Mike Rowe says Canadians are turning more and more to pros to get their home repairs and renovations done. And Home Depot Canada is evolving to meet that demand. Rowe is the president of Home Depot Canada. In conversation with Hardlines, he shared his enthusiasm for the latest, and likely the biggest, step the retailer has made in recent years to cater to pros more effectively.

That initiative is a new flatbed distribution centre, which opened late last year in Mississauga, Ont., west of Toronto. The 300,000-square-foot FDC (which is twinned with an equally large area for stock and flow-through) receives and fulfils pro orders sent in by area stores. Those orders, typically too big for one store to ship, are instead shipped directly to the contractor from the FDC. By June, the FDC is expected to ship orders on behalf of 54 Home Depot stores in and around the Greater Toronto Area.

Rowe says the FDC is part of an overall strategy that Home Depot has been rolling out in recent years to attract more contractors into its stores. Banner-wide, pros now make up almost 50 percent of sales, while accounting for barely 10 percent of its customer base.

The new DC carries more than 1,000 SKUs, including drywall, insulation, and lumber. The facility started out by offering next-day delivery for orders placed by 1 p.m., and that has now been moved to a 4 p.m. cutoff. In coming weeks, Rowe expects that to be move even later, to 8 p.m.

The rollout of the FDC parallels other pro initiatives. For example, by 2025, Home Depot Canada aims to offer payment on receipt for large pro orders, as opposed to payment at time of purchase. And the retailer is looking at ways to offer fixed pricing on commodities to contractors and builders that are pricing jobs for clients months in advance.

Last week, Chrystia Freeland, minister of finance, presented the federal government’s budget for the 2024-2025 fiscal year. The business community has almost universally given the budget a thumbs down—mostly because of the controversial change to the capital gains tax in Canada.

Freeland announced that, effective June 25, the capital gains tax “inclusion rate” will increase from 50 percent to 66.6 percent. In other words, whereas gains (such as the difference between the sale price of an entity such as a business or building—or shares—versus the original purchase price) were historically 50 percent tax free, now they will be 33.3 percent tax free—and the rest will be treated like income.

If you sell a hardware store or a building supply yard—or a manufacturing operation or sales agency—that will cost you big time. The “Capital Gains Tax Advantage” became a buzzword of sorts since capital gains were introduced by the feds in 1972. Now, the “advantage” is going to shrink substantially.

The Canadian Chamber of Commerce was among many business groups to react negatively to the budget. They said the tax changes added to businesses’ burden in Canada. “We oppose any measure which will increase the costs for businesses and Canadians when both are currently experiencing challenging economic headwinds,” said Jessica Brandon-Jepp, director of the Chamber’s fiscal and financial services policy.

The federal government says the new capital gains rules were necessary to raise $19.4 billion over five years—to pay for, among other things, Freeland’s housing industry subsidies, most of which had been announced prior to the budget announcement.

On the plus side, those housing construction incentives that the budget delivers are in the billions—and the stimulated demand should be a plus for building centres and their vendors. But in paying for that increased spending, in part, through an increase in capital gains taxes, all of the pluses come with asterisks.

Hardlines talked to one concerned building supply dealer, Roy Perkins, 65, who owns a BMR store in Cornwall, Ont. “This store is my retirement fund,” Perkins said. He planned to join a webinar put on by his accounting firm, BDO Canada, the day after the budget, to learn about the implications to his business—and his retirement.

There is some good news in the changes for small businesses owners. Along with farmers, they will see their lifetime capital gains exemption rise about 25 percent to $1.25 million.

RONA inc., has been named one of Canada’s Greenest Employers for a fourth consecutive year. The national competition celebrates employers who stand out for their sustainable development initiatives and environmental awareness efforts.

Canada’s Greenest Employers is organized by Mediacorp. Home Depot Canada and IKEA Canada were also on the list.

While proclamations and achievements such as this one play well with the media and even the shareholders, do they matter to customers? According to Mélanie Lussier, senior director, communications, public affairs, and sustainable development at RONA inc., the answer is Yes.

“Our goal is to let our customers know that we’re doing the right things when it comes to the environment,” she says. “We’re constantly looking for new opportunities to make our practices and operations greener and more sustainable, and this recognition shows that our efforts are paying off.”

The organizations in the Greenest Employer rankings have been evaluated according to the following criteria:

• Unique initiatives and programs developed to care for the environment
• Measurable efforts that contribute to the reduction of the environmental footprint
• The participation and degree of involvement of employees in these programs, and whether they possess any unique skills that positively contribute
• The extent to which these initiatives are linked to the employer’s public identity and serve to attract new employees and customers

RONA says it’s continually working to develop and deploy new ways to reduce its environmental impact. The company stands out thanks to an offering of over 5,000 ECO-branded products available in different categories and in a wide price a range to help customers reduce their environmental impact, a waste management program in its corporate stores, and procurement policies that exceed current regulations.

“In 2024, we plan to launch new initiatives that will reduce the environmental impact of our products, while continuing to consolidate our accomplishments,” Lussier added.

Canada’s conference for the retail, marketing, and technology community, DX3, returned to the Metro Toronto Convention Centre for its latest edition on April 9 and 10. The event featured a full program of keynotes and panels, along with a trade show showcasing service providers in the digital age.

One breakout, on how to maximize full-funnel sales post-Covid, featured Matthew Bergum, country business director at Bosch Power Tools Canada. Bergum is also responsible for Bosch Power Tools’ North American Amazon business and overall e-commerce strategy development. So he was in a good position to discuss some of the challenges his company has faced through the pandemic.

He admitted that the power tool business went crazy during Covid but has since been flat, even stagnant. Dealing with a post-Covid decrease has meant taking a harder look to full-funnel marketing to optimize marketing spends and ROIs.

Bergum said Bosch has stayed focused on its pro business, using targeted marketing through video ads on Prime, and looking to drive new users across all channels by following through the funnel, from the bottom to the top. He said his team is viewing Amazon as more of a publisher or agency than simply a marketplace.

Panelists all emphasized the need for agility. Their attitude was that if you’re not doing it, someone else will. They stressed the importance of adapting to one’s customers and to the marketplace—and using data effectively. Listen, they agreed, to what the marketing stats are telling you. And don’t be afraid to make mistakes. “If you’re not failing, then you’re not innovating.”

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RETAILER NEWS

Castle Building Centres Group has a new member. Eastcut Wood Building Solutions in Trenton, N.S., is owned by Donald MacDonald, who founded the business in 2019. In response to a shortage of tradespeople available to build homes in the area, he began manufacturing pre-built wall, roof, and floor components for modular homes. The business occupies a 100,000-square-foot space.

Canadian Tire has been recognized as one of Canada’s most trusted brands. In Léger Marketing’s Reputation 2024 study, Canadian Tire landed in the third spot, behind international brands Google and Sony. Last year, it ranked number four. Other retailers on the list were Shoppers Drug Mart at number six, Dollarama at number nine, and Costco at number 10.

Wolseley Canada will hold the grand opening of its latest outlet this week in North Surrey, B.C. It’s a 20,000-square-foot facility offering a full range of Wolseley Canada’s plumbing and HVAC products. The facility also includes a studio showroom featuring the latest in kitchen and bath trends and lighting fixtures. The grand opening will take place on April 24.

Amazon has reached an agreement with the Italian state railways to launch a new rail service, which will move products between Amazon’s distribution centres in Italy and Germany. They are setting up two routes: one from Duisburg in Germany to Pomezia in Italy, and one from Herne, Germany, to Verona, Italy. One aim is to reduce the marketplace’s CO2 emissions. Over time, the e-commerce giant intends to increase its shipments to over 100 rail lanes and more than 300 sea routes.

A Miami-area investigation into three suspects accused of stealing $260,000 in merchandise from multiple Home Depot stores has determined that one of the accused works for the retailer—as a loss prevention officer, no less. The Miami Dade Police Department, a local NBC affiliate reports, conducted an investigation into more than a quarter-million dollars of missing merchandise. The three people are accused of stealing products from Home Depot stores throughout Miami-Dade County.

Richelieu Hardware’s first-quarter sales rose by one percent to $407 million, thanks to growth from acquisitions. In the hardware, retailers, and renovation superstores market, sales of $57.3 million were down by $1.6 million compared a year earlier. Canada sales remained stable at $232 million. Net earnings of $15.2 million represented a decline of 35.7 percent.

The number of housing starts in urban centres across Canada rose 16 percent in March to 17,052 units, from 14,756 units a year earlier. The increase was driven by higher multi-unit starts, up 19 percent, but single-detached starts also grew by two percent. Housing starts were 10 percent and 15 percent higher in Toronto and Vancouver, respectively, though single-detached starts declined. Montreal’s edged down by one percent, dragged by lower multi-unit starts. (CMHC)

Sales of existing Canadian homes edged up 0.5 percent between February and March. The actual (not seasonally adjusted) number of transactions came in 1.7 percent above the previous March’s tally. That was a smaller gain than those recorded in the previous two months, impacted by a largely inactive market during the Easter long weekend. (Canadian Real Estate Assoc.)

Peavey Industries, the Red Deer, Alta.-based retail farm and hardware chain, continues to strengthen its network of Ace dealers in this country. As the licence holder to the brand in Canada, Peavey uses its distribution network to supply some 70 dealers that bear the Ace banner on their stores.

According to Doug Anderson, CEO of Peavey Industries, those stores are about equally broken down into hardware, farm, and building supplies. The hardware and farm lines are supplied from Peavey’s distribution centres in Red Deer and in London, Ont., while LBM is supplied through an agreement with Winnipeg-based Sexton Group.

In an exclusive interview with Hardlines, Anderson shared his concerns for the economy, which is affecting retail in general. In addition, many of the farm communities that his stores serve have been further challenged by droughts and water shortages. He identified some growth in the third quarter of 2023, but inflation and high interest rates are impacting customers everywhere. “But we’ve seen some strength in the new year,” he adds.

While his team works with the Ace dealers, the company’s flagship banner, Peavey Mart continues to see growth, as well. He points to a new Peavey Mart in Steinbach, Man. (shown here), which opened late last month. The 28,800-square-foot building features a 1,440-square-foot greenhouse and even has a dog-washing station, sponsored by Purina.

However, continued growth will be driven at a cautious pace, says Anderson. Based on economic conditions, he says he’s “pretty cautious” about more rollouts, and prefers to wait for consumer confidence to return. Add to that the drought conditions that have affected many markets, especially in the West, and also impacted Peavey’s farm and ranch customers. “We have quite a bit of concern on that front. But you still have to feed and contain your animals, so that part of the business remains strong.”

While he sees further opportunities for new Peavey Mart stores across Canada, he stresses that caution he expressed earlier. “It’s just about us making sure that the timing is right—and recognizing that the timing for aggressive expansion is not now.” Looking ahead, however, he does identify both the Maritimes and British Columbia as opportunities for future strategic growth.

Anderson adds that Peavey Mart’s digital presence has been strong, especially following a series of upgrades implemented over the past six months, including better content and enhanced search capabilities, “and customers are responding nicely.”

Lee Valley Tools has opened its Auto-Store, a “micro-fulfilment centre” in Carp, a community in eastern Ontario that has been part of the city of Ottawa since 2001. The facility has allowed Lee Valley to consolidate 36,000 square feet of picking operations into 6,000 square feet, freeing up space to expand manufacturing.

The facility boasts 18,000 bin locations and 42 shuttles or bots on top of the structure to retrieve products for warehouse pickers. With the new system, the 200-plus operators in the DC can process over 250 orders in an hour. That’s more than double the previous output.

In a release, president and COO Jason Tasse said the DC is “more than a business decision: it’s a commitment to our roots here in Ottawa and prosperity for the Canadian economy.” In 2023, Lee Valley Tools celebrated its 45th year in business.

Through the implementation of technology, the company will work to elevate efficiency and augment job satisfaction and protection for employees. The investment in modernizing operations is expected to enhance business operations and production during peak shopping periods, reducing handling times, and increasing order efficiency.

The automatic picking system has been in the works since the early days of Covid. At that time, the company recognized the critical importance of online sales and began a series of initiatives to strengthen that part of its business. Automating parts of the picking process will free up the company to re-direct employees to more essential, higher-paying functions.

“By investing in manufacturing and automation, we are strengthening our foundation and helping employees with tasks that involve undesirable work, like repetitive lifting and walking all day,” said Tasse.” The more efficient we can make our operations, the more flexibility we have to adapt to disruptions that may occur during seasonal hiring periods and can scale appropriately as needed.”

The National Hardware Show included a series of educational session at its latest edition, held late last month at the Las Vegas Convention Center. Kicking off day two was the NHS Executive Summit, featuring five high-impact sessions in collaboration with the North American Hardware and Paint Association. Participants took away practical insights into consumer behaviour, succession, supply chain, and the state of the industry overall.

In the session entitled “Adapting to Change in the Industry,” Dan Tratensek, COO and publisher for the NHPA (shown left), moderated a panel with Jodi Karroum (centre), director of strategy and business development for Walmart, and Gina Schaefer, co-founder and former CEO of A Few Cool Hardware Stores, a chain of 13 Ace stores in the Washington, D.C. area.

The panel session touched on such topics as attracting good employees by engaging in outside-the-box hiring practices and the importance of having a succession plan in place. Low unemployment rates have “sharpened the pencil” for employers to look beyond relevant work experience and hire based more on an individual’s core values.

“For us, diversity in hiring includes employing those with different genders, races, and cultural backgrounds,” Karroum said. “But it’s also about bringing on people with different career backgrounds and experiences and finding those people who are passionate about the industry.”

Tratensek echoed those sentiments, saying that intentionally seeking out different perspectives strengthens a company overall and can be one route for hiring good employees.

The importance of having women in the workplace—and keeping the door open for women to enter this industry—remains an important issue. In recent years, said the panelists, there has fortunately been lots more growth in diversity in what was once a male-dominated workplace.

Panelists also discussed various ways an independent can tackle the issue of succession. When it comes to succession planning, Tratensek said, one of the biggest mistakes he sees is business owners putting it off until it’s too late. Schaefer offered the strategy of creating an employee-owned business rather than leaving it to one person.

The discussion emphasized that succession planning should be in place from the time a business is acquired. Don’t wait until the owners are approaching retirement. “For anyone who is a business owner, the minute you take on the mantle of running the business, you owe it to your employees to engage in succession planning,” Tratensek said.

The latest edition of the DX3 conference was held last week in Toronto, gathering digital marketing and advertising experts from all aspects of the retailing and retail service industries in Canada. The event featured a full two-day program of keynotes and panels, along with a trade show showcasing service providers in the digital age.

One panel was especially timely. Called “Surviving the Slowdown,” it addressed what has become a common plight for retail in general. The panel featured (from left to right) Jeremiah Curvers, co-founder and CEO of Polysleep, a Montreal-based company selling mattresses online; Vino Jeyapalan, CEO of Kabo, a frozen pet-food provider; and moderator Nadine Hall, a consumer packaged goods consultant.

The past year, along with a slow start to 2024, has posed a challenge to many retailers. For Curvers at Polysleep, the business realities have forced his company to stay focused. “We need to put on a different lens and follow the customer,” he told delegates. That has included a careful evaluation of where the competition is coming from. For Polysleep, said Curvers, that competition has meant the likes of IKEA and Amazon. He added that he expects things to stay slow for another two or three years.

One way to stay ahead is to dig deep into data. “We’ve been using data sets and learnings online.” That means having a strong presence online—and in bricks and mortar—and managing the consumer’s expectations about the brand across all platforms. Polysleep is now in some 120 stores, besides selling online.

“There’s a major discrepancy between what consumers are finding online and what’s in stores.”

Another way Polysleep has managed through the downturn has been through managing costs and maintaining price points, “to make sure product quality is aligned with the cost.” Part of that equation is working closely with suppliers. “That has been a key to our growth in the past.”

Jamal Hamad has started a new position as senior vice-president, professional services at RONA inc. Hamad spent more than 15 years at Home Depot Canada, most recently in the role of senior director of contractor services, pro-tool rental-home services-MRO. But early on, in 1999, he was a store manager in Toronto, then a district manager. In 2008, he got involved in Home Depot Canada’s contractor side of the business, which included the retailer’s tool rental business. He became senior director of contractor services in 2016.

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RETAILER NEWS

Numerous media outlets reported last week that Canadian Tire Corp. gave its top executives no bonuses for its disappointing 2023 performance. Retail (excluding petroleum) same-store sales declined 2.9 percent at CTC in 2023 and total earnings were $604 million, versus $1.01 billion in earnings in 2022. CEO Greg Hicks received a bonus of $983,976 from the company’s annual incentive plan for total compensation of $6.49 million in 2022. In 2023, he received no bonus, according to reports, and his total compensation fell to $6.04 million.

Castle Building Centres has announced that O’Connor Hardware in Oro-Medonte, Ont., is the latest independent retailer to join the group. Founded in 1996, it is under the new ownership of Brent and Sarah Johnston. The general manager is Karen O’Connor.

Home Hardware Stores Ltd. and the Toronto Blue Jays have launched the BeautiTone Balcony at Toronto’s Rogers Centre. Located on the 100 level directly above the BeautiTone Marquee Sign in left field, the BeautiTone Balcony features two tiers of standing room and a reserved group space for up to 40 guests. BeautiTone, Home Hardware’s private label paint brand, is the Jays’ official paint.

Home Depot employees have been hit with a data breach. The breach, which affected the data of company staff, occurred through a slip-up by a third-party software-as-a-service (SaaS) vendor. As a result, that vendor’s database of some of Home Depot’s staff was hacked. About 10,000 employees had their names, work emails, and user names compromised. Home Depot was itself hit by a major data breach in 2014, which exposed the personal details of some 50 million customers.

Marty Young, the owner of Mount Forest Home Hardware Building Centre in Mount Forest, Ont., has acquired another store and adopted the Home Hardware banner. Young’s Home Hardware Building Centre in Walkerton, Ont., re-opened last month under its new name. In 2023, Young’s Mount Forest location was named Best Home Hardware Building Centre in the Central Region by Home Hardware Stores Ltd.

Dollarama reported Q4 net earnings of $323.8 million, or $1.15 a share. That was up from $261.3 million a year earlier. Sales for the quarter rose by 11.3 percent to $1.6 billion. For the full fiscal year, sales jumped 16.1 percent to almost $5.9 billion. Net earnings of $1.0 billion were up from $801.9 million.

The Air Miles loyalty program, which filed for bankruptcy on both sides of the border last year, was acquired by Bank of Montreal last June. With new owners, there are new ideas. According to Maclean’s, a new concept called Air Miles Receipts allows consumers to scan their receipts with an app to earn bonus points and offers, by “layering over” existing retailer programs. This can be done even at stores that offer loyalty programs of their own.

The value of building permits in February increased 9.3 percent month-over-month to $11.8 billion. Residential permits increased 7.4 percent to $7.1 billion. Ontario’s increase, at 14.2 percent to $2.8 billion, contributed the most in both the single- and multi-family sectors. Overall, the value of single-family permits was up 9.6 percent, or $248.2 million. The non-residential sector grew 12.3 percent to $4.7 billion. (StatCan)

The Home Depot has entered into a definitive agreement to acquire SRS Distribution Inc., a residential building products distributor headquartered in McKinney, Texas. It largely serves the roofing industry, but also sells products for landscapers and pool contractors. SRS has 760 branches across 47 states and a sales force of more than 2,500, together with its 4,000-plus truck fleet and jobsite delivery capabilities.

Under the terms of the agreement, a subsidiary of The Home Depot will acquire SRS for a total enterprise value (including net debt) of approximately $18.25 billion, making this the biggest acquisition the retailer has made to date.

According to a release, “SRS will accelerate The Home Depot’s growth with the residential professional customer. SRS complements The Home Depot’s capabilities and will enable the company to better serve complex project purchase occasions with the renovator/remodeler, while also establishing The Home Depot as a leading specialty trade distributor across multiple verticals.”

The deal adds to Home Depot’s portfolio of integrated companies as it works to build a vertical business service network, particularly into the contractor and builder markets. These are considered key growth areas for the company. Although pros account for only 10 percent of its customers, their spend totals 50 percent of the retailer’s total sales. And coming out of Covid, pros’ expenditures have increased faster than DIY dollars.

Home Depot has been making acquisitions since its founding, most of them to round out its services and products for pros. The first was Maintenance Warehouse, a direct mail marketer of maintenance supplies. Home Depot bought it in 1997 for $245 million. Apex Supply, another industrial supplier, was added two years later. In 2004, both these businesses were incorporated as Home Depot Supply.

By 2007, this division was rebranded HD Supply. But only months after the rebranding, it was sold off, at the insistence of shareholders, under the direction of then-CEO Bob Nardelli. Private equity companies led by Bain Capital acquired it for about $8.5 billion. Ironically, as Home Depot continued to expand its vertical reach with acquisitions, the value of the HD Supply business made sense again, and Home Depot bought back the company at the end of 2020 to better serve its growing MRO customer.

Hughes Supply, a large home retail company, represented another large acquisition in 2006 for Home Depot. That deal was worth $3.5 billion. A decade later, Interline Brands, a wholesale MRO chain, was bought up for $1.6 billion.

Home Depot had started a tool rentals division internally back in 1995, but in 2017 the retailer added Compact Power Equipment Inc., an equipment rental and maintenance services business, for $265 million. Most recently, International Designs Group, a distributor of stone and porcelain tile, was added to Home Depot’s portfolio in 2023.

Of course, for Canadians, one of Home Depot’s earliest acquisitions was its most impactful for this market. In 1994, it bought the Aikenhead’s chain from Molson Cos. and made its entry into Canada. The deal, which gave Home Depot a 75 percent share of Aikenhead’s, was worth $150 million. Four years later, Home Depot bought up the remaining 25 percent for $375 million, making Home Depot Canada a wholly-owned subsidiary.

The National Hardware Show was held March 26 to 28 at the Las Vegas Convention Center and the event managed to draw its share of Canadians. Most of them were vendors and agents, including AGT Products, Alliance Consumer Group, Jacobs & Thompson, and Peninsula Plastics. Legacy brands like Robertson Inc. (maker of the Robertson screwdriver), as well as Imperial, Olfa, and Kidde, were also on hand.

Finding key buyers at the show was more difficult. Alexandre Lefebvre, CEO of BMR Group, was at the show, and brought with him a delegation of that group’s lead merchants. But the other majors, including RONA and Home Depot Canada, were notable by their absence from the show floor. However, Home Hardware has been encouraging its own dealer-members to attend the show in recent years, and a group of that banner’s dealers was there again this year.

Despite a limited showing from Canada, the show remains an important forum for networking and building new business. “The vibe was really positive,” says Joelle Cohn, VIP attendee manager for NHS. “The exhibition hall was sold out and we started selling already for 2025. A lot of people were excited about all the new offerings, and the experiences we created for socializing and networking were appreciated by attendees. The chance for relationship building was crucial, as human interaction is so important in building businesses.”

Canadian vendors were showing off new lines and attracting attention, with about 40 Canadian firms exhibiting. New-Line Hoses is looking to expand beyond the commercial markets it currently serves with retail lines. The Surrey, B.C.-based company’s products includes fittings, coupling and adapters, as well as hoses for homeowners that feature specs suitable for industrial applications.

Multinautic was featuring modular aluminum dock kits, with all products needed in one kit. This manufacturer, based in Saint-Sauveur, Que., sells everything but the lumber for the project, including matching accessories—and even flower baskets.

The show was rounded out by various activities and learning sessions. New to NHS for 2024, the Independent Retail Center featured Retailer Roundtables and Ask the Expert sessions. The next National Hardware Show will be held at the Las Vegas Convention Center from March 18 to 20, 2025.

To celebrate National Woodworking Month, Lee Valley Tools has a new campaign under the company’s evergreen brand series, Making Happiness. Throughout the month of April, the specialty tool and woodworking retailer is hosting in-store events and interactive workshops, while releasing original content intended to inspire the Lee Valley community of woodworkers, hobbyists, and garden enthusiasts to immerse themselves in their craft.

“April is National Woodworking Month, the perfect time to learn a new skill or embark on a new project,” says Jason Tasse, president and COO of Lee Valley Tools. “Our dynamic programming speaks to both the experienced woodworker and the younger generation of aspiring crafts people, encouraging them to embrace woodworking and learn a new skill that involves more than just their two thumbs.”

Tasse calls woodworking “a core line of business” for Lee Valley Tools. The Making Happiness campaign is a perennial series for Lee Valley Tools and is centered around highlighting the essence of the Lee Valley brand to both novice hobbyists and experienced craftspeople. The content in the new campaign aims to illustrate how the journey of creating with one’s own hands can lead to a sense of accomplishment. The content will showcase customers’ intrinsic appreciation for craftsmanship.

Lee Valley Tools launched the latest campaign last week with a series of online and in-store activations, including power tool demos over two days at its stores. In addition, the events featured giveaways, contests, plus Lee Valley’s team of sales advisors to help customers. The company is also hosting drop-ins, demos, and workshops throughout the month.

(Jason Tasse, President and COO of Lee Valley Tools, will be a keynote speaker at this year’s Hardlines Conference. The 2024 Hardlines Conference Series is taking place Oct. 22 to 23 at the Fairmont Le Manoir Richelieu, in Charlevoix, Que., in collaboration with AQMAT. Click here for more info!)

The “original local hardware store” has mounted an extensive ad campaign. True Value, the banner displayed by some 4,500 stores in the U.S. and worldwide, has launched “Hardware Hero,” with creative from its agency of record, Laughlin Constable. The campaign is based on a song from the British-American rock band Foreigner, which had a 1981 hit with “Juke Box Hero.”

True Value has been absent from the Canadian hardware landscape since 2012, two years after TruServ Canada Inc. was acquired by RONA. But it has remained one of hardware’s iconic banners south of the border. Nevertheless, True Value said in a release that it recognized that “independent businesses have been navigating a changing retail environment.” The executives in Chicago decided that the hardware banner could benefit from its first national ad campaign in 10 years.

“With 75 years under our tool belt, we knew we needed to continue our evolution and create a campaign that would resonate with not only our independent retailers, who are heroes in their own right, but also our customers,” said Jake Kalnitz, SVP and chief merchandising officer for True Value. “I love this campaign because it’s relatable, refreshing, and straight up fun. It’s different than anything else in the industry.”

Hardware Hero is a geo-targeted campaign designed “to connect consumers with hyper-local” True Value hardware stores. The 15- and 30-second spots will run on TV, YouTube pre-roll, Meta, and programmatic display.

Donna Gerrits, vice-president of sales and marketing at Alexandria Moulding, is retiring. A 40-year veteran of the industry, Gerrits was a co-owner and the general manager of Royal Woodworking until it was acquired in 2012 by Alexandria Moulding. In 2016, she joined Alexandria Moulding in the sales and marketing position. Alexandria Moulding was acquired two years later by Specialty Building Products. Now, Dave Stojni has joined Specialty Building Products as vice-president of sales for Canada. He was formerly with Doman Building Materials Group as general manager, Ontario. Gerrits will remain for several months to work alongside Stojni to facilitate a smooth transition of her responsibilities.

At Suncast Corp., a maker of consumer and commercial products for the home and industrial markets, Chris Whitall has been appointed national sales manager, Canada. He will be working with the major big box, hardware, home improvement, and lawn and garden accounts in Canada, supported by the Canadian sales agency groups that work with Suncast. Whitall previously held senior sales and account manager positions in Canada with Weber, Bosch, and Stanley.

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RETAILER NEWS

Castle Building Centres held its annual general meeting last week at the JW Marriott hotel in Summerland, outside Las Vegas. The event attracted the buying group’s top vendors and dealer-members from across Canada.

A store in Lacombe, Alta., just north of Red Deer, has opened an imaginative shopping area on its upper mezzanine called “The Loft.” In this new retail showroom, Nowco Home Hardware features home accessories and home products including décor, scents, sprays, candles, and soft furnishings. The third-generation owners of the store are Deanna and Tyler Nowochin, who won the Marc Robichaud Award for Community Leadership at last year’s Outstanding Retailer Awards.

To kick off Earth Month, IKEA Canada has launched a “Second-Hand Tax,” an initiative in all IKEA As-is marketplaces across Ontario. It’s another effort by the giant retailer to help Canadians cope with the rising costs of living and promote sustainability. Ontario IKEA stores will feature the Second-Hand Tax, a deduction of 13 percent on the sale price of its re-used products, to match Ontario’s 13 percent HST. The promotion runs from April 2 to 11, 2024 and is available to IKEA Family cardholders. The retailer hopes to make “shopping circular” more attractive and acceptable to Canadians.

The Home Depot has rebranded its online marketplace, Retail Media+, with a new name: Orange Apron Media. The site, which was launched in 2018, hosts vendors of all types, not just those that sell products in Home Depot stores, and claims to have 1.76 billion transactions a year. According to the Orange Apron website, its mission is to “create the best interconnected experience for your brand and the customers we serve.”

Local delivery service DoorDash says it’s partnered with Lowe’s Cos. to offer on-demand delivery from over 1,700 stores in the U.S. This partnership marks DoorDash’s first foray into the home improvement category. Lowe’s products can now be purchased directly on the DoorDash app, helping consumers easily shop for items they need delivered same-day. All participating Lowe’s stores will also be available on DashPass.

Books and lifestyle retailer Indigo Books & Music Inc. has agreed to a deal to sell the majority of its shares to Trilogy Investments L.P. and Trilogy Retail Holdings Inc., taking the company private. TILP will acquire all outstanding common shares of Indigo for $2.50 in cash per share, which represents an increase from the original offer of $2.25. TILP already owns about 60.6 percent of Indigo. The Trilogy companies are controlled by Gerald Schwartz, the husband of Indigo CEO Heather Reisman and CEO of Onex Corp.

Saint-Gobain has announced that its building materials subsidiary CertainTeed Canada will acquire The Bailey Group of Companies. The Vaughan, Ont.-based manufacturer of commercial metal framing and building products was founded in 1950. A family-owned company with almost 700 employees at locations in multiple provinces, it consists of Bailey-Hunt Ltd. and its subsidiaries, including Bailey Metal Products. Under the agreement, Saint-Gobain will also complete the purchase of the remaining equity and assets of The Grid Company, its ceiling grid manufacturing joint venture with Bailey.

Western Forest Products has closed a previously announced deal with four of the six member nations of the Na̲nwak̲olas Council. These four First Nations will acquire a 34 percent interest from Western in a newly formed limited partnership. The partnership consists of certain assets and liabilities of Western’s Mid Island Forest Operation, in a transaction valued at $35.9 million. The parties also announced the new name for the partnership: La-kwa sa muqw Forestry (pronounced la-KWAH-sa-mook). The name means “the wood of four” in the Kwak’wala language.

West Fraser Timber Co. and Mercer International Inc. have announced an agreement to dissolve their 50/50 joint venture in Cariboo Pulp and Paper. West Fraser will continue as the sole owner and operator of the mill, doing business as Cariboo Pulp and Paper Co. Located in Quesnel, B.C., Cariboo has the capacity to produce up to 340,000 tonnes of Northern Bleached Softwood Kraft pulp annually. It employs nearly 300 people.

Retail human resource professionals navigate a complex and changing landscape. Understanding and addressing employee needs has become more crucial than ever for cultivating vibrant workplace environments and cultures. Retail Council of Canada (RCC) will host the Retail Human Resources Conference on April 25 at the International Centre in Mississauga, Ont. It will feature a packed agenda with distinguished speakers, offering a pivotal gathering for retail HR professionals that will explore the pressing issues shaping the future of retail HR. Click here to learn more and register.

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.

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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)