August 28, 2017 Volume xxiii, #32

“One today is worth two tomorrows.”
— Benjamin Franklin (American inventor, scientist, statesman, and diplomat, 1706-1790)

IN THIS ISSUE:

• Changes at Home Hardware reflect growing focus on commercial sale

• Orgill’s latest dealer market features new programs for Canadians

• eRetailer Summit will help home improvement sellers build business online

• In the shadow of their U.S. parents, big boxes battle for market share in Canada

• PLUS: RONA is heading to the Supreme Court, Castle’s latest additions, Ace gets new member in Quebec, Canadian Tire beat estimates, Lowe’s reports earnings, Newfoundland hardware store rebuilds, Réno-Dépôt partners with Sico, Home Depot reports sales, Jacobs & Thompson makes acquisition, Nicholson and Cates celebrates Canada’s 150th, Johns Manville now supplier to Crossroads, Thompson promoted at Jeld-Wen, Wal-Mart’s Q2, existing home sales down, and more!
  
  

Changes at Home Hardware reflect growing focus on commercial sales

ST. JACOBS, Ont. — Home Hardware Stores has made some changes to its marketing team, which reflect the co-op’s increasing emphasis on its commercial business.

Alex Goyette has been promoted to the role of commercial sales marketing manager. Home set up the strategic business unit four years ago to help its network of independent dealers increase maintenance, repair, and operations (MRO) sales. MRO refers to anyone responsible for the day-to-day upkeep of any facility that needs to stay looking good and in good working order. That can mean a small business or factory, an office building, a multi-unit residence, or even a public building like a school or hospital. It’s emerging as a hot category for a number of dealers across the country.

Goyette, who was previously the commercial sales program co-ordinator in merchandise, reports to Rob Wallace, Home Hardware’s director of marketing. Part of Goyette’s job includes holding training sessions for Home Hardware dealers and employees across the country on how to best manage their MRO business.
                   

Orgill’s latest dealer market features new programs for Canadians

BOSTON — Orgill’s Fall Dealer Market took place August 24 to 26, attracting retailers from around the globe, including a strong contingent of around 400 Canadians, to the Boston Convention and Exhibition Centre. 

Along with a range of vendors spread over 800,000 square feet of show space, one of the features of this year’s event was an outdoor area with dozens of displays highlighting products from the outdoor living, grilling, and tailgate categories. 
The event is well-known for its model stores right on the show floor. Dealers who sell to contractors and professionals were especially interested in “Central Tool & Building Supply,” a brand new model store that caters to pros.

The footprint of this store featured 100% Canadian-compliant assortments, with displays from both the London, Ont., distribution centre and Orgill’s newest DC, in Post Falls, Idaho, which is serving dealers in Western Canada.

eRetailer Summit will help home improvement sellers build business online

WORLD HQ, Toronto — Home Depot’s online sales grew by 20% last year. But not every retailer, nor their suppliers, for that matter, can claim that kind of success. That’s why so many retailers and vendors are attending the Second Annual Home Improvement eRetailer Summit from September 13 to 15, 2017, at the Rosen Shingle Creek in Orlando, Fla. This event will focus on helping the hardware and tools, home decor, paint, housewares, lawn and garden, furniture, outdoor living, and flooring sectors develop winning e-commerce strategies.

For suppliers looking to build business with top eRetailers, the event will offer face-to-face private meetings between eRetail decision-makers and suppliers. For everybody, the eRetailer Summit will feature amazing networking and learning, all in an intimate, business-ready setting.

Expansion of the Home Improvement eRetailer Summit’s mandate to serve sectors ranging from housewares to large furniture reflects the overwhelming dominance of online selling in every aspect of today’s shopping experience. The biggest challenge—delivery, whether in a timely fashion or to accommodate large, big ticket items—will be addressed at the Summit.

“Having attended the first Home Improvement eRetailer Summit, I saw first-hand the value of getting together with both vendors and other online sellers face-to-face,” said Elizabeth Ragone, SVP, direct to consumer for Lenox, a leading seller of luxury tableware and gifts. “It was a valuable, business-building experience—one that I am happy to return to this year as one of the event’s keynote speakers.”

Along with a host of top e-commerce experts, this year’s speaker lineup will feature a powerful keynote by Alyssa Steele, divisional merchandise manager-home and garden for eBay.

Retailers looking to understand the e-commerce space and vendors who wish to make real connections with leading eRetail decision makers will find this ground-breaking forum a way to meet, share ideas, and develop concrete strategies for growing online sales.

(For more information, contact Beverly Allen here at the World Headquarters, or go to www.eretailersummit.com.)

In the shadow of their U.S. parents, big boxes battle for market share in Canada

SPECIAL REPORT — Both Lowe’s and Home Depot have released their second-quarter results over the past several days and in each case, their respective comp sales for their U.S. stores have been better than each company’s overall results. This suggests that the comp performance of their international businesses—Canada and Mexico for Home Depot and Canada only for Lowe’s—fell well below the comp numbers reported.

For example, Lowe’s second-quarter comp sales were up 4.5%, while U.S. stores were up 4.6%. Lowe’s sales in Canada account for just 10% of the company’s sales overall, yet they were able to pull Lowe’s comp number for the quarter down by one percentage point. That would indicate that Lowe’s comps in Canada are slightly less than 4%. For Home Depot, comps were up 6.3% from last year, and U.S. stores had a positive comp of 6.6%, a spread of three percentage points, affected by stores that account for barely 7% of Home Depot’s overall sales.

While lower than their U.S. counterparts, the comp performance of the Canadian stores by both these retailers would still be strong in light of the slower economic growth in this country.

A quick comparison of Home Depot and Lowe’s in Canada reveals some interesting differences—and similarities…

Home Depot arrived in Canada in February 1995 with the acquisition of 19 Aikenhead’s Hardware stores from Molson Cos. Lowe’s arrived in Canada just over a decade later, in 2007, with greenfields stores. And with its dominance in heavy appliances and strong customer service, Lowe’s put its chief rival on the alert with its arrival here. As a result, Home Depot Canada expanded its appliance department and increased its range of decorative building materials, including flooring and paint.

Lowe’s Canada had 57 Lowe’s-bannered stores at the end of Q2 2017. It continues to open new Lowe’s stores and convert some existing RONA big boxes outside of Quebec to Lowe’s, as well. In addition, it invested heavily in the RONA and Reno-Depot banners. Smaller independent dealers are being served by Lowe’s license in Canada of the Ace banner.

Home Depot, on the other hand, has opened only three stores in Canada since 2012: in Chilliwack, B.C., followed by a store in Brampton, Ont., in November 2014, and an opening in Vaughan, Ont., in April 2015. Instead, the company has focused in recent years on e-commerce and logistics. To that end, it has refined its distribution model with the opening in 2014 of a Regional Distribution Centre (RDC) in Vaughan, Ont., followed by one in Calgary a year later.

(You’ll find further detailed analysis of Home Depot and Lowe’s, as well as the rest of Canada’s leading home improvement retailers, in the 2017-2018 Hardlines Retail Report. This amazing report features everything we know about the size and growth of the retail home improvement industry in Canada, all packed into 200 PowerPoint slides. Click here now for more info and to order yours today!)

DID YOU KNOW…?

...that the market share of big box stores has jumped in this country? Did you know that the Top Four retail groups in Canada account for more than half of all sales in this sector? All this—and more—is included in our Hardlines Retail Report. It features 200 PowerPoint slides with deep analysis of the top retailers and forecasts for the industry for the next two years. Click here now for more info and to order your own amazing Hardlines Retail Report today!

RETAILER NEWS

OTTAWA — RONA is heading to the Supreme Court to fight Revenue Canada’s demand for a list of its commercial clients. The retailer, the lone holdout in the industry, is appealing the case from the Federal Court of Appeal, which ruled in favour of the government. Canada Revenue Agency wants to verify that purchases made by contractors from RONA’s stores match their tax declarations. RONA denounces the move as an act of intimidation. More than 20 Quebec hardware retailers, including BMR and Patrick Morin, have already agreed to provide similar lists.

MISSISSAUGA, Ont. — Ace Arthur Rivest Hardware in Saint-Julienne, Que., is the latest addition to the Ace Hardware banner. The former TIMBER MART store has a footprint of 10,000 square feet, not including its lumber yard. “Owners Nathalie Fortin and Michel & Guy Ricard made the decision to join earlier this year,” said Josée Desrosiers, National Development Director for Ace Canada.

TORONTO — Canadian Tire beat estimates during a rainy second quarter, thanks in part to its use of data mining for targeted promotions. The retailer has also diversified its product lines, mitigating the effect of the weather on seasonal offerings. Revenues increased by 2% to $3.4 billion, compared to $3.3 billion a year ago. Net income rose to $195.2 million from $179.4 million. Same-store sales were up 1.8% across the board, including increases of 1.4% at the Canadian Tire banner, 4% at Mark’s, and 2.6% at FGL Sports.

MISSISSAUGA, Ont. — Castle Building Centres’ latest addition is Ultimate Windows & Doors, which has been in business in Fredericton for more than a decade. The retail store serves local contractors and homeowners, specializing in windows, doors, and siding, as well as offering a full range of hardware products. Crossroads C&I has also joined Castle as a commercial building supply member. Crossroads operates nine locations in Ontario, Quebec, and Nova Scotia, specializing in the distribution of commercial and industrial insulation.

MOORESVILLE, N.C. — Lowe’s reported net earnings of $1.4 billion for the quarter ended August 4, up from $1.2 billion in the second quarter of 2016. Sales for the quarter increased 6.8% to $19.5 billion from $18.3 billion in the second quarter of 2016, and comparable sales increased 4.5%. For the six-month period, net earnings were $2.0 billion, down slightly from $2.1 billion a year ago. Year-to-date sales increased 8.5% to $36.4 billion over the same period a year ago, and comparable sales increased 3.3%. Comparable sales for the U.S. home improvement business increased 4.6% for the second quarter and 3.4% for the six-month period.

PORT AU PORT WEST, N.L. — One of Newfoundland’s oldest companies has begun to rebuild a hardware store that burned down last spring, breaking ground with an excavator last week. Abbott & Haliburton Home Building Centre’s store was built shortly after the end of the Second World War by a family enterprise dating back to the 1880s. The store and its upstairs gift shop were ravaged by a fire the night of April 3.

BOUCHERVILLE, Que. — Branding firm Sid Lee and Reno-Depot have partnered for a third consecutive year to showcase the range of Sico paint colours available at the building supply banner. For this year’s follow-up initiative, Reno-Depot is introducing LiveSwatches, an app that captures colours from everyday life and associates them with the Sico paint range database in real time.

ATLANTA — Home Depot reported that comparable sales in its second quarter rose by 6.3%, leading the retailer to its highest-ever quarterly revenue, as home values and consumer spending rose in the U.S. Total sales amounted to $28.1 billion. Net earnings of $2.7 billion rose from $2.4 billion a year ago. The company updated its guidance for the year and now expects sales to rise by about 5.3%.

BENTONVILLE, Ark. — Wal-Mart’s Q2 sales and earnings exceeded Wall Street estimates as the retail giant pushed expansion in online sales. Total revenues came to $123.36 billion. U.S. comparable sales rose 1.8%, led by food sales, with a 1.3% increase in traffic. The company continued to reap the rewards of its acquisition of Jet.com, as e-commerce sales soared by 67% year over year.

SUPPLIER NEWS
BARRIE, Ont. — Weatherstripping maker Jacobs & Thompson has purchased Toronto-based Engineered Foam Products, a foam converter and material supplier to the North American market. J&T calls the acquisition an “important addition to our industrial business” and “a crucial step in our company’s continued growth and overall success.”

BURLINGTON, Ont. —Nicholson and Cates is celebrating Canada’s 150th birthday by introducing TrueNorth Fibre Cement Siding to the Ontario market. The company is responding to an increase in fibre cement siding’s market share there with this new line, which feature four Dual Tone Finishes inspired Canada’s North Country.

MONTREAL — Intertape Polymer Group reported that Q2 revenues rose 4.3% to $210.2 million, primarily due to an increase in average selling price, including the impact of product mix, and additional revenue from the company’s acquisition of Powerband. Net earnings decreased $3.5 million to $10.2 million, primarily due to a decrease in gross profit and an increase in selling, general, and administrative expenses.

EDMONTON — Insulation provider Johns Manville has been selected as the primary supplier of mechanical insulation products and accessories to Crossroads C&I Distributors, a distributor and fabricator of commercial and industrial insulation products. Under the agreement, Crossroads C&I will serve as JM’s authorized full-line distributor of mechanical insulation products in Alberta, British Columbia, Yukon, and Northwest Territories. 

PEOPLE ON THE MOVE
At Jeld-Wen Windows & Doors, Marianne Thompson has been promoted to the position of SVP, North America Sales, succeeding Bob Merrill, who has announced his intention to retire. Merrill joined the Jeld-Wen’s predecessor, CraftMaster Manufacturing, in 1997. Thompson was previously VP of sales for Canada. Before joining the company, she was VP of sales and marketing at Alexandria Moulding. In her new role, Thompson reports to John Dinger, EVP and President for North America.

Jim Solomon has been named merchandise manager of household and commercial cleaning at Home Hardware Stores Ltd. He reports to Brian Straus, group merchandise manager. Previously, Solomon was merchandise manager of automotive and sporting goods. Jason Boshart is the new Merchandise Manager for Automotive and Sporting Goods. He is now responsible for selecting and managing Home’s automotive and sporting product lines. He also reports to Straus.

David Stern is now Vice President of Installation Services for Lowe’s Canada. He comes over from Home Depot Canada, where he spent eight years working in a number of positions, including director of installation services. Most recently, he served as District Manager and Business Development Manager for Home Depot in Quebec. He also sat on the board of directors of the Home Depot Foundation.

ECONOMIC INDICATORS
Sales of existing homes across Canada declined by 2.1% between June and July, with decreases recorded in almost two-thirds of markets. The drop was the fourth consecutive monthly decline. Actual (not seasonally adjusted) sales fell 11.9% year over year. The number of newly listed homes edged down by 1.8% compared to June, while the national average sale price decreased by 0.3% year over year. (Canadian Real Estate Association)

U.S. retail sales logged their biggest increase in seven months in July, rising 0.6% against an expected 0.4%. Year over year, retail sales rose 4.2%. (U.S. Commerce Department)

U.S. housing starts declined unexpectedly in July by 4.8% from June, to a seasonally adjusted annual rate of 1,155,000. A 10-month low in multi-family residential construction contributed to the drop. Starts fell in the Northeast, Midwest, and West. Single-family starts, the largest segment of the market, fell 0.5% to 856,000 and the volatile multi-family segment slumped 17.1% to 287,000. (U.S. Commerce Department)

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