Many dealers are concerned that the wild ride home improvement has enjoyed during COVID may fall off as restrictions ease and lockdowns end. Increased spending on many non-essential retail products was tracked by StatCan as restrictions related to the third wave of the COVID-19 pandemic began to ease across the country back in June.

Despite concerns, Canadians continued to spend on tools and projects related to home improvement in June, with sales of hardware, tools, and renovation and lawn and garden products increasing 5.9 percent from the same month a year earlier. The largest contributor to sales growth in this category was lumber and other renovation materials and supplies, which were up 12.1 percent, followed by floor coverings and tiles—up almost 30 percent.

But can the trend continue? By the end of the summer, and facing a fourth wave, some groups were already seeing slowdowns.

Eric Palmer, vice president and general manager of Sexton Group, reports that his dealers noted sales slowing as the summer was wound down. Product shortages, especially feeding into dealers’ contractor business, created added uncertainty. But Palmer says his members remain largely positive about the continued health of the economy.

Indications of sales starting to slow

Other groups are detecting similar slowdowns. “August was soft as sales were down and, additionally, dealers were significantly lowering their white wood and panel inventories due to lumber wholesale price depreciation,” says Bernie Owens, president and CEO of TIMBER MART. “September has been better than August,” he adds, but any big rush that was anticipated after Labour Day did not materialize.

Cody Smith, director of Home and Building Solutions (HABS) at Federated Co-operatives Ltd., concurs. He has observed that sales overall have been sliding over the past two months, “especially as we compare them with the previous year. We don’t have any hard data to verify why sales are lower comparatively.”

Smith remains uncertain about the rest of the year. “With restrictions easing, we would speculate that disposable income is being spent elsewhere in the economy.  The other factor is the decline in lumber pricing.”

Owens is a bit more optimistic but has some reservations of his own. “Looking ahead, most dealers are hopeful the fall will be busy, but there is still some doubt being felt as we’ve entered a fourth wave of COVID-19. Dealers are not sure if semi-lockdowns will affect jobs and consumer traffic coming into their stores.”

Their concerns, he adds, extend to how preliminary countervailing and anti-dumping rates in the U.S. on Canadian softwood will impact lumber pricing, and “if container shipping rates will prevent the dealers from receiving goods from overseas or whether COVID outbreaks at production plants will further strain supply.”

Expect homeowners to stay put and renovate

Palmer at Sexton recognizes that, as LBM prices have eased, so has demand. But he expects low interest rates and the high cost of housing will keep people home and renovating, often with higher-end projects, rather than moving.

Looking further out, Owens anticipates a similar scenario based on how consumer spending habits have been affected by COVID. “These uncertainties are underscored by a shift in consumer mentality, whereby people seem to be placing a greater value on home improvement and renovation projects—both inside and outside the home.

“Due to this shift, we believe that we’ll continue to see strength in renovation demand well into 2022, which is positive for our industry and our dealers.” He adds that TIMBER MART will continue to direct members’ purchase volumes through his group’s programs and leverage vendor relationships and distribution networks to remain stocked and competitive.
(Photo: Rebekah Littlejohn)

Peavey Industries held its latest Ace Canada virtual trade show last week. The event ran from Sept. 22 to 23.

While relying on a virtual platform, the event did have live interaction, says Jest Sidloski, vice president, marketing, e-commerce, and customer experience at Peavey. The virtual event was available to dealers ahead of the actual trade show, “and the platform will remain up past the two live days.”

Peavey, which took over the licence for Ace in Canada from Lowe’s Canada in March 2020, serves about 100 Ace-bannered dealers across the country from its distribution centres in Red Deer, Alta., and London, Ont. Sidloski says he expected fully 95 percent of those dealers would participate.

The event offered more than show specials. Dealers could get updates on Ace’s private-label programs, while vendors could offer information videos as well as additional content and training through their virtual “booths.”

“Aside from vendor interaction, Peavey Industries corporate will also have departments throughout the show to speak to any questions dealers may have concerning anything from marketing to accounting,” Sidloski adds.

(Get the full story on Peavey’s expansion of the Ace banner from Peavey president and CEO Doug Anderson, who will present live at the upcoming Hardlines Conference. In addition, we’ll have a presentation from an Ace dealer. Rob Faries is the general manager of GG’s Ace Hardware & Building Centre, with locations in Moosonee and Moose Factory, Ont. A double-whammy of Ace insights! While space at this COVID-restricted event is now at capacity, you can join us remotely. Click here to register for virtual access to the conference!)

Home Hardware Stores Ltd. has again joined Tree Canada to plant hundreds of trees and shrubs at different locations across Canada. The campaign ties in with National Tree Day, which fell this year on Sept. 22.

Tree Canada is a national non-profit organization dedicated to planting and caring for trees in both rural and urban environments. Since 1992, Home Hardware dealers have planted over 28,000 trees, valued at over $1.6 million, in green spaces from coast to coast.

The initiative has endured for almost three decades because it resonates with the dealers. “As a supplier of lumber and building materials, this is an important initiative that we support corporately, and our dealers continue to be passionate about,” said a spokesperson for Home Hardware Stores.

“Our stores and their local communities face a variety of challenges, whether it be natural disasters or environmental events, leading to the loss of trees. Tree plants are a great opportunity to engage the local community, regreen or beautify areas in need, and, above all, create a long-lasting, positive environmental impact.”

This year, on the 10th anniversary of National Tree Day, 32 Home Hardware locations are participating in tree planting initiatives within their communities. For example, staff from Geerlinks Home Hardware Building Centre in St. Thomas, Ont. (shown here), partnered with nearby Mitchell Hepburn Public School to encourage the next generation to become better aware of the environment.

Similarly, Harris Home Hardware in London, Ont., planted 80 trees at a nearby park. The site was selected because it’s close to a newly developed residential area in need of more greenery.

National Tree Day is part of National Forest Week, an awareness campaign to remind Canadians of the health and environmental benefits of trees. The day is celebrated across the country with tree dedications, plantings, workshops, and outdoor education walks.

“We continue to see steady growth in the program amongst our stores, as we expand to new communities and work together toward our shared goal of growing better places to live in,” added the spokesperson.

Pascal Houle has formally transitioned into his new role as CEO of Sollio Cooperative Group. Houle spent six years as CEO of BMR Group and also served as executive VP of parent company Sollio. He was named COO of Sollio in early 2021, and less than two months later was announced as the successor of outgoing Sollio CEO Gaétan Desroches.

Kohltech Windows & Entrance Systems has announced two new appointments to its sales team. The Nova Scotia-based firm named Jeff Barsalou to lead its U.S. sales team as business development manager. He will be responsible for the oversight and growth of Kohltech throughout the U.S. John Ballard has been named to lead the central Canada sales team. He will also play a key role in guiding the new North Bay manufacturing plant’s product strategy.

DID YOU KNOW...?

... The 2021 Hardlines Market Share Report is now available! It features exclusive information on the market share in every store format, region, and province using sales data for year-end 2020. Sales by province and region of every hardware and home improvement retailer in the country are detailed. Changes from the 2019 to 2020 data are presented in percentages and market shares are broken down by store format. Click here to order yours today!

Tractor Supply Co. will become the exclusive retail carrier of Porter-Cable’s power tools and accessories in the U.S. The agreement between retailer and manufacturer will include the launch of new cordless products over the coming year. “By pairing the Porter-Cable brand with Tractor Supply, the largest rural lifestyle retailer in the United States, we are able to get our tools into more hands than ever before,” said Tabata Gomez, chief marketing officer for Stanley Black & Decker’s Global Tools & Storage division, Porter-Cable’s parent.

SUPPLIER NEWS

JRTech Solutions has signed a three-year agreement with Castle Building Centres Group, making it Castle’s exclusive provider of electronic shelf labels (ESLs). Long a fixture in the Quebec market, where several BMR dealers have the program, JRTech recently added Laferté Renovation Center, an I.L.D.C. member based in St-Hyacinthe, Que., and has been expanding into other parts of Canada.

A fire broke out recently at a log yard owned by West Fraser Timber in Chetwynd, B.C. Employees at the adjoining mill spotted the blaze in the early afternoon. There were no injuries and the company said that the fire was contained to the yard and posed no threat to the mill. According to the local RCMP detachment, no foul play is suspected.

Three men have died due to their injuries after an explosion at a wood manufacturing plant in Beauceville, Que. Among the eight people injured, six had to be transferred to a trauma care unit some 80 miles away. Of those, the other three remain in critical condition, according to Quebec’s provincial police. Séchoirs de Beauce specializes in processing and drying “jointed and laminated wood into door and window components,” the company’s website says.

ECONOMIC INDICATORS

The seasonally adjusted annual rate of housing starts was 260,239 units in August. That was a 3.9 percent drop from 270,744 units in July. The SAAR of urban starts decreased by 4.7 percent for the month to 235,782 units. Single-detached urban starts fell by two percent to 62,662 units. Rural starts were estimated at a rate of 24,457 units. (CMHC)

Sales of existing U.S. homes declined in August amid ongoing tight supply. All regions contributed to the two percent drop, which brought resales for the month to an annualized rate of 5.88 million units. In the single-family category, sales were down by 1.9 percent. Year over year, home resales fell by 1.5 percent. (U.S. Commerce Dept.)

U.S. retail sales rose unexpectedly by 0.7 percent in August. LBM and garden equipment sales rose 0.9 percent from July and 6.3 percent from August 2020. Excluding automobiles, August sales were up 1.8 percent. (U.S. Commerce Dept.)

Housing starts in the U.S. rose by 3.9 percent in August to a seasonally adjusted annual rate of 1.615 million units, from July’s pace of 1.554 million units. (U.S. Commerce Dept.)

NOTED

The latest issue of Hardlines HR Advisor is now available. In this edition, read about how wages are on the rise, the value of remote work, and navigating the fourth wave of the pandemic. If you did not get your copy emailed to you, you can sign up at no cost right here.

OVERHEARD...

“After thoroughly reviewing several electronic shelf label solutions and providers, JRTech Solutions’ system stood out as the perfect fit for our member stores.”
—Ken Jenkins, president of Castle Building Centres, on the group’s adoption of new electronic bin label technology by JRTech.