November 13, 2017 Volume xxiii, #43

“Beware of the barrenness of a busy life.”
—Socrates (Classical Greek philosopher, c. 470 B.C-399 B.C.)

IN THIS ISSUE:

• Groupe BMR celebrates 50th anniversary with annual buying show

• New digital platform helps RONA affiliates tap lucrative appliance category

• Notes from the Do it Best Market: How tariffs are affecting U.S. independents

• Home Depot to ditch chemicals in an effort to go green

• PLUS: Home Hardware stores honoured, Canadian Tire results, Giant Tiger celebrates grand opening, The Brick helps Sears customers, Amazon kicks off Black Friday sales early, Regal ideas honoured, Newell’s sales fall, Lowe’s rolls out smart home centres in-store, housing starts, and more!
  
  

Groupe BMR celebrates 50th anniversary with annual buying show

QUEBEC CITY — Delegates from nearly 350 stores and 300 exhibitors gathered in Quebec City last week for Groupe BMR’s annual trade show.

Marking its 50th anniversary, the show’s theme was Expo 67, referencing the international exposition that took place in Montreal the same year BMR was founded. The show, which is widely recognized by vendors for its lively atmosphere and the thought and creativity put into the décor, was packed on day one with dealers eager to make purchases.

New to the show this year was an expanded seasonal selection, a category in which the company has been gaining traction. Located at the front of the show floor, the patio furniture also offered a convenient and comfortable spot for dealers to pause and have a conversation.

The company’s commitment to its independent dealers was also on display. Another new feature this year was a dealer services desk on the show floor where retailers could go and ask questions or have any concerns addressed.

Heading into 2018, e-commerce is a major priority for the company. The marketing team was on hand to help dealers navigate the new website and develop individualized strategies based on their store size and geographical location.

Dealers on the floor expressed that they were happy with the show and the business opportunities it offered. Vendors were happy, as well, as they kept busy taking orders and getting that face time with retailers.

New digital platform helps RONA affiliates tap lucrative appliance category

MONTREAL — With the demise of Sears Canada, hardlines retailers are all eyeing the potential for heavy appliance sales. For example, Lowe’s Canada has been converting its RONA big boxes to the Lowe’s banner and revamping assortments in the aisles. And appliances are getting a big push.

But these large-ticket items are not reserved solely for big boxes. RONA’s independent, or affiliate, dealers are giving the new category careful scrutiny. The first affiliate dealer to take on appliances in a big way was RONA Lespérance, with two stores in Blainville, Que., and a third in nearby Ste-Thérèse.

Now, 60 dealers are carrying appliances in some form or another. That includes online sales, which dealers can be part of as RONA introduces its new platform to allow them to tap into the digital world.

André Lespérance, president of RONA Lespérance, didn’t want to comment just yet on the new lines, saying it was too soon to properly evaluate their success. But on the show floor at the recent Lowe’s buying show for its RONA and Ace dealers, Roy Perkins, of the RONA in Cornwall, Ont., and one of RONA’s earliest independents in Ontario, said the appliance category could be a positive one for many dealers. He further noted, however, that the category would require a real commitment both in terms of selling space in the store and knowledgeable sales people to handle it.

The new online platform should help, says Annick Day, director of wholesale and dealer support for Lowe’s Canada. She explains that dealers can update and personalize their assortments themselves. “We have access to their inventory. We’ve built the interface with the vendors and now we’re onboarding the dealers.”

Notes from the Do it Best Market: How tariffs are affecting U.S. dealers

INDIANAPOLIS — Anyone curious about how softwood lumber tariffs and duties are affecting dealers south of the border had only to eavesdrop on the lumber panel discussion at the recent Do it Best show in Indianapolis. The main topic of conversation there was the shortage of supply from Canada.

Demand is being driven from at least two directions. First is on the supply side, as prices for Canadian product have been driven up by almost 20% for most mills. But scarcity has been exacerbated by the forest fires in British Columbia. According to Gary Nackers, VP of lumber and building materials for Do it Best Corp., the equivalent of 200,000 carloads of softwood, or about a year’s supply, was damaged in the B.C. fires.

Devastation following one of the worst hurricane seasons in memory in the U.S. has driven demand up considerably—and further impacted softwood lumber prices. Other building materials are up, as well. Insulation sales were up 21% in September, following the hurricanes. Products like drywall were being shipped to Houston, which was devastated by flooding, while roofing materials were being diverted to Florida, where high winds had caused damage to roofs. Nackers said at least 13,000 additional truckloads of roofing were expected to be needed to meet demand in that state.

Do it Best is working hard to position itself as an LBM distributor, not just a hardware wholesaler. The company shipped $700 million in lumber over the past year. And Lumber sales were up 29% in the third quarter. “More and more dealers across the country are turning to Do it Best for lumber and building materials,” said Nackers.

Home Depot to ditch chemicals in an effort to go green

ATLANTA — Home Depot is following in the footsteps of its big box competitors like Walmart and Target to disclose the chemicals found in the products it sells. It intends to begin removing them and replacing them with more green alternatives.

This news comes out of the company’s updated environmental policies, included in its 2017 Responsibility Report. The report says that Home Depot is “increasing its protection of high conservation value forests and pulling substances like formaldehyde and lead in several of its categories in an effort to meet demands for greener products.”

Home Depot says it’s strengthening chemical oversight practices in paint, carpet, vinyl and laminate flooring, and insulation. The strategy includes “commitments to increase the assortment of products that have transparency of product ingredients and third-party certification of chemical ingredients,” the company says.

Home Depot says it has “significantly improved” its paints in the past decade, removing triclosan, lead, and formaldehyde from the latex-based wall paint it sells in the U.S. and Canada.

Many other home improvement retailers have started implementing these new alternatives, especially after U.S. flooring retailer Lumber Liquidators was investigated for selling laminate flooring with higher levels of formaldehyde than permitted by California’s health and safety standards.

DID YOU KNOW…?

...that the HARDLINES website has been updated? You can now purchase our Market Share Report or seamlessly auto-renew your annual HARDLINES subscription with a credit card, letting us process and respond to your order quickly. You can also now manage your HARDLINES subscription yourself. That’s right: you can make changes to the users on your subscription by adding or removing email addresses through your own password-protected access. Make sure you and your team stay current with HARDLINES each week! Click here for more information.

RETAILER NEWS

TORONTO — Canadian Tire reported third-quarter results that included overall sales for the corporation that were up 5.1% to $3.7 billion. For the retail sector, which consists of Canadian Tire Retail, Mark’s, FGL Sports, and PartSource, sales reached $2.98 billion, up 5.5%. The Canadian Tire stores were up 5.3%, and same-store sales were up 4.7%. The company is maintaining a forecast of 3% growth for its Canadian Tire stores in 2017.

ST. JACOBS, Ont. — Three Ontario Home Hardware stores are among the honourees of their respective communities’ local Readers’ Choice Awards, with voting administered through local newspapers. Wellesley Home Hardware, in the town of the same name, received Diamond status for the three categories of Favourite Building Materials Store, Favourite Hardware Store, and Favourite Lumber Yard. In Kitchener, Swanson’s Home Hardware Building Centre received the Gold ranking in the same categories along with Favourite Paint and Wallpaper Store. Ontario Seed Home Hardware in Waterloo placed Diamond in both the Best Shopping Garden Centre and the Best Shopping Hardware Store categories.

BRAMPTON, Ont. — Giant Tiger celebrated the grand opening of a new 23,500-square-foot store in Brampton, Ont., last week. The day included free activities for customers of all ages, including a charity barbecue, strolling entertainment, free face painting, promotional and gift card giveaways, and of course, a visit from Friendly, the Giant Tiger. To mark the occasion, the chain and store manager Marco Costa made a charitable donation to the Peel Children’s Aid Foundation.

MOORESVILLE, N.C. — Following a three-store pilot last fall, Lowe’s is expanding its “Smart Home powered by b8ta” connected-home shopping experience, a store-within-a-store concept, to 70 Lowe’s stores in the U.S. The program has been developed in partnership with software-powered retailer b8ta. Each smart home centre features a selection of high-tech products along with onsite support from specially-trained experts known as “b8ta testers.” 
 
EDMONTON — Furniture retailer The Brick is stepping in to relieve some of the frustration for Sears Canada’s appliance customers by offering a $100 gift card to anyone with warranties on fridges and stoves, as Sears will no longer honour their warranties. According to the Huffington Post, The Brick is also looking to hire up to 300 former Sears employees.
 
SEATTLE — Amazon has kicked off Black Friday sales early, unveiling deals on big-ticket items like home electronics. The 10-day sales event will feature new deals each day on categories from toys to fashion, with Prime members getting early access and bonus perks. The e-retail giant, which is eyeing a move to Canada for its new headquarters, is looking to keep pace with competitors like Target, Walmart, and Best Buy, who are also getting a head start on pre-holiday sales.

SUPPLIER NEWS
DELTA, B.C. — Aluminum railing system maker Regal ideas Inc. has been honoured with the silver Davey award for its integrated marketing and merchandising campaign called “Inspiring Homeowners.” The Davey Awards recognize the best in web, design, marketing, and social media from companies around the world. Regal’s winning program combined its online and social presence with in-store branding and turnkey merchandising. It was one of more than 4,000 entries in six categories. The awards are overseen by the Academy of Interactive and Visual Arts.

HOBOKEN, N.J. — Newell Brands saw sales fall 7% to $3.7 billion in a quarter marked by low demand for back-to-school orders and pressure from the bankruptcy of Toys R Us, one of its top buyers. Net income of $234 million represented an increase from the $187 million reported a year ago, boosted by lower interest and tax rates. The acquisition of Jarden helped to drive up income in the small appliance segment to $215 million from $212 million a year ago.

ECONOMIC INDICATORS
Housing starts seasonally adjusted for all areas in Canada reached 222,771 units in October, up 1.6% from 219,293 units in September. This marks nine months out of the past 10 in which starts have exceeded the 200,000 mark. Urban starts increased by 2.5% in October to 205,935 units, while multiple urban starts jumped by 12.5% to 149,593 units. Single-detached urban starts decreased by 17.1% to 56,342 units. (CMHC)

Building permits rose in September for the first time in three months, as strength in the non-residential sector outweighed a lag in the residential sector. The value of building intentions reached $7.9 billion, up 3.8% from the previous month. A 1.7% decrease in the residential sector was offset by a 13.9% increase in the non-residential sector. Ontario posted the largest decrease in residential permits, mainly due to lower construction intentions for apartments. (StatCan)

NOTED
HARDLINES is proud to co-host the 2nd Annual Home Improvement eRetailer Summit, November 29 to December 1 at the Rosen Shingle Creek in Orlando, Fla. Retailers looking to understand the e-commerce space and suppliers who want to make real connections with leading eRetail decision makers will find this ground-breaking forum an amazing way to meet, share ideas, and grow online sales. You will get face-to-face with, and learn from, the top hardware, housewares, and home improvement eRetailers in North America! Check it out here—or contact Beverly Allen for more info and join us in Orlando!

OVERHEARD…
“We recognize the role we play in the value chain for home improvement products, especially lumber and manufactured goods. We believe that better transparency is the key to retailers and consumers making better purchasing decisions that will improve our industry’s long-term environmental impact.”
—Ron Jarvis, vice president of environmental innovation for Home Depot, on the company’s recent announcement that it will eliminate toxic chemicals from a range of products in its stores.

OUT AND ABOUT
Katherine Yager and Sigrid Forberg are just back from Quebec City, where they attended the BMR show. This week, the whole Hardlines Team is in Niagara Falls, Ont., for our 22nd Annual Hardlines Conference! It’s not too late to register and join us Tuesday and Wednesday at the Sheraton on the Falls hotel! This year’s line-up is jam-packed with leading edge thinkers and this industry’s top retailers. Join us! Then David Chestnut and Michael McLarney will attend the LBMAO’s 100th anniversary gala in nearby Niagara-on-the-Lake. Crazy!

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