net-zero by 2050,” said Joel Creswell, manager of Ecology’s Climate Pollution Reduction Program. Home Depot has 30 days to appeal the penalty to Washington’s Pollution Control Hearings Board.

In celebration of its 100th anniversary, Koelnmesse, the German trade fair organization, has announced the opening of Confex, an event centre with facilities for conferences and trade shows. It has space for 6,200 guests located at the Cologne Messe/Deutz railway station. The state-of-the-art venue creates new opportunities for innovative event formats in the region and its location at the railway station provides convenience to attendees coming from across Europe and around the world. Koelnmesse is the site of the biennial International Hardware Fair, Eisenwarenmesse, which will be held next in the spring of 2026.

Construction spending in the U.S. experienced a slight downturn in May, falling by 0.1 percent to an annual rate of US$2.1 trillion. That dip follows a rise of 0.3 percent in April. Spending on residential construction inched down by 0.2 percent to an annual rate of US$918.2 billion. Non-residential construction spending dipped by 0.3 percent to an annual rate of US$733.9 billion. (U.S. Commerce Dept.)

Following an unprecedented pandemic run that resulted in three years of solid gains for Canadian hardware and home improvement dealers, the industry slowed right down in 2023, according to the latest data from Hardlines.

As we crunch the numbers on the overall size of the industry year over year, brand new data reveals that overall top-line sales from all hardware, building supply, big box retailers in the country dropped by almost four percent last year.

Throughout the pandemic, the retail home improvement industry enjoyed record growth, as consumers had little else to spend their money on during lockdowns. They endured Covid stuck at home, so their investments were in that home. The industry grew by more than 30 percent from 2019 to 2022. But the brakes came on last year, with a slowdown—call it a correction—that responded to the world’s attempts to return to “normal” following the worst of the pandemic.

Those numbers refer to like-for-like dollars and do not take into account inflation, which hit a high in 2023 of almost four percent, making the year-over-year losses for retailers even more acute. In fact, the Top Four retail groups in Canada—Home Depot, Home Hardware Stores, RONA inc., and Canadian Tire Retail—saw their sales slip slightly more than the industry overall last year, reflecting the resilience of smaller independents in local markets.

And how do we get those statistics? It’s a huge task that our editorial team takes months to complete. We collect surveys, from both independent dealers and the head offices of retailers and buying groups, on their sales, store counts, and business conditions. We examine store openings, closings, and banner changes. We look at retail square footage. We compare our industry with StatCan data on the retail trade. We look for the fine print in annual reports from publicly traded companies like Canadian Tire and Home Depot.

The results are presented in our annual Hardlines Retail Report, which breaks out the size and growth annually of the industry, identifying which retail sectors and which banners are winning and losing from year to year.

(Reserve your copy of the 2024 Hardlines Retail Report, which will be released later in July. Click on the link for info and order details—and remember, as a Premium Member with your subscription to this newsletter, you will take advantage of a big discount on the price!)

Red Deer, Alta.-based Peavey Industries LP will end its relationship with Ace Hardware International at the end of this year. Peavey has been the licensee of the Ace banner in Canada since 2020.

In a release, Peavey said that the decision “underscores the growth trajectory that Ace Canada has experienced, evolving from Peavey Industries LP’s acquisition of the Ace Canada master licence from Lowe’s in 2020. This period has been filled with shared aspirations for growth and a steadfast commitment to supporting local Canadian-owned retail.”

The original deal had some knocks against it from the very start. Peavey signed the deal to take over the Ace licence in Canada at the end of 2019, just weeks before the world was shut down by Covid. The licence had previously been held by Lowe’s Canada, which inherited the Ace business as part of Lowe’s acquisition of RONA inc.

The irony of that deal did not escape the management at Ace Hardware Corp. in the U.S. (its headquarters are in Oak Brook, Ill., a suburb of Chicago). Lowe’s happens to be one of Ace’s biggest competitors in the U.S. (Neither Ace Hardware nor Ace International responded to multiple queries about the future of the banner in Canada.)

With the move of Ace to Peavey Industries, the future of the venerable brand, which is carried by some 5,800 stores in 60 countries, appeared more secure than ever.

With Peavey, the Ace business was back in the hands of a Canadian company—and a western-based one at that. Under the leadership of CEO Doug Anderson, Ace was another part of Peavey’s trajectory as a truly national retail hardware company.

But it had to develop a wholesale business to supply the more than 100 Ace dealers that came along with the deal. Many of these are smaller hardware stores serving rural or remote communities. But even these were a fit with Peavey’s vision to support, in its words, “small retailers and local communities that are the backbone of our economy.” Peavey’s own banner, Peavey Mart, consists entirely of corporately-owned farm and hardware stores, many serving secondary and rural markets.

As some Ace stores are building centres, Lowe’s Canada continued supplying them with building supplies until Peavey made a deal with Sexton Group in Winnipeg to manage that side of the business.

But the one-two punch of the pandemic and the slowing Canadian economy that followed took its toll. Over time, the number of Ace dealers was reduced, some through banner conversions and some through culling by Peavey as it sought a good fit with the Ace dealers themselves. Now, there are about 70 Ace dealers in Canada.

“Over the past few years, the retail landscape has faced numerous challenges, including the global pandemic, supply chain disruptions, inflation-induced consumer behaviour changes, and increased operational costs, particularly in smaller, remote markets,” Peavey explained in the release. “These factors have prompted a strategic re-evaluation by Peavey Industries LP, leading to the decision to end our relationship with Ace Hardware International.”

Peavey said its relationship with Ace dealers in Canada will be “business as usual” until the end of the year. During that time, Peavey says it remains committed to supporting the Ace dealers. “We pledge to maintain open communication and provide assistance and guidance to all affected parties.”

(This is the second part of a report on the state of department stores and other general merchandisers. Part one appeared in our previous issue.)

These are tough times for department stores and other large-surface retailers in Canada. The exit of Lowe’s from its Canadian business follows similar retreats by other retailers, from Nordstrom to Target, and the Hudson’s Bay Co. has been scaling back its retail footprint to make the most of some of the prime real estate it holds.

But there are bright spots in the landscape. Consumers continue to flock to affordable—and Canadian—retailers like Dollarama and Giant Tiger, while Quebec-based Simons is in growth mode with its apparel offerings at multiple price points.

Simons CEO Bernard Leblanc, the first appointed to the role from outside the Simons family, attributes the retailer’s success to its responsiveness to the market, a trait he says it shares with retailers who have succeeded in bucking the trend. “That’s very much what we’re about:  listening to our customer, being sure that we’re evolving, that we’re offering what they’re expecting.” That includes customizing SKUs to local markets, though the overall inventory remains the same Canada-wide.

On that score, HBC has failed, Liza Amlani, co-founder of Retail Strategy Group, told CBC News. “The customer is changing, but the department store is not evolving with them,” she said.

But there are bright spots in HBC’s outlook. Customers have responded warmly to its rollout of Zellers stores-within-stores at The Bay locations across Canada, including a partial revival of the classic Zellers diner in a food truck format. And while HBC has closed some bricks-and-mortar locations of Saks Off 5TH, it spun off the bargain brand’s e-retail platform into a separate business.

Rob Brooks, who took over as CEO of Saks Off 5TH last year, said in a podcast with the National Retail Federation in the U.S. that the e-retailer is “seeing great uplift” in average order value and average unit retail. Consistent with Amlani’s critical observation, Brooks said that “better understanding customer preferences” is “one of our main focuses.”

Saks Off 5TH isn’t the only retailer that’s surviving by appealing to budget-conscious shoppers. Montreal-based Dollarama has seen sales and earnings rise consistently since the pandemic, as shoppers seek relief from inflation. Last month, it reported an 8.6 percent hike in its first-quarter sales, while earnings rose by $0.14 per share.

A YouTube phenomenon dubbed the “Dollarama Budget Grocery Shopping Trend” has seen vloggers taking to the platform to show off their grocery hauls and low bill totals. CEO Neil Rossy told analysts the trend was a “flavour of the day” while modestly averring that food “remains a small part of our offering.”

Meanwhile, Giant Tiger, which boasts the tagline “Low Price is What We Do” garnered attention on social media earlier this year for its grocery prices, sometimes as little as two-thirds of what Loblaw’s own Superstore banner charges for the same items.

The privately held company doesn’t have to report financial results, but it is in growth mode: in 2021, Giant Tiger pledged to add about 40 stores. Just last fall, it opened new locations in its home province of Ontario, in Sault Ste. Marie and Vaughan.

ABC Supply Co., a wholesale distributor of roofing, siding, and other exterior building products in Canada, has announced the promotion of Michelle Dagenais to the role of western Canada district manager. Dagenais joined ABC Supply in 2023 as the exterior products business manager for Canada. Prior to joining ABC Supply, she was a sales leader for James Hardie, serving western Canada.

DID YOU KNOW…?

… that the latest instalment of our podcast series What’s In Store is now live? In this episode, we talk with Duane and Dave MacDonald, dealers-owners at Callbecks Home Hardware Building Centre in Summerside, P.E.I. The two brothers tell a great story of their father’s acquisition of the business and how they landed the Leon’s franchise for the province, combining the strength of the Home Hardware brand with the biggest name in furniture and appliances. Click here and scroll down to choose the podcast and have a listen!

RETAILER NEWS

More than 500 participants attended AD Canada’s second annual meeting in Vancouver earlier this month. Three-time Olympic champion and Canadian ice hockey icon Cassie Campbell-Pascall was among the guest speakers at the event. Next year’s annual meeting will be held May 26 to 29 at the Westin Harbour Castle in Toronto.

A storage rack that had visible damage or wear, according to a WorkSafeBC report, cost a Penticton, B.C., RONA store $330,507 in a fine earlier this month. WorkSafeBC is the province’s workplace safety agency. It conducted a random investigation and imposed a “stop use” on the rack in question. However, the store did not repair or replace the rack, the report said.

Ace Hardware has celebrated a century in business in the U.S. with a nationwide “100th Anniversary Block Party.” The promo ran on June 29, with participating Ace stores transformed into a block party venue. They featured specials on a range of products including barbecues, outdoor furniture and accessories, and power tools, along with live demonstrations and family-friendly activities.

Empire Co., whose grocery banners include Sobeys and Safeway, reported Q4 profits of $148.9 million, down from $182.9 million a year earlier. Sales were flat at $7.4 billion. Comp sales edged down by 0.3 percent but rose 0.2 percent when excluding fuel.

SUPPLIER NEWS

Canadian Thermos Products Inc. is celebrating 120 years this year for the Thermos brand. To commemorate the milestone, the company has launched a new product line called the Icon Series, while renewing its commitment to product designs that meet or exceed applicable government standards. Canadian Thermos is also hosting contests. Until Aug. 12, contestants will get a chance at a Canadian vacation as well as one of 20 Thermos prize packs.

Some 130 members of the Teamsters union are on strike at Richelieu Hardware’s Montreal warehouse, but the impact is limited, according to a report by the Quebec trade association AQMAT. The workers have been without a collective agreement since the end of 2023. The relation between wages and inflation is at the heart of the dispute.

Retail sales increased 0.7 percent to $66.8 billion in April compared to the previous month. Sales were up in seven of nine subsectors and were led by increases at gasoline stations and fuel vendors as well as food and beverage retailers. Sales in LBM and garden categories declined by 1.4 percent. (StatCan)

The annualized rate of housing starts in the U.S. fell 5.5 percent between April and May to 1.28 million units. Single-family starts were down by 5.2 percent to a rate of 982,000. Building permits were at a rate of 1.39 million units, down 3.8 percent from April. Single-family permits declined by 2.9 percent to a rate of 949,000. (U.S. Census Bureau)

The Canadian Home Products Trade Association has renamed its scholarship program in memory of former CHPTA president Vaughn Crofford, who died in June 2023 at the age of 73. The program provides money to children of employees of its member companies to attend university or college. Successful candidates receive $1,000 for their first year of study leading to a degree from an accredited community college or university. (Click here for more info.)

RONA inc. has tapped its existing executive ranks to find its newest president and CEO. Jean-Philippe (J.P.) Towner joined RONA barely a year ago, in October 2023, as CFO.

Before joining RONA, Towner spent three years at Dollarama as CFO. Prior to that he served as EVP and CFO at Pomerleau Inc., a commercial construction company based in Saint-Georges, Que.

Towner replaces Andrew Iacobucci, who was hired last June—exactly a year ago—in what turned out to be an interim position as president and CEO. Iacobucci brought with him a 20-year background in the grocery industry, a field from which many other RONA execs have been drawn in the past. His CV on LinkedIn indicates he’s filled an interim CEO role at least once before in the past, during his tenure at US Foods, a food service provider based in Rosemont, Ill.

In fact, since the departure of its founding CEO, Robert Dutton, RONA and Lowe’s Canada have had a variety of people leading the charge. Dutton was forced out after major shareholders, led by Caisse de dépôt et placement du Québec, insisted on his removal. He was at the helm for 20 years, until stepping down in November 2012.

Chief Executive Dominique Boies had been CFO and was pulled in as interim CEO after Dutton. But within a few months Robert Sawyer, a veteran grocery executive who came over from Metro, was hired. Sawyer oversaw the sale of RONA to Lowe’s Canada in 2016.

By then, Lowe’s Canada had installed a Quebecer, Sylvain Prud’homme, to run the Canadian business. When Sawyer resigned after selling RONA, Prud’homme took over the combined business. Like Sawyer, he had a background in grocery, including Loblaw, Sobeys, and Walmart Canada. He had joined as CEO of Lowe’s Canada in December 2017 and moved the company’s offices from Toronto to RONA’s head offices in Boucherville, Que.

Barely two years later, Prud’homme left and Tony Cioffi, Lowe’s Canada’s EVP for finance, real estate, and dealers, became interim president in October 2019. But by January 2020, Lowe’s sent up a new CEO, Tony Hurst, from Mooresville, and Cioffi continued in his EVP role, reporting to Hurst. When the RONA business was sold by Lowe’s to Sycamore Partners, a New York-based private equity firm, at the beginning of 2023, Cioffi was soon replaced by Iacobucci.

With Towner in place, he will be overseeing, among other things, the conversion of Lowe’s and RONA big boxes to the RONA+ banner, and the investment in the affiliated dealer base with a fresh identity program.

“I am greatly honored to assume the leadership of this Canadian household name. It’s an exciting time for RONA as we are building the future of this iconic brand that has been serving Canadians for the past 85 years. We have an exceptional team in place which I’m proud to lead into the next phase of this company as we strive to help Canadians build their homes and dreams,” said Towner in a release.

On April 19, Coastal Drywall Supplies, a distributor with three branches in New Brunswick and Nova Scotia, coordinated with Pinaud Drywall + Acoustics, a local contractor, to deliver and place over 100 lifts of drywall (26 boards to a lift) at the jobsite of The Mills Residences, a mixed-use apartment community with 220 suites, whose construction in downtown Halifax, N.S., is scheduled for completion in late summer.

This delivery feat—which Coastal touted on its Facebook page the following day (see their photo of a crane lifting one of the lifts)—speaks to the competitive importance and centrality of customer service and logistics for Gypsum Specialty Dealers (GSDs). GSDs may be relatively few in number but they play outsized roles in helping Canadian contractors meet the demands of their commercial and residential clients.

“Service is the name of the game in drywall,” said Daniel Porter, Coastal’s general manager. “Early morning, late night, whenever.”

“Our vision is to be the best,” added Brian McCormick, president of Regina-based Kenroc Building Materials, a GSD with 15 locations. “That means more than just moving product from Point A, our distribution centre, to Point B, the customer’s jobsite. Performance is paramount, so when our customer has a problem, we have a problem.”

GSD sources agree that reliable and consistent customer service and delivery are what determine competitive advantage. Paul Green, president of Vaughn, Ont.-based GMS Canada, said that what sets his organization’s dealers apart is their ability to “load the building,” meaning that no matter a project’s scale, GMS Canada can deliver and place drywall to the building’s height and depth. Undergirding GMS Canada’s delivery services is a fleet that includes 350 heavy trucks, 73 trailers, and 120 light passenger trucks.

(This is part of a larger feature article on Canada’s GSD industry in the next issue (mailing in July) of Hardlines Home Improvement Quarterly, our trade magazine. HHIQ subscriptions are free to bona fide dealers. Go to hardlines.ca to sign up.)

Amid changes at head office (see lead story—Editor), RONA continues to invest in the growth of its independent, or affiliated, dealer network. Last week, the company officially launched its new visual identity for stores owned by RONA affiliated dealers. The goal of this initiative is to “turn the spotlight” on RONA independent dealers by showcasing their entrepreneurial side, while leveraging the strength of the RONA brand.

The new look was first unveiled to the dealers at last November’s RONA show for independents, called Connexia.

“Our network of affiliated dealer stores is a key priority for the organization and, as such, we are investing to help our dealers stand out even more in their respective markets. We are proud to have welcomed more than ten new affiliated dealer stores since the beginning of the year,” says J.P. Towner, the brand-new president and CEO of RONA inc. (see lead story, again—your ever-helpful Editor).

The first store to get the complete new visual package is RONA Iberville, in Saint-Jean-sur-Richelieu, Que. It will soon be followed by the RONA in Manotick, Ont., near Ottawa. The company says the signage has been modernized to highlight the entrepreneurship, unique history, and community spirit that characterize RONA affiliated dealers.

Elements of the new look include:

• a logo specific to dealer owners, which includes their company name, to help customers easily identify RONA stores owned by independent dealers
• outdoor pylon bearing the words “Dealer Owner” (Marchand Propriétaire)
• a sticker to be displayed in the main door of the stores, bearing the words “Dealer Owner” and the year each store was founded
• wall panels presenting the history and values of each store

“The unique history and strong local roots of each affiliated store are differentiating elements, and we wanted to clearly highlight them with this new visual identity,” said Catherine Laporte, SVP, marketing and customer experience, at RONA inc.

(Check out this video made at RONA Iberville during the installation of the new image program.)

The retail landscape in Canada, challenging at the best of times, has seen banners come and go over the past decade. American chains such as Target and Nordstrom have entered and then withdrawn from the Canadian market.

But the struggle isn’t limited to them: even Hudson’s Bay Co., a proverbial “part of our heritage,” is downsizing. Its downtown Montreal location is having its footprint cut in half, while the one in Calgary is slimming down to three storeys. In Toronto, the company in 2022 closed the Bay location at Yonge and Bloor, which served as its flagship in that city before the acquisition and conversion of the former Simpson’s store south of the Eaton Centre.

That complex is itself a case study in the life cycle of retailers. After the collapse of the namesake Eatons banner, it hosted Sears and Nordstrom as flagship tenants, both of which in turn have since made their exits from the country.

Now Quebec City-based La Maison Simons is to be the latest addition to the space, taking over a portion of the former Nordstrom site. It’s also adding a new store at the Yorkdale Shopping Centre in the north end of the city. These stores will be the 18th and 19th for the chain, which first ventured outside Quebec in 2012 with a location at the West Edmonton Mall.

Simons’ business model offers mid-to-higher-end fashions at a variety of price points. Some analysts think it has a chance of defying the odds that have seemed stacked against other retailers.

Toronto Metropolitan University retail management professor Joseph Aversa told CBC News that, since the family business appointed Bernard Leblanc as its first outside CEO in 2022, it has been “very calculated in terms of expansions. They’ve grown relatively organically across the country.”

The fact that it is a homegrown retailer (the first Simons began as a dry goods store in 1840) is also a factor. Liza Amlani, co-founder of Retail Strategy Group, told the CBC that American have tried at their peril to replicate their business models in Canada.

“We are different. We are not another state out of the U.S.; we are another country. And across Canada, we’re very different: The Vancouver customer is very different from the Toronto customer.”

(This story is the first instalment of a two-part series on the state of department stores and discount retailers in Canada. Catch the rest in next week’s Hardlines Weekly Report!)

PEOPLE ON THE MOVE

Home Hardware Stores Ltd. has announced the appointment of John Pierce as chief retail operations officer. Reporting to CEO and president Kevin Macnab, he will oversee field operations, dealer support functions, business development, real estate and construction, store design and space planning, Home’s Innovation Centre, communications, events, and public relations. His previous role was VP of retail business development.

DID YOU KNOW…?

… tthat the latest issue of Hardlines HR Advisor hit inboxes last week? In this edition, we explore how Pet Valu attracts top-calibre staff, IKEA Canada’s financial literacy efforts, and tips for creating an inclusive workplace both during and beyond Pride Month. HR Advisor is monthly and it’s free: click here to sign up today!

RETAILER NEWS

Canadian Tire Corp. is building a new store at the Stanley Park Mall in Kitchener. The new Canadian Tire store, which is forecast to open this fall, will replace the existing Canadian Tire store at Victoria and Frederick streets in Kitchener. The new store will occupy the location vacated by Walmart at the mall.

The Home Depot has completed its acquisition of SRS Distribution, Inc., a building products distributor with more than 760 locations across 47 U.S. states. The deal, first announced March 28, is worth about US$18.25 billion. SRS serves professional roofers, landscapers, and pool contractors, with a sales force of 2,500 and a fleet of some 4,000 trucks. Home Depot expects the acquisition to accelerate its growth with the residential contractor and builder with bulk orders.

Wilson’s Home Hardware Building Centre in Barrington Passage, N.S., is celebrating its centenary. The Wilson family has been in charge for four generations. “Our roots are as a general store. Then it morphed into a grocery store and then we took on the home hardware banner in 1967 and I’ve just kind of continued to grow from there,” dealer-owner Mike Wilson said.

Employee retention has been on every retailer’s mind since Covid, but now we’ve got some statistics showing costly that can be. According to Quartz, the business news service, IKEA lost 62,000 employees globally in 2022, at a cost of about $5,000 to replace each employee—or a massive $310 million. IKEA has since raised pay, benefits, and introduced more flexible work schedules. (Listen to our podcast with Michael McLarney interviewing Tanja Fratangeli, chief people officer at IKEA Canada, here).

Gypsum Management & Supply Inc. announced Q4 sales of US$1.41 billion, up 8.4 percent from a year earlier. Net income declined 25.4 percent to $56.4 million, compared to $75.6 million in the previous Q4. For its fiscal year 2024, which ended April 30, GMS saw sales grow by 3.2 percent to $5.5 billion. Annual net income came to $276.1 million, a 17.1 percent from $333.0 million in 2023.

Sales of existing homes edged down 0.6 percent between April and May, remaining a little below the average of the last 10 years. Actual (not seasonally adjusted) monthly activity came in 5.9 percent below May 2023. The number of newly listed homes was up in May, though only by 0.5 percent on a month-over-month basis. (Canadian Real Estate Assoc.)

Housing starts rose to an annualized rate of 264,506 units in May, compared to 241,111 in April. The actual number of urban housing starts was up 39 percent to 21,652 units in May compared to 15,606 units a year earlier. Total starts declined in Vancouver but increased in Toronto and Montreal. (CMHC)

Investment in building construction decreased 2.0 percent to $20.5 billion in April from March. The residential sector declined 2.7 percent to $14.2 billion, while the non-residential sector fell 0.5 percent to $6.3 billion. Nationally, single-family home investment fell 4.7 percent to $6.9 billion. Saskatchewan was the only province to report a spending increase (17.7 percent) in that subsector. (StatCan)

Business Wire informs us that there is a current call for entries for the China International Industrial Design Competition for Hardware Products, which has been held for 18 consecutive years, organizers say. If you have designed a sensational product for which you would like to share specifications, pictures, plans, etc. with the organizers (your cynical yet unbiased Editor), you can send them to Yongkang, China, for a chance to win an unknown part of the ¥3.63 million (C$689,700) prize money. Those still interested will find the link easily throughout the internet.

Community involvement and goodwill efforts are a key part of how many retailers brand themselves and go to market. They can be generated at head office through holistic—though sometimes suspect—initiatives like ESG (environmental, social, and corporate governance), or play out right at the staff level with fundraisers and awareness campaigns to support local charities or causes.

How much they really matter may be questioned, especially if a company is public and driven at least in part by the desires of shareholders. But on the front lines, the value of these programs is genuine.

Take Federated Co-operatives Ltd. Based in Saskatoon, FCL services more than 160 local Co-ops across western Canada. Based on its model of local investment, FCL is distinctly community-minded. That’s why it developed its Co-op Community Spaces Program, which raises money to help protect, beautify, and improve local spaces served by Co-op stores.

This year’s projects range from new greenhouses in Salt Spring Island, B.C., to an accessible playground in Rosetown, Sask., and a greenhouse for a community farm (shown here) in Red Deer, Alta. Since 2015, Co-ops have given $13.5 million to 189 capital projects across western Canada.

At the same time, RONA inc. has issued its latest Sustainability Report. During the past year, the retailer made available some 5,000 ECO-branded products in stores and online. It also touts the recovery of 1,980 tonnes of paint, aerosols, batteries, light bulbs, and fluorescent tubes.

The company also said two-thirds of the waste it generated was reused or recycled. It also installed more than 1,000 solar panels at its Milton, Ont., distribution centre and donated $3 million to non-profit organizations through the RONA Foundation. In addition, RONA has supported the FSC wood certification program for the past 15 years. It’s been ranked among Canada’s Greenest Employers and is one of Greater Montreal’s top employers since 2021.

Pam O’Rourke, the senior merchant who recently left Home Depot Canada (see story below), was also chair of The Home Depot Foundation, which is devoted to supporting homeless youth in Canada. Through Home Depot stores, the foundation’s Orange Door Project supports 120 local organizations that are committed to preventing and ending youth homelessness in Canada. This year’s fundraiser started June 4 and continues to July 7.

These types of fundraisers and community projects have hundreds, if not thousands, of iterations at the store level among independents, as well. They are not only positive brand builders, but they provide tangible support to the very communities upon which the dealers themselves rely.

Pamela O’Rourke is leaving The Home Depot Canada. She spent 15 years in hardlines retail, including six at the discount department store chain SAAN and nine as vice-president of merchandising at Home Depot Canada. There, O’Rourke (shown here in a meeting with the CHPTA in 2019) was instrumental in many areas of the business, and was focused on both the retailer’s customers and Canadian communities.

Before becoming the giant retailer’s top merchant, she held other duties along with her merchandising roles, including overseeing strategy, planning, and sourcing. She was also the chair of the Home Depot Canada Foundation, an organization devoted to reducing youth homelessness in Canada.

With O’Rourke’s departure, Jim Recore, a merchant from Home Depot’s head office in Atlanta, has been brought up to lead the Canadian merchandising team. He assumes the VP merchandising title for Canada. In his new role, Recore is responsible for global sourcing and product development, along with Home Depot Canada’s Merchandising Execution Team, in-store environment, assortment and space planning, and sustainability initiatives.

According to his LinkedIn profile, Recore got his start in retail growing up at his parents’ convenience store. His first job was working there at the age of eight. He joined The Home Depot in 2010 as the director of private brand development, working out of the Atlanta head office. Since then, he has taken on roles with increasing responsibility, including several division merchandise manager roles and vice-president of merchandising for building materials.

Most recently, he served as vice-president of merchandising for lawn and garden, overseeing categories such as outdoor power, outdoor living, and cleaning. Before joining Home Depot, Recore worked at Sears in the U.S. for 22 years in various roles, including divisional vice-president of Craftsman Product Development.

To solve the chronic housing shortage, Ottawa has suggested that our industry needs to build 1.3 million homes extra homes over and above the 1.8 million homes projected through 2030.

If those extra homes are going to materialize, our industry is going to experience a residential construction boom not seen since the post-WW2 era. Will there be enough building materials?

It’s an open question. Relatively new technologies—such as ICFs (insulated concrete forms)—will help. But clean gypsum is not in unlimited supply. Mitch Wile of The Cedar Shop in Calgary, knows the subject. He’s opened more than a few GSDs—for both Kenroc and Winroc— and he’s worried.

Wile estimates that an average 2,400-square-foot house requires about 11,000 square feet of drywall. Multiplied by an extra million homes, that’s problematic.

One major drywall manufacturer is seeing the opportunity. CGC Inc. recently announced that it has begun construction of its new manufacturing plant in Wheatland County, Alta., east of Calgary (artist’s rendition shown here). The 220,000-square-foot facility represents a $210 million investment. It will manufacture CGC’s Sheetrock brand of wallboard and create more than 100 permanent, full-time manufacturing jobs, the company says. The construction phase will conclude in 2026. Plant recruitment and hiring will start in mid-2025.

“This project underscores our commitment to being the best wallboard manufacturer to do business with, particularly as builders, governments, and communities across Alberta and the West work to expand housing starts, accessibility and affordability,” said Chris Griffin, CEO of USG Corp., CGC’s parent.

And a dealer group specializing in gypsum, GMS Inc. (Gypsum Management & Supply), has acquired seven-location Yvon Building Supply, a GSD in the Greater Toronto Area and southern Ontario. Yvon also sells ceilings, insulation, and other products. The price was $196.5 million and, for that, GMS will hope to see many years generating at least $190 million in revenue, as Yvon did in its most recent fiscal year.

For the year ended April 30, 2023, GMS Canada reported the equivalent of $887.7 million in retail sales, 12.2 percent of its parent’s total. GMS Inc. stated that drywall accounted for 42 percent of its net corporate revenue.

When a hardware distributor—even a huge one—launches its own loyalty program, you know they’re important.

Memphis-based Orgill Inc., which serves a growing number of independents in Canada, got into the loyalty program game in 2019. Its program, called FanBuilder, allows an independent dealer to build their own loyalty program the way they want it—though FanBuilder is also ready to go right out of the box.

At the other end of the spectrum, some of the very biggest retailer loyalty programs in Canada have had a changing of the guard. Air Miles, which once reigned supreme as the biggest loyalty program in the country, hit the skids in recent years. Retailers defected from it en masse. Approaching its 30th anniversary in Canada early in 2021, Lowes, RONA, and Réno-Dépôt left the program. They were soon followed by Staples, Rexall, and the Liquor Control Board of Ontario. Grocery giant Empire Co., which includes the Sobeys and Safeway brands, followed suit.

Most recently, Metro, a grocery chain in Ontario and Quebec, announced that its Ontario stores will no longer accept Air Miles cards later this year. Metro has already gone with another loyalty program for its Quebec stores called Moi Rewards, in partnership with RBC. Right now, the program is also available in Quebec at Super C, Jean Coutu, Brunet, and Première Moisson. In Ontario and New Brunswick, the Moi program is offered at Jean Coutu stores.

There was a reason for all the ship-jumping with Air Miles. Its parent companies in both Canada and the U.S. filed for bankruptcy on both sides of the border last spring. BMO, already one of the biggest partners that Air Miles had, took over ownership. BMO has pledged to give Air Miles new life in an effort to reverse its fortunes.

The program is certainly trying new things. A new concept called Air Miles receipts allows consumers to scan their receipts from other stores—even those with competing programs—with an app to earn bonus points and offers. This is a new concept in loyalty: “layering over” existing retailer programs—for those that participate, that is. Not all independent retailers choose to, including the members of TIMBER MART, which is continuing to partner with Air Miles as a group.

Then, on May 22 of this year, Air Miles announced it had signed an exclusivity deal with Pharmasave, its Canadian independent drugstore partner, that will simplify consumers’ ability to collect points at Pharmasave’s almost 900 stores.

PEOPLE ON THE MOVE

BMR Group has appointed Marlène Hins as vice-president, marketing and communications. With nearly 25 years of experience in marketing, including more than 12 years at RONA and Lowe’s, Hins joins BMR after four years at Lassonde, a food and beverage company. She reports to BMR’s COO Antonio Di Pasquale.

Ryan Medlock has joined  OLFA North America as national account manager, Pro Retail Canada. A 25-year industry veteran, Medlock was most recently at Southwire Canada in the national account manager role.

At Lowe’s Cos., Jennifer Wilson has been promoted to senior vice-president and chief marketing officer. She joined Lowe’s in 2006 and most recently served as senior vice-president, enterprise brand and marketing. In her new role, Wilson will oversee strategic brand and product marketing, loyalty and personalization, promotional planning, creative, and media. As CMO, she will also build out a new customer experience integration organization designed to deliver end-to-end customer journeys (wow!—your baffled Editor).

DID YOU KNOW…?

… that as a subscriber to this newsletter, you are also a valued Hardlines Premium Member? One of the many perks of your Premium Membership is one complimentary Classified Ad each year in this newsletter. Don’t pass up a free chance to grow your team, add new lines, or advertise a new opportunity at your company. Contact Jillian MacLeod at the Hardlines World Headquarters to book your free Hardlines Classified. (For a full list of all your Premium Membership benefits, click here!)

RETAILER NEWS

Castle Building Centres Group has announced the addition of Adam Tools Inc. in Mississauga, Ont., as its newest dealer-member. Owners Ron and Marwan Amer founded Adam Tools more than two decades ago.

Montreal-based Dollarama released results for its fiscal 2025 first quarter, which ended April 24. Those results included sales that increased 8.6 percent over last year’s first quarter to 1.41 billion. Comparable store sales grew 5.6 percent, following 17.1 percent growth a year earlier. The increase in comps was driven primarily by strong customer demand for consumables. Net earnings increased by 20.0 percent to $215.8 million.

Castle Building Centres Group held its annual vendor appreciation golf tournament in Georgetown, Ont., recently, attracting over 150 participants. As usual, the event raised funds for the SickKids Foundation, this time reaching a record donation of close to $70,000.

Quebec-based retailer Simons is in expansion mode outside its home province, with two new stores coming to Toronto. The chain has pending openings in the Toronto Eaton Centre and in Yorkdale Shopping Centre. The Eaton Centre location in particular has outlived such tenants as Eaton’s, Sears, and Nordstrom, but some analysts think Simons stands a better chance.

SUPPLIER NEWS

Luxo Marbre has entered into a strategic agreement with the sales agency, Bestrep Inc. Bestrep provides services for vendors to retail clients within the hardware and LBM markets across the province of Quebec and eastern Ontario.

The Canadian Home Products Trade Association has announced the renaming of its scholarship program in memory of former president Vaughn Crofford, who died last year at the age of 73. The program helps offset the cost of post-secondary education for children of employees of CHPTA member companies. Successful candidates receive $1,000 for their first year of study leading to a degree or diploma from an accredited community college or university.

The value of building permits increased 20.5 percent to $12.8 billion in April from the previous month. Construction intentions in the residential sector rose by 21 percent to $8.0 billion. The value of single-family permits edged up 2.4 percent to $2.6 billion. (StatCan)

The latest edition of Hardlines Dealer News hit subscribers’ inboxes last week. In this issue, we cover the “sunset” of the Réno-Dépôt brand, how one Home Hardware store opened a Leon’s franchise, and the latest acquisition of a Canadian independent by U.S.-based GMS. Hardlines Dealer News is monthly and it’s free: click here to subscribe now!