January 11, 2016 Volume xxii, #2 “Too much rest is rust.”
SPECIAL REPORT — From acquisitions to the housing recovery to data breaches, there was never a dull moment in the industry in 2015—and you read about it all right here in HARDLINES. Here, we take a look back at a dozen of the most arresting quotations from our coverage of the last year.
New merchandising company at RONA: a good match? TORONTO — After terminating the contract for in-store detailing and merchandising from RDTS, through its IMAGINE program, RONA will continue to maintain its stores through a new program, RONA Merchandising Services (RMS). But it has a new service provider to execute the program, a North American shopper marketing agency, Match Marketing Group. With head offices in Toronto, the company’s scope is wide, and it has had rapid growth in recent years that includes a raft of acquisitions (including five in 2013 alone). But its strength has historically been in the grocery channel and in sporting goods. According to its website, clients include Mars candy bars, Pepsi, Kraft, Adidas, Ford, Dannon yogurt, Campbell’s soups, Samsung, Rogers, and YUM Brands. That expertise has many vendors in this industry concerned and some shared those concerns. The new arrangement is being regarded as a disruption of RONA’s long-standing relationship with some 450 vendors. One hardware executive, whose company has hundreds of lines listed with RONA, said he was worried about service levels with a company he perceives as unfamiliar with hardlines. “We’re extremely concerned,” he added. As the sales manager for one Ontario-based building products manager put it, “The highest level of in-store merchandising expertise has always been with RDTS.” She added that the company was known for its enthusiasm, thoroughness, and know-how in hardware and building materials. Match MG did not respond to HARDLINES’ requests for an interview. According to the company’s website, it currently employs more than 600 people in seven offices, as well as more than 7,000 field staff across North America. Based on current recruitment efforts, Match MG will seek to ramp up its expertise in this industry quickly. Just before Christmas, it had more than 2,000 job postings on its website for “home improvement merchandising specialists” and team leaders. While RONA was a big customer for RDTS, company president Robert Di Tomasso says the company remains strong in merchandising and sales through its original business model, working directly with vendors doing merchandising, audits, sales, and market research in the Canadian market.
RONA dealer’s expansion strategy aims to counter “uber factor” GUELPH, Ont. — When Wayne Filsinger decided to renovate his store, W. Filsinger & Sons RONA in Guelph, Ont., three years ago, he took the needs and wants of his customers as a blueprint. Factoring in e-commerce, and with plenty of bricks and mortar competition nearby, the 2015 Outstanding Retailer Award winner sees it as the only viable business plan. “We don’t want to be ‘ubered’, like what’s happening in the taxi industry,” Filsinger says, referring to the upstart online ride sharing service that has rocked the taxi industry. The old RONA Guelph was about 7,000 square feet, which Filsinger points out is now the size of the store’s receiving area. The renovated store measures 35,000 square feet, and includes a separate contractor and design showroom. With all that extra space, Filsinger says his team tries to keep the receiving area as empty as possible, because “people want to come in and see the product on the shelves.” The new store design features low sight lines and he’s even moved merchandise such as patio stones, which were historically kept outside, inside the store since he’d found people often forgot which product they liked once they went back inside to order. However, one of the biggest changes since the renovation is a dedicated bath showroom. With a direct line to a specialty bath supplier in Toronto, Filsinger says he is able to stock products that are a notch above the standard quality, but still not quite as expensive as more luxury lines. “Nobody in the radius has a better selection of handheld showers,” he says. “It’s really working and we’ve only just scratched the surface.”
Home Depot’s greatest growth coming from big contractors SPECIAL REPORT ― As the world’s largest home improvement retailer has recovered from the worldwide recession, it has experienced the greatest growth from purchases by its larger contractor customers. Home Depot is tracking the trend to more contractor sales, with a series of initiatives and merchandising strategies to increase its appeal to pro customers. In a call to analysts during release of its third-quarter results, Home Depot CEO Craig Menear said, “We are seeing that growth come from our larger pro customers and we’ve seen that trend for the past several quarters now.” And the contractors tracking strongest are the “large-spend pros,” who are spending more year over year than the average DIY customer. As Home Depot continues to focus on these larger pro customers with new services and dedicated house brands, Menear expects that the spread between the DIY and contractor spend to keep growing. “We would certainly expect it to continue,” he added.DID YOU KNOW…? …that the next issue of our sister publication, Hardlines Home Improvement Quarterlymagazine, is mailing this week? It’s got a full report on the winners of the 2015 Outstanding Retailer Awards, as well as tips on how to sell installed services while keeping your contractor customers happy. Plus: hot new products, secrets to effective merchandising, and Ace’s growth in Canada. If you’re a dealer and you’re not receiving this valuable store management tool, e-mail me right now to request your own free subscription! ―Michael
RETAILER NEWS TORONTO ― More than two million consumers in Ontario availed themselves of energy-savings coupons, the CBC reports. The numbers come from the province’s Independent Electricity System Operator, which funds the saveONenergy program. Available online and in certain hardware stores, the coupons offered savings of up to $30 on high-efficiency appliances. “They’re very popular,” Brad Swanson, owner of a Kitchener Home Hardware store, told the CBC. “The most popular ones now-a-days are for the LED light bulbs. We sell tens of thousands of them.” TORONTO ― The 12-month trend for Canadian retail has seen a steady decline in 2015, according to analyst Ed Strapagiel, who says that the year will end “on a whimper.” Reviewing the latest StatCan data, taken not on a year-over-year basis, Strapagiel says the trend, which is even more pronounced in the last three months, is likely to continue into 2016. As a result, the total retail sales gain for the outgoing year may be as little as 2.3%, half the 4.6% annual rise for 2014. U.S. economic recovery could trickle up north during 2016, Strapagiel says, but it will be a slow-going process.
ISSAQUAH, Wash. — Costco Wholesale Corp. reported December net sales of $12.45 billion, an increase of 3% over the similar period a year earlier. For the 18 weeks ended January 3, the company reported net sales of $41.66 billion, up 2%. Same-store sales for December were up 3% in the U.S. and down 9% in Canada.
SUPPLIER NEWS SEOUL ― LG is unveiling its SmartThinQ hub, a competitor to Amazon Echo, the voice-operated speaker and personal assistant. Although Echo links to smart home platforms like Wink, its LG counterpart aims to emphasize the “smart home” aspect more, supporting several protocols including wifi and Bluetooth, and including an LCD screen for notifications from connected devices. The SmartThinQ made its debut last week at the Consumer Electronics Show in Las Vegas.
ECONOMIC INDICATORS Housing prices in the U.S. rose 5.2% year over year in October as demand outstripped supply. This is the second increase after an annual rise of 4.9% in September. In the top 20 U.S. cities the trend was even stronger at 5.5%. (Standard & Poor’s/Case-Shiller Home Price Index)
PEOPLE ON THE MOVE Maxime Gendreau, sales and marketing manager for Canada for Garaga Inc., has announced the appointment of Éric Léveillé as territory sales manager for Montreal Island, West Montreal, Abitibi, and Ottawa areas. Léveillé has worked in the building materials industry for more than 24 years, including senior sales roles with major Canadian building material wholesalers. Garaga, a Canadian family-owned garage door manufacturer for the residential, commercial, and industrial markets, owns plants in Saint-Georges, Que., and in Barrie Ont., plus a distribution centre in Montreal. (eleveille@garaga.com; 1-866-609-3792)
NOTED
|