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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DID YOU KNOW…?

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

RETAILER NEWS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DID YOU KNOW…?

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

RETAILER NEWS

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

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

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

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

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

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

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

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

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

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

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

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

Our confirmed speakers so far are:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DID YOU KNOW…?

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

RETAILER NEWS

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

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

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

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

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

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

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

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

A couple of hundred Canadians were among the thousands of attendees at Orgill’s 2024 Spring Dealer Market, held Feb. 22 to 24 at the Orange County Convention Center in Orlando, Fla.

The event brought together retailers from around the world to connect with vendors that were represented in more than 1,200 booths throughout the show floor. The market also included model stores, support services, and special buys, plus a stage that hosted a range of educational sessions.

“Now, more than ever, retailers in this industry need to be proactive about finding ways to compete and succeed, and our market is designed to provide them with the tools they need to do just that,” said Boyden Moore, president and CEO of Orgill. “We are very thankful to all the retailers who are here and all of our vendor partners who step up to make the event the best in the industry.”

One area that drew lots of attention was a brand new one: the Farm and Pet showcase. This area featured products for both household pets and agricultural applications. In addition, an adjacent “Pet Oasis” gave attendees a spot to unwind and interact with rescue dogs—which were all available for adoption.

An important part of the market for Canadians (at least, we’d like to think so—your humble Editor) was the chance for Canadian dealers to gather in one place at Hardlines’ Canada Night reception. Dealers in attendance came from a range of banners and buying groups, including Castle and TIMBER MART, as well as stores from other banners looking for fill-in lines or alternative sources of wholesale supply. They all met at a British-style pub near the Orange County Convention Center, where the Orgill event was held.

Orgill’s Online Buying Event began on Feb. 19 before the Dealer Market and continued until March 3. There, retailers could access promotional buying opportunities, shop for seasonal merchandise, and browse the thousands of new products.

At Orgill’s 2024 Spring Dealer Market, held recently in Orlando, Fla., dealers were largely upbeat, even though the industry in North America is stalled somewhat. Following a less-than-stellar year, the forecast for the next few months remains moderate.

“It’s very similar in both countries,” said Orgill’s EVP of marketing and communications, Greg Stine. “It appears to us that both the U.S. and Canadian markets are in a kind of ‘Covid shadow’ recession.”

Dealers certainly benefited during the restrictions of the pandemic, but the industry is feeling the fallout now. “It’s not horrible, but it’s tight. It’s hurting retailers, or at least making it harder for them to grow in place in the shadow of the Covid bubble.”

For example, he said, people may typically want to paint their homes or purchase a big item such as a barbecue every six or eight years. “Our industry has got this rhythm where we knew what everybody was going to need, which months they needed that kind of stuff in, and then Covid came along and got everyone locked in their houses. And then the buying patterns blew up and changed. Then, after Covid happened, they changed again.”

Stine says that dealers became so used to driving volume on low-margin products over the past couple of years. Now, however, they can change up their assortments, increase the value proposition to their customers, and drive higher margins with more turns out of the front end of their stores.

Against this backdrop of a disrupted market, dealers in attendance were nevertheless busy seeking out special buys, learning about new retail services, and investigating the offerings at the market’s giant new product showcase area.

Lowe’s Cos. presented its fourth-quarter and full-year financial results for 2023 last week. Like rival Home Depot, which reported the previous week, Lowe’s was impacted by slower activity in the housing market in a year marked by high borrowing rates. Still, its annual profits rose even with the loss of sales from RONA, Lowe’s Canada, and Dick’s Lumber, whose acquisition by Sycamore Partners was finalized in February.

DIY customers, too, were “hesitant to spend on big-ticket purchases for their homes,” CEO Marvin Ellison said on an earnings call. “Those that did engage in home improvement activities took on smaller, non-discretionary projects with a heightened focus on value.”

The company said it earned net income in Q4 of $1.02 billion, up from $957 million in the comparable period of 2022. When costs related to the sale of the Canadian business are factored out, earnings came to $2.28 per share. Sales declined to $18.6 billion from $22.45 billion in the previous Q4, which was a week longer and also included sales in Canada.

Revenues for the year came to $86.4 billion down from $97 billion in 2022, while profits rose to $7.7 billion.

Like Home Depot, Lowe’s is continuing an aggressive strategy of outreach to contractors. Ellison noted that, “despite a challenging macro environment and difficult weather in January, our comparable pro sales were flat quarter-to-quarter.”

The company, Ellison said, is “focused on executing our wholistic pro strategy, with more convenient fulfillment options, an enhanced product assortment, creating a best-in-class digital experience, and a rewards program that incentivizes long-term loyalty.”

CFO Brandon Sink told analysts that “pro sales should continue to outpace DIY,” looking ahead.

Lowe’s outlook remains cautious into 2024. It’s predicting that earnings will fall short of estimates, at about $12 per share. Comp sales are likewise expected to come in two to three percent lower than 2023.

There’s lots going on at Home Hardware Stores—on all fronts, from merchandising and store relations to technology and new product development. We recently talked with Laura Baker, chief marketing officer at Home Hardware Stores Ltd., about these and other topics. We continue our report on that exclusive interview here.

One of the big announcements Baker shared was Home Hardware’s pending entry into the tiny homes market, a phenomenon that has been drawing attention in both small-town America and in laneways of major centres like Toronto and Vancouver.

“We’re launching access dwelling units in our Beaver Homes and Cottages and the Backyard Package Projects program,” says Baker. “That’s another big thing that consumers are thinking about with real estate—whether it’s children living at home longer, the need for more secondary spaces in their homes, the idea of creating an Airbnb, or severing real estate to have several real properties on one place.”

Baker says the new lines will be launched “later in the year.” All products in the design packages will be available from local Home Hardware Building Centre dealers. Customers can even source contractors through those dealers as well.

While the tiny homes movement is definitely a growing trend, Baker says the move was made strictly as a response to the needs of Home Hardware customers. “We’ve been in this business for a long time with Beaver Homes and Cottages, and our packaged programs with decks and garages,” so the Beaver Homes architects are updating their plans to match those consumer demands. This will let homeowners “add space in a creative way or to add revenue.”

Despite their size, these dwellings—some as small as 200 square feet according to other websites—provide opportunities not just for smaller communities with lots of space. They are also being squeezed into lanes and garage lots in high-density urban markets.

And talking about urban markets, Baker says Home Hardware recognizes the value of its stores in big cities. She says the company’s commitment, however, is to the dealers and it relies on those dealers to fill in those urban markets.

But she admits this approach has its problems. “Something that has been challenging us a bit is downtown Toronto, in terms of condo development and even in terms of transit. We continue to see amazing traffic into both our building centres and our hardware stores, and we continue to support those customers and those dealers in those markets. Nothing is changing in that regard in terms of how we want to grow.”

Baker emphasizes the importance of having stores in those markets, but Home’s online presence can help too. “I think the biggest thing is what we’re doing on our website to support customers and get products delivered to their closest store—or wherever they are.”

Castle Building Centres Group has a new business development manager for the Newfoundland and Labrador regions. Brian Warr was the fourth-generation operator of George Warr Ltd., in Springdale, Nfld., where he spent 28 years operating Warr’s Castle Building Centre. He left the industry for almost a decade to hold various positions with the provincial government, including serving as the Newfoundland and Labrador MHA for Baie Verte-Green Bay and most recently as deputy Speaker of the House of Assembly. In his new role, Warr’s responsibilities will include the support, development, and growth of the existing member base, while also cultivating new opportunities in the region.

DID YOU KNOW…?

… that the 2024 Hardlines Conference is coming to the province of Quebec for the first time in its history? The event will take place Oct. 22 to 23 at the Fairmont Le Manoir Richelieu, a gorgeous resort in the province’s Charlevoix region, and we will put this one on in collaboration with AQMAT. Save the date—and watch for more info in future issues!

RETAILER NEWS

RONA held its Vendor Forum late last month, welcoming about 350 participants and 150 vendor partner companies to learn about its priorities and strategies for 2024. Attendees also had the opportunity to meet with members of RONA’s executive leadership and merchandising teams, including chief merchandising officer Doug Young, a former VP merchandising from Canadian Tire who joined RONA last autumn.

A Montreal law firm has agreed to a $2.5 million settlement in a class action lawsuit against Dollarama. The lawsuit claimed Dollarama had allegedly mishandled its Environmental Handling Fee pricing. EHF is charged by many retailers on environmentally-hazardous products such as batteries. Under Quebec consumer protection law, the full price of an item must be displayed by a retailer. Dollarama has denied any wrongdoing or illegality. If approved by the courts on April 9, Canadian customers who qualify will be able to apply for a $15 Dollarama gift card.

Trying to cope with “rampant shoplifting,” a long-standing San Francisco hardware store is using a novel technique to cut down on its shrink. It has employees escort customers while they shop. Customers must wait at the entrance of the store until an employee is available. According to CBS News, Fredericksen Hardware has been working to cut shoplifting in the store, which has been operating since 1896.

Amazon is partnering with non-profit Les Produits du Québec to offer a portal through which consumers can order more than 1,000 Quebec-made products, CBC News reports. The province’s government had previously launched Le Panier Bleu, a directory and later a transactional website for purchasing Quebec products. Critics feared the Amazon partnership would undermine Le Panier Bleu. In fact, the four-year-old program was axed last week. Le Panier Bleu managed, during its existence, to register more than 600 retailers from Montreal to the Côte-Nord region and display some 250,000 products.

SUPPLIER NEWS

Taiga Building Products reported Q4 net sales of $367.7 million, down by $33.1 million from $400.8 million a year earlier. Net earnings fell to $9.4 million from $9.7 million. Sales for the year amounted to $1.68 billion, compared with $2.19 billion in 2022, a decline attributed to lower selling prices for commodity products. Annual net earnings of $61.3 million marked a drop from $88.6 million in the prior year.

Sales of existing U.S. homes rose by 3.1 percent in January on an annualized basis. Year-over-year, sales declined by 1.7 percent. Prices increased across all four geographical sectors of the U.S. (National Association of Realtors)

The latest instalment of our podcast series What’s In Store has gone live! In this episode, we talk to workplace specialist Pierre Battah. He shares his insights on how dealers can manage their HR function “on the fly” and work with their teams to increase engagement. Sign up now to get updates about the latest free podcasts in your inbox!

The 2024 Hardlines Conference is coming to the province of Quebec for the first time in its history. The event will take place at the Fairmont Le Manoir Richelieu, in the Charlevoix region, in collaboration with the Quebec industry association AQMAT, Oct. 22 to 23, 2024. (Shown l-r: David Chestnut, vice-president and publisher at Hardlines; Richard Darveau, president of AQMAT; and Hardlines’ Michael McLarney)

This is the only national event for the home improvement industry that is open to all banners and suppliers. We take great pride in being able to host top retailers and buying group executives from across the country, as well as leading wholesalers and manufacturers, working closely this year with AQMAT and its members.

We don’t want to give away too much (you’ll have to wait until next week for details—your sly Editor), but we have lined up senior executives from some of the country’s top retail groups. The event will be a truly national, bilingual experience, with presentations available in both official languages thanks to simultaneous translation onsite.

At the 28th annual Hardlines Conference, you will join your colleagues and customers for two incredible days of information and trends, as well as a fantastic networking experience. Please mark your calendars for Oct. 22 and 23!

For the second year in a row, TIMBER MART held its national buying show with a traditional in-person event, which was held at the Toronto Congress Centre in mid-February, supported by a virtual online version.

“Once again this year, we’re seeing very strong attendance and support for our show thanks to the virtual convenience it has to offer alongside the member-exclusive deals and great networking opportunities available,” said Bernie Owens, president & CEO of TIMBER MART. “The hybrid show format is proving to be a valuable and cost-effective option for dealers and vendors alike and is likely one that is here to stay.”

The physical show drew hundreds of TIMBER MART dealers and staff from across the country, who were able to check out 227 vendor booths on the 70,000-square-foot show floor. Highlights of the show included displays and attractions such as a pallet-buy area, with a wide range of products for sale in pallet quantities.

At the centre of the floor, the TIMBER MART area encompassed hubs for all of TIMBER MART’s services and programs, including TIMBER MART LBM distribution, dealer marketing, merchandising, and banner support.

Owens pointed out that the majority of TIMBER MART dealers don’t fly the TIMBER MART banner, preferring to rely on their own brand in their respective markets. On the other hand, some dealers embrace the TIMBER MART banner, making them “part of something bigger.”  He sees this flexibility as a strength of the buying group, adding that the group can offer varied options to its dealers, depending on how each of them chooses to go to market. “It’s about adding value to the independent dealer without adding a heavy cost to them,” he told Hardlines.

On Feb. 14, TIMBER MART hosted dealer meetings where members were kept abreast of the group’s activities. At the end of that day, a welcome reception was held for attendees. And the show included a networking and recognition reception for vendors.  Select suppliers were presented with awards for their excellence in customer service, dealer support, product value and operations.

The Home Depot reported last week its financial results for Q4 as well as the fiscal year 2023. The year was marked by a lacklustre housing market that appears likely to continue well into 2024.

“I’d say we have a neutral look on housing for 2024,” CEO Ted Decker said during an earnings call. “We don’t think there’s incremental pressure, nor do we think that we’re quite ready for a hockey-stick recovery.”

Home Depot’s Q4 earnings of $2.80 billion represented a drop compared to $3.36 billion in the comparable period of 2022. Revenues in the quarter likewise declined to $34.79 billion from $35.83 billion. U.S. same-store sales for the quarter were down 3.5 percent, CFO Richard McPhail noted on the call. In Canada, the decline was less steep, while the Mexican market even saw comp sales grow.

For the full year, sales declined by three percent to $152.7 billion. Comp sales fell by 3.2 percent overall and by 3.5 percent in the U.S. Net earnings slid to $15.1 billion, compared to $17.1 billion in 2022.

The retailer’s focus on its contractor clientele was a theme of 2023 that Decker said will carry over into this year. December saw Home Depot acquire Construction Resources, a distributor of appliances and specialty products for pro customers.

“By the end of 2024,” Decker told analysts, “we will have 17 of our top pro markets equipped with new fulfilment options, localized product assortment, an expanded salesforce, and enhanced digital capabilities, with trade credit and order management in pilot or development.”

Still, the mood remains cautious for fiscal 2024, which is a week longer than last year. Home Depot is projecting only a one percent sales uptick this year, during which it will open 12 new stores.

“Our market is on its way back to normal demand conditions,” McPhail told CNBC. “We’re not quite there yet, but the pressures we saw in 2023 are receding.”

There was a time when dealers debated whether to charge for deliveries at all. Today, the need for charging customers for the range of services a dealer can offer, including getting product to a jobsite, is accepted. However, some dealers still offer free delivery, introduced during the pandemic. Either way, the logistics of managing those deliveries effectively are more complex than ever.

In recent years, new technologies have driven dealers to tweak their delivery services for greater efficiency. That’s often translating into centralized distribution and inventory management. For example, Fraser Valley Building Supplies’ three RONA affiliates in the Lower Mainland of British Columbia use the company’s biggest yard in Mission as their distribution point. That yard is stocked with higher levels of building materials, says Ray Cyr (pictured), Fraser Valley’s president.

Centralization saves time and money at a time when equipment and drivers are more expensive, and as dealers are considering where technology might fit into their delivery services and fleet management.

Delivery can be a significant expense, and what dealers charge their pro customers for the service is at best ancillary to the overall cost. In 2022, Fraser Valley spent $1.2 million to add to its fleet, which now consists of 25 vehicles, many of them boom trucks with arms up to 45 feet for second-floor drops and up to 105 feet to reach higher elevations. Cyr says that four of those vehicles are owned and operated by independent drivers, some of whom were once Fraser Valley employees.

Fraser Valley charges for delivery by zones, and the charges range from $55 to $155 per trip, plus $3 per minute for crane time, which typically averages around 20 minutes.

Driver shortages still pose a challenge, one that Cyr is meeting by looking to hire a part-time fleet manager. Their role, in part, would be to keep scheduled maintenance from falling through the cracks. Fraser Valley has 22 drivers, ranging in tenure from two to 30 years. Cyr says driver shortages in his market had abated somewhat over the past 18 months. But other dealers are still struggling to hire and replace drivers when they leave or retire.

(This is an excerpt from a larger article that will appear in the next issue of our sister publication, Hardlines Home Improvement Quarterly. This amazing magazine gets mailed out four times a year to 11,000 dealers and store managers across Canada. Retailers can subscribe to HHIQ for free and suppliers can get it for just $90 per year. Simply click here!—Your ever-helpful Editor.)

At Tyndale Advisors, Orgill’s marketing arm and subsidiary, Jim Rivas has been promoted to the position of president. Rivas was most recently director of retail technology at Orgill. In that role, he managed Orgill’s retail operations and technology services consulting.

DID YOU KNOW…?

… that the latest issue of Hardlines HR Advisor hit inboxes last week? In this edition, we look at the benefits of decision-making maps, the power of mentorship, and managing labour costs. If you’re not already receiving HR Advisor, click here to sign up for free!

RETAILER NEWS

Canadian Tire’s two product development labs, in Calgary and Toronto, were a focus of a Globe and Mail feature (titled “Inside the lab”) published on Feb. 21, as part of the newspaper’s Report on Business Magazine. The article said that, under the rubric of Canadian Tire’s “Better Connections” project, begun during the pandemic, the retail chain is trying to bring 12,000 newly-developed SKUs to market by the end of 2025.

Walmart reported Q4 earnings of $5.49 billion, compared to $6.27 billion a year earlier. Sales rose 5.7 percent to $173.38 billion. In Canada, net sales rose by 1.8 percent to $6.0 billion, with comp sales growth of 1.5 percent. At the same time, the retailer announced it will acquire TV maker Vizio for $2.3 billion.

Loblaw Cos. Ltd. reported Q4 net earnings of $541 million, or $1.72 per share, up from $529 million ($1.62) a year earlier. Sales rose by 3.7 percent to $14.5 billion. Revenues for the full year came to $59.53 billion, an increase of 5.4 percent. Net earnings grew by 9.4 percent $2.09 billion.

SUPPLIER NEWS

Owens Corning had a solid Q4, owing to a surge in roofing sales, and outperformed analyst expectations for its year-end results, the company announced on Feb. 14. The company reported that it had a US$131 million Q4 profit and US$9.68 billion in revenue for the year. Roofing sales were up 16 percent in the quarter, versus Q4 2022, driven by strong demand and favourable pricing. Insulation sales for the quarter were down three percent, while composite sales fell 13 percent.

Investment in building construction edged up 0.3 percent month over month to $19.8 billion in December. Residential construction spending grew by 0.3 percent to $13.8 billion, led by a 12 percent gain in Prince Edward Island. Investment in detached single-family homes declined 1.0% to $6.5 billion. (StatCan)

The national inflation rate dropped to 2.9 percent in January, a lower-than-expected number, and down from 3.4 percent in December. Lower gasoline prices were the primary driver of the drop. The Bank of Canada had raised interest rates 10 consecutive times before holding steady at five percent since last July. (StatCan)

The federal government’s Canada Greener Homes grant is coming to an end, expected to close to new applications by the end of next of month. The program provided up to $5,000 toward renovations increasing energy efficiency, and its demise is prompting concerns about the job security of the auditors who complete the required assessments.

Canadian Tire Corp. reported its fourth-quarter and year-end results last week. Revenue was down 16.8 percent from Q4 2022 to $4.44 billion, falling short of expectations for the company. Not including petroleum, revenue actually decreased by 17.8 percent. Consolidated comparable sales were down 6.8 percent.

Retail sales fell 7.1 percent to $5.32 billion compared to the fourth quarter of 2022, while Retail sales excluding Petroleum were down 6.9 percent. This reflected “continued softening of consumer demand, compounded by weaker sales in winter categories across all banners, due to unseasonable weather across the country in December,” the company reported.

Automotive, however, stood out as CTR’s strongest division during the quarter. CTR’s consolidated comp sales decreased 6.8 percent.

“Our performance last year fell short of our expectations as our team continues to navigate a challenging macroeconomic environment,” said Greg Hicks, president and CEO of Canadian Tire Corp.

For the full year, Canadian Tire’s consolidated retail sales were $18.50 billion, down 3.9 percent. Consolidated retail sales, excluding petroleum, decreased 3.1 percent and consolidated comp sales were down 2.9 percent. Consolidated revenue for the company declined 6.5 percent to $16.66 billion.

Revenue, excluding petroleum, decreased by 6.1 percent compared to the same period last year, with the decline in the Retail segment partially offset by Financial Services growth.

“In the near-term, we are taking a measured and cautious approach to our operating plans. While the pace of our investments has slowed, we remain committed to our strategy as we balance tough short-term decisions with our long-term objectives,” added Hicks.

The industry is watching one of its top players go through several changes in recent years, as it evolves from its dealer-based roots into a national retail-focused entity. In an exclusive interview with Laura Baker, chief marketing officer at Home Hardware Stores Ltd., we dig into how the company is managing those changes while holding onto the values that made Home Hardware the retail powerhouse it is today.

Baker joined Home Hardware in 2021 as vice-president of marketing. Less than a year later, she got her new title as CMO. Looking at how the company goes to market, she shares what Home Hardware’s branding signifies, noting that it’s still built around the dealer network.

“It really is about our dealers and about our team members in the stores providing that amazing, friendly experience and customer advice to help get that project done. And we want to be that one-stop shop for consumers and pros to get everything they need to get those projects completed.”

The company continues to focus on supporting dealers as an integral part of the communities in which they serve: “That is who we are.” That mandate is more important than ever, Baker adds, as the company celebrates its 60th anniversary this year.

A lot of attention has been paid to the pro customer in this industry in recent years, and Home Hardware is no exception. Most recently, it launched a loyalty card especially for contractors and trades. But, says Baker, the DIY customer has not gotten lost in the shuffle. In fact, she calls them “essential to our business.” She and her team think about the retail and contractor sides as both equally important.

“A lot of our advertising really focuses on the DIYer customer. Even if you’re not necessarily going to do it yourself, you are maybe going to get some assistance getting it done. It’s the consumer at the end of the day that’s driving those projects and helping to dictate where those products get bought.” She adds that this approach takes the contractor into account by helping to inspire that contractor’s own customers to take on more projects.

For DIYers, however, there is still a big push on certain types of low-cost projects they can do themselves, especially in light of the high costs surrounding home ownership, including high interest rates and continued inflation. “You’re going to see a huge stress from us on painting, and our BeautiTone paint, on how you can rethink colour and change a space with a low-cost project you can do yourself in a couple of hours or over a weekend.”

Sexton Group has added a modular home builder, Maison Nordique, as its newest member. The family-run business in Abitibi-Témiscamingue, Que., has been manufacturing prefabricated homes in the region for over 50 years. The company specializes in building homes that are designed for the surrounding communities in the northwestern region of the province.

But Maison Nordique is not the first modular home builder in Quebec to join the Winnipeg-based group. It already has members there and farther east in Atlantic Canada.

In fact, Sexton has had a strong representation by modular and pre-fab home builders for years. “Manufactured home builders are not traditional building supply dealers, but they are big consumers of LBM,” says Eric Palmer, president of Sexton Group. He adds that both sides see the opportunities that exist by aligning with the group. “At the end of the day, they’re trying to buy their LBM products at the best position—and that’s where we come in.”

The influx of pre-fab home builders really gained momentum when Suzanne Walsh joined Sexton Group seven years ago. Before her move to Sexton, Walsh had been doing sales of exterior building products for a major supplier. Among her key customers were a number of modular home builders across western Canada. Collectively, those companies were part of a co-operative of modular builders called BNBC. When she became a business development manager for Sexton in 2017, she identified that this group of dealers would be a good fit to add to Sexton’s ranks.

Over time, Walsh, who was promoted last month to director of business development for the entire country, succeeded in bringing most of  the members over to Sexton, as these dealers, she said, recognized they needed more product support and better terms.

However, Sexton’s appeal to modular home builders dates back much further than even this and includes dealers like Nelson Lumber Co. in Lloydminster, Alta., and Champion International. When Champion signed in 2014, it had five Canadian locations and was considered the largest modular home builder in the country.

“We’re a lot less retail-oriented than the other groups,” says Palmer, “which is where we fit in.”

Home sales activity recorded through Canada’s real estate MLS System rose 3.7 percent between December 2023 and January 2024, reports the Canadian Real Estate Association. The latest increase builds on a 7.9 percent month-over-month increase recorded the month prior.

According to CREA, activity is now back on par with 2023’s relatively stronger months recorded over the spring and summer, but 2024 is starting about 9 percent below the 10-year average.

National gains were once again led by the Greater Toronto Area, along with Hamilton-Burlington, Montreal, Greater Vancouver and the Fraser Valley, Calgary, and most markets in Ontario’s Greater Golden Horseshoe and cottage country.

The actual (not seasonally adjusted) number of transactions came in 22 percent above January 2023, the largest year-over-year gain since May 2021. However, this activity is still running at below-average levels. While last month showed a double-digit gain over the same month a year earlier, January 2023’s sales represented the worst start to almost any year in the past two decades, according to CREA.

The number of newly listed homes edged up 1.5 percent on a month-over-month basis in January, although it remains close to the lowest level since last June.

“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,” said Larry Cerqua, chair of CREA. “There’s a consensus that the market will probably look quite a bit different this year compared to 2022 and 2023.”

Recent price declines have been located mainly in Ontario markets, particularly the Greater Golden Horseshoe and, to a lesser extent, in British Columbia. Elsewhere in Canada prices are mostly holding firm or in some cases, such as in Alberta and Newfoundland and Labrador, prices have been continuing to climb.

Martina Pileggi has been promoted to the role of senior director for the North American Business Partners at The Hillman Group. A veteran HR executive, she was previously head of HR for Hillman Canada.

At M-D Building Products, Andrew Gladstone has been promoted to VP of sales, Canada (pro and consumer channels). Gladstone joined the company in June 2022 as VP of sales, retail channel. He is based at M-D’s main sales and marketing location in Milton, Ont.

DID YOU KNOW…?

… The latest edition of Hardlines Dealer News has hit subscriber inboxes. In this issue, we look at Home Hardware’s outreach to contractors, how changes at RONA reflect its commitment to independents, and the importance of jobsite delivery post-pandemic. Hardlines Dealer News is monthly and it’s free: click here to subscribe now!

RETAILER NEWS

Patrick Morin has doubled the footprint of its distribution centre in order to support the growth of its store network. The addition of 150,000 square feet brings the facility’s total surface to more than 340,000 square feet. It includes 52 loading docks and a 400,000-square-foot lumber yard.

The RONA corporate store in Sainte-Thérèse, Que., has been acquired by a group of RONA’s affiliated dealers. Eddy Calderon and Karl Tremblay, affiliated dealers from the Calderon Group, took over the location, adding it to their other two stores, both in Quebec: RONA Quincaillerie Métro in Laval and RONA Pincourt. Danny Lewis, a former RONA employee, will join Calderon and Tremblay as a shareholder partner in the RONA Sainte-Thérèse project.

Payzant Building Products, a member of Home Hardware, has celebrated the “soft launch” of its 60,000-square-foot fulfilment centre in Fall River, N.S. The location is just north of the Halifax/Dartmouth metro area. On 18 acres of land, the fulfilment centre will serve the nine-outlet regional chain, which has eight stores in Nova Scotia and one in New Brunswick, and allow for potential expansion.

A Whitby, Ont., couple have been arrested and are facing 28 charges of fraud, theft, and possession of stolen property. They had targeted Home Depot stores in Ajax, Pickering, Whitby, and Clarington on numerous occasions since July 2023. Police say the suspects would make a purchase and then return to the store with the receipt and walk out with a similar stolen item. They would also switch price tags on items to defraud the stores.

West Fraser Timber Co. has reported a fourth-quarter net loss of $153 million on sales of $1.51 billion. Full-year sales were $6.45 billion, down from $9.70 billion in 2022. The company had a net loss for the year of $167 million, down from a net profit $1.98 billion in 2022.

Western Forest Products reported a net loss of $14.3 million in the fourth quarter of 2023, compared with losses of $17.4 million in the previous quarter and $21.4 million a year earlier. That was attributed to lower pricing and shipment volumes on a stronger lumber sales mix. The annual net loss of $70.1 million for 2023 followed net income of $61.8 million in 2022.

In its fourth quarter, lumber producer Interfor Corp. recorded a net loss of $169.0 million, compared to a net loss of $42.4 million a year earlier. Sales in the quarter in 2023 were $785.9 million, down from $828.1 million a year earlier. The company said in a release that the results are attributed to a weak lumber market, “continuing to be impacted by the elevated interest rate environment and ongoing economic uncertainty.”

The total level of seasonally-adjusted housing starts in January decreased by 10 percent to 223,589 units, compared with December 2023. Despite these declines, the actual number of housing starts across Canada in centres of 10,000 population and over was up 13 percent to 14,878 units. (CMHC)

Kent Building Supplies, the Saint John, N.B.-based building supply chain, has joined the A.R.E.N.A. Alliance. The move puts it in the company of the French franchisor Groupement Les Mousquetaires, Gruppo Bricofer in Italy, and Germany’s hagebau. BMR Group became a member of A.R.E.N.A last June.

A.R.E.N.A. is an international alliance of hardware and home improvement retailers, which are generally called DIY stores in Europe. The group is focused on sourcing, negotiation, and quality benchmarks for hardware, garden, and home improvement products. It maintains offices in Paris, Shanghai, Ho Chi Minh City, Warsaw, and New Delhi.

Kent is the purchasing alliance’s ninth partner. Collectively, the nine retail companies represent groups of independent dealers like BMR, and also retail brands that have a mix of both corporate and dealer-owned stores. Kent is a solely-owned chain, part of the J.D. Irving group of companies. A.R.E.N.A. members account for more than €16 billion ($23.2 billion) in sales, and are located in 12 European countries plus Canada.

“We are delighted to be able to join the A.R.E.N.A. Alliance. The opportunity for us to share best practices with some of the biggest and best home improvement leaders in the world will be transformative for our business,” said Michael Simms, VP retail at Kent parent J.D. Irving Ltd.

When BMR joined A.R.E.N.A. last summer, BMR’s VP of merchandising, Charles Grégoire-Béliveau, said at the time he expected the affiliation to help level the playing field, especially for products that the European group sources overseas. The result, Grégoire-Béliveau added, would be broader assortments, better prices, and improved margins for dealers.

Like BMR, Kent is a member of the Canadian LBM buying group I.L.D.C. Both retail groups also buy hardlines through the hardware buying group, Spancan.

Some vendors may be reviewing their order volumes over the past couple of years to find that the groups representing independent dealers were doing better than the large-surface retailers.

That trend is borne out by data in the 2023 Hardlines Retail Report, which gathers sales and intel to the end of 2022 to track the size and growth of the retail home improvement industry in Canada. (The updated 2024 Hardlines Retail Report, with data from year-end 2023, will be available in July.—your ever-thoughtful Editor)

During the first two years of the pandemic, 2020 and 2021, the industry enjoyed tremendous growth. According to the 2023 Hardlines Retail Report, by 2022, sales remained strong, but year-over-year increases started to normalize. While overall sales growth by the industry was up over 11 percent in 2021, those gains were tempered in 2022, up overall by 4.6 percent—still a healthy increase.

Broken down by store format, those increases varied according to retail type. Building centres enjoyed the strongest growth by far in 2022, with overall estimated sales by that retail category up 6.5 percent from 2021. At the other end of the spectrum, hardware stores had the smallest gain, up only 1.3 percent year over year, following strong gains in 2021 of almost 16 percent, as consumers sought out the convenience factor of local hardware retailers.

Big box stores, however, with their larger formats and bigger overheads, were impacted more seriously by the slowdowns in 2022. Their estimated collective sales were up only 2.7 percent.

This sales analysis represents just a fraction of the information available in the 2023 Hardlines Retail Report. It’s our annual deep dive into the size of the retail market for hardware and home improvement sales in Canada. We examine the leading retail groups, and break down the industry’s sales by province, banner, and store type. The report explores topics ranging from online sales and big box strategies for growth to the importance of private labels.

Because you are a Hardlines Premium Member, you can save 20 percent on The 2023 Hardlines Retail Report, as we begin to work on this year’s report, which will be ready in July. You can save another 15 percent by using this coupon code: 2023report. Wait! Get even more savings by purchasing the current Hardlines Retail Report in a bundle with our 2023 Hardlines Market Share Report.

(Click here for more information and to place your order!)

RONA has made news in recent weeks for the closure of two DCs, and more recently, has restructured its affiliate (independent) corporate management.

That includes the hiring of a new VP to head up the new affiliate division. “Consistent with our focus on growing our valued partnership with our dealers, RONA’s executive team welcomed at the end of January Alain Ménard as senior vice-president, RONA dealers and affiliates,” a company spokesperson told Hardlines.

Ménard spent the past 20 years in upper management with grocery giant Sobeys. He was most recently in charge of the affiliate division of Sobeys, which includes IGA, Tradition, and Bonichoix, as VP of business development and commercial relations, affiliated merchants. He replaces the former head of RONA’s affiliates, Jean-Sébastien Lamoureux, who left RONA on Jan. 25.

The move represents a renewed dedication to the dealers in the RONA organization. In a memo to dealers, RONA president and CEO Andrew Iacobucci affirmed the company’s commitment to the independent owners. AQMAT, the Quebec trade association, partially quoted the memo as follows: “You, our affiliate dealers, play a key role in the growth and success of our business and we are committed to strengthening our relations with you as we enter this new chapter in the history of RONA.”

Another newcomer to RONA is Bruno Baldessari, who has joined as SVP of lumber and building materials, after stints at TIMBER MART and BMR, as well as RONA almost two decades ago.

But RONA continues to make changes at store level, as well. Early last week the company announced it would convert one of its Réno-Dépôt stores to the new RONA+ banner. The Hull store, located in Gatineau across the Ottawa River, and part of the National Capital Region, is one of 21 stores carrying the Réno-Dépôt banner, which exists only in Quebec. The Hull store is closest to English-speaking markets that are already seeing stores convert to the RONA+ brand, as the Réno-Dépot stores are concentrated largely around the Montreal and Quebec City markets.

Réno-Dépôt was acquired by RONA in 2003.

“The conversions to the RONA+ banner that took place in other Canadian provinces had a very positive impact on store performance,” said the spokesperson from RONA. Réno-Dépôt is a banner that targets decorators, contractors and knowledgeable DIY customers. “We are confident that this pilot project at the Réno-Dépôt store in Hull will bring positive results and lead the way for the upcoming arrival of this new banner in Quebec.”

Over the past 12 months, 41 stores have converted to the RONA+ banner in other Canadian provinces. Another 15 stores will be added by March 1, 2024, all in British Columbia and Alberta.

Mayfair Lumber Sales Ltd. has maintained a steady business supplying lumber to western markets from its Calgary facility. But the addition of a warehouse in Edmonton has opened up new possibilities and new markets for the wholesaler.

The new distribution centre sits on 10 acres in the Edmonton area, and has manufacturing in place, along with cold storage. “So we’re now shipping into northern Alberta and over to northern Manitoba,” says Randy Aikens, president of Mayfair Lumber (shown here at the recent WRLA Building & Hardware Showcase in Winnipeg).

Aikens says the proximity of the new DC to northern markets is part of the strategy for growth. “Dealers want to see that you’re committed to their community, so that’s why we’re there.”

But the new location has another advantage for Mayfair: it gives the company better access to the timber supply from northern Canada.

Mayfair specializes in wood, fibre, and OSB, leaving wider commodity supply to the larger wholesalers. Aikens notes that his company’s targeted approach fills a niche in comparison to the large nationals. “We’re strictly lumber, as opposed to the big guys that offer broad commodities. And a couple of our guys, commodity lumber traders, they’ve got a sixth sense for what’s going to take off next.”

That specialty approach has paid off for Mayfair, setting it apart from the larger wholesalers, “and we compete very well with them in the south. This new location gives us more presence in the north as well.” That “grassroots” approach, says Aikens, is drawing more business from the buying groups.

However, product and proximity are only two parts of the equation. Aikens says that price remains a huge consideration for dealers. “It’s always about price. But it is relationship-based. If you don’t have a relationship, you don’t have a chance.

At Wolseley Canada, Brad Rutledge has been appointed VP, Waterworks, effective Feb. 1. Rutledge joined Wolseley in 2018 and led the national quotations team. He’s held progressive leadership roles since then, including branch area manager in Alberta and eventually director for Wolseley Industrial. Prior to joining Wolseley, he worked at MRC Supply and at Lockwood.

DID YOU KNOW…?

… that as a valued Hardlines Premium Member, you get a complimentary subscription for your company to our quarterly print magazine, Hardlines Home Improvement Quarterly? All you have to do is contact Jillian MacLeod at the Hardlines World Headquarters to ensure your mailing address is up to date. For a full list of Premium Membership benefits, click here!

RETAILER NEWS

Castle Building Centres Group has signed Lumberville Co. Ltd., a former independent in Milton, Ont. Founded by Maria and Pasquale Mercurio Sr. almost 40 years ago, Lumberville is now managed by their son Pasquale Jr. Another Castle member has added a new location in Quebec. Produits Boréal, a pre-fab home builder, has taken over Boréal Rive Nord Inc. in Chertsey, a location in the southwestern region of the province.

The RONA store in La Ronge, Sask., has new owners. Matthew Klassen and Krista Funk have taken over the 2,700-square-foot proximity store, which serves pros with building materials, as well as continuing to serve the community of La Ronge. The pro assortments will be expanded with products such as standard windows and doors, metal products, and insulation.

Canadian Tire has been running multicultural OLV (online videos) and commercials for years, so it’s no surprise that they are back this winter with a new campaign. Under the theme, “Canada’s Winter Store,” an apparently immigrant family gets their initial experience of a Canadian winter. The 30-second spots are in English, French, and Hindi. The campaign ran until Feb. 11.

Tractor Supply Co.’s Q4 net sales declined by 8.6 percent to $3.66 billion, compared to $4.01 billion in the comparable period of 2022. The latter included an extra sales week, which contributed to the decline, as did a 4.2 percent drop in comp sales. Net income fell 8.5 percent to $247.9 million. For the full fiscal year, sales were down 2.5 percent to $14.56 billion, while net income rose by 1.7 percent to $1.11 billion.

The board of directors of Indigo Books & Music has received a non-binding proposal from a consortium controlled by Gerald Schwartz, a member of the board and husband of Indigo founder and CEO Heather Reisman. Trilogy Retail Holdings and Trilogy Investments have made the offer to acquire all of Indigo’s common shares not already owned by Trilogy and related investors.

Lowe’s has introduced Style Studio, a platform available through Apple Vision Pro. The app enables customers to get “an immersive 3D kitchen scene” that lets them explore preset styles created by Lowe’s designers and customize hundreds of materials, fixtures, and appliances. Style Studio uses spatial computing to help customers visualize and design their kitchen reno virtually.

West Fraser Timber Co. has announced the closure of the sale of its Hinton, Alta., pulp mill to Mondi Group PLC. The transaction was first announced last summer. Hinton Pulp produces unbleached kraft pulp. West Fraser will continue to support the mill through a long-term fibre supply agreement.

The total value of building permits decreased 14 percent from November to $9.2 billion in December, the lowest monthly level since October 2020. Declines were recorded in both the residential and non-residential sectors, with residential permits down 17.9 percent, driven by a significant decline in multi-unit intentions. Construction intentions in single-family dwellings edged up 0.8 percent to $2.9 billion. A 15.3 percent gain in Alberta more than offset declines in seven other provinces. (StatCan)

The Greater Toronto Area logged 6,448 home resale transactions in January. The 9.6 percent monthly increase (seasonally adjusted) is the second in a row, following November’s 19.5 percent hike. (Toronto Regional Real Estate Board)

RONA made news in recent days with announced layoffs, along with pending closures of two distribution centres. The layoffs will affect about 300 people in total, including 115 staff at RONA’s head office in Boucherville, Que. The DCs slated to close are in Calgary and Terrebonne, Que.

The cuts were followed quickly by news of movement at RONA’s head office. Jean-Sébastien Lamoureux, senior VP for affiliate dealers, wholesale, and public affairs, left the company a day after the wider cuts were announced. In a farewell statement posted to LinkedIn, he paid tribute to “all the dealers across the country who make RONA shine every day.”

As one of the three largest home improvement retailers in Canada, RONA is a big customer for suppliers—and a significant competitor at retail. This latest news puts the spotlight on a company that has had its share of changes, including getting new owners exactly one year ago.

But the consolidation at RONA reflects a wider slowdown across the industry in North America.

As housing starts have slowed and interest rates remain high—the Bank of Canada has held its central interest rate at five percent—changes like the ones at RONA are being felt by hardware and home improvement retailers of all sizes in most parts of the country. Large North American retailers are posting slower results while, anecdotally, smaller dealers across the country are facing challenges of their own.

Whether it’s the building centre manager in a small town who had to lay off six people in the yard and two on the floor last month, or the hardware store owner who had to close shop entirely before Christmas after three years of economic vagaries and evolving competition, stories like these abound. These setbacks are not making news. But they are having an impact.

Other large retailers are bracing for poor results, both here and in the U.S. Facing earnings drops of as much as four percent for fiscal 2023, Lowe’s Cos. and The Home Depot have both reported that they have eliminated corporate positions.

Faced with a forecast of a sluggish economy for at least the first half of 2024, dealers will have to rely on the traits that have helped them through tough times so often in the past: patience and determination.

As the retail home improvement industry tightens its belt following a flat year, one business leader offers some considerations for what might get better—and worse—in the coming months.

Bernie Owens, president of TIMBER MART, says he is positive overall about the year ahead, but tempers that outlook with caution. “Looking at the first half of the year, we’ll feel the lull for the first six months,” he said, and doesn’t expect things to get any worse than they are now. “But I don’t anticipate any major [hitting of] the brakes and activity overall is stronger than it was pre-Covid.”

TIMBER MART is a buying group representing some 600-plus stores. About 200 of those locations fly the TIMBER MART banner. Members are in all 10 provinces and the Northwest Territories and represent estimated sales of more than $4 billion.

With supply chain issues largely in the past, product availability has increased, even as demand has softened. “But money is not cheap right now. We’re still seeing long lead times and some categories are still tight, but overall the supply is getting better in many categories.” And as prices are easing, dealers can no longer hold out for the best price on scarce materials, “so they need to sell harder, even as margins are lower because of ample supply.”

Continuing on the positive side, Owens notes that his buying group came off what he calls “a good year.”

Collectively, TIMBER MART dealers managed well through a year that was at best flat for most. He concedes that sales overall were down compared to the heady years of Covid. LBM channel lumber unit volumes grew overall even as sales were down slightly, due mainly to declines in lumber pricing year-over-year. “However, our strong commercial dealer activity more than offset this decline.” And, looking ahead, as interest rates ease, “We’ll see some of the momentum coming back. It has to.”

Owens also cites the federal government’s push to increase Canada’s housing stock over the coming years. “It’s good for our industry as a whole.”

Looking at the negatives, he sees people getting out more, which means they are spending on other areas. “Travel is back.” People are back at restaurants and spending their discretionary income elsewhere now. “So years of spending for us is moving underground—that’s going to dry up somewhat.” But he adds that he expects “crazy housing” activity will bring sales up for dealers.

Home Hardware has launched a credit card for its contractor customers. Developed in partnership with Scotiabank, the Scotia Home Hardware Pro Visa Business Card has been designed to support small businesses, though its focus is squarely on entrepreneurs in the trades and construction industry to help them better manage and grow their businesses.

The new card will tie in with Home Hardware’s existing Scene+ loyalty program, with features including a variable interest rate, no annual fee, a 21-day interest-free grace period on new purchases, and credit limits up to $500,000. Users of the new card will allow flexibility to redeem Scene+ points on a range of products and services, including travel, grocery, dining, entertainment, and home improvement.

Home Hardware introduced its Scene+ loyalty program in September 2023. It allows Home Hardware customers to collect points by using either a Scene+ card or a Scotiabank Scene+ Visa card.

The new pro card is designed to let contractor customers manage their expenses with Visa Spend Clarity for Business, a web-based tool that allows users to track expenses and stay on budget.

It will also replace Home Hardware’s long-standing Top Notch Rewards program, which will be terminated at the end of June. Top Notch Reward members have been notified and they have until 11:59 p.m. EDT on June 30, to redeem their Top Notch Rewards points.

“The Scotia Home Hardware Pro Visa Business Card brings immense value to our pro customers, giving tradespeople, contractors, and builders alike the power to manage and grow their businesses while being rewarded with Scene+ points for purchasing the building materials and supplies needed to complete every job,” said Laura Baker,  Home Hardware’s chief marketing officer.

IKEA Canada has begun a long-term investment throughout 2024 to reduce the prices of products across the entire IKEA range, pouring over $80 million into price reductions on 1,500 products. IKEA has promised to cut prices in a number of countries, including Canada, where it has 16 stores and a growing number of Planning & Design Studios. The idea is fundamental to mass-market retailing: lower the prices, increase volumes.

IKEA says it has lowered costs—and also is seeing decreased raw material prices—enabling the price cuts. It has said that its goal is to lower prices to “inflation-adjusted” pre-pandemic levels by the end of next year. The retailer has already announced lower prices in Germany as well as Sweden and the UK.

The initiative is in step with recent comments by IKEA Canada’s CEO and chief sustainability officer, Selwyn Crittendon (pictured). At a breakfast meeting held in Toronto before Christmas, he addressed the issue of rising prices. Much of Crittendon’s presentation centred around IKEA’s concern for keeping products affordable for Canadian consumers. He talked about the importance of maintaining affordability for Canadians faced with high interest rates and rising product costs.

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.”

Bruno Baldessari has a new position as senior vice-president, lumber and building materials, at RONA inc. He was formerly VP forest products, trading, at TIMBER MART, a role he held for just over two years. Prior to that, Baldessari was VP retailing at BMR. He served almost 16 years at that buying group. Baldessari was employed by RONA once before, from 2000 to 2006, as a merchandiser.

At UFA Co-operative Ltd., Steve Kovacs has been appointed to the newly created position of chief sales officer, based out of UFA’s head office in Calgary. He will be involved in UFA’s continued expansion into Saskatchewan. Kovacs is a tenured executive with strong senior leadership experience, most recently as vice-president at Parkland Corp. His experience within the agricultural industry includes almost 15 years with Nutrien (formerly Agrium). No stranger to UFA, he spent several months with the co-op on contract in 2020 as an advisor to the CFO.

Patricia Lachance has joined Acceo Home, Garden and Building Supply Solutions as vice-president of sales. She was formerly VP at estimating software provider Seljax.

DID YOU KNOW…?

… that we’ve marked down the 2023 Hardlines Retail Report by 15 percent? The Retail Report is our annual deep dive into the size of the retail market for hardware and home improvement sales in Canada. Based on 2022 numbers, we break down the industry’s sales by province, banner, and store type, and explore trends ranging from online sales and big box strategies for growth to the importance of private labels. Save even more with a Hardlines Premium Membership by purchasing the Retail Report in a bundle with our 2023 Market Share Report. The 2024 edition won’t be ready until July, so click here for more information and to place your order for our current Report!

RETAILER NEWS

Lee Valley Tools has taken the top spot in Léger’s annual WOW In-Store report. The study evaluates the in-store experience for consumers in 23 areas in order to offer feedback about how consumers feel about their in-store experience. Lee Valley has moved up the rankings from the number-three position last year.

Quincaillerie B.L. in Mont-Louis, Que., has joined the Home Hardware banner. Dealer-owner Bernardin Lemieux and his wife, Louise Côté-Lemieux, founded the business 50 years ago. The co-owners’ sons, David and Louis, work at the store and will take the reins of the business one day.

At supermarket and pharmacy giant Metro, Sales in the first quarter of fiscal 2024 ended Dec. 23 were $4.97 billion, up 6.5 percent from the previous first quarter. Food same-store sales were up 6.1 percent and up 3.4 percent when adjusting for the timing of the Christmas season versus last year. Net earnings of $228.5 million were down 1.1 percent. Pharmacy same-store sales were up 3.9 percent, with a 6.6 percent increase in prescription drugs and a 1.2 percent decrease in front-store sales.

SUPPLIER NEWS

Hillman Solutions Corp., the Cincinnati-based hardware supplier, has acquired Koch Industries Inc., a Minnesota-based manufacturer of rope and twine, chain, wire rope, and related hardware products. This acquisition marks Hillman’s first foray into the rope and chain category. Hillman, whose brands include Dominion, and Paulin, is also celebrating its 60th anniversary this year. Founded in 1964, the company grew from a small distributor of fasteners and hardware serving independent hardware stores in southern Ohio and northern Kentucky to become a North American entity, generating $1.5 billion annually.

West Fraser Timber Co. has announced the permanent closure of its Fraser Lake, B.C., sawmill. The company says it has lost cost-effective access to fibre in the region. The approximately 175 affected employees will be offered opportunities at other locations. The closure cuts West Fraser’s lumber capacity by about 160 million board feet.

In December, the Consumer Price Index rose to 3.4 percent, up from 3.1 percent a month earlier. (StatCan)

The latest instalment of our podcast series What’s In Store is now online! In this episode, we talk to Jest Sidloski, VP of marketing and customer experience at Peavey Industries, about the latest developments with the retailer, which owns Peavey Mart and the licence for the Ace banner in Canada. Sign up now to get updates about the latest free podcasts in your inbox!

RONA inc. has released the news that it will consolidate its distribution operations, moving resources into its head office warehouse in Boucherville, Que., on the South Shore of Montreal.

The company says it has reviewed its national distribution operations, resulting in the planned closure of regular operations at its DC  in Terrebonne, a suburb on Montreal’s North Shore, on March 22. The move will result in 40 job losses. One of RONA’s DCs in Calgary, on 60th Street SE, will close in October 2024, but those jobs “are being transferred to another distribution centre,” according to RONA.

The 60th Street facility was built almost 20 years ago and represented 380,000 square feet of space at the time. The other DC is likely RONA’s Calgary-area distribution centre, at High Plains Industrial Park northeast of the city, which opened in 2021. At 1.23 million square feet, the High Plains facility is much larger than the older DC.

Reductions will also take place at RONA’s Boucherville head office, where 115 employees in various roles there will be impacted.

The closures will result in the layoffs of about 300 people in total, says the company. RONA was sold by Lowe’s Cos. to Sycamore Partners, a New York-based private equity firm, at the beginning of 2023. In June of last year, the retailer laid off 500 people, then another 50 in the fall, in addition to the 300 that will be impacted by the latest cuts. RONA has about 22,000 employees in total.

The changes, which included last year’s replacement of Tony Cioffi with Andrew Iacobucci as company president, can be seen as a response by the new owner to maximize profitability from its new holding. But the shakeup also reflects a more sombre outlook within the retail home improvement industry in general, one which anticipates a slow turnaround through the first half of 2024.

In an email, RONA said, “As part of this next phase in our evolution, we have to focus on further simplifying our operations and eliminating inefficiencies created over the last few years. Doing so is critical for our aspiration of becoming the leading home improvement retailer in Canada.”

The company went on to say that the streamlining will benefit other aspects of the business, “and will fund important strategic investments in areas like RONA+, digital, and our dealer network that will help us better serve Canadian consumer and market.”

The message from RONA took a reflective turn, offering a positive note for the future. “Decisions like this are never taken lightly but we are confident that these changes will make RONA inc. stronger for the years to come.”

The major trade show for building centre dealers and lumberyards in western Canada was held at the Winnipeg Convention Centre from Jan. 17 to 19. The Western Retail Lumber Association hosted its annual Building & Hardware Showcase and, according to WRLA president Liz Kovach, “It was probably our best show ever.”

The show’s attendance was up over last year, Kovach added, despite weather challenges, especially for people flying in from British Columbia, which was hit by a huge snow storm a couple of days prior. Pre-registration reached almost 700 before the doors even opened this year, as dealers from across the west converged in Winnipeg to check out the products and services of close to 200 vendors.

The show was preceded by a daylong series of workshops to help dealers manage and grow their businesses, under the theme of “Build, Hire, and Plan.” On the first morning of the show proper, before the floor opened, delegates enjoyed a breakfast and keynote from Lauren Johnson, a business coach and expert in mental conditioning who has worked with organizations such as Google, the New York Yankees, and Johnson & Johnson.

Her presentation explored the potential of harnessing the power of the mind and conditioning one’s team to excel. She offered many inspiring anecdotes about working with young athletes to help them do better, to push them to new levels of achievement.

At the close of day one, a gala reception was held next door at the Delta Hotel. During the festivities, Murray Finkbiner took to the stage as the WRLA’s 2023 Industry Achievement Award recipient. “Winning the Industry Achievement Award is, for me, an industry pinnacle,” he told the crowd.

A long-time supporter of the WRLA, Finkbiner joined AFA Forest Products in 1988. In 2014, he took over as president and COO, and led the company until its acquisition by Gillfor Distribution in 2022.

Delegates at the show included some of the biggest dealers from all banners in the West, such as Fraser Valley Building Supplies, Igloo Building Supplies, McMunn & Yates, Federated Co-op, UFA, J&H Builder’s Warehouse, and Fries Tallman Lumber.

While shows have given way to online technology as the best way to access the latest pricing, the retailers Hardlines spoke with found value at the show in three ways. Whether from head office or from the stores, big commercial dealers or local building centres, they all found it a valuable forum to meet existing suppliers, form connections with new contacts, and get information and product knowledge.

During the show, Kovach announced that the Hardware & Building Showcase will relocate in 2025 and 2026, when it will move to Edmonton.

The retail home improvement business at Federated Co-operatives may be a small part of its overall business, but the Home & Building Solutions (HABS) division services a network of stores that put Federated Co-op firmly in the Hardlines Top 20 list of retail players in this sector.

Cody Smith is director of the HABS division. In this issue, we continue our conversation with Smith that began in last week’s edition.

One area of FCL’s business that’s growing in importance is its private labels. Smith says the company continues to invest in its house brands, which, he says, are recognized and trusted by co-op customers. “There’s a couple of different areas we look at, across all lines of business. The co-op brand is pretty strong. It’s recognized out here, so the more we can build on that and create new products, it really entrenches you with the customers.”

There are some guidelines around which types of products to focus on. “We’re typically looking at private label to be a product that’s unique and different in the marketplace. And where there’s opportunity, we use it on our import program as well.”

As they are for many retailers, seasonal products are a big part of FCL’s import program. But unlike most other home improvement retailers, FCL has a whole food and grocery division, which carries a lot of housewares and kitchenwares on its grocery shelves. Do the two sides share merchandising opportunities? “We do share information,” says Smith. “The food business—as you’re aware—has a lot more data, so they can dig a little deeper. As we gain more business intelligence, we’re going to use some of their strategies and some of their methodologies to help us.”

He underscores that the goal is not strictly to sell more products, but to sell products that make sense to FCL customers, and make their lives easier, with reliability and in-store expertise. “We’re not selling products, we’re selling solutions, so we’ve got to continue to go beyond the product and make sure we’re taking that customer right to the end stage.”

That process includes providing product knowledge—“training for staff to think beyond product and the transactional sale.” But FCL’s digital footprint is also important here. “The other piece would be awareness with our online catalogue to make sure people are aware that we’re in a lot of these categories. So that’s a key one.”

Bath fixtures maker Luxo Marbre has unveiled the addition of two new business segments. The Saint-Rémi, Que., supplier has launched two kitchen lines, Luxo Kitchen and a high-end brand called Luxo Signature. It is also complementing its offerings to retailers by getting into the wholesale game.

VP Marc-Antoine Héroux told Hardlines that getting into kitchen fixtures only makes sense for Luxo. “The vanity and the kitchen, it’s basically like the same product, it’s the same technology, and it’s the same customer,” he said. “It doesn’t make sense to be only on one side of the business when we can offer the two streams of revenue.”

For example, the company already has the gloss paint needed to finish its bathroom fixtures, so it can easily–and affordably–make it available for use on kitchen installations. That finish “doesn’t exist in the retail market because it’s more high-end,” Héroux explains. “It’s like a kitchen of $50,000 that we can sell directly. So for [dealers], it’s much more profitable.”

In support of this growth, Luxo has received $335,000 in financial support from Canada Economic Development for Quebec Regions, allowing to upgrade its sub-assembly operations, which have been repatriated to Canada from China.

The repayable financial package will also allow Luxo to set up an innovation department and an international marketing strategy, all while cultivating a national deployment strategy. During a tour of the revamped facility, Luxo president Mathieu Gosselin explained that its proximity to the nearby highway will help keep transportation costs down.

“We understand that our customers on a national basis, they are looking for sales on the west side of the Canada and the Vancouver port as well,” says Héroux. “So we’re looking for a warehouse down there to make sure that we can push the sales coast-to-coast in Canada.”

Gosselin adds that dealers benefit when they can order directly from Luxo. “It’s easier for the retailer to develop the business and to grab a new segment of the market because we have a large scoop of inventory for the different models of vanity and accessories.”

Alexandre Lafrance has joined Garant as national business development director and a member of the company’s executive committee. Lafrance brings more than two decades of experience to the roles, most recently overseeing U.S. and Canada sales at Stelpro. Previously, he was sales director for Quebec and the Maritimes in the pool and spa division of Groupe Sani Marc.

At Lowe’s Cos. in Mooresville, N.C., Margi Vagell has been named executive vice-president, supply chain, effective March 1. She is also vice-chair of the Lowe’s Foundation and serves on the boards of trustees of two universities. Vagell succeeds Don Frieson, who has served as EVP, supply chain since 2018. He will retire on April 1.

Burlington, Ont.-based store design and fixture supplier BMF (Burlington Merchandising and Fixtures) has made three personnel announcements. Mike Tonner has joined BMF as business development manager. Tonner has nearly two decades of sales experience working with Canadian retail partners in the home improvement and hardware channels. Ty Pierson joined BMF in 2023 as a business development manager. He has spent his career focused on store operations across various national retailers. And Valerie Stark has joined BMF as marketing manager. With over eight years of marketing and e-commerce experience, Stark will lead strategic marketing efforts, showcasing BMF’s projects across Canada and the U.S.

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RETAILER NEWS

The stadium that is home to the Winnipeg Blue Bombers has a new name. IG Field, the 32,000-seat stadium in Fort Garry, Man., has been renamed Princess Auto Stadium. The 10-year sponsorship is the result of a new deal between the Winnipeg Football Club and the hardware and automotive retailer. Princess Auto is headquartered in Winnipeg and has been a long-time sponsor of the pre-game tailgate party.

Greater Montreal-based Distribution G.I. is the latest independent retailer to join TIMBER MART. Co-owners Alexander Ferro and Yannick Trottier launched the business in 2022 in Chambly, Que. The business moved into a larger location soon after opening. It now occupies 7,500 square feet, consisting of 4,000 square feet of outdoor storage and a 3,500-square-foot building that houses a showroom, office, and warehouse.

Home Hardware Stores Ltd. has been recognized on Forbes’ list of Canada’s Best Employers 2024. Forbes and Statista Inc. co-present this award to recipients based on independent surveys from Canada-based employees who gave feedback on their workplace. Evaluations were based on recommendations from employees who were asked to rate their willingness to recommend their employer to friends and family, based on factors including working conditions, salary potential, and company image.

Costco is testing out a new procedure requiring customers to scan their membership cards at store entrances in a bid to curb unauthorized sharing of cards. The pilot project has begun in Costco’s home state of Washington and builds on previous moves to verify membership at self-checkout in the same way as for those in cashier lanes.

Hand-held scanners in warehouses are standard practice in 2024. One of the data sets they provide is, of course, employee productivity. But Amazon went too far in France in monitoring its employee activity and performance, according to the country’s data protection watchdog, CNIL. It has fined Amazon €32 million ($47 million) for “excessively intrusive” monitoring of employee scanner data.

Richelieu Hardware posted Q4 earnings of $29.4 million, 36 percent below the comparable period of 2022. Sales were down by 0.8 percent to $453.7 million, the decline tempered by acquisitions. In Canada, sales fell by $2.6 million, or 4.4 percent, to $1.05 billion. On a call to analysts, CEO Richard Lord said, “Richelieu is well positioned to achieve good results in 2024.”

Renoworks Software is reaching out to contractor customers with the launch of a Pro Partner program. Through the program, the visualization platform will enable contractors to take advantage of co-selling, co-promotion, and referral opportunities. At the same time, the firm has introduced a new API Hub, allowing partners to create, retrieve, and display 2D and 3D visualizations within their applications, including CRMs, measurement, quoting, estimation, and sales/marketing automation software.

The Tando division at Derby Building Products has been renamed Tando Composites. The business offers two exterior cladding options:  the Beach House Shake composite shingle and TandoStone composite stone. “Updating the brand’s name to Tando Composites reflects decades of manufacturing development,” Derby CEO Ralph Bruno said in a release.

Retail sales declined by 0.2 percent to $66.6 billion in November. Sales were down in four of nine subsectors, led by decreases at food and beverage retailers and in five provinces, with the biggest drop in Quebec. Core retail sales, which exclude fuel and automotive categories, were down 0.6 percent. LBM and garden sales amounted to $3.9 billion, down 0.1 percent from the previous month and down 3.3 percent from November 2022. (StatCan)