RONA shares updated signage for its affiliated dealers at Montreal buying show

RONA dealers got an update on head office’s new programs, its new retail brand, and where independents fit in with the company’s vision at the dealer conference and show, RONA Connexia, in Montreal on Nov. 30 and Dec. 1. The event provided an opportunity for RONA affiliated dealers to meet with members of the RONA team, as well as some of their vendors, and discover what’s new for 2024.

Meetings on day one were held at the Fairmont Queen Elizabeth hotel. Connexia continued the next day at the RONA Planogram Facility in Boucherville with a showcase that highlighted products for the 2024 spring-summer season.

In those meetings, dealers were also introduced to a new identity designed exclusively for RONA’s affiliated dealers, based on a review of the signage outside of the stores and the brand elements inside. This new identity is designed to promote the entrepreneurial side of the dealers while capitalizing on RONA’s brand awareness.

And it’s unique to the independent RONA dealers. It involves a new, clean banner with room to further identify the store’s own name and brand, using its own colours and look. “The new look means the store is branded as a dealer store. We see tremendous value in identifying them as dealer-owned,” says Jean-Sébastien Lamoureux, senior vice-president, RONA affiliated dealers and public affairs. That branding will be extended through the interior of the store, as well.

And the refresh will be implemented at no charge to the dealers. “We’ll be paying for it all,” says Lamoureux. “It is a priority for us.” He notes that a locally-owned store is invaluable for a community and Canadians recognize the importance of that local advantage. “We wanted to capitalize on these assets, while focusing on the impact of each dealer in their communities.”

The roll-out of the rebranding will take place over the coming months, and he calls it “an important commitment by RONA to its dealers. “Next year is our 85th anniversary. RONA was created for and with independent dealers and we wanted to reflect that. We wanted to say the dealers are front and centre for us.”

Canadian Tire Retail expects slightly better 2023 margins despite forecast of tougher Q4

Canadian Tire Corp. went into the fourth quarter with its share of concerns, as the fiscal period will complete a year in which most hardlines retailers are facing challenges.

In a call to analysts following the release of the company’s third-quarter results, executives shared their expectations for the quarter—and the year ahead—as CTC works to reduce inventory costs and get customer traffic back up to pre-inflation levels.

“In fall-winter categories, the combination of higher inventory from last year and the majority of products shipping in Q3 this year compared to Q4 last year means our CTR dealers are very well stocked heading into our biggest selling season, and we expect to ship little fall-winter  product in Q4 unless consumer demand proves stronger than expected,” said Gregory Craig, EVP and CFO at Canadian Tire Corp. He further noted the reluctance of CTR dealers to hang on to extra inventory, due to higher interest rates.

The result: a more modest end to the year than previously hoped. “These factors will make for a tough revenue comp going into Q4 compared to a year ago,” Craig said, “when retail revenue excluding petroleum was up two percent, as dealers were still building Christmas and winter inventory.”

The company has also undertaken staff cuts during the last quarter of 2023. The initiative has been two-pronged, the first of which is targeted headcount reductions to reduce staffing levels by three percent or about 200 people. In addition, the elimination of open job vacancies was expected to take company’s headcount down by another three percent compared to 2022. While these cuts will result in a charge of up to $25 million in Canadian Tire’s fourth quarter, they are expected to result in overall longer-term savings of approximately $50 million.

While CTC is forecasting slightly smaller margin rates across the company, the outlook is more positive for its Canadian Tire Retail business, which includes Canadian Tire-bannered dealers. On the merchandise front, Canadian Tire remains committed to increasing the penetration of its private labels, which have helped squeeze out better margins for those dealers.  According to TJ Flood, president of Canadian Tire Retail, “We are expecting full-year margin rates at CTR to be slightly ahead of last year, and this is despite … what is going to be a tougher Q4 for us in CTR.”

However, the company is well-poised to weather the current softness, Flood added. “When you think about all of the weapons in our arsenal now—the Triangle Rewards program, our owned brands portfolio, our good-better-best range architecture—we provide a lot of choice for consumers, and we’re going to continue to try to expose them to the great value that we provide them as we go forward here.”

ABSDA’s HR conference gives Atlantic dealers valuable hiring, retention guidelinesThe Atlantic Building Supply Dealers Association held its second annual HR Conference last month, bringing together experts on hiring and recruitment with a room full of dealers looking for ways to cope with the ongoing shortage of available workers. More than 100 people from across Atlantic Canada were in attendance.

“It’s a perfect storm of aging demographics and a new generation coming up,” said ABSDA president Denis Melanson in his opening remarks. He added that 34 percent of the population in Atlantic Canada is now 62 years or older, “and we expect to have to hire 4,000 people in the coming years.”

Melanson and his team created the HR Conference last year in response to a survey of members that had addressed a range of hiring issues for dealers. These included recruitment, onboarding, and what kinds of policies are in place to help individuals along in their careers. “It identified some glaring gaps, but in turn it provided some opportunity for us as an association to provide services.”

The morning was devoted to a hands-on workshop conducted by HR expert and workplace issues expert and author Pierre Battah.

His presentation gave each table of delegates a set of tasks and challenges through the morning. At the heart of his talk was the need for communication—not full-on all the time, but tailored to the situation. And that includes addressing conflict within the team, something too many leaders are reluctant to face.

“We can lose people if we’re not prepared to have the difficult conversations,” Battah said. “A lot of what we do as managers is trying to get everyone on the same page.”

Julie Melanson is an HR consultant with JMC HR Consulting in Moncton, N.B. She took to the podium after lunch to share some tips and guidelines for hiring and retaining staff with her “HR tool kit.” She stressed the need to create a positive and welcoming environment for your candidates right from the start, reminding the audience that some people can be extremely nervous during a job interview. “It’s not something we do very often.”

The realities of today’s labour market require employers to consider new Canadians in their hiring. Jordan Remedios, program co-ordinator for the Immigrant Services Association of Nova Scotia, talked to the delegates about how to make your workplace more welcoming to new hires, regardless of where they come from.

Fostering an environment that enables all workers, including new Canadians, to share ideas goes a long way to ensuring one’s workplace will reap the benefits of inter-cultural competency. These can include everything from providing prayer rooms to respecting a variety of holidays. And this can have a positive impact on both staff and customers, Remedios said. “The more we can commit to this, the more we can commit to inclusivity in the workplace.”

A car swerved out of control, crashed, and exploded at the entrance to the Rainbow Bridge last month, quickly becoming an international incident. The bridge spans the Niagara River between New York state and Ontario at Niagara Falls.

Because it’s one of the most travelled routes between the two countries, concerns quickly arose that the explosion was terrorist-related. Coverage of the incident filled TV news stations on both sides of the border. While tragic, the circumstances ultimately proved not to have international security implications.

It turns out the car, a Bentley Flying Spur, was owned by Kurt Villani, who was accompanied by his wife Monica. They lived in Grand Island, on the Niagara River between Buffalo and Niagara Falls, N.Y. They were the owners of Gui’s Lumber, a dealer with seven Ace Hardware stores in western New York.

For reasons that have still to be determined, the car raced out of control on the American side of the border crossing, hit a median, and crashed into a row of security booths and exploded. While the investigation continues into this incident, certain versions of the Bentley Flying Spur have been the subject of recalls, due to reports of gas pedals getting stuck.

At BMR Group, Vincent Chicoine has been appointed vice-president, pro sales, effective Jan. 8. He will report to Antonio Di Pasquale, BMR’s COO. Chicoine spent the past 15 years with IKO Industries, most recently as regional sales manager for eastern Canada.

Michael Gawtrey, Home Hardware’s director of loyalty and CRM, is retiring. He started 35 years ago as a buying assistant at Canadian Tire Retail, later moving to marketing to lead Canadian Tire’s loyalty efforts. This was followed by stints at LoyaltyOne (Air Miles) and Home Depot Canada before Gawtrey joined Home Hardware. There, he worked on Home’s loyalty and CRM programs, including its Pro marketing program and the launch of its loyalty partnership with Scene+.

The Western Retail Lumber Association has named Murray Finkbiner as its 2023 Industry Achievement Award recipient. This award recognizes someone who has contributed to their business, the building supply industry, the WRLA, and the communities in which they live. An active member of the building supply industry since he began working at his father’s lumber yard 51 years ago, he is best known for his tenure at AFA Forest Products. He joined the company in 1988 and took over as AFA’s president and COO in 2014, serving until its acquisition by Gillfor Distribution in 2022.

At Regal ideas, Joe Jacklin has been promoted to national sales director in Canada. Continuing on his launch of the company’s DeckStar Contractor program, he will be responsible for managing the dealer business. Brandon Taylor has joined Regal ideas as territory manager for southwestern Ontario. He comes over from Nuvo Iron and replaces Clifton Phelps, who has retired. Laurence Ballen has joined Regal ideas as territory manager for British Columbia. His background includes retailers such as Sherwin Williams.

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RETAILER NEWS

The Home Depot Canada held its 15th semi-annual Orange Door Project fundraising campaign last month. The campaign combats youth homelessness across Canada by collaborating with local charities to support ongoing initiatives aimed at providing safe, stable housing and life skills development to help youth find a path to housing. Since the program’s inception in 2009, the Foundation has raised over $18 million for youth across Canada, and it hopes to raise $125 million by 2030.

Through the remaining weeks of 2023, RONA continued to convert more of its Lowe’s-bannered stores to the new RONA+ brand. The latest rounds began with 13 stores, all in Alberta, including six in Calgary. The other conversions were in St. Albert, Edmonton North East, Edmonton South Common, Edmonton West, Sherwood Park, Red Deer, and Lethbridge. These were followed by nine more conversions in mid-December at locations around the Greater Toronto Area.

Castle Building Centres has announced its newest member, VP Resources in Invermere, B.C., owned by Bryan and Lauren Kroker. The couple plans to build a brand-new store to showcase a complete LBM and hardware offering for the area’s homebuilder and contractor market.

Quebec hardware chain Gagnon – La Grande Quincaillerie (Gagnon – The Great Hardware Store) held a big celebration in Montreal recently to mark the company’s 50th anniversary. The night included a video history of the company, and a tribute to Yves Gagnon, who had taken over a single store from his father in 1973 and built it into a thriving chain of five home centres. The business is currently run by Yves’ daughter, Geneviève Gagnon.

Patrick Morin, the founder of the retail home improvement chain of the same name, died earlier this month at the age of 96. Morin, along with his wife, Denise Benny, opened their first store in Ste-Marcelline-de-Kildare, in Quebec’s Lanaudière region, in 1960. Over time, the Patrick Morin stores grew to comprise one of the largest privately-held retail home improvement companies in the country, with 22 stores in Quebec. In 2021, Groupe Turcotte, which owns a group of Home Hardware stores in Quebec, bought the family-owned Patrick Morin business with additional investment from Home Hardware’s head office. Morin is survived by his wife and two sisters, along with eight children, 20 grandchildren, and 27 great-grandchildren.

Gillfor Distribution has forged a multi-year national sales and distribution partnership with IKO Industries. With this deal, Gillfor consolidates its shingle and roofing products segment across Canada to work exclusively with IKO to service Gillfor’s independent retail customers.

Alpagroup, a French group and European supplier in the furniture and home improvement industry, has made its official launch in North America, headed by a Canadian, general manager Maxime Lebon. Alpagroup is already a key supplier to many of Europe’s home and home improvement retailers. In North America, Alpagroup is backed by seven divisions that represent a range of products, including flooring, storage, bathroom and outdoor furniture, and custom B2B furniture.

The Lumber and Building Materials Association of Ontario (LBMAO) held its annual general meeting recently, followed by a gala dinner. In its AGM, the board reported that the association ended the year ahead of budget and is looking at developing a program in 2024 of site visits to suppliers’ facilities to increase product awareness among its dealer members. (Any suppliers interested in hosting a factory tour should contact the LBMAO’s president, Trevor Small.)

The total value of building permits increased 2.3 percent from September to $11.2 billion in October, led by gains in the non-residential sector. Residential permits edged up a more modest 0.6 percent to $7.1 billion, following a 2.8 percent increase in September. Gains in Ontario (+7.4 percent), Alberta (+14.8 percent), and Quebec (+7.0 percent) offset declines in the remaining seven provinces. Year-over-year residential construction intentions were up 16.1 percent in October compared with October 2022. (StatCan)

The Western Retail Lumber Association is holding the 30th anniversary edition of its Building & Hardware Showcase from Jan. 17 to 19. Members and suppliers will gather at the Winnipeg Convention Centre for new product launches and the latest tech, trends, and topics hitting the LBM industry. (Click here for more information and to register!)

Acquisitions will be key to BMR’s national ambitions for expansion, says CEO

BMR Group is continuing to pursue growth outside its home province of Quebec, not only in Ontario but with a view to acquisitions nationwide, its CEO says. Hardlines spoke with Alexandre Lefebvre during BMR’s annual buying show, held earlier this month at the Centre des congrès in Quebec City.

“Obviously, we’re a dominant player in Quebec but in the past few years we’ve been able to make inroads, mainly in Ontario. Every year we’ve been fortunate enough to be able to sign fairly big dealers in Ontario, so it’s giving us bigger market share there.”

Lefebvre adds that BMR’s commercial division in the Greater Toronto Area, while “less well known,” is “growing a lot.” That division is part of the Lefebvre & Benoit business that BMR bought into in 2019. Shortly thereafter, Lefebvre moved the top job in BMR.

“More than ever, growing outside Quebec is a priority for us.” It makes sense to pursue that growth “organically, through the Maritimes, Quebec, and Ontario,” but, he added, “the rest of Canada is still very much on the radar. Realistically, it’s going to have to come through acquisitions, so if there’s a good opportunity that presents itself, we’re going to be looking.”

BMR’s management team has ensured the company’s house is in order and ready for growth. “We really solidified our balance sheet, cleared off the debt, so that we’re in a good position to be able to make acquisitions.”

The group offers an assortment of banners under the BMR name, including BMR Express for smaller, convenience-oriented hardware stores and BMR Pro for contractor-oriented dealers. Lefebvre notes that these options can help BMR appeal to dealers in a wide variety of contexts. “We’re a network of independent dealers, so it’s important for us to cater to different markets, different models, different sizes of stores.”

That versatility is further served by BMR’s strength in the agricultural side of the business, as well, which can be a boon for rural communities. “The fact that we have that core, in-house agricultural business gives us that volume, that critical mass to have a strong agricultural offer, which has been really beneficial, not just to the co-ops, but to a lot of the independent dealers as well.”

Mentioning that the company is in the midst of strategic planning, Lefebvre added that “another new vision” for the multi-banner strategy is coming soon.

Kent introduces heavy appliances in select stores in Atlantic Canada

Kent Building Supplies has launched a new and significant addition to its product mix. The Atlantic building supply dealer has begun selling heavy appliances in some of its stores and, effective last week, the new assortments were supposed to be available online as well.

The products are being sold at Kent’s nine big box stores for starters and are expected to roll out to additional stores over time. The company boasts that the major brands, including Samsung, Whirlpool, and GE, are represented in the new offering and the retailer is promoting the fact that it will ship the products directly to customers’ homes.

The launch is getting a push on social media, including Facebook. A contest that invited people to “like” the Kent post made them eligible to win a $2,200 GE stainless steel refrigerator and a $1,000 grocery gift card. While Kent was to have the products available online last week, a search of the website did not turn up any washers, fridges, or stoves. Kent did not respond to queries from Hardlines.

Kent is certainly not alone in taking on appliances. Other hardlines retailers are carrying appliances in Atlantic Canada, including Home Hardware dealers. Both RONA and Home Hardware introduced them about six years ago, following the demise of Sears, which was a major seller of fridges and stoves in Canada. When RONA exited Newfoundland and Labrador at the beginning of 2019, that left further room in the market.

Home improvement retailers advised to guard margins in their Black Friday sales

Canadian retailers from Home Hardware to Hudson’s Bay are taking advantage of the Black Friday sale trend with discount promotions of their own. The day, which follows American Thanksgiving and landed this year last Friday, Nov. 24, is a traditional discount sale day in the U.S. But over the past decade it has become an international phenomenon thanks to the borderless nature of online sales. It long ago surpassed Boxing Day as the biggest shopping event of the year in Canada.

David Ian Gray, a retail strategist and principal at his firm, DIG360, says even home improvement retailers can get some mileage out of Black Friday, and its following Monday online sales day, Cyber Monday (today), but he offers a warning: “With some product exceptions, home improvement and hardlines writ large is not the typical holiday priority for shoppers and these products have different seasons in which to peak.

“With the cost of cutting through the communications noise, especially for independents, there is not much point for many operators fretting about these promotional days.”

However, the big retail banners get involved heavily in the Black Friday phenomenon. Home Hardware, for example, has featured sales on a range of products. A search of its website reveals discounts of 25 percent off DeWalt tools, Philips light bulbs, and BeautiTone paint. The retailer’s own Benchmark power tool line is boasting discounts of up to 55 percent.

Office supply retailer Staples Canada announced a series of sales just two days before Black Friday, which were available only as long as supplies lasted. Customers could get “gate-crasher” specials on products ranging from iPods and printers to luggage and Keurig coffee makers by shopping online beginning at 6 p.m. the night before.

Gray warns hardware and home improvement retailers not to give away too much. “There is a chance to promote traffic with selected features that are relevant to the season, like lights and accessories. But avoid the pressure to crater your margins.”

And more and more retailers are stretching out the Black Friday timeline. This protects them from inventory shortages and can further help protect their staff from being slammed over a day or a few days.

Home Depot Canada has a prominent promotion on its site, inviting shoppers to “save on must-haves for the holiday season” with aggressive pricing on everything from power tools to holiday decorations. Hudson’s Bay began its Black Friday sale on Nov. 17 and runs until Nov. 28. Discounts are being offered on cosmetics, kitchenwares, and clothing. RONA’s website boasts nothing less than “One Month of Black Friday Deals.” Big discounts appear there on power tools, as well, such as 55 percent off Bosch products, plus 50 percent off artificial Christmas trees.

But these extended sales strategies have their downside, says Gray.

“Over the past two years, we’re seeing a stepping back from hype by many mainstream retailers, save for those who strive to ‘own’ Black Friday. There’s also a growing concern the extreme peaks and troughs day-by-day in the season bring extra strain on already tired and stretched front-line and back-office staff. And the peaks create vulnerabilities in the surge of in-store theft.”

Bad Boy Furniture has entered bankruptcy protection in an effort to restructure its business. The Toronto-area furniture and appliance retailer was (in)famous for decades for its TV ads that featured old-time hustle and bravado, with endless variations on the slogan: “Who’s better than Bad Boy? Nooobody!”

Now, faced with high interest rates and a slowed housing market, Bad Boy has filed a notice of intention proposal under the Bankruptcy and Insolvency Act. Faced with $13.7 million in debt, the company has appointed Infinity Asset Solutions to oversee the total liquidation of its entire inventory, valued at $25 million. The decision to hold the liquidation sale is part of Bad Boy Furniture’s strategic restructuring plan, according to a release. The retailer is promoting savings of up to 50 percent on appliances, furniture, electronics and home décor.

The story of Bad Boy began in 1953 with Mel Lastman, a flamboyant Toronto appliance salesman who went on to become mayor of Toronto. That year, his future wife, Marilyn, got Lastman a sales job at an appliance store in Toronto. A year later, he purchased the business. In 1955, he opened his first Bad Boy store. A brilliant self-promoter and outspoken TV personality, he grew the business to 40 locations by 1990.

In 1972, Lastman became mayor of North York, a suburb on the north end of the Greater Toronto Area, a post he held for an impressive 10 terms totaling 25 years. In 1998, he became mayor of Toronto, a role he held until 2003—with somewhat less distinction. (He called in the army to help with snow removal after a major snowstorm in 1999, an incident Torontonians continue to live down to this day.)

In 1991, Lastman’s son Blayne revitalized the image of stores, complete with the striped prison outfit and the infamous “nooobody” slogan. Mel Lastman died in 2021.

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RETAILER NEWS

Lowe’s Cos. reported Q3 revenues of $20.74 billion for the quarter, down 11.7 percent from a year earlier. Adjusted earnings of $3.06 per share were down from $3.27. CEO Marvin Ellison pointed to a “greater-than-expected pullback in DIY discretionary spending, particularly in bigger ticket categories.” The pro side, which accounts for 25 percent of Lowe’s business, saw an increase in comp sales, however. Lowe’s has downgraded its forecast for the full year and expects comp sales expected to be down about five percent, compared to its forecast at the end of Q2 of a drop of two to four percent.

Canac is investing $10 million in the expansion and renewal of its store in Quebec City’s Charlesbourg district. The store was lifted onto beams and moved by truck in what marketing director Patrick Delisle called “a manoeuvre you don’t often see.” The retail space is to be expanded by 10,000 square feet. For the time being, the store is open with limited inventory. It will close Dec. 4, with a reopening planned for the spring.

Walmart posted Q3 earnings of $453 million, compared with a $1.79 million loss a year earlier. Revenues of $160.84 billion were up 6.1 percent from $152.81 billion. In Canada, net sales rose by 5.3 percent to $5.8 billion.

The Home Depot has entered into an agreement to acquire International Designs Group (IDG), a distributor of tile, stone, and other architectural specialty products for contractors. IDG owns finishes supplier Construction Resources, which has pro showrooms across the eastern and southeastern U.S. The world’s largest retailer is acquiring IDG from Mill Point Capital LLC, a private equity firm.

Exchange-A-Blade (EAB) has been awarded the Corporate Leadership Award by the Recycling Council of Alberta (RCA). The power tool accessories maker was recognized in the province’s “Rs of Excellence” program, which honours the special contributions by RCA members to “promote, facilitate, and advocate for a circular economy in Alberta through waste reduction and resource conservation.” EAB has been committed to reusing blades and bits through its resharpening and remanufacturing program since 1976, the vision of Rob Forbes, founder and owner of EAB.

West Fraser Timber Co. has completed its acquisition of Spray Lake Sawmills in Cochrane, Alta. The operation produces treated wood products, dimensional lumber, and a variety of wood residuals and bi-products. It has an annual lumber capacity of 155 million board feet.

Investment in building construction increased by 5.3 percent to $18.9 billion in September. Residential construction spending grew by 7.3 percent, reaching $12.9 billion. Manitoba’s 33.6 percent gain was the largest. Single-family home investment increased 6.4 percent to $6.3 billion. (StatCan)

The annualized pace of housing starts rose by one percent to 274,681 units in October, from 270,669 units the previous month. The rate of urban starts increased two percent, with 257,357 units recorded. Total starts were down 43 percent in Montreal and 24 percent in Toronto, while Vancouver recorded an increase of 35 percent, driven by the multi-unit segment. (CMHC)

U.S. housing starts increased by 1.9 percent in October to 1.37 million units. Building permits edged up 1.1 percent to 1.49 million units following a 4.5 percent drop in September. (U.S. Census Bureau)

The latest instalment of the Hardlines podcast series, What’s In Store, is now live. In this episode, Richard Darveau discusses how Quebec association AQMAT keeps the industry informed through its French-language reporting, and its role in launching the Well Made Here campaign in support of Canadian products. (Click here to listen to this and to all our podcasts with this industry’s leaders and top retailers!)

RONA continues its Lowe’s banner conversions, this time in western Canada

The rebranding of Lowe’s stores in Canada continues as RONA inc. works to shed the brand after being sold by Lowe’s Cos. near the beginning of this year. Under the ownership of New York-based private equity firm Sycamore Partners, 62 Lowe’s stores in this country were targeted for rebranding, which involved renaming them with the RONA name—but with a twist.

RONA+ is the new banner. It has been applied to the Lowe’s stores in Ontario, and now the company has taken the changeover outside of that province, announcing the renaming and reopening of RONA+ stores in the following locations:

• Winnipeg East
• Winnipeg South
• Saskatoon
• Regina
• Nanaimo (shown here)
• Victoria – Tillicum
• Victoria – Langford

Members of RONA’s leadership team joined the store teams as well as elected officials.

The conversion of the former Lowe’s store to the RONA+ banner is part of a wider plan aimed at redefining how Canadians shop for home improvement and represents a significant local investment. Through this process, the company is looking to build on the strong legacy of the RONA brand and build momentum for the Canadian-operated household name.

The latest banner changes add to the list of some 25 stores, all in Ontario, that have already been converted. In addition, the brand consolidation has resulted in the closing of one Lowe’s store, in Vaughan Ont., as well as two RONA stores: a Home & Garden big box in London, Ont., and another store in Belleville, Ont.

According to Jean-Sébastien Lamoureux, SVP for RONA affiliates, wholesale, and public affairs, the company plans to have more than half of the Lowe’s stores converted to the RONA+ banner by the end of the year.

Canadian Tire Retail faces slightly lower traffic and negative comps in Q3

Canadian Tire Corp. reported a Q3 net loss of $66.4 million, compared with earnings of $184.9 million a year earlier. That loss includes $328 million in costs related to CTC’s buyback from Scotiabank of a minority stake in its Canadian Tire Financial Services business. Revenues for the period rose 0.5 percent to $4.25 billion, while consolidated comparable sales were down 1.6 percent as a result of softening customer demand, especially in Ontario and British Columbia.

Canadian Tire stores saw sales drop by nine percent, while comp sales fell by 0.6 percent. Store traffic was also down, though modestly, from last year’s third quarter. However, post-Covid, the company continues to identify its business according to essential and discretionary categories. Essential categories at CTR were up around 4 percent, led by strength in automotive, while discretionary categories were down by about the same amount.

Softness in home projects drove a decline in CTR’s Fixing category, while higher sales of pet and household cleaning were the drivers behind a modest increase in the Living category.

There were a couple of other bright spots as well. “Comp traffic at CTR was down by only half a percentage point, and basket size remained relatively steady,” said Greg Hicks, president and CEO of Canadian Tire Corp., on a call to analysts. And performance by CTC’s private labels continued to grow as they appeal to budget-conscious shoppers. “From a sales perspective, we had strong performance in two of our most profitable owned brands, Motomaster and Pro Series, with sales up 10 percent and 26 percent respectively in the quarter,” Hicks added.

In announcing the results, the company also said it is eliminating three percent of its work force before year’s end, with some cuts already in place. The redundancies affect the equivalent of 200 full-time corporate positions. It is also cancelling “the majority of current vacancies” in its ranks, which amounts to an additional three percent reduction in its human resources.

AQMAT Gala draws record crowd to honour Quebec industry

AQMAT, the Quebec hardware and building materials association, held its 11th Recognition Gala this month at the Fairmont Queen Elizabeth hotel in Montreal. Awards recognized 54 employees, products, and companies in front of a record audience of 530 guests. AQMAT president Richard Darveau was joined by actor Jeff Boudreault of TV’s District 31 as co-host.

The event is a must-attend for the entire Quebec industry, drawing independent dealers and their staff, plus wholesalers, buying groups, and executive head offices from both the retail and vendor sides.

The gala will take a break next year as AQMAT collaborates with the 28th annual Hardlines Conference to create a pan-Canadian event in La Malbaie, Que. Then, the Recognition Gala will move back to the Fairmont Château Frontenac in Quebec City, where it will be held March 27, 2025.

With seating capacity of only 400, the Quebec City venue will be smaller than this year’s Montreal event, which may compel the association to limit attendance from each company, said AQMAT CEO Crystelle Cormier. “To give more people a chance to participate, we are considering limiting the number of places per company.”

(Click here to see a list of all the winners at the Recognition Gala.)

BMR Group held its 2023 Buying Show this month at Quebec City’s Centre des congrès. A record-setting 1,500 dealers, vendors, and partners converged on the historic city to share hot products and services, as well as to showcase private-label brands. Vendors who spoke to Hardlines expressed positivity and enthusiasm about the pace of sales this year.

The event concluded with a gala evening held right in the Centre des congrès and hosted by strongman and brand ambassador Hugo Girard along with comedian Korine Côté. The duo’s seamlessly bilingual repartee accompanied a five-course gourmet dinner.

Addressing the 1,000-strong audience, CEO Alexandre Lefebvre boasted that “again this year we have not lost a single BMR dealer to our competitors.” He added, “BMR is growing at a faster pace than anyone else in our industry. We have an NHL-level team—and I’m not talking about the Ottawa Senators!”

Vendor awards were presented in the categories of LBM (Duchesne et fils), hardware (Ipex), forest products (Tolko), and agriculture/horticulture (Garant). Among BMR’s member retailers, Marianne and Mathieu Moisan of BMR Paulin Moisan, based in Saint-Raymond, Que., were honoured with the Ambassador Award. It was just the latest recognition for these two cousins, who were already named Young Retailers of the Year at Hardlines’ 2022 Outstanding Retailer Awards.

Finally, new dealers who joined BMR over the past year were inducted with a fun NHL-style “draft” announcement. They are H. Dagenais et fils inc. (Saint-Sauveur, Que.), Centre de rénovation Senneterre (Senneterre, Que.), Group Anctil (Magog and Saint-Denis-de-Brompton, Que.), and Leis Lumber Co. Ltd. (Goderich, Ont.). A professionally produced short film took the gathered company behind the scenes of the newly recruited stores, allowing the dealers to speak directly to the audience.

At Grainger, Cecelia Myers has been named VP, group product manager. Myers was most recently VP, digital, at CDW. Previously, she held a series of positions at Groupon and co-founded CakeStyle, an online women’s styling business.

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RETAILER NEWS

RONA inc. has laid off 25 workers at its Boucherville, Que., warehouse, Le Journal de Montréal reports. A spokesperson for the company cited “a surplus of personnel” in explaining the move. In total, some 1,550 employees work at the Boucherville operations, which include RONA’s head office and the distribution centre.

The Home Depot reported third-quarter sales of $37.7 billion, a decrease of three percent from the third quarter of fiscal 2022. Comparable sales for the third quarter of fiscal 2023 decreased 3.1 percent, and comparable sales in the U.S. decreased 3.5 percent. However, in local currency, Canada posted comps above the company average. Net earnings were $3.8 billion, compared with $4.3 billion in Q3 2022.

Canadian Tire Corp. has unveiled Canada’s Christmas Lists, a new gift registry platform that allows customers to build, share, and shop personalized Christmas lists. Shoppers can add their most-wanted items to their list and share with friends and family using a personalized URL. The digitally secure registry, powered by MyRegistry.com, will remain available beyond Christmas for birthdays, weddings, and other special occasions.

Amazon had remained union-free until 84 Amazon delivery drivers in Palmdale, Calif., formed a union in June. They were employees of a firm called Battle Tested Strategies (BTS), one of 3,000 “delivery service partners” (DSPs) that works with Amazon around the world. Amazon subsequently cancelled their agreement with BTS and the drivers went on strike. The drivers claim they are joint-employees of Amazon. Amazon claims they are not their employees.

Discount retailers TJ Maxx and Marshalls will close additional stores in Illinois, Minnesota, New York, and Pennsylvania by the end of next year. That’s after closures this year in Philadelphia and in Minnesota’s Twin Cities. Parent company TJX said it had been “assessing and reviewing our real estate strategies, and our decision to close this store reflects that thinking.”

Taiga Building Products reported Q3 sales of $456.6 million, down 14 percent or $76.5 million from $533.1 million a year earlier. The decline was attributed largely to lower selling prices for commodity products. Net earnings for the quarter rose to $21.4 million from $18.6 million in the previous Q3, thanks to income tax recoveries from the prior year.

Sales of existing homes declined by 5.6 percent month-over-month in October. The actual (not seasonally adjusted) number of transactions came in 0.9 percent above October 2022. The number of newly listed homes fell 2.3 percent, the first decline since March. (Canadian Real Estate Assoc.)

The latest issue of Hardlines HR Advisor hit inboxes last week. In this edition, we look at IKEA Canada’s affordability strategy, how to check references when hiring, and navigating inter-generational working relationships. If you’re not already receiving HR Advisor, click here to sign up for free!

IKEA Canada president talks affordability, sustainability, and accessibility

IKEA Canada organized an in-person event last week to present its annual IKEA Canada Summary Report 2023. The report highlights the company’s ongoing growth and its commitment to making affordable, quality home furnishings that are accessible to Canadians.

The presentation was led by Selwyn Crittendon, IKEA Canada’s CEO and chief sustainability officer, who offered some highlights from the report that reflect how the company has grown over the past year. Crittendon told the audience in a downtown Toronto event space that IKEA Canada’s sales increased by 10.9 percent to $2.9 billion in the fiscal year ending Aug. 31, while national store visits increased by 6.3 percent to 28.6 million. During the year, 1.6 million deliveries were made to Canadian households.

“We are a purpose-driven, value-driven brand but we always put our heart and soul into the products and services we deliver.”

He went on to note some other achievements, including plans to invest over $400 million to support the company’s fulfilment networks in the Greater Vancouver and Toronto areas. In addition, IKEA opened a new distribution centre last year in Beauharnois, Que. Crittendon said it’s the first such facility in this country in over three decades.

But the core of his message that morning was about affordability. He noted the rising cost of living for Canadians and emphasized IKEA’s commitment to producing affordable—and sustainable—products to counter those rising costs. “These are the foundations of our company: function, form, quality, sustainability, low price. We will never compromise.”

Accessibility is another important aspect of IKEA’s strategy, Crittendon said. That includes physically, as the retailer plans to add to its growing list of small-format showrooms, called “plan-and-order points,” with more locations nationally to come, in addition to the ones most recently announced, in London, Ont., and Lachenaie, Que., which will open next spring.

But there’s another aspect of accessibility that IKEA has addressed as well, and that has to do with affordability. The retailer has partnered with RBC to offer a financing plan that will let customers pay for their purchases over 12 months with no interest.

Recession? Maybe, but it won’t be deep, RBC economist tells CHPTA members

Hardlines reported last week on the latest StatCan numbers indicating they predict flat GDP growth for the third quarter ending on Sept. 30. The second quarter was a contraction. Are we headed into a recession (two quarters with negative growth)? While some economists are being pessimistic, a report by Rishi Sondhi to a group of members of the Canadian Home Products Trade Association offered a more upbeat forecast.

Sondhi is an economist at TD Bank. In offering an outline of economic conditions in Canada, he started with China, the world’s second-largest economy. That country has been experiencing five percent growth. “That’s slower than previous years, but still is better than the world in general. But that growth rate is expected to keep falling.”

Moving closer to home, Sondhi said the U.S. is going through some diversifying, what he called “reshoring,” as manufacturers bring some production back home from Asia. That, he said, could cause higher production costs and add to inflation. He expects the U.S. economy to slow following strong five percent growth there. A drop in consumer spending that will continue into 2024 will contribute to that deceleration, he pointed out.

Sondhi next addressed the big question of which way interest rates will move. He suggested they have peaked. “We think the Bank of Canada is done hiking interest rates.” He forecasts that they’ll begin falling gradually by the middle of 2024 and expects them to reach 4.5 percent by October of next year.

He observed that economic growth here has already flattened. It may technically be a recession, he said, admitting it’s certainly flat. Add to that the reality of high interest rates, which continue to suppress consumer spending.

“We forecast weak, subdued growth for the Canadian economy, but we’re not expecting a deep recession.”

AD reports solid performance for Canadian members year-to-date

AD (Affiliated Distributors) reported owner-member sales of $57.6 billion through nine months of 2023, an increase of three percent and a record for the Wayne, Penn.-based contractor and industrial products wholesale buying group. Its Canadian members fared well also, including those within AD’s Building Supplies – Canada division.

Eighty companies have joined the group so far this year, half of them through acquisitions by existing members. Another 35 of AD’s existing 866 members were sold to outside entities. Owner-member same-store sales grew six percent through the first nine months of 2023.

The home improvement division, AD Building Supplies – Canada, was formed when the TORBSA buying group merged with AD Canada in June 2022. That division consists mainly of about 45 former TORBSA member locations, plus new members that have joined since the division was established. Hardlines did not get updated Canadian numbers as of press time. However, the building supplies business accounted for an estimated $786 million in sales in 2022, an increase of almost 10 percent over the previous year (Source: 2023 Hardlines Retail Report).

By country, same-store sales in the U.S. were up seven percent, while comps for Canada were up six percent. The AD division with the highest growth was Safety at 13 percent. Electrical, Industrial, and Bearings/Power Transmission all enjoyed growth of nine percent.

A recent webinar hosted by the Retail Council of Canada offered some important insights into the profiles of various consumer groups in Canada and how they spend on home improvement products.

The presentation was given by two individuals from Environics Canada. David Spira is the director of account management and Michael Scida is director of business development at Environics—in addition to being an alumnus of this industry, having served for almost seven years at Lowe’s Canada.

Scida identified roughly 19,000 retailers that cover the space, not including Walmart or Canadian Tire. About 57 percent of those stores are in Quebec and Ontario. The total aggregate spend, says Scida, is $118 billion.

Environics’ data broke the sales down, with furniture accounting for $33 billion, large appliances for $8 billion, and small appliances and home décor equalling $19 billion in sales. Environics estimates the home improvement category, which includes tools, lawn and garden, building materials, and labour, at $69 billion.

(Note: these numbers differ from Hardlines’ own estimate of the size of the industry as defined in our annual Hardlines Retail Report, as we don’t include the specialty stores or labour, but only sales through traditional hardware and building materials channels, including Canadian Tire.)

“The average Canadian household spend is $7,827 per year on all household refresh categories,” said Scida. But that spend is not consistent across the board.

So, which groups are the biggest spenders? Scida explained that his company created a series of profiles for different demographics among Canadian consumers, based on store traffic. The group profiled various consumer groups and put them into four targeted consumer groups. Older families and empty nesters represent 1.1 million households and an average household spend of $13,188. Middle-aged families, representing 2.6 million households, spend $120,183. Large, diverse families represent $746,000 and spend an average of $12,000 per household. The younger mix is the fourth profile, which spends  an average of $9,247 per year on home improvement.

These target groups represent 29 percent of the population, said Scida, but account for fully 41 percent of the spend in the home improvement and home décor categories. For example, the older families and empty nesters, aged 65 and up, account for eight percent of the population but represent 13 percent of the spend.

But without a doubt, one group stood out. Environics has determined that the highest-spending group, and therefore the one making the biggest impact on spending in the home improvement and home décor categories, is the aging baby boomer demographic.
“The older families and empty nesters are really the key target group for household spending on home improvement.”

How do the different groups gather their information about which products to buy? Not surprisingly, the older demographic prefers to do it in person or on their computers. And they overwhelmingly prefer to complete the sale in person. The younger groups don’t see the need to conduct the transaction in person and are much more comfortable doing the deal completely online.

An executive at Home Hardware Stores Ltd. has been recognized as one of Canada’s Top 100 Most Powerful Women by the Women’s Executive Network (WNX). Vanda Boyd is senior director, in-store systems solutions for the St. Jacobs, Ont.-based retailer. Since 2003, the WNX has celebrated Canada’s Top 100 Most Powerful Women by recognizing community advocates, trailblazers, and thought leaders.

At Derby Building Products, Patrick McKernan has been named territory sales manager, home improvement retail, for the mid-Atlantic region. Based in Lafayette Hill, Penn., McKernan will work to expand Derby’s penetration into Home Depot’s U.S. stores with Novik Stone, Derby’s line of stone siding. His previous roles include working at East Coast Roofing Systems, an exterior residential remodeling company. Most recently, McKernan was at Colonial Electric Supply, a family-owned electrical distributor in the U.S.

DID YOU KNOW…?

… that the 2023 Hardlines Retail Report is your best tool for planning your marketing strategy for 2024? This incredible study examines the sales, market shares, and strategies of the country’s top retail banners. It also identifies the key trends these retailers are facing and looks at how all these trends have translated into sales numbers, with breakdowns by banner, province, and store type. As a Premium Member-Subscriber, you save more than 20 percent on your order, and more than 30 percent when you buy the Retail Report bundled with its companion research, our annual Hardlines Market Share Report. You can click here now to order!

RETAILER NEWS

Federated Co-operatives Ltd. has announced that Swan Valley Co-op will purchase two home and building retail sites, in the Manitoba communities of Swan River and The Pas, from the Minsh Group of Companies. Each property includes over 9,000 square feet of retail space, a lumber yard, and storage facilities. The acquisition is expected to close in late November, with Co-op operations beginning on Dec. 1.

RONA inc. is holding the third edition of its PROvember event in most of its Lowe’s, RONA+, RONA, and Réno-Dépôt stores from Nov. 2 to 29. The event, linked to the VIPpro program, will feature in-store “lunch and learns,” special offers, surprises with purchase, and contests for building and home improvement professionals. In addition, participants can choose at checkout to support the RONA Foundation’s Building from the Heart campaign, which aims to renew living environments and make housing accessible for those who need it.

Castle growth continues in Ontario with its newest member location, Windeco Building Supply in London, Ont. The full-service lumber, building materials, and hardware retailer is getting set to open its doors with a full-service retail storefront in addition to its lumberyard. Owners Peng Yi Chen,Ri Kai He, Tong He, and Xian Yi Jiang will target home renovation contractors and DIYers in London and the surrounding area with their new store.

Wolseley Canada has launched its newest store in the Yorkdale area of Toronto. The 16,000-square-foot facility held a grand opening on Nov. 9.

IKEA Canada is expanding its network of plan-and-order points with additions in Ontario and Quebec. They will be located in London, Ont., and Lachenaie, Que., and are slated to open next spring. The spaces allow customers to consult with specialists to plan purchases for complex projects. The retailer has also opened a pick-up location in Thunder Bay, Ont.

Franchise Times has released its annual Top 400 list, which measures the largest franchise systems in the U.S. by global sales. Ace Hardware placed at number five, the same ranking it held in 2022, behind Burger King, KFC, McDonald’s, and 7-Eleven. Ace posted $23.1 billion in annual retail sales last year, a 3.4 percent increase from the prior year. It opened 168 new locations in the U.S. and 232 total new locations worldwide in 2022.

Canfor Corp. reported a third-quarter operating loss of $65 million, including a $49 million loss from its pulp business. The results include a net $20.8 million reversal of a previously recognized inventory write-down. In western Canada, earnings were squeezed by higher spruce-pine-fir prices.

The value of building permits issued decreased 6.5 percent in September to $11.2 billion. Most of the drop was attributed to a monthly decline in the institutional sector. The value of residential permits increased 4.3 percent to $7.2 billion, led by a 37.2 percent increase in construction intentions in British Columbia. Gains in the value of residential permits in Quebec, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador offset declines in the remaining five provinces. (StatCan)

For its fiscal year ended Aug. 31, IKEA Canada enjoyed a healthy increase in sales of almost 11 percent. But food sales increased 27 percent as Canadian shoppers enjoying more than 15.6 million meatballs and three million hot dogs during the year.

RONA returns to the airwaves with new reality TV show in Quebec

RONA inc. has developed a new reality show for Quebec television called Le grand chantier RONA. The retailer’s first TV effort in 14 years, it will begin airing sometime in 2024, and line up with RONA’s 85th anniversary next year.

The show will be hosted by the popular actor and comedian Marie-Lyne Joncas, and RONA claims it will be Quebec’s biggest home improvement competition, with 12 couples competing over 10 weeks to win a brand-new, fully furnished home worth $700,000.

The new program marks a return to French-language television for the Quebec-based retailer. It was created in partnership with French-language TV network Noovo and the production house Zone3. A show called Ma maison RONA ran from 2003 to 2009 and was a hit across the province. The new program is part of a concerted strategy to focus on the RONA brand now that the company is free of its ownership under Lowe’s Cos. (The Lowe’s Canada business was sold off at the beginning of the year to Sycamore Partners, a New York-based private equity firm.) The Lowe’s-bannered stores in the retailer’s network are currently being converted to a new banner called RONA+.

“We’ve been dreaming of this show for three years,” says Catherine Laporte, VP of marketing for RONA inc. “We wanted to regain the brand leadership across Canada and the place to start was in Quebec, in our home province.”

The show will give an important lift to the RONA brand at home, says Laporte, as the company reinforces its brand post-Lowe’s—and prepares to promote its anniversary, which will land in September 2024. “There are some strong players in Quebec, but we have the leadership with 85 years in the province.”

While English-language TV must deal with spillover from U.S. content, which can dominate the airwaves, Quebec enjoys a strong home-grown entertainment industry. Laporte would love to see the show’s concept rolled out eventually to an English-speaking audience, as My RONA Home was in 2009.  “There’s no reason why RONA couldn’t come out with a home improvement reality show for all of Canada,” she says. “It just makes sense, but first we’ll see how it goes in Quebec.”

Veteran of Home Depot’s early days shares stories of the retailer’s growth and vision

The stories around the start of what is today’s the world’s largest home improvement retailer are filled with colourful characters, determination, and breaks—good and bad. Jim Inglis was there for much of it. He joined The Home Depot early in its growth, in 1983, at a time when the big box model was new, unproven, and widely ridiculed by competitors. He ended up becoming EVP of merchandising and EVP of strategic development before leaving the company 13 years later.

Inglis shared some memories of how Home Depot grew with delegates at the 27th Hardlines Conference, held last month in Whistler, B.C.

Home Depot got its start in 1980 and went public in 1983. Amidst the struggles and the victories that underscored the retailer’s growth, one factor was crucial to holding the company together, and that was its clearly defined culture—what he refers to as “bleeding orange.”

According to Inglis, co-founder Arthur Blank was the numbers guy. His partner Bernie Marcus was the culture and people person. And Pat Farrah, who had first initiated the concept in a store in California before Blank and Marcus joined, was the merchandising visionary. These three individuals formed the basis upon which that orange culture was established.

Inglis noted that by 1988 Home Depot had surpassed Lowe’s in sales. Another big competitor at the time was a chain called Scotty’s in Florida. Scotty’s issued its latest catalogue, proudly displaying its competitive pricing on a range of products. Home Depot staff rounded up the catalogues and put them on the end aisles of its stores, then wrote on them with magic markers that Home Depot would sell anything at 20 percent less than the Scotty’s prices. That take-no-prisoners approach was a cornerstone of the Home Depot philosophy. And that was the last time Scotty’s published a catalogue.

Inglis also talked about Home Depot’s entry into Canada. He admitted that the executives in the U.S. figured Canada to be something of a 51st state, similar to California in market size. But initial forays, with stores in British Columbia, did not go smoothly. That all changed when the company hired a Canadian, Annette Verschuren, to head the company. Within a few years, Canada was Home Depot’s fastest growing division. (PHOTO: Josef Povazan)

Is Canada on the brink of a recession? StatCan says ‘yes’

Amid high interest rates and higher costs, Canadians are wondering whether a recession is in fact in the making. Now some hard statistics give weight to a bad-news scenario.

Statistics Canada released its numbers last week for the country’s August gross domestic product levels, which showed a flat economy with no growth, missing analyst estimates for a tiny increase of 0.1 percent. The agency also released its preliminary forecast for September and the third quarter, which points to continued flat growth.

That, technically, would put Canada’s economy into a recession, defined as two quarters of economic contraction. The GDP in the second quarter contracted 0.2 percent. Some economists says that the latest GDP numbers should put an end to interest rate hikes from the Bank of Canada.

Meanwhile, a new study from TD Bank, “Canadian Housing: Navigating Challenges,” offers TD’s analysis of the Canadian housing market. Unsurprisingly, it says that multiple interest rate increases from the Bank of Canada have depressed housing prices and, consequently, listings. However, there was good news in terms of the degree of housing starts currently occurring.

“Even with multi-year highs in borrowing costs and persistent labour shortages, builders have been able to sustain a pace of housing starts that is roughly 20 percent above pre-pandemic levels and near multi-decade highs,” the report says. However, the report gives national numbers, while observing that Quebec housing starts, in particular, are “retrenching.”

Attacks on retailers are getting increasingly more aggressive, and in one case, more outrageous.

Grand Valley Home Hardware, in the township of East Garafaxa, 100 kilometres northwest of Toronto, was broken into twice in the early morning hours of Oct. 22. Security footage from the second break-and-enter incident shows the perpetrators stealing the store’s safe which was on the second floor (see photo, courtesy of Ontario Provincial Police).

The two suspects first arrived at 2:10 a.m. in a dark-coloured SUV and one of the suspects gained access to the building by removing a window in the side door. The suspect who removed the window was captured on a security camera wearing a dark-coloured pullover with hood, a facial covering, and gloves (see above photo at right). Both individuals spent 35 minutes at the store, but it is unknown whether they stole anything on that first visit.

At about 4:10 a.m., the suspects returned to the store in the same vehicle. This time, the second suspect was captured on video. He was wearing a dark jacket with a hood, a surgical mask, orange gloves, blue jeans, and blue running shoes. His partner in crime re-entered the building and dropped the safe from a second-storey window, where the second suspect placed it on a dolly.

Both suspects moved the safe to the vehicle, placed it inside, and then drove off. They had spent a total of just 20 minutes at the store stealing the safe, security videos indicate. Ontario Provincial Police are investigating but had made no arrests by the time of publication.

The Arthurs family has owned Grand Valley Home Hardware since 2016.

The Home Depot has named Ann-Marie Campbell as senior EVP. She will assume responsibility for outside pro sales efforts and installation services, while continuing to oversee U.S. stores and operations—and the Canadian and Mexican business units. A 38-year veteran of the company, Campbell has served as EVP of U.S. stores and international operations since 2020. Hector Padilla has been named EVP of U.S. stores and operations, where he will lead the company’s three U.S. operating divisions, reporting to Campbell. He has been with The Home Depot for some 30 years, most recently as EVP, outside sales and service.

DID YOU KNOW…?

… that the 2023 Hardlines Retail Report is your best tool for planning your marketing strategy for 2024? This incredible study examines the sales, market shares, and strategies of the country’s top retail banners. It also identifies key trends and forecasts sales for these retailers, with breakdowns by banner, province, and store type. As a Premium Member-Subscriber, you save more than 20 percent on your order, and more than 30 percent when you buy the Retail Report bundled with its companion research, our annual Hardlines Market Share Report. You can click here now to order!

RETAILER NEWS

Carleton Co-operative in Florenceville-Bristol, N.B, will convert its country store to the Ace Country & Garden banner. Founded in 1946, Carleton Co-op consists of some 3,000 square feet and is served by a staff of about 10. Jim Kennedy is general manager and John Nigro is retail manager. In addition to the country store, the site includes a Foodland grocery store, gas bar, NB Liquor agency, and propane fill station.

Canadian Tire Corp. has repurchased Scotiabank’s 20 percent stake in Canadian Tire Financial Services (CTFS). With the $895 million all-cash transaction, CTC is once again full owner of its financial services arm. CTFS is key to the company’s Triangle Rewards program, accounting for some 75 percent of all Canadian Tire money issued each year.

Amazon, the world’s largest e-retailer, enjoyed profits that more than tripled in the third quarter ending Sept. 30. In spite of rising interest rates, and falling disposable income, consumers continued to spend heavily on online purchases. Revenue in the third quarter was $143.1 billion. Profit in the quarter was $9.9 billion compared to $2.9 billion in the same quarter of 2022. Amazon’s workforce, which reached a record 1.62 million workers worldwide at the beginning of 2022 during the Covid boom, has since been cut significantly and now stands at 1.5 million workers.

W.W. Grainger has reported Q3 earnings of $476 million, with profits reaching $9.43 on a per-share basis. Revenues for the quarter came to $4.21 billion.

U.S. farm and ranch retailer Tractor Supply Co. released its third-quarter results that included a 4.3 percent year-over-year increase in sales to $3.41 billion. It also experienced a 0.4 percent dip in comparable store sales. Core year-round merchandise, including consumable, usable, and edible products “significantly outpaced the chain average.” The company noted lesser demand for seasonal goods and big-ticket items.

Ace Hardware has relocated its corporate headquarters to the former McDonald’s corporate campus in Oak Brook, Ill. The new location houses over 1,100 staff and features open workstations, 150 conference rooms, 12 cafes and pantries, a fitness centre, conference centre, multipurpose room, large cafeteria, dining centre, and a variety of collaboration spaces.

PPG posted record third-quarter net sales of $4.6 billion, up four percent over the same period a year earlier. Net income in the quarter reached $426 million, up 29 percent from Q3 2022, when net income was $329 million.

Investment in U.S. construction was up 0.4 percent in December. Investment in residential construction rose by 0.6 percent, with spending on single-family projects up 1.3 percent. (U.S. Commerce Dept.)

The latest instalment of Hardlines’ podcast series, What’s In Store, is now live. In this episode, Richard Darveau, president of the Quebec industry association AQMAT, discusses the work of his organization, including the story of the Well Made Here program, which identifies and promotes Canadian-made products. (Sign up now to get updates about the latest podcasts in your inbox!)

RONA SVP talks about the power of the independent at Hardlines Conference

RONA inc. remains committed to its affiliate dealers under its new ownership, Jean-Sébastien Lamoureux told delegates at the 27th Hardlines Conference. The event was held earlier this month in Whistler, B.C.

The company’s senior vice-president for affiliate dealers, wholesale, and public affairs combined updates from RONA with advice for the industry at large in his address.

“Following the acquisition by Sycamore Partners, we brought the RONA brand back front and centre,” Lamoureux said of the ongoing conversions of Lowe’s-branded stores to the new RONA+ banner.

During his presentation, Lamoureux noted that only hours before, RONA had announced to its dealer network the locations of the next nine conversions. “By year’s end, more than half Lowe’s stores will have been converted,” he said. “Our new ownership understands the value and potential of our RONA affiliated dealer network.”

Regarding RONA’s commitment to independent dealers, Lamoureux admitted that the model has advantages of its own, which fit into RONA’s overall strategy. Independent dealers are “often in more remote areas where big corporate players don’t set up shop,” he said, adding they also have the personal knowledge of their local markets to customize their mix.

That can give independents an advantage in an environment where consumers are increasingly favouring proximity. “People don’t necessarily want to drive 20 or 30 minutes to get supplies for a project, especially when they realize they need more of a product or are missing something.

“The pandemic encouraged Canadians everywhere to prioritize buying local. I encourage you to capitalize on that.”

It’s not only in rural areas that small independents can thrive, either. “We see a clear need for more urban stores that carry the essentials that homeowners need,” Lamoureux observed. Moreover, e-commerce can enable even the smallest stores to offer a wider variety of products than they could accommodate on-site.

“No matter how you choose to do it, if you’re not online yet, you need to work on getting there as soon as possible,” he underscored. “Dealers who have a good online offering and offer buy-online, pick-up in-store can turn their customers from competitors who either don’t offer online shopping or don’t have a bricks-and-mortar store.”

Ultimately, the strength of the local independent lies in service. “I can’t emphasize enough the importance of training your staff to support the top-notch experience you need to deliver to your customers.” (PHOTO: Josef Povazan)

Kent gets uncharacteristically scary—and funny—for Hallowe’en

While it’s well known as a worthy competitor in Atlantic Canada and well regarded as a reliable retail customer, Kent Building Supplies is not known for its sense of humour. With the exception of some very funny ads that come out of Quebec (that’s another story for another day!—Editor), home improvement retailers in Canada have typically provided a very straightforward and upright promotional face to customers.

But a new ad for the Saint John-based retailer, a division of J.D. Irving Ltd., breaks the mould. The bit ties in with the Hallowe’en season with a fictional depiction of a pair of vampires that are regular customers at Kent.

According to online advertising trade publication The Message, the concept was originally pitched to Kent by Accomplice Content Supply Co., a production and animation agency in Halifax.

The video, which runs for almost three and a half minutes, also has a few 30-second variations. It focuses on various advantages to shopping at Kent, including the hospitality of its employees. Since vampires can’t enter a home without being invited, they wait until a Kent greeter cheerfully waves them inside. While the rest of the staff cautiously admit they welcome the business from these long-time customers, they are admittedly wary. “We just keep distance from them when, um … they haven’t eaten.”

The bit leads to the vampire customers buying some Minwax stain, which they take back to their home and use to coat a coffin.

The vampires, a 300-year-old couple named Zaros and Lenora, are played by Logan Robbins and Aryelle Morrison, two actors based in Atlantic Canada. They likewise share the joy they get in shopping at the store, which sells “high-quality products that will last as long as we do,” says the Zaros character. “Ever since Kent opened 40 years ago, it’s been an after-life changer.”

(Watch the ad in its entirety here. It’s great fun!—Editor)

BMR adds to its dealer development team in response to membership growth

BMR Group has been adding to its business development team over the recent months. The group has brought new staff on board to support the growth it says it has seen from stores joining BMR from competing banners.

Based in Boucherville, Que., on Montreal’s south shore, BMR has about 275 members (source: 2023 Hardlines Market Share Report). While the majority of these stores are in Quebec, the group is committed to growth across the country, focusing in the near term on the Ontario market and parts of the Maritimes.

However, efforts continue in the group’s home province as well. The most recent new member-dealer is Groupe Anctil, which has operated in Quebec’s Eastern Townships for five generations. Today, it operates two renovation centres, in St-Denis-de-Brompton and Magog, and has co-ownership of a prefabricated wood structures plant, also located in Magog. In addition, Groupe Anctil operates a Granby-based company specializing in wastewater, sewage, and water treatment.

A grand reopening, hosted by Quebec strongman and BMR ambassador Hugo Girard, was held earlier this month.

To support this ongoing growth both inside Quebec and beyond, BMR has added some new faces to its dealer development team. Fady Faddoul joined BMR in July as business development advisor. He was previously at Ford Motor Co. Cris Morton has been in a similar role since May. His experience includes 12 years with Unilever and seven years with Church and Dwight Co. Melanie Johnson recently joined BMR as business development advisor for Atlantic Canada.

These individuals join fellow business development advisors Gilles Parenteau, who has been with BMR since 2017, and Patrick Cadieux, who came on board in 2015 after 13 years as a hardware store owner himself. The team is overseen by Simon Gouin, BMR’s senior director of business development for eastern Canada since 2021.

More than any other speaker, Romain Mercier brought the e-commerce angle to the 27th annual Hardlines Conference held two weeks ago in Whistler, B.C.

But for all the digital technology referenced in his talk, Mercier, a founding partner of the PS&Co Data Lab in Vancouver, had a fundamentally human message: “Over the decades, nothing much has changed. Most purchases are emotionally driven. E-commerce is still commerce between people. And people do business with people they trust, with whom they share mutual values. This is not rocket science.”

Mercier led off his presentation with a carrot and a stick. The carrot was that there is going to be—if Ottawa has its way—a home-building boom between now and 2030 like Canada has not seen before. “The federal government has finally realized that to get affordable housing we need to double the amount of housing being constructed in the next seven years,” Mercier said. This obviously provides unparalleled opportunities for our industry.

The stick was that retailers are generally in the stone age when it comes to reaching out to customers, digitally, Mercier suggested. “Retailers don’t know very much about their customers,” he said. “Each customer is a persona, is part of a segment. There’s a tendency for retailers to do one-size-fits-all marketing. When, if you knew more about your customer, you could send something personalized.”

But the big question is, how do we do that?

Mercier is a big believer in collecting data, online, about customers. It’s what he does at PS&Co and what he has done over more than 15 years working for some of the biggest names in online tech. “Most businesses have five or fewer attributes [discrete pieces of information] for each customer. What can you say to your customer with that information? Nothing!”

Mercier closed his presentation with a summary of the funding available from the Canada Digital Adoption Program (CDAP). Ottawa has backed this program, first announced in April 2021, with $1.4 billion in grants to small and medium-sized enterprises, plus up to $2.6 billion in interest-free loans from the Business Development Bank of Canada. (PHOTO: Josef Povazan)

DID YOU KNOW…?

… that you can update your subscriptions, place orders, and book your Classified Ads by contacting the newest addition to our Hardlines Team, Jillian MacLeod. She is the person to get in touch with if you want to update your subscription to Hardlines Weekly Report, or to book a Classified Ad. So reach out to Jillian if you need help!

RETAILER NEWS

IKEA Canada CEO Selwyn Crittendon says the company will dramatically overhaul its omnichannel and fulfilment processes in the coming years. Speaking to Retail Insider about two months into his role, Crittendon said that as stores get turned into fulfilment units, some of them are doing their omnichannel processes entirely on their own, without being connected to a central hub or DC.

Giant Tiger Stores will open its second location in Saint John, N.B., on Nov. 4. The 16,675-square-foot store is located at 88 Consumers Dr. The grand opening will include the usual Giant Tiger private-label Marché giveaways, a gift card to the first 100 customers, and an appearance by the chain’s mascot, Friendly, the Giant Tiger. The company now has over 260 locations across Canada.

The RONA Foundation, which oversees the philanthropic activities of RONA inc., completed a new campaign, Home Sweet Home, which ran from September 1 to October 9. Thanks to the involvement of employees and the generosity of customers, more than $730,000 was raised for revitalizing living environments or easing access to housing for survivors of domestic violence and their children, low-income families, and people with special needs or mental health issues. The 175 organizations were selected separately by each local RONA team.

Discount department store banner Zellers has brought back its mascot, a stuffed teddy bear named Zeddy. The plush toy, which stands about 15 inches tall, is available for purchase in-store since Oct. 27 and online beginning today. The retailer has committed to donate $5 out of every $15 sale to support Campfire Circle, a charitable organization that supports children with cancer or serious illness and their families.

Kent Building Supplies in Antigonish, N.S., is taking an additional order on deck chairs that support adults with intellectual disabilities. Kent partners with CACL Antigonish to the sell the chairs, which are made by staff and clients of the non-profit. The Antigonish store had excess inventory this year. Jeff Teasdale, executive director of CACL, told local radio station CJFX-FM that Kent has been supportive in marketing the product and in employing its clients.

York Supplies, a 75-year-old hardware store in Birmingham, England, fell on hard times post-Brexit and post-Covid. Local residents were invited to invest in the business and form a single-store co-operative, in what the BBC called the “first time in England a hardware shop had been saved in this way.” The equivalent of $588,000 in funding was raised in just six weeks.

An employee at a San Rafael, Calif., Home Depot store was arrested last week after an internal investigation pointed to her as a suspect in the embezzlement of $1.2 million over the past year. The employee is accused of taking various amounts out of the store’s cash registers, ranging from $25,000 in a month up to almost $174,000 in August of this year. The woman worked in finance at the store. Police said that her house contained “an exorbitant amount of luxury clothing and handbags.”

Third-quarter sales for West Fraser Timber Co. reached $1.71 billion, up six percent from $1.61 billion in the second quarter of 2023. Earnings for the quarter were $159 million, compared with a loss of $131 million in the second quarter. The company expects total lumber shipments for the year to be similar to 2022, as it has not experienced the severe transportation challenges faced last year. For its North American engineered wood products segment, demand has remained relatively robust, leading West Fraser to forecast that its 2023 OSB shipments will reach levels as high as 6.4 billion square feet.

Toolquip’s Agency’s John Ross, age 67, died of cancer on Oct. 4. Ross was the owner of Toolquip Agency Ltd., a Toronto-based sales and marketing company. After retiring in 2016, he continued his activities as a volunteer with Canada Dog Guides, Canadian Adaptive Snow Sports, and Para Alpine Ski Racing. Ross is survived by his wife, Brenda Ross, his daughters Lindsay, Lauren, and Meg, sons-in-law Eli Winterfeld and Scott Grundy, and granddaughter Abigail.

Investment in building construction rose by 1.1 percent to $17.9 billion in August. The residential sector was up 1.6 percent to $11.9 billion, while the non-residential sector edged up 0.1 percent to $5.9 billion. Following five months of consecutive declines, investment in residential building construction rose 1.6 percent to $11.9 billion. Single-family home investment rose 2.4 percent to $5.9 billion, with six provinces posting gains. (StatCan)

Outstanding retailers from across Canada honoured at Hardlines Gala

Suppliers and retailers from across Canada gathered last week to honour the retail home improvement industry’s best hardware and building supply retailers. The occasion was the 31st Annual Outstanding Retailer Awards, presented during a Gala Dinner during the annual Hardlines Conference. The event was held at the Fairmont Chateau Whistler resort in Whistler, B.C.

Retailers were honoured in eight categories covering the range of retail hardware and home improvement formats.

“While much of the chaos that marked the worst years of the pandemic is behind us, retailers face new and bigger challenges than ever before,” said David Chestnut, vice-president and publisher of Hardlines Inc. “These winning dealers represent the innovation and passion for their businesses, and commitment to customers, that makes them truly outstanding.”

This year’s winners were:

• Best Hardware Store – Hydway Hardware, Fort Vermilion, Alta. Ray Toews and Robyn Currie, Owners. Award sponsored by the National Hardware Show.
• Best Building Supply or Home Centre under 15,000 square feet – Nova Scotia Building Supplies (Castle), Blockhouse, N.S. Andrew Mills, Owner; Curtis Saulnier, General Manager. Award sponsored by Jeld-Wen.
• Best Building Supply or Home Centre over 15,000 square feet – Centre de rénovation Marieville (Home Hardware), Marieville, Que. Louis Turcotte, Eric Berthiaume, Simon Louvet, and Daniel Gervais, Owners. Eric Berthiaume, Store Manager. Award sponsored by BP.
• Best Contractor Specialist – The Cedar Shop (Sexton Group), Calgary, Alta. Tyler Palko and Brad Palko, Owners; Mitch Wile, President. Award sponsored by Trex.
• Best Large Surface Retailer – RONA+ Whitby, Whitby, Ont. Paul Santos, Store Manager. Award sponsored by JRTech Solutions.
• Retail Spirit Award – Hodgins Building Centre (Castle), Wingham, Ont. Brock Hodgins and Jordan Hodgins, Owners; Nik Glazounov, Manager. Award sponsored by Johns Manville.
• Young Retailer of the Year – Barry Eidt, Co-owner of Arthur Ace Hardware, Arthur, Ont. Award sponsored by Acceo Solutions.
• Marc Robichaud Community Leader – Nowco Home Hardware, Lacombe, Alta. Tyler and Deanna Nowochin, Owners; Tami Schneider, Manager. Award sponsored by BMF.

The winners were carefully chosen from a field of high-quality nominees submitted from every part of Canada. They stood out within this elite group thanks to their success in the areas of good business practices, customer relations, innovation, and niche marketing.

Launched in 1992, the Hardlines Outstanding Retailer Awards are the retail home improvement industry’s only national awards program dedicated to celebrating the achievements of hardware and building supply dealers across all banners in Canada. In its 31-year history, the program has honoured more than 170 retailers.

Hardlines Conference brings hot ideas, insights to industry’s decision makers

The 27th Hardlines Conference was held last week, with record attendance, at the Fairmont Chateau Whistler in Whistler, B.C. It was the first Hardlines Conference to be held in Western Canada.

And before delegates sat down to two days of top-flight retail speakers from across North America, they got the opportunity to network and relax at the RONA Pub Night. Retailers, retail group executives, and vendors gathered at Merlin’s Bar and Grill in Whistler for the traditional kick-off opening event at the conference.

The next morning, the event began in earnest as Jim Inglis, consultant and former Home Depot executive, got the ball rolling with his insights and experience, including wisdom drawn from the banner’s Canadian launch. He was followed by Geneviève Gagnon, who runs three companies and five building centres in Quebec. She spoke of her experience growing up in her family store and how she brings an unabashedly feminine touch to the customer experience.

In the afternoon, Hardlines president Michael McLarney gave a state-of-the-industry update that included a discussion of how climate change is impacting home improvement and the challenges of making bricks and mortar a compelling experience to compete against online sales.

Dan Tratensek provided a perspective from the North American Hardware and Paint Association. Cody Smith capped off the afternoon with an update on exciting new developments at Federated Co-op, including the expansion of the co-op’s LBM distribution network in Alberta.

The afternoon closed with a reception hosted by Home Hardware Stores Ltd., leading into the 31st Outstanding Retailer Awards gala dinner (see previous story).

Day two of the conference got started with a heartfelt story from the front lines of hardware retailing. Sylvain and Marilyne Laferriere shared their experience as owners of the Victory Ace store in Mackenzie, B.C. Their challenges running a business in a small community that sees its population dwindle and customers head to the big city to shop, while the town itself fails to provide adequate support for local businesses like theirs.

Zaida Fazlic is the VP of people and culture at Taiga Building Products. Back by popular demand after a heartfelt and informative presentation at last year’s conference, Fazlic again shared her insights into the HR world, outlining the differences and commonalities among the different generations of workers, and how best to manage and integrate those workers.

The day, and the conference, was capped by a presentation from Jean-Sébastien Lamoureux, SVP for RONA affiliates, wholesale, and public affairs at RONA inc. He talked about RONA’s ongoing commitment to its independent, or affiliate, dealers. He also took the time to share some best practices that any independent should follow to ensure success in a changing post-Covid marketplace.

The information shared by the speakers, along with the ability of delegates to network and meet dealers from every part of Canada, made the Hardlines Conference once again a great platform for industry individuals to share and learn from senior thought leaders—and from each other. The Hardlines Conference moves to the province of Quebec in 2024, from Oct. 21 to 23.

TIMBER MART adds Winnipeg distribution centre to serve Prairie members

TIMBER MART has launched a new LBM distribution facility on a three-acre property in Winnipeg. Located within a six-hour radius of buying group members in Manitoba, Saskatchewan, and northwestern Ontario, it will offer weekly deliveries, cross-docking and furtherance service, and easy access for dealers looking to pick up their orders.

With an estimated 600 dealers nationwide, TIMBER MART has almost 120 in the Prairies, including about 35 dealers in Manitoba (source: 2023 Hardlines Market Share Report).

“Our new distribution centre in Winnipeg will offer many of our members in the Prairies all of the conveniences that our existing facilities provide for our members in B.C., Ontario, Quebec, and New Brunswick,” says Bernie Owens, president and CEO of TIMBER MART. “We look forward to providing our dealers with a great source of LBM products and competitive advantage in their local markets.”

TIMBER MART’s new distribution centre is located at 95 Paquin Rd. in Winnipeg. It will be the fourth facility the buying group operates and will represent a significant expansion of their current distribution network. It joins existing facilities in Langley, B.C.; Mount Forest, Ont.; and St-Nicolas, Que.

Geneviève Gagnon isn’t exaggerating when she says was born into the industry. “The home I was born in was literally in the lumber yard” of her family’s store, she recalled in an address to this year’s Hardlines Conference.

As a “pretty turbulent kid,” she was constantly trying to get into the yard, prompting her parents to erect a fence around the house. Even that wasn’t enough to keep her out, so the family moved to a farm they still own today.

Growing up “between the farm and the yard,” as she puts it, Gagnon’s childish persistence wore her parents down until they could no longer refuse to let her to work in the store. She was so young, she says, that isn’t even sure exactly how old she was at the time.

As an adult, she completed an education in finance and tax law. She also broadened her horizons in South Africa, and working on an international project in Tunisia—one that she found personally challenging.

Gagnon’s grandfather founded his general store in the 1940s in Chénéville, Que. In 1973, her father Yves converted it into a hardware store and lumberyard. That outfit was the kernel which grew into Gagnon, La Grande Quincaillerie. Today, with five locations, the banner is one of three businesses Gagnon helms.

The family business spent 35 years under the BMR banner, where Yves served as CEO and Geneviève was named financial director at 26, before going independent in 2020.
Shortly after, Geneviève took the reins from her father, giving Yves “a much-deserved retirement,” and presiding over a period of growth and innovation. “Our two most recent stores are eco-friendly,” she notes.

It also benefits from distinctive marketing. The company’s logo uses a font that was developed in Quebec, and the store’s signature colour is a shade of purple. But it’s not a random choice for the stores’ visual identity. Says Gagnon: “You may think it’s because purple was the only colour not used in the industry. Well, that helped but it wasn’t the decision-maker.”

Rather, she said, “purple represents peace—and it’s a feminine colour and we stand by that.” The banner even has a signature fragrance to welcome customers into the store. Gagnon handed out samples of the scent to each of the conference tables.

“Hardware is soothing. It’s the family feel that we want people to have.”

(PHOTO: Annemarie Grudën)

The BSIA of B.C. handed out its 2023 Industry Merit Awards last week to three individuals who have made significant contributions over decades to building up the province’s retail home improvement industry. The honourees were: Bruce Allen, a RONA dealer-owner who is president of three RONA-bannered stores in North Vancouver, Powell River, and Salmon Arm; Brad McCluskie, business development manager of Coast Distributors, a prominent west coast hardlines distributor; and Ray Cyr, president of Fraser Valley Building Supplies, with six RONA stores in the province.

DID YOU KNOW…?

… that we had record attendance at our Hardlines Conference last week? We had more than 200 people join us in Whistler, B.C., including 85 delegates from the West Coast who were there for the very first time! It was great to meet so many wonderful dealers and suppliers from the British Columbia marketplace! Our thanks again to the BSIA of B.C. for partnering with us to make such a successful event!

RETAILER NEWS

RONA inc. has announced the conversion of nine more Lowe’s stores to the RONA+banner in Ontario. They are: Brampton South, Brampton North, Mississauga Central, Scarborough North-Markham, Scarborough West, Toronto York, Etobicoke South, Milton, and Burlington North. Jean-Sébastien Lamoureux, SVP for RONA affiliates, wholesale, and public affairs, told the Hardlines Conference last week that by year’s end, more than half of Lowe’s Canada stores will have converted to the RONA+ banner.

The BSIA’s 85th anniversary gala took place at the Fairmont Chateau Whistler resort last week, in conjunction with the 27th Hardlines Conference. The association used the event to present its 2023 Orion Awards. This year’s winners are: Parkland Building Supplies 1998 Ltd., a Home Building Centre dealer in Sicamous, which won in the urban hardware and rural lumberyard category; Central Hardware 2018, a TIMBER MART dealer in Enderby, for the building centre contractor yard category; Nelson Home Building Centre in Nelson, winner in the building centre-mini-box category; Windsor Plywood, Courtenay, in the finishing and specialty products category; and Arbutus Home Building Centre, Galiano Island, winner in the mystery shopping category.

Castle Building Centres has added Toronto’s Mr. Bin Inc. as its newest member. Founded in 2019 and proudly rooted in Toronto’s Canadian Chinese community, Mr. Bin encompasses three different business categories: LBM, hardscapes, and construction disposal services. With the move to Castle, the owners will place a renewed focus on the LBM side of the business. A grand opening celebration is planned for late fall.

A new promotion from Home Hardware Stores is designed to encourage its customers to use Home’s newly adopted Scene+ loyalty card. Called the “Scan and Win” contest, the promotion automatically enters a customer into a draw to win a million points every time they scan their Scene+ card when making a purchase at Home Hardware. The contest continues until Dec. 31.

Hudson’s Bay, which is already busy with a relaunched banner (Zellers) and a repositioning at select Bay locations (the Outlet Store) has relaunched Hudson’s Bay Rewards, its loyalty program. The Hudson’s Bay Rewards app delivers exclusive offers personalized to members based on preferences and shopping habits, in-app “Quests” that give members bigger returns, access to special events, and other perks.

Ipex has held the grand opening of its new U.S. flagship manufacturing facility in Pineville, N.C. The 200,000-square-foot injection moulding plant features fully electric injection moulding machines, proprietary automation, and cloud connectivity.

The annualized rate of housing starts rose by eight percent in September to 270,466 units, from 250,383 units in August. The rate of urban starts increased by nine percent, with 250,766 units. Single-detached urban starts were up three percent to 43,077 units. (CMHC)

Sales of existing homes declined by 1.9 percent between August and September. It was the third consecutive monthly decrease, but only about half as large a drop as in August. Declines in Greater Vancouver and the Greater Toronto Area offset gains in Edmonton, Montreal, and Kitchener–Waterloo. The actual (not seasonally adjusted) number of transactions in September came in 1.9 percent above September 2022. (Canadian Real Estate Assoc.)

Bill Simon, CEO of Walmart U.S. from 2010 to 2014, gave an insightful interview with CNBC recently, in which he talked about the recent change in retailer pricing strategies. Inflation, among other factors, is hampering retailers’ ability to offer bargain prices, Simon said. This has resulted in some retailers changing their price promotions. You can see the signs when you enter mass merchants’ stores—if you pay attention. “They usually say, ‘50-inch TV, $199, or something like that. And now they say, ‘50-inch TV, 40 percent off.’ You use percentages when you’re not real proud of your price point,” Simon observed.

Slower growth is forecast for home improvement retail this year and in 2024

Hardware and home improvement retailers enjoyed unprecedented sales growth through the Covid years, with overall sales volumes increasing by more than 30 percent from 2019 to 2022.

But can it last?

These numbers, as reported in this year’s Hardlines Retail Report, showed a big turnaround for the industry from 2019 to 2020—a shift that was as challenging as it was beneficial. Retailers scrambled to get product and to get it into the hands of customers as lockdowns and fears of the spread of the Covid virus held the world in its grip.

The Hardlines Retail Report is an annual study by Hardlines that compiles sales growth year over year, identifying those sales according to store formats—hardware stores, home centres and building centres, big boxes, and Canadian Tire (yes, it gets its own category). Sales are also examined regionally, with performance by each province and territory examined.

Pre-Covid, this industry was watching sales slow to the point that, in 2019, Hardlines reported negative sales growth for only the second time since we began tracking the industry almost 30 years ago. A year later, sales increased by a whopping 15.5 percent, leaving retailers struggling to meet demand while suppliers scrambled to get product, raw materials, and access to shipping lanes. The following year, 2021, saw double-digit growth again, but by 2022 that growth had slowed—or normalized—to less than five percent year-over-year (and below the 6.8 percent rate of inflation).

But 2023 is shaping up for many retailers to be a different reality. According to the report, the industry is forecast to remain steady this year, with an anticipated slowdown in the second half of 2023 that is already, for many dealers, setting in. Regionally, Alberta is forecast to lead any growth this year, with Saskatchewan close behind. Modest growth is anticipated for New Brunswick and Nova Scotia.

The external factors affecting the industry are acute: as interest rates remain high, it puts pressure on housing affordability and on renovation investment, while higher prices for food and essentials are putting further limits on consumers’ discretionary spending abilities.

In addition, major retailers anticipate flat to negative growth for the year, and our surveys of the retailers in this sector, large and small, have forecasted largely flat sales growth this year. Based on all these factors, Hardlines forecasts that growth for the sector will be stable at best for 2023.

(The Hardlines Retail Report features 130 slides in handy PowerPoint format. As a Premium Member-Subscriber, you save more than 20 percent on your order. And save more than 30 percent when you buy the Hardlines Retail Report bundled with its companion research, the Hardlines Market Share Report. To order your Reports, click here now!)

RONA makes acquisition through its Dick’s Lumber division

Since the takeover of the Lowe’s and RONA business in Canada, the new owners have been colouring pretty much within the lines—until now. Under the ownership of Sycamore Partners, RONA inc. has made its first strategic acquisition, and it’s not a traditional dealer.

Through its Dick’s Lumber division, the company’s commercial and contractor business, RONA has completed the acquisition of ZyTech Building Systems, a manufacturer and distributor of building components and engineered wood products. The deal is intended to allow Dick’s Lumber to expand its design and manufacturing footprint to developers and builders in Western Canada.

Founded in 1997, ZyTech is headquartered in Balzac, Alta., and has locations elsewhere in the province in Airdrie, Red Deer, and Leduc, as well as one in Saskatoon and one in Dallas/Forth Worth, Texas. It also has sales offices in Calgary and Stony Plain, Alta. ZyTech had been owned, since 2014, by TriWest Capital Partners, a Calgary-based private equity firm.

ZyTech specializes in floor and roof systems, including I-joists, engineered steel columns and floor trusses, as well as prefab stairs and wall panels, to builders and contractors.

While RONA would not confirm further details of the acquisition, a quote in the original press release attributed to Mike Powell would indicate he will remain CEO at ZyTech. Powell’s background includes a role as VP and general manager at Star Building Materials in Calgary and, more recently, as VP finance for TIMBER MART’s head office. RONA would not confirm whether Powell will report directly to Dick’s Lumber’s president, Paul McKeown.

“We are thrilled to welcome the ZyTech team to the Dick’s Lumber and RONA families,” said Andrew Iacobucci, CEO of RONA inc. “ZyTech is a very strong player in its field. This acquisition will strengthen our position in the Alberta and Saskatchewan markets and improve how we serve our valued customers.”

Garant’s repositioning reflects the power of brand in an age of message clutter

How important is strong branding? Drive down the coast in Miami, Fla., and you’ll see lots of condo developments being built, but more and more these buildings are adopting valuable brand names. Brands like Porsche and Armani are gracing the sides of condo buildings—in an effort to heighten their appeal and sense of exclusivity.

Names such as the Aston Martin Vulcan, with a penthouse listed at $59 million, and the Porsche Design Tower, which has units that cost as much as $32 million, are becoming more common in Florida.

The importance of any company’s brand must be carefully nurtured, something Garant, the outdoor tool manufacturer based in Quebec, has focused on under its general manager since 2021, Pierre-Yves Martin. Drawing on a legacy that dates back more than 125 years, Garant has launched a plan to establish its products as “the Canadian brand of choice for all essential tools and accessories related to outdoor work and projects,” according to the company.

With headquarters in Saint-François-de-la-Rivière-du-Sud, Garant is known for its lines of gardening, snow removal, and striking tools, including rakes, hoes, shears, shovels, sledgehammers, and axes. The company plans to double brand recognition across Canada, with ambitions to increase sales by 50 percent and to boost project design innovation revenues by 20 percent within the next five years.

“We have decided to concentrate all our activities under the Garant brand by gradually eliminating several of our sub-brands,” says Martin.

Garant is working with LG2, a Montreal-based advertising and communications agency. The agency’s mission was to establish “a new brand platform that reflected the company’s evolution while respecting its legacy and heritage,” said Jacques de Varennes, a partner and VP at LG2.

The transition will take place gradually as the Botanica, Xtra, Econo, Cougar, Practica, Blizzard, Agro Series, Proflow, Yukon, Alpine, Nordic, and Lynx brands are gradually pulled from the shelves to make room for a broader Garant identity. Garant is unveiling a new logo, and the transition will be supported by an advertising campaign and a new website that will become transactional in 2024.

When the Hardlines Conference starts this week in Whistler, B.C., the increasing “digital divide” in our industry will be put under the microscope by at least three speakers.

While Home Depot doesn’t release its online sales figures, the company was thought by analysts to do about US$22 billion via e-commerce in its most recent (2022) fiscal year. That represents 14 percent of its online sales.

Walmart, which does break out its e-commerce sales, did a similar online percentage—13 percent of its total sales, or a whopping US$80 billion, in 2022.

In this country, Hardlines estimates that the leading corporately-owned retailers in our Top 20 Retailers—Home Depot, RONA, and Canadian Tire—do about 10, 10, and eight percent of their sales, respectively, via e-commerce. While lower than the U.S. numbers cited above, that is well above the retail industry average in this country. StatCan reports that Canadians spent 6.2 percent of their total retail expenditures through e-commerce last year.

But the dilemma that independent retailers face—compared to the well-heeled, high-tech box stores—is how to compete in a digital world. Indeed, the 2023 Hardlines Retail Report estimates that independent stores in our industry do barely 0.1 percent of their sales online. That means that the box stores are doing 100 times the percentage of online sales that their family-run competitors are doing.

This has been dubbed the “digital divide” by the podcast The Business of Retail. It features David Ian Gray, a retail consultant in Vancouver whose firm DIG360 has consulted for Lee Valley Tools, a hardlines retailer that has excelled at e-commerce in addition to its bricks-and-mortar presence. Gray will be speaking at the Hardlines Conference about—you guessed it—The Digital Divide, among other topics.

The topic will also be addressed by customer-engagement expert Romain Mercier, who specializes in using data to reach customers in the retail space at PS&Co Data Lab, Vancouver. Mercier will talk, in part, about funding that is available to help smaller retailers begin their digital transformation. And, finally, Dan Tratensek, CEO and publisher of the North American Hardware & Paint Association (NHPA) will address the digital divide from a both-sides-of-the-border perspective.

For anyone that doubts that the digital divide is a threat to traditional methods of retailing, consider this: the total sales of Amazon (the world’s largest digital retailer) last year were US$514 billion—which just happens to be approximately the size of the entire American retail home improvement industry. Or 10 times bigger than our own retail home improvement industry.

Joanne Moore has joined Derby Building Products as territory sales manager for the province of Quebec, representing Derby’s Tando Composites and Novik brands. In her new role, Moore will focus on strengthening relationships with distributors and dealers to drive business growth. She will also work with installers and specifiers, as well as siding and renovation contractors, builders, architects, and designers.

At Wolseley Canada, Mark Evans has been appointed director of sales, plumbing, and HVAC for western Canada. In this newly created role, he will work closely with the regional sales managers. Evans was most recently senior director of corporate development at Viega.

DID YOU KNOW…?

… that the entire Hardlines Team is in Whistler, B.C., this week? We are preparing to host the 27th annual Hardlines Conference, in partnership with the BSIA of B.C. It’s gonna be a blast!

RETAILER NEWS

Amazon now has a pickup depot in Iqaluit. The company says the new facility will reduce delivery times in the region to between just three and five days, compared with the previous window of two to three weeks. Amazon has partnered with the airline Canadian North. Flights from Ottawa to Iqaluit every Wednesday and Sunday will transport Amazon Prime orders to northern communities. Iqaluit Mayor Kenny Bell told CBC that he estimated Amazon delivered 200,000 parcels to Iqaluit in 2019.

Home Hardware Stores Ltd. has partnered with local artists across Canada to mark World Mental Health Day. Home Hardware stores have selected organizations in their communities and presented indoor murals featuring colours from BeautiTone’s 2024 Colour Trends Card.

Home Depot is among the major North American retailers facing larger and increasingly better organized theft rings. But where does all this stolen merch go? An investigation in Florida came to the conclusion that a pastor in Tampa was behind a years-long crime ring that was allegedly responsible for stealing $3 million worth of products since 2016. Robert Dell is a pastor who ran a drug recovery program. He is accused of recruiting vulnerable individuals in the program to shoplift the products, then in turn selling those wares online.

Canadian Tire’s JumpStart charity aims to foster equality in sport and recreation. It funds sports fees for the children of families in need—and it also builds sports and recreation infrastructures. The largest playground ever built by JumpStart was officially opened last month in Barrie, Ont. The city’s Painswick Park is the location of the Muriel and A.J. Billes Family Playground.

Wolseley Canada held a grand opening last week for its newest store, in Port Coquitlam, B.C. The 16,000-square-foot facility is one of two stores set to open in British Columbia over the next year, as part of Wolseley Canada’s planned expansion in the region.

Walmart has been testing AI to help its employees serve customers. Staff at a store in New Jersey, among others, use a special app to gauge what needs restocking, plotting the most efficient route they should take between the stockroom and the shelves. The app shaves 30 percent off employees’ time to complete restocking tasks, the company has said. Walmart has said that, within five years, 65 percent of its stores will have this technology.

Richelieu Hardware’s third-quarter profits fell by $30.7 million. Consolidated sales declined by 2.9 percent to $459 million. The company pointed to a weaker loonie and higher warehousing costs as contributing to its financial results. For the year to date, consolidated sales reached $1.3 billion, down 0.8 percent. Since the beginning of the year, Richelieu has made six acquisitions, four in Canada and two in the U.S.

The total monthly value of building permits increased 3.4 percent in August to $11.9 billion. However, residential permits declined 3.7 percent to $6.8 billion, largely due to weaker multi-unit construction intentions in Ontario, Quebec, Manitoba, and Nova Scotia. These declines were partly offset by monthly gains in the value of single-family home permits. (StatCan)

The first half of 2023 showed an uptick in new home construction for several major cities. The increase, however, was slight, and rested largely on the strength of the multi-family sector. Factors like higher building and borrowing costs are expected to put a damper on the pace of homebuilding. Housing starts were up in just two of the six cities reviewed (Toronto and Vancouver) over the comparable period of 2022. (CMHC)

The latest edition of Hardlines Dealer News came out last week. In this issue, we look at how the major banners are wooing pro customers, Home Hardware’s private-label push, and winning social media strategies. Hardlines Dealer News is monthly and it’s free: click here to subscribe now!