The world’s two largest home improvement retailers released their third-quarter results last week. Both provided strong numbers, especially given the big gains enjoyed by them—and pretty much the entire industry—over the past two years.

But if their respective financials are any indication, the days of crazy Covid-fuelled growth are definitely easing.

Home Depot’s Q3 profits rose 5.1 percent to $4.34 billion on revenues that were up by 5.6 percent to $38.87 billion. Strong numbers on their own, but by comparison this was more normal growth compared with an increase of almost 10 percent in the same quarter of 2021. Home Depot’s comp sales for the latest quarter were up by 4.3 percent, also down compared to 6.1 percent a year ago. Canadian comps were below that average and U.S. comps were up 4.5 percent.

Lowe’s reported profits of $154 million, which included a pre-tax non-cash asset impairment charge of $2.1 billion related to its Canadian retail business, compared to profits that more than doubled in the third quarter of 2021. Sales reached $23.48 billion, up from $22.92 billion a year earlier. Comp sales for the quarter grew by 2.2 percent, while comp sales for the U.S. home improvement business increased three percent, boosted by revenues from pro customers, which were up 19 percent.

On a monthly basis, Lowe’s and Home Depot saw their strongest comps in August, which then slowed in September and October (both retailers have Jan. 31 year-ends).

Both companies reported that DIY sales were back up, helping drive results. Through Covid, contractors represented the main sales driver, especially for Home Depot. While that customer base continues to be the strong growth vector, the retail customer is definitely making a comeback.

Online sales have also come more in line with traditional growth rates. Lowe’s saw its online business grow by a healthy 12 percent, on top of the 25 percent growth realized last year. Home Depot’s online business was up almost 10 percent compared to the same period a year earlier. About half those sales were fulfilled through its stores.

Looking ahead to the rest of the year, Home Depot has forecast annual growth for 2022 of three percent. Lowe’s expects similar yearly growth of between two and three percent.

U.S. analysts not as interested in sale of Lowe’s Canada as you’d think

Lowe’s executives shared more details about the sale of its Canadian business during a call with analysts last week. The analysts’ call is a Wall Street tradition: after the company’s results are posted, usually by 8 a.m. that morning, the top execs hold a phone conference with the analysts who guide decisions for the investment community.

These calls typically start with prepared comments from key executives, followed by questions from the analysts. (Journalists can listen in but not ask questions on these calls.)

Marvin Ellison, chairman, president and CEO of Lowe’s Cos., led his company’s call last week. He was joined by Bill Boltz, EVP merchandising; Joe McFarland, EVP of stores; and CFO Brandon Sink.

Ellison offered a viewpoint that housing starts and interest rates won’t affect Lowe’s as much as some investors might think. Ellison’s claim was that the DIY and pro business that drives most home improvement retailers, including Lowe’s, is not directly linked to those data sets.

Ellision then moved to the sale of Lowe’s Canada to private equity firm Sycamore Partners. That deal was announced at the beginning of this month and is expected to close early in the new year. The problem, Ellison admitted, wasn’t what was wrong with Lowe’s Canada—aside from how it didn’t fit in with the mother ship or the profit levels of a U.S. company.

“Over the last few years, we focused on the retail fundamentals of our Canadian operations, which brought the Canadian business to profitability and improved its operating cash flows,” Ellison said. “However, for this business to achieve the profitability in line with the U.S., significant incremental capital investments would be required to streamline the banners and improve operating margins.”

The Canadian business provided too much complexity for the U.S. head office. The Lowe’s/RONA/Réno-Dépôt multiple banners and various ownership models were unlike anything Lowe’s operates south of the border. While no analyst on the call said so, they are constantly comparing Lowe’s performance against its rival Home Depot, which operates in Canada the same way it does in the U.S.

Ellison noted that complexity and the importance of sticking to the core U.S. business and growing market share there. “This transaction will simplify our business model, improve our operating margins and return on invested capital, while enabling us to deliver sustainable value to our shareholders.”

Reality check: while the deal has rocked the Canadian market, igniting the national media and even warranting air time on CBC radio morning shows across the country, the topic of the Canadian divestiture elicited a grand total of zero questions from the analysts on that call.

Kent must open books to CRA to share its pro accounts, court rules

The Federal Court of Canada has given the Canada Revenue Agency the green light to comb through the records of Kent Building Supplies’ pro and commercial customers.

A division of J.D. Irving, Kent has 48 building centres and big boxes in Atlantic Canada.

In its latest push against the underground economy in construction, the tax agency had applied to the court to obtain “significant data” on pro customers’ purchases from Kent dating back to Jan. 1, 2019.

Kent is now required to forward to the CRA the name and contact information, CRA business number or SIN, and total transaction amounts for all contractors belonging to the retailer’s Kent Pro loyalty program who have spent more than $20,000 annually.

Hardlines contacted Kent but was referred to the only statement parent company J.D. Irving issued, to the National Post, calling CRA’s action a “common and routine practice for home improvement retailers in Canada, where select contractors are concerned.”

They’re right—and it seems to happen regularly in November when the year is coming to a close. Home Depot Canada faced the same battle at this time in 2019. A court order was required, forcing Home Depot Canada to turn over records of sales to its contractor customers for the years 2013 through 2016.

Two years earlier, RONA went to court to attempt to block CRA from doing the same thing. At that time, the feds investigated RONA’s trade customers at some of its stores for the years 2012 to 2015.

In 2018, CRA estimated that the underground economy exceeded $50 billion, with residential construction accounting for about half of that.

Concerns about shrinking housing markets in this country have been borne out by the latest numbers indicating slowdowns in both new and resale housing.

Sales of existing homes actually edged up by 1.3 percent between September and October, according to the Canadian Real Estate Association. But that’s the first monthly gain since February. These numbers are adjusted for seasonal variations in housing markets, but the actual number of transactions in October plummeted by 36 percent compared to the same month last year.

About 60 percent of all local markets saw sales rise in October, although both gains and declines were generally small across the board. The largest gain, a six percent increase in Greater Vancouver, was offset by a 2.4 percent decrease in activity in Montreal.

New housing is softening as well. October’s annualized rate of housing starts came in at 267,055 units, down 11 percent from September’s high of 298,811 units. The rate of total urban starts also declined by 11 percent, falling to 245,234 units.

Multi-unit urban starts decreased 13 percent to 188,189 units, while single-detached urban starts fell by four percent to 57,045 units. Rural starts were estimated at a seasonally adjusted annual rate of 21,821 units.

Investment in building construction declined 0.6 percent to $20.9 billion in September, StatCan reports, all due to residential spending. The residential sector decreased 1.3 percent to $15.4 billion. Conversely, the non-residential sector rose 1.6 percent to $5.4 billion.

The Lumber and Building Materials Association of Ontario has announced the appointment of Trevor Small to succeed David Campbell, who stepped down as president effective Nov. 1 after 20 years in the role. Small grew up in his family’s building supply business and also owned and operated one of his own in Bowmanville, Ont., in addition to his experience on the vendor side of the business.

Paul Wood resigned last week as CEO of Giant Tiger Stores Ltd. Gino DiGioacchino, a member of the board of directors and a former senior VP at Home Depot Canada, has been appointed to the role on an interim basis.

DID YOU KNOW…?

… The latest edition of Hardlines Dealer News went out last week? In this issue, we talk to some top RONA dealers for their take on the Lowe’s Canada sale; plus an expanded interview with Home Hardware’s chief marketing officer, Laura Baker. If you’re not already receiving Hardlines Dealer News, click here to sign up for free!

The 2022 BMR Buying Show was held at Quebec City’s Centre des congrès. The event returned to a fully in-person format this year following last year’s primarily virtual show, enabling dealers and vendors to gather in the historic city to network and trade. BMR Group’s gala capped off the event.

Walmart Inc. has posted an increase of nearly nine percent in sales for the third quarter, as Americans turned to its groceries to stretch their budgets. In Canada, net sales were up 5.5 percent while comp sales rose by 5.2 percent. The retail giant’s net loss of $1.8 billion was driven by settlement of litigation related to opioid sales in its pharmacy business.

Ace Hardware Corp. reported record third-quarter revenues that reached $2.2 billion, up 10 percent from the third quarter of 2021. Profits were up slightly to $100.6 million, an increase of $1.3 percent. Ace’s 3,600 retailers reported a 5.8 percent increase in U.S. retail same-store sales. Estimated retail inflation of 11.2 percent helped drive a 9.5 percent increase in average ticket. Same-store transactions were down 3.4 percent. 

BuildDirect Technologies Inc., the Vancouver-based internet LBM seller, reported Q3 revenues of $22 million, down from $22.3 million in the comparable period of 2021. Profits declined to $6.9 million from $8.1 million a year earlier. Revenue from pros reached $19.4 million, representing 88.2 percent of the company’s total revenue and a 5.6 percent growth from the previous quarter.

Wolseley Canada held a grand opening last week for its newest branch, located in West Kelowna, B.C. The 17,000-square-foot facility offers a full range of Wolseley Canada’s plumbing and fire protection products, with HVAC products to be added over time. Jarett Smith is the store manager.

IN MEMORIAM

Jim Gillies has died at the age of 76 after a prolonged illness. Gillies held senior sales and marketing positions with Newell Companies and Fiskars Garden Tools. He served for several years on the board of the CHHMA (now CHPTA). Gillies is survived by his wife Marlene, son Jeff and daughter Kim, and four grandchildren.

ECONOMIC INDICATORS

Housing starts in October were at an annualized pace of 267,055 units, down 11 percent from September’s high of 298,811 units. The rate of total urban starts also declined by 11 percent, falling to 245,234 units. Rural starts were estimated at a seasonally adjusted annual rate of 21,821 units. (CMHC)

Investment in building construction declined 0.6 percent to $20.9 billion in September, dragged down by a 3.4 percent drop in Quebec. The residential sector decreased 1.3 percent to $15.4 billion. (StatCan)

U.S. housing starts in October were at a seasonally adjusted annual rate of 1,425,000, representing a 4.2 percent drop from the previous month, and down 8.8 percent year over year. Single‐family starts fell by 6.1 percent.

NOTED

We noted in People On The Move that Gino DiGioacchino has taken over the interim leadership of Giant Tiger Stores following the departure of CEO Paul Wood. DiGioacchino was well known in this industry for many years as second in command at Home Depot Canada during the growth era under then-president Annette Verschuren. How did spelling-challenged Hardlines consistently get DiGioacchino’s name right on such an uncharacteristically regular basis? Our over-worked editor used Auto Correct; when he typed “Gino D” the full name inserted automatically, thereby ensuring the highest editorial standards that you, our Faithful Readers, encounter here several times a year.

OVERHEARD…

“I would like to thank our entire Canadian team for their hard work and dedication to our customers, and we look forward to collaborating with Sycamore Partners in executing a seamless transition.”
—Marvin Ellison, chairman and CEO of Lowe’s Cos., on a call to financial analysts last week, when he gave a few more details of the sale of Lowe’s Canada.

Lowe’s Cos. has entered into a “definitive agreement” to sell its Canadian retail businesses to Sycamore Partners, a private equity firm based in New York.

The price was “$400 million in cash and performance-based deferred considerations,” according to the release. (figures are in USD.) For that, Sycamore acquires some 450 stores that include 70 Lowe’s big boxes in Canada; about 150-corporate owned RONA stores; the wholesale supply business of another 210 independent RONA stores; plus Reno-Depot’s 20 corporate stores, in addition to Dick’s Lumber.

Lowe’s Companies had acquired the vast majority of these stores on May 20, 2016, for US$2.4 billion, at the time valued at CDN$3.2 billion.

“The sale of our Canadian retail business is an important step toward simplifying the Lowe’s business model. While this business represents approximately 7 percent of our full year 2022 sales outlook, it also represents 60 basis points of dilution on our full year 2022 operating margin outlook,” said Marvin R. Ellison, Lowe’s chairman, president and CEO.

Sycamore Partners, based in New York City, specializes in retail and consumer businesses. Other holdings include Staples, Ann Taylor, Talbots, Dollar Express, and Aeropostale.

In a note to Canadian vendors, Lowe’s Canada president Tony Cioffi expressed his support for the deal saying, “We look forward to teaming up with Sycamore, with its in-depth knowledge of, and appreciation for, the Canadian market through its ownership of Staples Canada/Bureau en gros.”

Meanwhile, other Canadian home improvement retailers are watching the deal with interest, especially in light of the future of the affiliate, or independent, dealers flying the RONA banner. “It’s too early to say if BMR would be interested in acquiring the RONA business,” said Alexandre Lefebvre, CEO of BMR Group, “especially as we’re looking at the market ahead with concern.” 

Regardless of the future of the economy, however, he says his company can continue to have a strong appeal for RONA dealers. “This is an opportunity for BMR—100 percent.”

Sycamore Partners’ managing director Stefan Kaluzny, said: “We are honoured to partner with Lowe’s to establish Lowe’s Canada and RONA as a standalone company headquartered in Boucherville, Quebec.… We look forward to working with the company’s management team to build on its 83-year history as a leading Canadian home improvement business.”

(To read the full release from Lowe’s, click here!)

Following sell-off, Lowe’s Canada president says stores will switch to RONA

The news that Lowe’s Cos., based in Mooresville, N.C., is selling off its Canadian division to New York City-based Sycamore Partners, a private equity firm, has rocked the retail home improvement industry—and lit up the news feeds.

The news has also sparked sarcasm from some journalists and business analysts in Quebec, where RONA, acquired by Lowe’s in 2016, had been a legacy brand in the province for decades. The business was sold to Sycamore yesterday for a mere US$400 million cash—plus unspecified performance payments—only six years after Lowe’s had paid US$2.4 billion (CDN$3.2 billion) for RONA inc. The new deal is expected to close early in 2023.

In a letter to vendors, Lowe’s Canada president Tony Cioffi stated, “Under our new ownership, we will maintain a strong commitment to our Canadian- and Quebec-based vendors, including through our ongoing involvement in the ‘Well Made Here’ initiative, meant to encourage the purchase of domestically manufactured quality products.”

Cioffi also shared that the Lowe’s big box stores will change names eventually. “There are no significant changes planned for the stores. We will eventually move away from the Lowe’s banner in Canada in favour of the RONA banner in a manner that ensures the least possible disruption to our business. Otherwise, you will see minimal change.”

A further clarification to the announcement of the sale was sent out the following morning, reaffirming that Lowe’s Canada will remain headquartered in Boucherville, Que., on the south shore of Montreal. It also notes that the deal includes “includes performance-based deferred consideration.”

Lowe’s Canada says it is working to make the transition to the new ownership a “seamless” one, “with minimal disruption for our 26,000 associates. It will remain business as usual, including unchanged compensation and benefits.”

Atlantic association holds HR conference to examine hiring, retention issues

About a hundred dealers and suppliers gathered last week at the Halifax Convention Centre to hear from HR experts on the challenges of finding and retaining workers. The conference was put on by the Atlantic Building Supply Dealers Association (ABSA). 

One session outlined the opportunities to hire new Canadians, including immigrants and refugees. The need to do more of this type of hiring is clear because Atlantic Canada has the highest ratio in Canada of workers in the retail home improvement industry who are age 55 and over. 

Denis Melanson, ABSDA president, told attendees that salary is typically not the main reason why workers quit. “Money is typically number four or five on the list of why people leave,” he said, adding that employees are more likely to leave because of bad management. “Hey, they don’t like you. It’s rarely that fifty cents an hour.”

Another speaker, recruiter, author and former CBC broadcaster Pierre Battah (shown here), talked about what a leader needs to do to improve employee retention. “What have you learned over the past two years ab​out retention?” he asked. Stressing the importance of an inclusive workplace, he remarked, “people need to feel ‘I belong here.’”

(The ABSDA HR Conference offered some great speakers. Hardlines will feature more on their presentations in upcoming editions of our sister publication, Hardlines HR Advisor.—Your 50-cents-an-hour Editor.)

Peter Norman, one of the top land and housing economists in the country, took the economic pulse of the nation at last month’s Hardlines Conference in Niagara-on-the-Lake, Ont. “Uncertainty and caution are what we’re going to talk about,” he said at the outset of his presentation. “Uncertainty but also some good things.”

First, the good news. “If your industry involves construction, you’ll have found that business has been quite good lately,” Norman said. “But the economy is in transition and all sorts of stuff is going on.”

Inflation was the first topic that Norman tackled in his analysis of that “stuff.” The Consumer Price Index was up 6.9 percent in August, the most recent month for which stats were available at the time of Norman’s presentation. Transportation cost increases led the way at 10.2 percent in August, food was at a 9.6 percent increase, and shelter was up 6.6 percent year-over-year.

Norman predicted “one more 75-point change” in the Bank of Canada policy interest rate to come. He was slightly pessimistic. A week after his speech, on Oct. 26, the central bank raised its rate by 50 basis points. The Bank of Canada rate currently sits at 4.0 percent. Norman compared that to the three previous peaks over the past 20 years: 3.0 percent in October 2008, 4.5 percent in November 2007, and 5.75 percent in January 2001.

Norman prognosticated that the Bank of Canada rate will stay around 4.0 percent for “12 to 18 months … then we might see that rate come down.” The Bank of Canada’s stated goal is to bring inflation down but, as almost everyone has been observing, the economy is slowing quickly and may downshift into a recession.

And there’s more behind the Bank of Canada’s plan, Norman said. In addition to inflation control, the central bankers are worried about supporting the Canadian dollar. 

Still, the effect of the interest rate increases on retail sales are easy to predict. “If you’re taking out a mortgage right now you are paying roughly twice the rate you were about a year ago,” Norman said. “The market effect is that house prices come down. It is not a bubble bursting but the market is adjusting to these new rates.”

“People renewing their mortgages, who got them four or five years ago, have no choice but to renew at these new rates. And they will not be spending as much money in hardware stores.”

Norman had good news to share, as well. “500,000 more people have jobs than a year ago,” he said. However, the  peak employment month was June and employment has been flat since then. Firms have slowed their hiring because of risk, Norman said.

The overriding question is: “Are we going into a recession or not?”

Norman said yes. “Expectations are that the recession will last through the end of next year.” Ending on good news, the economy is being stimulated by lots of new consumers, Norman said. “We had almost 656,000 immigrants last year. That’s 703,000 new Canadians including the birth rate.”

DID YOU KNOW…?

… that Hardlines HR Advisor (HRA) can help your store with valuable information on hiring and retaining employees? Don’t have an HR department, you say? Then you are the HR department—and you can build your HR skills with HRA. (If you’re not already receiving HR Advisor, click here to sign up for free!)

Marc Chevalier Inc. in Bedford, Que., has joined TIMBER MART as the group’s newest member dealer. Marc Chevalier Inc. opened earlier this year and offers an array of building materials like roofing materials and exterior cladding. It occupies a large acreage which includes a 3,000-square-foot store and a 1,500-square-foot warehouse, with room for future expansion.

Lowe’s Canada is launching PROvember in most of its Lowe’s, RONA, and Réno-Dépôt stores, through Nov. 23. PROvember, an event directly linked to the VIPpro program, includes a vendor tour, in-store breakfast meetings, exclusive offers and rewards, several contests, as well as a partnership with the Movember Canada organization. Additional offers and discounts will complement existing VIPpro benefits. Pro customers will also get the opportunity to make a donation at checkout to support Movember Canada, which is dedicated to men’s health with a focus on mental health and suicide prevention, prostate cancer, and testicular cancer.

The Royal Canadian Mounted Police are investigating after a fire at a Home Hardware store on Pender Island, B.C. Security camera footage appears to show a woman with short brown hair breaking into the store and setting the blaze, which caused some $10,000 in damage. According to police, the suspect travelled to the island by ferry on Oct. 8, the night before the incident.

Giant Tiger Stores will hold the grand opening on Saturday, Nov. 12 of a fourth location in Windsor, Ont. The 17,500-square-foot store is located at 1745 Huron Church Road. Giant Tiger stores are stocked with affordable, on-trend home and family fashions, brand-name groceries, and everyday essentials at low prices.

IKEA Canada is expanding its network of plan-and-order points with a location in Brossard, Que., on Montreal’s south shore. The Quartier DIX30 retail and leisure complex will be the newest site for the concept, which allows customers to design custom home projects. They can make appointments for one-on-one consultations with IKEA specialists and test out products from a selection of home furnishings. The Brossard location will join existing plan-and-order points in Kitchener, Ont., and Boisbriand, Que.

W. W. Grainger reported Q3 sales of $3.94 billion, up 16.9 percent from the comparable period in 2021. Net earnings soared by 43.4 percent to $426 million, or $8.27 per diluted share, compared with $297 million a year earlier. The results exceeded the expectations of analysts surveyed by Zacks, who projected earnings of $7.19 per share on revenues of $3.88 billion.

SUPPLIER NEWS

The Monarch Group of Companies, a supplier of siding, roofing and building materials in Alberta, has been acquired by ABC Supply of Beloit, Wisc. The Monarch Group operates Monarch Siding Centre Inc., Monarch Exterior Centre Inc., and Monarch Metal Systems Inc.

This is the first international move for ABC Supply. The five Monarch locations in Calgary, Edmonton, Acheson, Red Deer, and Lethbridge will continue to operate under the Monarch brand. No financial terms of the acquisition were released. Last month, ABC Supply acquired the U.S. operations of siding supplier Kaycan Inc.

ECONOMIC INDICATORS

Total U.S. construction spending for September reached $1,811.1 billion, up 0.2 percent from August’s level of $1,807.0 billion. (U.S. Commerce Dept.)

NOTED

The latest episode of our podcast series What’s In Store is now live! In this edition, we talk to Geneviève Gagnon, CEO of Groupe Gagnon, a flourishing chain of stores in Quebec. She talks about her trajectory from law school to the multiple businesses she now manages and her passion for supporting palliative care. (Sign up now to get updates about the latest podcasts in your inbox!)

OVERHEARD…

“The Eisenwarenmesse – International Hardware Fair is the most important platform for our industry. It’s both a barometer of trends and a trendsetter. In other words, it’s the networking platform for the global hardware trade. I’m very happy to be in Cologne, meeting so many colleagues from all over the world.”
—John Herbert, general secretary of the European DIY Retail Association and the Global Home Improvement Network, on the success of the show, which was held in Cologne, Germany, last month.

Suppliers and retailers from across Canada gathered last week to honour the retail home improvement industry’s best hardware and building supply retailers.

The occasion was the 30th Annual Outstanding Retailer Awards, presented during a Gala Dinner at the annual Hardlines Conference. The event was held Oct. 18 at the Queen’s Landing Hotel in Niagara-on-the-Lake, Ont.

Retailers were honoured in eight categories covering the range of hardware and home improvement retailing formats. This year’s winners were:

• Best Hardware Store – Quincaillerie Jean Denis (Home Hardware), St-Raymond, Que. Sophie Denis and Philippe Moisan, Owners. Award sponsored by JRTech Solutions.
• Best Building Supply or Home Centre under 15,000 square feet – Grunthal Lumber (Castle), Grunthal, Man. Mel Funk and Murray Rempel, Owners; Mike Bourgeois, Manager. Award sponsored by Johns Manville Canada.
• Best Building Supply or Home Centre over 15,000 square feet – Grande Prairie Home Hardware Building Centre, Grande Prairie, Alta. Kevin Gillman, Manager. Award sponsored by Trex.
• Best Contractor Specialist – Pierre Naud Inc. (BMR), Trois Rivières, Que. Marc-André Lebel and Philippe Lebel, Owners; Jessica Bastarache, Manager. Award sponsored by the North American Hardware and Paint Association (NHPA).
• Best Large Surface Retailer – Lowe’s Pickering, Pickering, Ont. Angelo Tzogas, Store Manager. Award sponsored by the National Hardware Show.
• Retail Spirit Award – Gander Bay Building Supplies (Castle), Victoria Cove, Gander Bay, N.L. Deborah and Todd Brinson, Owners. Award sponsored by Kohltech.
• Best Young Retailer – BMR Paulin Moisan Inc., St-Raymond, Que. Marianne Moisan and Mathieu Moisan, Owners. Award sponsored by Acceo.
• Marc Robichaud Community Leader – RONA Fort Erie, Fort Erie, Ont. Dennis Doidge, Owner; Jeff Hill, Manager. Award sponsored by BMF.

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

“The past two and a half years were marked by a level of disruption not seen in this industry in our lifetime,” said Michael McLarney, president of Hardlines Inc. “In a field of entries where the bar was already raised high by pandemic conditions, this year’s winners shine bright.”

Hardlines Conference reunites the industry in Niagara-on-the-Lake

The 26th Annual Hardlines Conference hosted almost 150 delegates at the Queen’s Landing Hotel in Niagara-on-the-Lake, Ont., last week. The in-person gathering was supplemented by a large number of delegates watching virtually from their devices.

The two-day event at the Queen’s Landing Hotel represented a veritable who’s who of the industry, with attendees from BMR, Castle, Federated Co-op, Home Hardware, Lowe’s/RONA, Peavey Industries, and Sexton Group, among others. Virtual delegates included top execs from Home Depot and RONA along with key independent dealers. The vendor community was well represented on both the LBM and hardlines side of the industry, with a number of wholesalers, sales agents, and distributors in attendance.

Presentations by senior executives from BMR, Lowe’s Canada, and Sexton Group were followed on stage by thought-provoking presentations by a well-known housing and land economist and one of the country’s leading retail gurus.

The traditional opening pub night, held in a nearby Irish pub and hosted by RONA, was packed, noisy, and opinionated. For many delegates this was their first national gathering in our industry in almost three years.

Alison Fletcher, owner of Cookery—a kitchenwares retailer with stores in Toronto and Montreal—opened on day one with a no-holds-barred description of the career battles she has gone through in several decades in the food and beverage industry. Cookery’s charismatic owner urged delegates to follow their dreams—and the data.

Eric Palmer, VP and general manager of the Sexton Group, gave a personalized overview of the dealer-focused organization founded in 1985 by industry icon Ken Sexton. Palmer talked about his own career path through the organization. He also referenced the recent sale of the Sexton Family of Companies to an investor group, PFM of Regina, Sask., in a deal that is expected to close later this fall.

Altus Group economist Peter Norman, no stranger to Hardlines Conference delegates (he has appeared at the conference more than a dozen times), was blunt at the outset of his presentation. “Uncertainty and caution are what we’re going to talk about this morning,” he warned. “But also some good things,” he promised. The upside? Canada is not likely to experience a housing crash, Norman said. But interest rate hikes will likely mean the heady times for home improvement retailers are over.

Zaida Fazlic, VP people, culture and change management at Taiga Building Products, focused on the skills required to be a good leader. She talked about collaborative leadership and servant leadership, which both require listening carefully and authentically to the feedback and needs of employees.

Tony Cioffi, president of Lowe’s Canada, outlined how his organization, which includes the RONA and Réno-Dépôt banners, was able to lead the industry in converting to e-commerce during the early days of COVID. He gave some detailed insights into how his banners are not resting on their laurels, but tooling up for any future interruptions from future public health crises.

Charles Grégoire-Béliveau, VP merchandising at BMR, took delegates through a tour of what he called “BMR 2.0.” The Quebec-based group is continuing to expand in Ontario and the Atlantic Provinces as well as aggressively signing new dealers in its home province.

Rob and Joanne Lawrie, winners of an Outstanding Retailer Award at last year’s conference, talked about their company’s growth from a single store in Annapolis Royal to seven Home Hardware stores today. Rob had straight-talking advice for anyone who thinks expansion should stop once an extra store is added to their single one. “Do not stop at two stores,” he said. “Do not do it!”

Doug Stephens, known as the Retail Prophet, was back from last year, too, by popular request. He explained why our supply chains became so broken by the pandemic and offered a prescription to avoid future fractures to supply that includes a change in philosophy from always seeking the lowest landed cost for products.

Starting next year, the Hardlines Conference is going on the road. Our 27th annual conference will take place at the Chateau Whistler in Whistler, B.C., Oct. 17 and 18, 2023.

Lowe’s Canada’s president talks to delegates about the changing face of retail

The pace of change in retail has been accelerating, Tony Cioffi told the 2022 Hardlines Conference last week, and it’s about to ramp up even more.

“It’s really important that we adapt to change faster than we have ever adapted before,” Lowe’s Canada’s president said in his address. Flexibility in the way consumers shop is one example. “Today they might want buy-online-pick-up-in-store. Tomorrow they might want to buy online and get it delivered. The next day they might want to come in” to shop in person.

That makes a seamless omnichannel experience more crucial than it has ever been. The average grill purchase, Cioffi noted, is preceded by more than 60 online searches, but only one in-store visit—making it imperative to get the experience of that in-person visit right.

One way that Lowe’s Canada is working toward that seamless experience is by having staff assist in placing orders for items that are available only online. Those items can be shipped directly to the customer’s home. The plan is to have those stores and staff receive credit for such sales by the end of next year.

Another part of the equation is making the best possible use of staff talent. With the labour shortages exacerbated by the pandemic, self-checkout has been “a godsend,” Cioffi says, freeing up would-be cashiers to serve in more complex roles.

Customer expectations around delivery are also evolving. “Two-day delivery is the norm,” with most shoppers expecting to receive items in no more than three days. “Soon, same-day will be the expectation,” Cioffi declared, adding that for about a third of customers it already is.

Lowe’s Canada is responding to demand by changing the way it warehouses orders. “We have three stores in Quebec that we’ve converted this year into direct distribution centres.” Cioffi noted the company has just opened a new bulk DC in the Calgary area.

He continues to look for more ways to work with vendors to respond to customers’ needs. “I’m always challenging our buying team: can the vendor deliver directly to the customer? Can the vendor deliver to the job site?” he said.

“At the end of the day, in this inflationary market, we can’t impose [more] costs on our customers. We need to find a way to be more productive together.”

Canada’s third-largest LBM distributor is poised for some strong growth, and it intends to stay close to its preferred vendors to realize that growth.

“Our vision does not just apply downstream to our customers, but also upstream to the vendors,” says Mike Schneider, vice president of business development at Gillfor Distribution.

The Woodstock, Ont.-based wholesaler was established when OWL Distribution in Woodstock, Ont., and McIlveen Lumber, an LBM wholesaler based in Calgary, merged in 2017. A year later, the company added Brown & Rutherford in Winnipeg and Brunswick Valley Distribution, based in Fredericton. But the acquisition of Bolton, Ont.-based AFA Distribution, completed on June 30 of this year, was the play that catapulted the company to a new plateau.

Schneider says 2023 will be a year of rapid growth, as the company will unite all its divisions clearly under the Gillfor brand (see our Oct. 10 edition—Editor). Gillfor’s vision includes working with “best-in-class vendors and developing real partnerships to grow the market and to take share.”

Gillfor is working to combine its offering to its dealer customers across the country. The base of its existing lines is the specialty building materials category, while the AFA acquisition added a broader range of LBM commodities to the mix. The company’s push in 2023 will be toward a more consolidated approach to the market as it will relaunch all divisions under one brand: Gillfor.

However, Schneider says, that uniformity of marketing will not be at the expense of the wholesaler’s regional strengths, as realized through almost 20 facilities countrywide. Rather, Gillfor’s centralized model will enable it to implement its national programs along with that regional sensitivity, which will come down to the account managers serving their customers in each region and the branches themselves.

“We have an unbelievable respect and confidence in our managers at the branches,” he says. “We believe they are the pillars.”

At BMR Group, Jean-Marc Prudhomme has been named VP, forest products, reporting to CEO Alexandre Lefebvre. Prudhomme joined BMR in 2011 as director of purchasing and was most recently senior director, commodity sales and purchasing.

DID YOU KNOW…?

… the latest edition of Hardlines HR Advisor hits inboxes on Wednesday? In this issue, we talk about the role of great mentors, plus managing the transition back to in-person work. If you’re not already receiving HR Advisor, click here to sign up for free!!

The Home Depot Canada’s nine stores in Atlantic Canada will donate $125,000 to the Canadian Red Cross for relief efforts following Hurricane Fiona. Each store will donate over $13,000 to show their support to local Castle Building Centres Group has announced the addition of Maderas, a new member in Rouyn-Noranda, Que., The new store will be a full-service home improvement centre complete with lumber yard, warehouse, and retail space. For co-owners Jonathan Gauthier and Hugo Dallaire Savard, it’s the fulfilment of a long-time dream to open a building centre.

Peavey Industries will open the doors of its newest store, in Salmon Arm, B.C., by the end of the month. The approximately 25,000-square-foot store in Centenoka Park Mall will be the third Peavey Mart in the province, joining locations in Dawson Creek and Kamloops. It will be the chain’s 91st location overall. It follows on the heels of an opening last month in Bedford, N.S., which was the chain’s first Peavey Mart store in the Maritimes.

SUPPLIER NEWS

Canadian Tire Corp. has submitted a request for a zoning variance that would allow the development of two high-rise residential towers at its downtown Toronto flagship. The design from Adamson Associates Architects preserves the façade of the current retail location. A new Canadian Tire outlet would anchor the project, which would consist of 49-storey north tower opposite a 41-storey tower fronting the subway. A new green space would replace the gas station at the existing store.

The Home Depot in the U.S. has launched a jobseeker marketplace to connect skilled tradespeople to trades professionals in the construction and home improvement industries. It’s part of Home Depot’s “Path to Pro” program to help address the growing skilled labour shortage in the U.S. Skilled trades jobseekers can visit PathtoPro.com to create a profile, upload their resumé, and add photos of their work to connect with Home Depot’s pro customers looking to hire in their local area.

SUPPLIER NEWS

JELD-WEN of Canada is donating $25,000 to the Canadian Red Cross to aid relief following the impact of Hurricane Fiona. The Canadian Red Cross is providing emergency shelter, financial aid, food, and clothing to those affected. The Government of Canada matched donations made by individuals and corporations up until Oct. 23.

JRTech Solutions has secured agreements to install its shelf label technology and cloud platform in 24 RONA affiliate stores. Among them are the nine stores under RONA Moffatt & Powell.

A.O. Smith, Blackstone, and Mansfield Plumbing have been recognized by Lowe’s Cos. as the retailer’s 2022 Vendor Partners of the Year. At the same time Lowe’s presented its Sustainability Award to Owens Corning, which has cut its greenhouse gas emissions by about 60 percent since 2007.

ECONOMIC INDICATORS

Sales of existing homes fell by 3.9 percent between August and September. While about 60 percent of all local markets saw sales fall, the national number was pulled lower by declines in Greater Vancouver, Calgary, the Greater Toronto Area, and Montreal. The actual (not seasonally adjusted) number of transactions in September came in 32.2 percent below September 2021 and about 12 percent below the pre-pandemic 10-year average for that month. (Canadian Real Estate Association)

The annualized rate of housing starts in September was at the highest since November 2021 at 299,589 units, up 11 percent from August. The rate of urban starts rose 12 percent to 276,142 units, though single-detached urban starts were flat at 59,593 units. (CMHC)

NOTED

The latest episode of our podcast series What’s In Store is now live! In this edition, we talk to Geneviève Gagnon, CEO of Groupe Gagnon, a flourishing chain of stores in Quebec. She talks about her trajectory from studying tax law to the multiple businesses she now manages and her passion for supporting causes such as palliative care. (Sign up now to get these Hardlines Podcasts. They are free!)

OVERHEARD…

“I think it’s important we don’t profit from the communities we serve in without giving back.”
—Rob Lawrie, of the Lawrie Group of Companies, who with his wife and business partner Joanne Lawrie told the story of their growth to a chain of seven Home Hardware stores in Nova Scotia. They presented at the latest Hardlines Conference, held last week in Niagara-on-the-Lake, Ont.

Registration is now open for the 2023 National Hardware Show, Jan. 31 to Feb. 2, 2023, at the Las Vegas Convention Center. The upcoming show shares access to four other trade shows: the NAHB International Builders’ Show (IBS), NKBA’s Kitchen & Bath Industry Show (KBIS), International Surface Event, and Las Vegas Market (Winter) show.

While NHS now has added horsepower behind it, many Canadians are still considering whether to make the trek to Sin City at the end of January. NHS was last held in April of this year and attracted very few Canadians, whether exhibitors or buyers. But as COVID restrictions are lifted and as air traffic is expected to improve in coming months, Canadians appear to be ready to get back to business in Las Vegas.

Unquestionably, the notion that retailers will send larger groups of their buyers down to attend multiple concurrent shows is a big draw for vendors. And buyers are putting the combined event on their calendars. “Yes, we are attending,” says Randy Martin, vice president of procurement at TIMBER MART. “Now that they are combining the three shows, including hardware, building materials, and kitchen and bath, we see a great opportunity. The plan is to have our procurement team in attendance.”

However, some vendors are skeptical of the show’s draw for Canadian buyers. Sam Moncada, president of the Canadian Home Products Trade Association (CHPTA), which represents hardware and housewares vendors, notes that a lot of retailers are waiting to decide whether to go. “A lot of vendors are concerned that retail organizations have been able to conduct business and launch new products without travelling. We’ll have to see if that will continue.”

While some vendors Hardlines spoke to will take a pass this year, many more are very positive about the prospects for the next show. However, not all of them will exhibit. “I do plan on attending the show,” says Kim Laurette, director of retail sales and Canadian marketing at A.O. Smith. She will not, however, exhibit. “I don’t normally attend IBS or Kitchen & Bath, so I look forward to walking those shows as well since it is all combined next year.”

Maxime Lebon, national sales manager for Belanger Laminates, is also interested in the opportunity to take in multiple shows. “We are planning to be at the National Hardware Show, KBIS, and the Builder Show as visitors. It’s good news that they have decided to combine all together.”

Richelieu Hardware is definitely going to be there, and an exhibitor at that. According to Larry Lucyshyn, VP for sales to U.S. retail markets, his company will actually exhibit at two shows. A retail booth at NHS will showcase its retail divisions—Richelieu, Onward, Reliable, Madico, Cedan, Nystrom, Mibro, and Task. The company will also have a presence at the Kitchen & Bath Show to present its industrial lines. “The needed sales and marketing team members from Canada and the U.S. will attend,” he adds.

Steve Finlay of Imperial Manufacturing was one of the few Canadian exhibitors at the April 2022 National Hardware Show. Now, he says, he’s looking forward to the next one. “I’m confident it will be a good event, because of the three shows in one. It will definitely bring the people in.”

Even though Imperial has some industrial lines as well as hardlines products, Finlay says he will confine his company’s presence to the hardware show only, at least this time. “But I’ll consider expanding to the Builders’ Show the following year.”

At the CHPTA, Moncada says that a month ago his members were pretty much split down the middle on whether they would go to NHS. And even if they do go down to Vegas in January, many vendors will travel light. “A lot of our manufacturers are planning to go down, not necessarily to exhibit, but to look around.”

But in recent weeks, Moncada has seen his members get more positive about travelling. “We are starting see and hear of more vendors heading down. The confidence level to participate in the event is starting to increase,” he says. A recent survey of members showed that 15.2 percent of them will exhibit, and another 37 percent will be there to walk the show. But more than a quarter of the member vendors said they won’t attend. Just over one-fifth remain undecided.

CHPTA will go ahead with an industry cocktail reception as it has done at NHS in years past. It used to be called Maple Leaf Night, but it’s being renamed Canada Night. Another big change is vendor accessibility to the event, which has historically been for CHPTA members only. “It will be a more casual event than in the past. And we’re going to open it up. It won’t be a member-only event now. You just have to buy a ticket to get in.”

While caution may be the watchword for many, the inclusion of other shows into NHS is considered a viable strategy, one that’s expected to see Canadian retailers send even more buyers than usual to Las Vegas. “In theory it’s a great opportunity to have the shows converge,” says Moncada. “I think it’s the right strategy.”

With integration of Ace, Peavey can focus on expansion of its corporate stores

Managing multiple banners keeps Doug Anderson very busy. He’s the president and CEO of Peavey Industries, which operates corporate stores under the Peavey Mart and MainStreet Hardware banners. Anderson also directs the wholesale and branding needs of a group of independent dealers that operate mainly under the Ace banner.

Ace is the newcomer—and the disrupter, in effect, that turned the Peavey into a wholesale distributor. But Anderson is investing in growth on all fronts, including new stores under the Peavey Mart banner. A store opened at the end of September in Bedford, N.S., marking the first location for the company east of Ontario. Why there? Anderson notes that various metrics, including demographics, were aligned for Peavey. “There was an opportunity, and we’re very opportunistic,” he says.

Another new store will open at the end of October on the other side of the country. This Salmon Arm, B.C., outlet will be the company’s 90th Peavey Mart location.

In fact, the idea of opportunity comes up more than once in conversation with Anderson. Even under the Ace banner, Peavey has made a point of acquiring and maintaining a few as corporate locations—when the opportunity presents itself.

The renewed focus on incremental expansion reflects the alignment of the company following several years of aggressive growth. That included the acquisition of 50-plus TSC stores, mainly in Ontario, in 2017 followed by the takeover of the Ace Canada licence in March 2020 from Lowe’s Canada. The early part of 2021 marked the completion of the changeover of the TSC stores to the Peavey Mart banner.

“The TSC changeover was good but there’s always work to do with redirection, etc. But we’re getting good at that.” Anderson says the lead-up to the rebranding of TSC was carefully plotted, as buying teams were combined and systems consolidated. “We had moved the stores to be more aligned, so by the time of the switch it was just a matter of putting up the new sign.”

Now, as Peavey Industries sees its corporate stores and its wholesale business working together more effectively, the focus is on the continued growth of Peavey Mart. “We aim to be a true national company.”

Castle’s new business development director anticipates another strong year

A new national director with an expanded dealer development team reflects the changes—and growth—occurring at Castle Building Centres Group.

Doug Keeling took over as the buying group’s director of business development on Sept. 1 from Bruce Holman, who has retired. Keeling oversees a team of eight people taking care of Castle’s 300-plus members, while connecting with prospects to keep adding to the group’s ranks. “We’re making changes for the growth we expect in the future,” says Keeling.

Coming out of COVID, the industry and the economy are confronting a lot of change, and change is always good for dealer recruitment, Keeling adds. As things have slowed down a bit, dealers are willing to take time to look at their own businesses more closely.

In addition, new ownership at rival groups such as Sexton Group and TORBSA adds to the sense of disruption. “We’re coming out of a couple of years that were crazy for all the groups, not just Castle. There have been big changes across various banners. That is causing some dealers to relook at the groups they’re with,” he says. “As Castle continues to grow, we are attracting attention.”

Part of that growth has meant splitting the Ontario territory, which has about 100 Castle dealers. The reps there are André Laurin for central and northeastern regions, and Lillian Diaz, business development manager for the central and southwestern parts of the province. Also, Brad Dixon has recently left his post as business development manager for British Columbia; Castle is actively looking for a replacement.

Despite the headwinds of rising interest rates and continued inflation, Keeling expects the momentum in the industry to continue. “This has been another record year for Castle, for both our new members and our existing dealers. And while some are skeptical about 2023, we expect the momentum, especially on the commercial side, to continue.”

At BMR Group, Jean-François Lemelin has been appointed assistant VP, sales. He will report to Martin Lecomte, VP, corporate store operations and dealer service. Lemelin has over 15 years of experience in the retail, hardware, and renovation industries. Most recently, he was VP of sales, marketing, and customer service at Boiseries Raymond. He is also a former sales manager for Jeld-Wen Canada.

DID YOU KNOW…?

… that top retail executives from Home Hardware, Lowe’s Canada, Sexton Group, Orgill, Federated Co-op, BMR Group, Castle, and Peavey are all attending the 26th annual Hardlines Conference in Niagara-on-the-Lake, Ont., Oct. 18 and 19? If you’re already registered, give yourself a mighty pat on the back because you are going to have a blast networking with everyone this year! If haven’t registered, avoid FOMO and mark your calendar for next year—Oct. 17 and 18, 2023, in Whistler, B.C.!

The Home Depot Canada’s nine stores in Atlantic Canada will donate $125,000 to the Canadian Red Cross for relief efforts following Hurricane Fiona. Each store will donate over $13,000 to show their support to local communities.

Kent Building Supplies and the town of Bay Roberts, N.L., signed a letter of intent that could see the retail giant become the first tenant in the town’s commercial park, SaltWire reports. The deal is conditional on the town’s finding either a second anchor tenant or multiple smaller tenants. Although the agreement was signed about two years ago, the town has only recently been publicizing it as part of its effort to recruit tenants, Bay Roberts economic development officer Ron Delaney told SaltWire.

The Canadian Tire show was back last month after a two-year hiatus during the pandemic. It was held in Toronto at the Metro Toronto Convention Centre. Along with hosting Canadian Tire’s preferred vendors, the show floor showcased the company’s 100th anniversary with black-and-white graphics and images of old flyers and storefront ads.

SUPPLIER NEWS

Orgill has announced plans to build a new 800,000-square-foot distribution centre in Tifton, Ga. It will replace Orgill’s current facility in the city, which covers 650,000 square feet. It opened in 1995 and is currently the oldest location in the company’s network. Along with the Tifton location, Orgill operates seven full-service distribution centres in the U.S. and one in London, Ont.

Taiga Building Products is donating $30,000 to the Canadian Red Cross in support of the hurricane Fiona recovery efforts in the Atlantic Region. “Many of our people and partners call the Atlantic region home,” CEO Russ Permann said in a release. “We hope that our support will help those that are close to us, and the broader community, recover from this storm.”

Richelieu Hardware reported Q3 sales of $472.9 million, an increase of 26.7 percent. In Canada, sales rose by 14.8 percent to $279.6 million. Sales to Canadian hardware retailers reached $51.6 million, up 11.2 percent. Net income increased by 19.6 percent to $46.4 million. The quarter saw Richelieu acquire Quincaillerie Deno, a Quebec distributor of specialty hardware products.

ECONOMIC INDICATORS

The value of building permits in Canada rose by 11.9 percent in August to $12.5 billion. Both the residential and non-residential sectors saw strong gains, with Ontario causing much of the increase. Residential permits for the month increased 12 percent to $8.4 billion nationally. Gains in Ontario offset losses posted in seven provinces. Construction intentions in the single-family homes component edged up 0.4 percent. (StatCan)

Lumber production decreased 16.9 percent from June to 3.74 million cubic metres in July. Production was down 10.2 percent from the previous July. Sawmills shipped 4.3 million cubic metres of lumber in July, down 5.5 percent from June and up 3.1 percent from July 2021. (StatCan)

Investment in U.S. construction fell by 0.7 percent, the largest drop since February 2021. August’s decline compounded the 0.6 decrease seen in July. In a Reuters poll, economists forecast that construction spending would edge down by 0.3 percent. Year-over-year, spending was up by 8.5 percent. (U.S. Commerce Dept.)

NOTED

The Hardlines Conference kicks off this evening at the Queen’s Landing hotel in Niagara-on-the-Lake, Ont., with the RONA Pub Night. We look forward to welcoming our delegates, who will arrive from every part of the country to network and learn. See you there!

OVERHEARD…

“Our priority during this time is the safety of our customers and our associates while we support them during this unprecedented time.”
—Sebastian Brand, district manager for Home Depot Canada in Atlantic Canada, on the efforts of its stores in that region to raise money for victims of Hurricane Fiona.

The latest buying event for Peavey Industries was held last week at the Toronto Congress Centre near Pearson International Airport. The trade show was called “Family Reunion,” and played host to some 75 independent Ace Canada dealers representing 150 store locations as well as managers from Peavey’s 90-plus Peavey Mart, MainStreet, and corporate Ace stores.

While he doesn’t like to bite the hand that passed the Ace portfolio over to Peavey (whew, that is one mangled metaphor!—your bemused and befuddled Editor), Jest Sidloski, Peavey’s VP of marketing, e-commerce and customer experience, said that this show was smaller and more intimate than the shows Ace dealers would have experienced when affiliated with Lowe’s Canada. “That intimacy aligns with the needs of the Ace dealers.”

The event was further distinguished by an emphasis on group meetings and information sessions among the dealers. Sidloski said these events provided important forums for Ace dealers to provide feedback on their concerns, as their relationship with Peavey is a recent one—beginning in 2020 shortly after the initial lockdowns brought on by the rise of Covid-19. At that time, Peavey Industries took over the licence for the Ace brand from Lowe’s Canada, which had operated it through its RONA division.

This event marked the first time that Ace dealers have gathered in person under the auspices of Peavey. Including exhibiting vendors in 150 booths, about 650 people in total attended the three-day event. Unlike at a traditional hardware show, product lines such as apparel and workwear, feed and pet, and farm and ranch were well represented.

Vendors were largely upbeat about the show, happy to be meeting with their customers face-to-face. They also noted with satisfaction that the dealers had made the trek from across the country, including a strong contingent of western Canadian dealers. Positive feedback came from both the Ace dealers and the Peavey managers who were walking the show.

The next show will be held in Peavey’s hometown of Red Deer, Alta., in 2023.

Canadian Tire supports staff in wake of homicide in Ontario store

A Toronto-area Canadian Tire store remained closed through much of last week as police investigated the stabbing death of a woman there last Monday evening. A local man was charged with first-degree murder in the attack at the retailer’s location in Mississauga’s Heartland Town Centre mall, at the intersection of Mavis Road and Britannia Road.

The Peel Police Homicide Unit charged Charanjeet Singh, 26, of Mississauga with the first-degree murder of 22-year-old Chandanpreet Kaur, his wife of three years.

Kaur died at the scene shortly after Peel Regional Police arrived to respond to “multiple stabbings.” Singh reportedly suffered minor injuries and was treated in hospital. CTV News reported that the crime occurred in the store’s garden centre, according to a customer in the store at the time.

A statement issued by Canadian Tire at the time said: “We are deeply saddened by the tragic incident that occurred at our Heartland location yesterday evening. The safety of our employees and customers is of utmost importance to us and we are working closely with the Peel Regional Police as they investigate the incident. Counselling services have been made available to support our store staff through this difficult time. The store is currently closed and will remain so until the onsite police investigation has been completed.”

Quebec association head calls for change to laws governing retail hours

AQMAT president Richard Darveau has issued an open letter calling on candidates in Quebec’s election to step up on behalf of the province’s retailers as they battle Amazon. The head of the Quebec building supply association issued the missive following this month’s first televised leaders’ debate, which Darveau says all but ignored the housing crisis at the heart of many voters’ concerns. (A second debate was held as Hardlines was going to press).

Quebecers go to the polls Oct. 3 and pundits consider a second majority government for François Legault’s Coalition Avenir Québec a near certainty. Quebec politics defy easy left-right narratives and Legault’s government has shown itself to be both business-friendly and unafraid of public spending to stimulate the economy.

Darveau argues that the sole advantage independent retailers have against the e-commerce giants—personal attention to the customer—is undermined by current laws which permit retailers to stay open almost 24/7. He wants those regulations changed so that independents and their teams can recharge without sacrificing competitivity.

“Opening 83 hours per week exhausts managers and employees, hinders dealer-owners in recruitment and retention of talent, and jeopardizes their chances of finding a successor,” Darveau wrote.

Speaking to Hardlines, Darveau stresses that the letter should not be read as primarily about staffing shortages, but about sustaining vital customer service offerings.

“People might think the main reason we’re battling is the lack of manpower. That’s not it and I think it’s a misreading of our letter that people are focusing on that,” he explains.

Although that is an issue he addresses in the letter, the driving motivation for writing, he says, is a concern for sustainable customer service.

“The reason is we’re looking at the numbers, where players like Amazon are getting more and more market share each year. With the status quo, if government does nothing, we might end up like Florida, where there are lots of franchises but no independent stores,” Darveau said.

Darveau contrasts the customer experience in a hardware store with sectors like grocery and pharmacy, where shoppers can go in armed with the info needed to make a purchase. “When you enter a hardware store, it’s for one of two reasons: you have a problem to fix, or a project or dream to realize. And in that case artificial intelligence isn’t enough.”

But retaining the human talent that is needed will be impossible if no action is taken, he adds, because “qualified people want their evenings and weekends.”

The U.S. Lumber Coalition is spearheading an attack on four Canadian federal climate programs which it says amount to unfair subsidies. It has joined with other players, including Weyerhaeuser Co., under the umbrella of COALITION. (The acronym stands for “Committee Overseeing Action for Lumber International Trade Investigations Or Negotiations.”)

In a filing with the U.S. Commerce Department, the consortium “hereby submit[s] an allegation of additional subsidies available to Canadian producers of softwood lumber products.”

Softwood lumber has been a perennial sticking point in Canada-U.S. trade relations. The crux of the dispute hinges on the contrasting systems of land ownership in the two countries. Most Canadian softwood is harvested from Crown land, for which the federal government charges modest “stumpage” fees.

U.S. lumber producers pay higher prices for timber from mostly private lands. In their view, the low cost of stumpage fees in Canada amount to a government subsidy, in violation of the U.S.-Mexico-Canada Agreement on free trade (and, previously, the North American Free Trade Agreement).

Trade arbitrators have consistently rejected that reasoning, but that hasn’t stopped U.S. regulators from periodically imposing countervailing and anti-dumping duties that tie up Canadian producers until they’re overruled.

The position of U.S. lumber producers also puts them at odds with their homebuilding counterparts. The National Association of Home Builders in the U.S. has described American duties on Canadian softwood as a “tax” on American builders and buyers that has driven up prices at times when domestic lumber supply isn’t sufficient to meet their needs.

This time, the U.S. lumber lobby is taking a different tack. This latest salvo is aimed mostly at federal and provincial climate incentives, though COALITION (which stands for… oh, never mind—Editor) is also concerned about a tax exemption for exporters and a federal wage program that encourages hiring Indigenous youth.

The targeted programs include two Natural Resources Canada initiatives, the Clean Growth Program and the Green Freight Assessment Program. Also under fire are the Tax Savings for Industry incentive for renewable energy use and the Western Business Scale-up and Productivity Program, which funds growing businesses in that region.

Provincial programs are also at issue. COALITION objects to programs in British Columbia and New Brunswick designed to help companies meet carbon goals.

In a written response, lawyers for Canadian parties including the federal government cautioned the U.S. Commerce Department not to “undermine the Biden administration’s stated policies on combatting climate change, reducing greenhouse gases, and protecting the environment.”

The response notes that government programs to forestall the climate crisis cut across industries and “cannot be considered specific.” It warns that if the Commerce Department imposes new duties, it “would be violating the applicable countervailing duty statute and regulations, and would be at odds with the executive order of the president directing trade policy to address the global climate crisis.”

Canada and the U.S. have lacked a bilateral agreement on softwood exports since the last one expired in 2006.

Chris Parsons has been named senior director, omni-channel marketing and strategic insights, at Home Hardware Stores Ltd. He joined the company in 2019 as director of e-commerce. The host of the podcast Delivering eCommerce, he has experience in the field at Walmart Canada and Ren’s Pets.

At Garant, Jonathan Cole is the new VP of sales and customer service. Cole held the position of national account manager from 2008 to 2012, then returned to Garant in 2014 as sales manager and was promoted to director in 2018.

DID YOU KNOW…?

… that it’s time you spent a couple of days working ON your business, not IN it? So join us to learn the latest about where home improvement retailing is headed by attending the 26th annual Hardlines Conference, Oct. 18 and 19 at the Queen’s Landing Hotel in Niagara-on-the-Lake, Ont. Sign up now for this year’s event!

The Home Hardware fall market had a new name, a new look—and a new location—this past weekend. Instead of the traditional St. Jacobs, Ont., gathering of dealers, the company held its buying show at the Enercare Centre, on the Canadian National Exhibition grounds west of downtown Toronto. The event had a new name, “Homecoming.” (The Hardlines team was there, of course, and we will have a full report on the show in the next spine-tingling edition of this newsletter.)

Surrey, B.C.’s Crown Building Supplies marked its eighth anniversary recently during its annual customer appreciation barbecue. Crown Building Supplies became a member of AD Building Supplies in July when Crown’s buying group, TORBSA, became AD’s Canadian division. Crown CEO Gary Sangha is chair of AD Building Supplies – Canada.

Lowe’s in the U.S. has launched an interactive store “digital twin,” which enables store staff to visualize and interact with nearly all of a store’s digital data to optimize operations and localize plans to serve customers. Built by the Lowe’s Innovation Labs team, the digital twin is a completely virtual replica of a physical home improvement store, created in NVIDIA’s Omniverse environment. It’s currently live in two U.S. stores.

Walmart Canada will invest more than $100 million to build a high-tech sortable fulfilment centre in Vaudreuil-Dorion, Que., outside Montreal. Walmart’s first in the province, the new facility is slated to open in 2024. At about 457,000 square feet, the warehouse will serve as a delivery hub for orders in Quebec and the Atlantic provinces. It’s part of a broader $1 billion effort in the retail giant’s infrastructure that also includes store upgrades and remodeling.

SUPPLIER NEWS

The B.C. Building Supply Industry Association will host a two-day event next month for retail members’ staff. The Westcoast Tour 2022 will take members to 10 manufacturers and suppliers in the Lower Mainland on Oct. 26 and 27 from 7 am to 6 pm. Attendees will learn about products and connect with others within the industry. Tour stops include CanWel Building Materials, Metrie, and Taiga Building Products. (Only 24 spots are available so click here to register.)

Avantis Cooperative, Quebec’s largest BMR member, will install JRTech Solutions’ electronic shelf labels in nine of its stores. The rollout builds on the existing partnership which has seen JRTech’s labels go up in 15 Avantis locations.

Demand for Halal home financing is strong in some provinces, The Globe and Mail reports. Islam prohibits both payment and receipt of interest, which rules out conventional mortgages. As a result, the country’s more than one million Muslims are disproportionately renters. Edmonton start-up Canadian Halal Finance Corp. is working with the Al Rashid Mosque to fill the niche. Contracts typically resemble a lease-to-own agreement.

ECONOMIC INDICATORS

Canada’s inflation rate fell to seven percent in August, following a 40-year high of 8.1 percent earlier this summer. Falling gas prices fuelled the steeper-than-anticipated decline. Food prices by contrast continued to mount, with grocery bills rising by a total of 10.8 percent over the past year. The actual price of goods, called core inflation, continues to stay high. (StatCan)

U.S. housing starts rose 12.2 percent in August to an annualized rate of 1.575 million units. Building permits for August fell by 10 percent to a rate of 1.517 million units. (U.S. Commerce Dept.)

NOTED

A recent poll commissioned by Canadian Imperial Bank of Commerce found that 17 percent of the 1,522 people surveyed changed employment in the past two years. Twelve percent moved to a new home; 11 percent acquired a new pet.

OVERHEARD…

“I prefer to have a surplus of staff in a hardware for 50 hours a week than to close the doors for good.”
—Richard Darveau, president of the Quebec industry association AQMAT. He was referring to his open letter to candidates in the province’s upcoming election that urges them to advocate for improved working hours for dealers.

The installation of Claudie Gervais as vice president of marketing and communications at BMR Group, announced last week, is just the latest step in the realignment of the executive team at the Quebec-based wholesaler and buying group.

Gervais (shown here) joined BMR in 2017 as director, promotional strategy and business intelligence. She moved up through the ranks until earlier this year, when she took over as senior director, marketing and communications, before assuming her current VP role.

But other appointments within the company are reflective of a larger trend under the leadership of BMR’s CEO, Alexandre Lefebvre, who has drawn on his background with his own family-owned business to oversee this latest reorg.

That includes a new head buyer, Charles Grégoire-Béliveau, who was promoted to vice president, merchandising at the beginning of June. He was previously senior director, merchandising. At the same time, Antonio Di Pasquale was named COO. He had joined BMR in 2020 as vice president, supply chain and operational excellence. In his new role, Di Pasquale oversees all BMR’s operations and much of the management team reports into him, including Gervais in her new VP role. A year earlier, Simon Grouin was appointed senior director, business development, for Eastern Canada, while François Grenier was named VP of human resources.

“I’m pretty excited about the team and where they’re headed now,” Lefebvre told Hardlines. A year and a half into the job himself, he came over to BMR following the group’s acquisition of his family’s business, Lefebvre & Benoit.

The vision was to reduce the number of people at the top of the organization and make the remaining execs more hands on, with many of them, including Gervais, reporting to COO Di Pasquale, “so they’re not in silos and we can move more quickly,” says Lefebvre. “Now they’re more agile.”

These experts will share their retail insights at the upcoming Hardlines Conference

The 26th annual Hardlines Conference is just weeks away (Oct. 18 and 19 in Niagara-on-the-Lake, Ont.).  The lineup of speakers will include top executives from Lowe’s Canada, BMR Group, and Sexton Group. In addition, delegates can count on getting a first-hand glimpse of the latest trends and big-picture outlooks from a world-class lineup of retail experts.

As the founder of global consultancy Retail Prophet, Doug Stephens (shown here) is one of the world’s leading retail and consumer futurists—and a top global retail influencer. He is also one of our most in-demand speakers for the conference. This year, he’ll take a deep dive into the future of retail in what he calls The New Age of Risk. “The role of the retail leader is increasingly one of anticipating and mitigating risk,” he says.

“Essentially, I’ll be promoting the idea that smart retailers are moving away from the goal of lowest unit cost and moving to a model where the goal is lowest business risk. Brands that are able to achieve this new model are garnering outsized customer loyalty and capital investment.”
  
For insights into the future of the economy, including housing and reno markets, we’ll rely on Peter Norman, one of Canada’s foremost land economists and forecasters. As vice president and chief economist at Altus Group, he is widely quoted in the Canadian media and remains a regular favourite on the Hardlines Conference podium.

Dan Tratensek is COO and publisher with the North American Hardware and Paint Association. NHPA represents independent retailers in the $400 billion-plus home improvement, paint, and decorating industry throughout the U.S. and Canada. Always a welcome addition to the Hardlines Conference, this year he will present brand-new data on how independents can benefit from growing their digital sales.

The 26th annual Hardlines Conference is returning to the Queen’s Landing Hotel in Niagara-on-the-Lake, Ont., a scenic destination just 70 minutes from Toronto Pearson International Airport. It will kick off with the ever-popular RONA Pub Night on the evening of Oct. 17. The 30th Annual Outstanding Retailer Awards Gala is a must-attend event on the evening of the first day of the conference, Oct. 18.

(We still have some seats available for the Hardlines Conference. To see the full list of speakers and to secure your spot at this incredible event, please click here!)

Online building materials supplier offers “last mile” service for pros

It started out 18 months ago as a way to get products to contractors’ jobsites in Vancouver’s Lower Mainland. Now, Warehoos Online Inc. has rolled out its delivery services throughout Canada and parts of the U.S.

Warehoos serves builders and provides same-day delivery for most building materials through its online marketplace. Unlike some “last mile” delivery services, Warehoos does not rely on its own warehousing but works with existing building supply dealers to source its products.

“Almost everything is actually fulfilled from building supply yards closest to the delivery, or if we don’t have a yard in the area, from the closest one we’ve partnered with,” says Ross Power of Warehoos. For example, in the Vancouver area, the service has worked with dealers like Dick’s Lumber in Surrey, Poco Building Supplies in Port Coquitlam, and Griff Building Supplies in New Westminster. A third-party logistics company picks up the products and makes the actual deliveries to the jobsites.

Power is also the president of PowerHouse Building Solutions, a Surrey, B.C.-based distributor specializing in building products for home construction on the west coast. But the new business is completely separate from the wholesale distribution company. “We don’t carry inventory ourselves, so we’re really an extension of the building supply yards that we partner with.” It’s a different business from PowerHouse, he stresses, with different staff and even competitive products to those that PowerHouse carries.

Power admits the new service is a way to adopt to changing demands of the marketplace, “to remain relevant in the years to come as opposed to some online suppliers that try to cut out the middleman and do as much as possible directly. We’re here to disrupt the industry and service the contractor without messing with the current distribution channel—to be complementary.”

He recognizes the need to overcome that “last mile” delivery challenge in the product supply chain. “Contractors inherently need service and products ASAP that most online companies simply cannot provide. The fact that we use building supply yards and have connections all over the place allows us to get product into the hands of the contractor faster than any other service we know of.”

He adds that the manufacturers appreciate the Warehoos model as well. “We can connect their materials to contractors that want to use them in markets where their products cannot otherwise be easily sourced.” 

The Home Depot is working on racial equity and deforestation assessments in response to shareholder proposals from the company’s latest annual meeting. But the assessments are nothing new for the company. The current initiative will expand on the information previously shared in the company’s annual Environmental, Social, and Governance (ESG) report.

The ESG efforts include initiatives and goals around what the company call three “fundamental pillars”: focusing on its people, operating sustainably, and strengthening communities.

Home Depot’s Office of Diversity, Equity, and Inclusion leads the company’s diversity reporting, which includes gender, ethnicity, and pay equity data for its workforce. Numerous initiatives have been designed to increase the diversity of its workforce, promote inclusion, amplify support for diverse suppliers, and enrich the communities the chain serves. The planned assessments will help the company benchmark its DEI and responsible forestry programs, highlight the ways it is upholding its commitments, and potentially identify opportunities to enrich its efforts.

The Home Depot has been investing in policies to promote fairness and combat bias, while ensuring that associates and business partners have access to the resources they need to succeed at work. In 2021, the company says, it spent $3.3 billion with its top suppliers and recently announced a goal to spend $5 billion annually by 2025.

Home Depot continues to focus on its sustainable forestry initiative, as well, a practice that dates back more than 25 years and reflects the company’s recognition that responsible forest management is essential to protecting the health of the world’s ecosystems. To help protect endangered forests and support efforts to preserve timber for future generations, it first issued its Wood Purchasing Policy in 1999, working with suppliers to understand and practise sustainable forestry throughout the world.

The company expects to publicly release its reports on these assessments by the end of its fiscal 2023 year.

Christine Joannou has joined Luxo Marbre as its chief strategy officer. The manufacturer and distributor of kitchen and bathroom furniture says rapid expansion and increased demand prompted the hire. Her experience includes terms as VP for the House of Rohl and Maax sales departments and serving on the board of the Canadian Institute of Plumbing and Heating.

At VicWest Building Products, Brian Glen has been appointed director of sales for Ontario and western Canada. In this role, he’s responsible for strategy development and deployment across all channels VicWest serves.

David Kohler has been elected chairman of the board of Kohler Co., in addition to his existing roles as CEO and president. The announcement follows the death of his father, executive chairman Herbert Kohler Jr., earlier this month.

DID YOU KNOW…?

… that the Hardlines Conference is barely a month away? That’s right, tickets are going fast for the biggest information and networking event of the season. Registration is open online for the 26th annual Hardlines Conference, Oct. 18 and 19 at the Queen’s Landing Hotel in Niagara-on-the-Lake, Ont. Sign up now as tickets are limited for this year’s event!

Princess Auto is slated to open a location next year in a newly renovated retail plaza in Sault Ste. Marie, Ont., according to Soo Today. In addition, next March it will open its seventh British Columbia location, in Abbotsford.

Hickey’s TIMBER MART held the grand opening recently for its newest store, located in Goulds, NL. Jim and Mary Hickey started the business 49 years ago, with the business now run day-to-day by sons Brad and Jay Hickey. Today, Hickey’s has four stores, with the other locations in Conception Bay South, Harbour Main, and St. John’s. 

The owners of Orillia Home Hardware Building Centre in the gateway to Ontario’s cottage country have a new store. Dean Smales is retiring after 34 years as dealer-owner of Dean’s Home Hardware in nearby Huntsville.

Dollarama reported Q2 net earnings of $193.5 million, up 32 percent from $146.2 million a year earlier. Total revenues grew by 18.2 percent to $1.2 billion, buoyed by the net increase of 13 stores in Dollarama’s network during the quarter. Comp sales rose by 13.2 percent while the number of transactions surged by 20 percent.

SUPPLIER NEWS

Garaga Inc. has acquired North Central Door in Bemidji, Minn., its second U.S. facility. The manufacturer previously bought Mid-America Door in Ponca City, Okla., in 2018. “The acquisition of North Central Door will allow us to strengthen our position in the American market and thus continue our growth,” said Garaga co-president Maxime Gendreau.

M-D Pro’s new web address has gone live at www.mdpro.com. Its search functionality and category tabs allow users to access Prova tile installation products and M-D Pro flooring accessories. The website introduces a “Become a Distributor” page for distributors to join M-D Pro’s network, and provides information on authorized M-D Pro retailers and distributors.

Eisenwarenmesse 2022, the International Hardware Fair, will take place Sept. 25 to 28 in Cologne, Germany. It’s the first in-person edition of the show in four and a half years. Some 1,400 exhibitors from 50 countries will gather at the Koelnmesse exhibition centre to showcase new products from tools to building and DIY supplies.

ECONOMIC INDICATORS

Sales of existing Canadian homes dropped slightly, by one percent, in August from the previous month. The actual (not seasonally adjusted) number of transactions came in 24.7 percent below August 2021. While still a large decline, it was smaller than the 29.4 percent year-over-year drop recorded in July. The number of newly listed homes fell to 5.4 percent on a month-over-month basis in August, building on a 5.9 percent decline recorded in July. (Canadian Real Estate Assoc.)

Investment in building construction rose 0.8 percent to $21 billion in July. Both the residential and non-residential sectors showed increases. Spending on residential building construction advanced one percent to $15.7 billion in July. Single-family home investment edged up 0.3 percent to $8.6 billion. (StatCan)

NOTED

Home Depot reports that its U.S. workforce is consistently more ethnically diverse than the U.S. working population at large, based on U.S. Department of Labour data.

OVERHEARD…

“We’ve partnered with building suppliers in B.C. and have been able to become a great customer. As we expand, we need more partners in Canada and the U.S. We’re also helpful for yards or suppliers that have niche products not available everywhere but which we can help fulfil to expand their reach.”
—Alec Yu, director of operations at Warehoos, which partners with dealers to source products and deliver them to nearby contractor jobsites.