October 24, 2016 Volume xxii, #40

“A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away.”

—Antoine de Saint-Exupéry (French writer, poet, aristocrat, and aviator, 1900-1944)

IN THIS ISSUE:

• Outstanding retailers awarded during gala awards dinner at Hardlines Conference

• Differentiate or die: lessons from the Hardlines Conferences

• Home Hardware real estate acquisition strategy aims to help dealers grow

• Dealer associations announce formalized union under CRBSC umbrella

• PLUS: Home Depot Canada Foundation helps homeless kids, Lowe’s expands Orchard Supply, Amazon opens more bricks and mortar, Best Buy and Google, Leon’s opens 10, Tractor Supply results, Acceo and TruRating, Superior Glove’s new plant in Newfoundland, retail sales, U.S. housing starts, and more!
  
  

Outstanding retailers awarded during gala awards dinner at Hardlines Conference

NIAGARA FALLS, Ont. — The Canadian home improvement industry gathered last week to recognize its top retailers during Hardlines’ 2016 Outstanding Retailer Awards. The awards were part of a gala dinner that concluded day one of the 21st Annual Hardlines Conference, held in Niagara Falls, Ont.

Hardlines, the information service for the retail home improvement industry, again celebrated the industry’s finest from across the country, who were honoured in seven categories covering the range of hardware and home improvement retailing formats.

“There is something about each of this year’s winners that impressed the judges, not only for their business acumen and leadership skills, but for their ability to connect with their customers and their communities in a profound way,” said Michael McLarney, editor and president of Hardlines Inc.

The winners of the 2016 Outstanding Retailer Awards are:

• Best Hardware Store – Brantford Home Hardware, Brantford, Ont.;
• Best Building Supply/Home Centre under 15,000 square feet – Home Building Centre-Salmon Arm, Salmon Arm, B.C.;
• Best Building Supply/Home Centre over 15,000 square feet – Vanderhoof and Districts Co-op Home Centre, Vanderhoof, B.C.;
• Best Contractor Specialist Store – Sen Western Wholesale Lumber (TIMBER MART) in Vancouver, B.C.;
• Best Large Surface Retailer – RONA Home & Garden, Kelowna, B.C.;
• Young Retailer of the Year – Cindy Caron and Raphaël D’Amours, Quincaillerie Palmarolle (TIMBER MART), Palmarolle, Que.;
• Marc Robichaud Memorial Community Leader Award – Orillia Home Hardware Building Centre, Orillia, Ont.

The ORAs were founded more than two decades ago as a way to honour and recognize the finest retailers in the hardware/home improvement industry. This year’s winning entries operate their stores, motivate their employees, connect with their customers, and contribute to their local communities in ways that put them ahead of their peers and identified them as truly outstanding to the Hardlines panel of judges.

Differentiate or die: lessons from the Hardlines Conference

NIAGARA FALLS, Ont. — Staying focused on the customer was a message that came through loud and clear at the 21st Annual Hardlines Conference.

The event, which gathered 165 people at the Sheraton on the Falls hotel in Niagara Falls, kicked off with Jay Heubner, president of Ace International, who warned the audience to “differentiate or die.” He stressed the importance of dealers staying focused on customer service, “because service is our only competitive differentiation.”

He also said the partnership in Canada with Lowe’s could be mutually beneficial, as the big box and traditional store both appeal to their own groups of customers.

Dan Tratensek, vice president of publishing at the North American Retail Hardware Association, provided the results of a recent poll of dealers in Canada and the U.S. The eye-opening findings identified how dealers are evolving their businesses and where they are looking to invest. Tratensek pointed out that the biggest growth categories by far for Canadian dealers are plumbing, paint and sundries, and lawn and garden-outdoor living.

Nicholas Couture is general manager of Gabriel Couture & Fils Ltée, a TIMBER MART dealer in Richmond, Que. He gave his grassroots story of growing up in the family business and being challenged now to grow it while maintaining the spirit and passion that typifies an independent operation.

While many of the presentations over the two days were devoted to the inexorable rise of online selling, one online leader gave some sobering statistics. Sumit Srivastava of eBay Canada told the delegates that only about 13% of Canadian retailers are selling online. However, online sales are expected to grow by 3% annually over the next three years, while bricks-and-mortar sales are forecast to grow by only 2.6%.

Along with top retail and economic speakers, the delegates at the Hardlines Conference benefitted from two days of networking, great food, and an incredible view of Niagara Falls. (We’ll announce the date and location for next year’s conference soon. Stay tuned! —Editor)

Home Hardware real estate acquisition strategy aims to help dealers grow

ST. JACOBS, Ont. ― Part of Home Hardware’s growth strategy is to help and encourage its existing member dealers to expand their existing operations. That can be either by adding to an existing store, or moving to a new location and building a larger outlet, one that typically carries a full range of hardlines and LBM, often under the Home Hardware Building Centre banner.

To assist those dealers with that transition and to manage that kind of investment, Home is increasingly buying the land under those stores and leasing it back to the dealers.

The dealer-owned co-op has “a big annual capital fund to help dealers grow their business,” says Terry Davis, CEO of Home Hardware Stores. He adds that the fund can also help dealers buy real estate of their own. And Home will also be proactive, buying up real estate in various communities in a pre-emptive strike to keep competing banners from moving in.

While Home has always carried a small inventory of “corporate” stores, often to hold onto a site while searching for a new owner to take it over, it got into the real estate business more seriously first with the acquisition of Crown Stores, a Calgary-based chain of 55 home centres, in 1988. But with the takeover of Beaver Lumber in 2000, Home found itself with another 90-plus properties.

Dealer associations announce formalized union under CRBSC umbrella

NIAGARA FALLS, Ont. — Leaders from each of Canada’s home improvement dealers’ associations met during the recent Hardlines Conference to formalize their union under an umbrella association, the Canadian Retail Building Supply Council (CRBSC).

Those associations: The Atlantic Building Supply Association (ABSDA), Quebec Hardware and Building Materials Association (AQMAT), Lumber and Building Materials Association of Ontario (LBMAO), Western Retail Lumber Association (WRLA), and the Building Supply Industry Association of British Columbia (BSIA), have been working behind the scenes to create a unified voice for the industry under the umbrella council. Each group will be an equal shareholder in CRBSC.

Richard Darveau, president and CEO of AQMAT, and current CRBSC chair, took the occasion of the conference, which had gathered 165 leaders from retail, wholesale, and vendor sides of the industry in one room, to announce the formalization of the CRBSC and its first board meeting, which took place following the conference itself.

“The potential force we will represent together is impressive,” Darveau told the group. “The total membership of our five associations is more than 3,000 retailers, more than 500 suppliers, and all the buying groups and distributors involved in the market.” He added that the drive to unify efforts is a direct response to the needs and desires of the retailers, buying groups, and suppliers in this industry.

Key initiatives of CRBSC will be to provide a forum that allows members to share ideas, information, and best practices for the betterment of the hardware and building materials industry in Canada. It intends to represent this sector before federal government authorities and to promote and defend the interests of its members by undertaking communication initiatives, taking policy positions, and offering educational activities.

DID YOU KNOW…?

... that top-level eRetail executives and buyers are gathering in Fort Lauderdale, Fla., this week to meet with vendors and suppliers who want to grow their online business? The Home Improvement eRetailer Summit www.eretailersummit.com will be held at the Hilton Fort Lauderdale Beach Resort, October 26 to 28. Online retailers attending include Wayfair, BuildDirect, Sears.com, Organize-It, SupplyHog, ToolsandHardware.com, Wakefern, and HSN. Want to sit down with these top eRetail decision makers? Contact Beverly Allen: bev@hardlines.ca; or 1-647-880-4589.

RETAILER NEWS

TORONTO — The Home Depot Canada Foundation’s Orange Door Project campaign raised $1.15 million through in-store donations across all 182 locations between September 1 and October 9. The Orange Door Project was established in 2013 with the goal of eliminating youth homelessness in Canada. All of the funds raised will support housing and life-skills development programs at charities across Canada.

SEATTLE, Wash. — As grocery retailers like Wal-Mart and Kroger in the U.S. move into online grocery sales, they must now face head-on bricks-and-mortar competition from Amazon.com. The giant online seller plans to build retail convenience grocery stores. Services will reportedly include home delivery and curbside pickup.

VANCOUVER — Best Buy Canada is collaborating with Google Canada to introduce “Google shops” to 14 of Best Buy’s new-format stores. Google shops are exploratory spaces that that enable customers to touch and try Google products, like Pixel, as well as upcoming products such as Daydream View and Chromecast Ultra (both available later this year). They are set to appear in Best Buy’s newly renovated “Experience Stores” by the end of 2016.

TORONTO — Leon's Furniture says it has opened 10 new retail locations across the country over the past three months, including its first four locations in British Columbia. It also opened a Brick store in Moncton, N.B. The remaining stores were opened in Ontario.

SYDNEY — Owners of Masters Home Improvement sites are up in arms over the Home Consortium’s $800 million bid for its properties, which they say would wrest control of their holdings from them. The Age reports that several landlords are aggrieved with Woolworths over the inclusion of 21 leasehold properties in the deal, and at least one has already issued a breach notice, with others likely to follow. “It’s not necessarily going to be easy to re-lease our property but there might be an opportunity to,” one landlord said on condition of anonymity. “We are not 100% sure we can have that conversation at the moment.”

BRENTWOOD, Tenn. — Tractor Supply Co. reported that net sales for the third quarter increased 4.5% to $1.54 billion. Comparable store sales decreased 0.6% versus a 2.9% increase in the prior year’s third quarter. Comp average ticket decreased 1.1% while comparable store transaction counts remained positive with an increase of 0.5%. Net income increased 2.4% to $89.4 million from $87.3 million.

SUPPLIER NEWS
TORONTO — Touted as the first program of its kind to be offered by an insulation manufacturer, Owens Corning has launched the ComfortCertified Program. It’s designed to help Canadian builders build above code and build energy-efficient and affordable homes—all with sustainability in mind. The ComfortCertified Program is a two-tiered “Home Buyer Certification Program” with minimum performance targets verified through third-party energy modelling and on-site blower door testing. The certifications depend on reducing heating and cooling energy use either by 25% for the ComfortCertified label or by 50%, to be certified ComfortCertified Net Zero Energy Ready.

MONTREAL — Payments and store POS provider ACCEO Solutions Inc. is partnering with TruRating, a consumer ratings startup. ACCEO’s secure EMV-certified Tender Retail payment software will combine TruRating’s customer feedback platform to give North American merchants and retailers the tools to gather live consumer feedback at the point of payment. TruRating takes the pulse of consumer sentiment via a pin pad, asking each customer to anonymously rate an aspect of their experience on the keypad just before they pay. The program will launch in 2017.

ACTON, Ont. — Superior Glove Works is opening a new plant in Springdale, Nfld. The facility will open in mid-November with a focus on manufacturing Superior’s line of Contender cut-resistant gloves and Cutban protective sleeves. The plant will start with 12 employees and grow to 20 by 2017. “This is about our continued commitment to manufacturing in Canada,” said President Tony Geng. “It means more jobs for Canadians and more hardworking hands and arms worldwide being protected by our Superior gloves and sleeves.” The new Springdale plant is located about two hours west of Superior’s existing Point Leamington plant and will be the third Canadian manufacturing facility for the company.

CHICAGO — Grainger reported Q3 sales of $2.6 billion, an increase of 3% compared to $2.5 billion the same time last year. Net earnings for the quarter, at $186 million, were down 3% versus $192 million in 2015. Operating earnings of $323 million for the 2016 third quarter declined 5%, driven by lower gross profit margins partially offset by lower operating expenses.

ECONOMIC INDICATORS
Economic activity remains weak worldwide, with this year’s roughly 3% global growth rate one of the lowest since the recession. Contributing factors vary by country, and include natural disasters, the outcome of the U.K. referendum on EU membership, and impending elections in several countries, notably the U.S. Rising oil prices could contribute to an uptick in U.S. investment activity and Canadian exports. The bank’s risk assessment points to a balanced forecast for North America, although growth of only 2% in Canada and 2.2% in the U.S. is expected over the next two years. (Scotiabank Global Outlook)

Retail sales edged down 0.1% to $44.0 billion in August. Lower sales at motor vehicle and parts dealers and general merchandise stores were the main contributors to the decline. Excluding these two sub-sectors, retail sales were up 0.2%. However, year over year, sales by building material and garden equipment and supplies dealers were up 10.1%. (StatCan)

U.S. housing starts in September dropped 9% from August to a seasonally adjusted rate of 1,047,000. Year over year, they were tumbled by 11.9%. (U.S. Commerce Dept.)

OVERHEARD…
“Is comp store sales even a relevant metric anymore going forward with e-retail?”
—Al Meyers, Business Development Executive with retail consulting firm Kalypso. He spoke last week at the 21st annual Hardlines Conference.

OUT AND ABOUT

CLASSIFIED ADS