August 1, 2016 Volume xxi, #31

“Some of us think holding on makes us strong; but sometimes it is letting go.”
—Hermann Hesse (Nobel prize-winning Swiss-German author, 1877-1962)

SUMMER PUBLISHING SCHEDULE: Please note there will be no weekly edition of HARDLINES on August 8, 21, or 29. The World Headquarters will remain open, however, during this time. The regular weekly schedule will resume September 5. (Click here to receive FREE Daily News updates all the time!)

IN THIS ISSUE:

• Federated Co-op realigns buying team

• Bill Douma gets senior procurement role at TIMBER MART

• Add-on sales can drive up your average ticket

• PLUS: Reorg at Sears Canada, Claude Dion in new role, Ikea sets up Halifax “Collection Point,” Tembec swings into profitability, Lowe’s invests in fulfillment centre, 3M results, retail sales slow, U.S. housing starts —and more!

Federated Co-op realigns buying team

SASKATOON — Federated Co-operatives Ltd. has made some changes to its buying team so we thought we’d give you a full update on the farm and hardware co-op’s category management team:

Erin Scrobe is in place as category manager for Section 1–Tools, Section 6–Paint & Accessories, and Section 18–Caulking and Adhesives.

But some categories have new faces. Jason Goodwin (effective July 25) is category manager for Section 2–Lawn & Garden, Section 17–Power Equipment, and Section 24–Pet Supplies. Byron Mann (effective August 1) oversees Section 3–Heavy Hardware, Section 4–Builders Hardware, and Section 14–Home Electronics & Home Furnishings. Johnnie Fong (effective July 25) is responsible for Section 7–Housewares, Section 16–Small Appliances, and Section 24–Pet Supplies.

In other categories, Mikael Drabyk takes care of Section 5–Farm Hardware, and Section 12–Plumbing and Heating. Josh Farrell has Section 8–Sporting Goods/Backyard Living, and Section 10–Automotive. Mike Yantz handles Section 9–Home Office Products, Section 11–Electrical, and Section 22–Toys & Decorations.

On the building materials side, Sean Gilchrist has responsibility for Section 19–Building Products (Warehouse); while Gil Parent has Building Products (Direct).

Bill Douma gets senior procurement role at TIMBER MART

VAUGHAN, Ont. — TIMBER MART has promoted Bill Douma to the role of senior building material procurement manager.

Douma enters the role with more than 40 years of industry experience, which includes store experience as a manager, and then a purchaser, for Turkstra Lumber in Stoney Creek, Ont. In 1999, he moved to TIMBER MART (then TIM-BR-MARTS Ltd.) as building materials manager. In addition to his current responsibilities negotiating the group’s national and regional buying programs, and developing and organizing TIMBER MART’s flyer program and national buying show, Douma will assume additional responsibilities during TIMBER MART’s program negotiations.

He reports to Randy Martin, vice president of procurement for TIMBER MART, out of the company’s Vaughan office.

Add-on sales can drive up your average ticket

SPECIAL REPORT — Upping your store’s average sale is one of the best ways to increase your top-line sales. The average dollars spent per transaction can be a reflection of a lot of things done right or wrong in your store.

A recent survey determined that North American retailers lose $129.5 billion in sales annually due to out-of-stocks. That’s equivalent to 4.1% of sales. Since that field includes many highly sophisticated chains with high-tech inventory systems, we have to assume that the percentage of lost sales for independents is likely much higher. Home improvement retailers should think in terms of projects, since that’s the way customers shop. That means stocking all the products customers will need to complete identifiable projects in the appropriate quantities. Alternatively, you risk losing the entire sale or at least the opportunity of profitable add-on sales.

An impulse purchase is any purchase a customer makes that wasn’t pre-planned or “on their list.” A 2012 Bank of Montreal study found that the average Canadian spends more than $3,700 on impulse purchases a year. Impulse products should be prominently displayed in a main aisle, clip-stripped, adjacent to related categories, and visible at service areas or the cash. Ideal items are high-margin products priced under $10.

And the longer a customer stays in the store, the more they’ll see, and the more they’ll buy.

DID YOU KNOW…?

... that HARDLINES will host a Canada Night Reception at the Orgill Buying Show in Las Vegas for Canadian dealers at the show? The date is on August 25. We expect more than 800 dealers and managers at this one, so we are opening up our sponsorship to interested vendors who will be exhibiting at the Orgill Show. Email me for more information. —Michael

RETAILER NEWS

BURLINGTON, Ont. — Ikea Canada has opened a “Collection Point” in the Halifax market. Located at Sameday Worldwide on Isnor Drive in Dartmouth, it enables customers to shop online and have deliveries made to the Collection Point for a flat rate of $59, regardless of the size of the purchase. The Collection Point is not an Ikea store and is in fact owned by a third-party service provider. No products will be available onsite for purchase. According to Ikea, this process, which is less expensive than the previous minimum home delivery fee of $129, will also substantially reduce delivery times.

SUPPLIER NEWS
MONTREAL — Forest products company Tembec has reported third-quarter consolidated sales of $376 million, up 3% from $365 million in the same quarter a year ago. The company generated net earnings of $9 million, versus a net loss of $16 million in 2015. The Forest Products segment generated adjusted EBITDA of $4 million on sales of $102 million for the quarter, up from $1 million on sales of $108 million in the prior quarter. SPF lumber sales increased by $3 million, due to higher prices and shipments.

ST. PAUL, Minn. — 3M has posted Q2 earnings of $2.08 per share, an increase of 3% from the same period last year, meeting analysts’ expectations. Sales declined 0.3% to $7.7 billion. Operating income was $1.9 billion and operating income margins for the quarter were 24.4%, up 0.5 percentage points year over year. Net income was $1.3 billion. Sales in Latin America and Canada grew by 4.8%.

TAYLOR, Mich. — Masco reported that Q2 sales rose 4% to $2 billion, while operating profit grew 20% to $335 million. Earnings of $0.45 per share represented an increase of 45%, and operating margins improved to 17.1% compared to 14.5% a year earlier. The only segment to see a drop in sales was cabinetry, where net sales decreased 3% due to the exit of lower-margin business in the builder channel, which was partially offset by growth and improved mix in the retail channel.

PEOPLE ON THE MOVE
The Building Supply Industry Association of B.C. has presented the Industry Merit Award to Brian Higgins. Higgins was general manager of UAP Inc. for Ontario in the 1980s before overseeing the national launch of the Autopro franchise. Settling in Victoria in 1986, he set up a Beaver Lumber franchise and married his wife and business partner Sylvia in 1989. The Higgins’ franchise moved to the Home Hardware banner in 1995 and relocated to Victoria West as BayWest Home Building Centre. It operated under that name for a decade before joining RONA as BayWest RONA. Brian and Sylvia sold the business in 2015 and retired.

Norske Tools Ltd., a manufacturer and distributor of power-tool accessories (PTAs) for professional users across North America, has announced that Claude Dion has joined as sales director, Eastern Canada. Dion has a broad range of experience in the power-tool accessory category, both from a buyer and vendor perspective. He has worked at BMR, Home Depot, Innovak, and RONA and Réno-Dépôt before joining the Norske team.

Sears Canada is shaking up its organizational structure under the guidance of executive chairman Brandon Stranzl, with Heywood Wilansky, a veteran CEO of several retailers and a director of the company, newly named as senior advisor for merchandising, marketing, and retail. The company is focusing on four components of its corporate strategy. “Sears 2.0” is updating the banner’s retail layout with a view to increasing inventory turnover. Initium Commerce Lab is an initiative to develop technologies in support of Sears’s current business as well as improving its e-retail platform. At the same time, the company is targeting its real estate portfolio and cost structure for greater efficiency.

Weyerhaeuser Distribution has promoted Brad Brubaker from division inventory manager to area general manager for the Carolinas. A 16-year Weyerhaeuser employee, Brubaker has previous experience with MacMillan Bloedel and wholesale/retail cedar sales in Canada.

ECONOMIC INDICATORS
After a strong start in 2016, retail sales slowed in May, increasing by only 0.2% to $44.3 billion. Sales were strong for food and beverage stores and for gasoline stations, but after removing the effects of price changes, retail sales in volume terms edged up just 0.1% in May. The building material and garden equipment and supplies dealers sub-sector was down 0.7% from April and down 3.3% year over year. (StatCan)

In the U.S., sales in June of new single-family houses in June were 592,000 at a seasonally adjusted annual rate (SAAR), up 3.5% from May and up 25.4% from June 2015. (U.S. Commerce Dept.)

NOTED

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