October 12, 2015 Volume xxxiv, #38

“Judge a man by his questions rather than his answers.”— Voltaire (French Enlightenment author, historian and philosopher, 1694-1778)

IN THIS ISSUE:

• Ace brand looms large at TruServ Show

• RONA completes buyout of 20 franchise stores

• ABSDA re-brands buying show, adds contractor day

• TSC puts more focus on private label

• PLUS: Ray Gabel honoured, housing starts surge, Ikea and 7-Eleven, Canadian Tire’s day off, Winder and Whitehouse offer consulting services, NRHA at FCL—and more!

Ace brand looms large at TruServ Show

WINNIPEG — At the recent TruServ Canada Fall Market, the presence of the Ace name was everywhere. TruServ Canada, which is owned by RONA inc., was making the most of RONA’s acquisition of the master license agreement for all Ace products and brands in Canada just over a year earlier. The 30-year agreement, which has been further solidified by RONA’s acquisition of shares in Ace International, opens the doors for the conversion of existing TRU dealers to Ace, as well as recruitment from other banners. Based on the number of dealers at this show switching or considering making a switch, the Ace name is gaining a lot of traction.

During the show, which featured more than 300 vendors, hundreds of Ace products were on display, offering price points—and a product guarantee—that dealers on hand said they found appealing.

Besides products, Ace was also promoting its culture, one that is focused on the customer and driving profits. Art Freedman, an Ace dealer from Folsom, Calif., and now a spokesperson for Ace in the U.S., was part of a series of Ace introductory sessions on the first day of the show. Freedman talked to a room full of dealers about the importance of customer service—and the necessity of driving profits. He added that Ace offers programs to help dealers deliver on both fronts, programs that TruServ is keen to make part of the overall Ace offering.

Bill Morrison, president of TruServ Canada, says the arrangement is a win for independents. “Our goal is to source the products with the best quality to meet the expectations of our customers.”

RONA completes buyout of 20 franchise stores

BOUCHERVILLE, Que. ― RONA inc. has completed the acquisition of its 20 franchised stores. The deal, first announced in mid-July, reflects negotiations with each of 15 franchisees. The franchise arrangement was unique to certain Quebec-based long-time RONA dealers.

RONA has made definitive purchase agreements with each of those franchisees to secure substantially all of the assets of 17 big box stores and three proximity stores operating under the RONA, RONA L’éntrepôt, and RONA Home & Garden banners. Two of the stores are Ontario and the rest are in Quebec, and together generate more than $500 million in retail sales annually. RONA paid $193 million for the stores. That amount took into account $19 million that was returned to RONA for its part ownership in some of those dealers’ stores.

“We are pleased to announce that this transaction has been finalized and we are proud to be able to count on the skills and experience of the 2,600 employees as they continue to provide our customers with excellent service,” said Robert Sawyer, president and CEO of RONA.

ABSDA re-brands buying show, adds contractor day

MONCTON, N.B. ― Less than a year into his new job as president of the Atlantic Building Supply Dealers Association, Denis Melanson began working with the association’s board to establish a new branding, complete with a new logo and a fresh look for its buying show. With the new look, says Melanson, “we are taking our brand to the next level.”

“Right now, I’m currently working to redo our website from A to Z and get our members to adopt some new technologies,” Melanson says. That rebranding affects the ABSDA’s biggest asset, its trade show. The Atlantic Building Materials Show is held annually in February in Moncton, N.B. Most noticeably, the show has a new name, the ABSDA Building Supply Expo, and will offer a number of new initiatives, such as an emerging leaders component. “We will encourage dealers to bring their young up-and-comers to the show. We will even offer a travel rebate to help with the expense.”

The single biggest change being made to the show will be the admittance of contractors for the last half of the final day. Contractors and builders will be able to walk the show with their dealers to see what’s new from exhibiting vendors.

Considered a touchy issue for many dealers, who don’t wish to share their pricing with their customers, Melanson is quick to respond: “We will communicate to the vendors that no pricing information will be made available.”

Besides driving some more traffic to the show and giving dealers another reason to bring more people, Melanson hopes the move will inspire vendors to increase the size of their booths. “We’re going to focus on the fact that our show is for Atlantic Canada―a sense of pride that includes all banners, not just one colour.”

TSC puts more focus on private label

LONDON, Ont. — TSC Stores continues to look for opportunities to expand its product categories to better serve its target farm and hardware market. And private label is becoming an increasingly important part of that strategy.

According to Darryl Jenkins, president and COO of London, Ont.-based TSC, dog food, and other consumables are already an important part of the retailer’s mix, “now with the addition of bigger sizes—but branded TSC—so we can support customers who have large farm properties.”

TSC is also launching its own line of private-label clothing and work wear, always an important part of the farm hardware market. A house line of power tools will be launched soon, as well. “We’re really under-developed on private label,” says Jenkins, “and we’re excited about our ability to grow private label over the next three to five years—and drive margins.”

FROM THE ARCHIVES: This week in 1995

The slow economy of exactly 20 years ago continues to plague the industry. Ross Mascoe, then-president and CEO of Vancouver-based wholesaler Smith-Barregar, expected tough times to last until at least the end of the year. Marty Ross at CanWel explained the importance of staying close to retail customers’ needs. Plus: Cashway prepares to relocate and Ontario co-op Growmark signs dealers. Click here to take a walk with us down memory lane!

DID YOU KNOW…?

RETAILER NEWS

TORONTO — Canadian Tire Corp. gave employees at its head offices the day off last Friday, enabling them to watch the Toronto Blue Jays’ second playoff game against the Texas Rangers. The team aroused the ire of fans last week when it announced a schedule of afternoon pitches, leaving fans scrambling to make arrangements at work. Some 5,000 employees at Canadian Tire’s Toronto headquarters, as well as the Sport Chek and Mark’s Work Warehouse offices in Calgary, were able to take advantage of the “free” day.

MISSISSAUGA, Ont.  — Walmart Canada is using six 7-Eleven Canada stores in the Greater Toronto Area as sites for its “Grab & Go Locker” service. The program offers customers using Walmart.ca a free shipping option where they can pick up their order, 24 hours a day, seven days a week, at no cost. This expands Walmart Canada’s current Grab & Go Locker service, which now offers 45 Grab & Go Lockers in the GTA.

SUPPLIER NEWS
VANCOUVER — CanWel Building Materials has signed an agreement to become the exclusive Canadian distributor of Louisiana-Pacific’s CanExel line of prefinished siding products. Effective January 1, the deal will allow the U.S.-based manufacturer of engineered wood building materials to take advantage of CanWel’s distribution network in Canada. Both Louisiana-Pacific sales VP Mike Sims and CanWel president Marc Seguin expressed their excitement at the agreement.

FRANKFURT — Henkel announced Thursday plans to cut 1,200 jobs in its adhesives division as part of the company’s efforts to trim costs. The German manufacturer missed sales expectations in the second quarter, largely owing to a slower demand for adhesives in North America and China. Originally slated to take place by the end of 2016, the layoffs will be moved up to March. Henkel’s adhesives division includes the Loctite and Pattex brands.

PEOPLE ON THE MOVE
Home Hardware inducted its former VP of merchandise and marketing for hardlines, Ray Gabel, into its Builders’ Circle at a shareholder’s meeting last month. The Builders’ Circle program, inaugurated for the company’s 50th anniversary last year, recognizes retired executives and directors who have supported its dealer-owners in an extraordinary way. Gabel retired from active duty as VP in August and is now senior merchandise advisor.

Two veteran retail merchants have hung up their shingle. Tony Whitehouse and Bruce Winder have established Retail Advisors Network, an advisory firm. Through their combined 60 years of experience, which spans across key retailers such as Canadian Tire, as well as manufacturers, Whitehouse and Winder have built a network of experts to provide a comprehensive full-service advisory network to their client base. They tell us they offer highly practical solutions, combined with their low overhead structure to bring value and ROI to their clients. (t_whitehouse@rogers.com; bwinder@brucewinder.com)

ECONOMIC INDICATORS
Housing starts reached 230,701 units on a seasonally adjusted basis in September, up from 214,255 units in August. The SAAR of urban starts increased by 7.7% in September to 216,194 units. Multi-unit urban starts increased by 10.5% to 157,919 units in September and the single-detached urban starts segment increased by 0.8% to 58,275 units. In September, the seasonally adjusted annual rate of urban starts increased in Quebec, the Prairies, Atlantic Canada, and British Columbia, but decreased in Ontario. Rural starts were estimated at a seasonally adjusted annual rate of 14,507 units. (CMHC)

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