January 22, 2018
Manufacturing Sales At Record High
Manufacturing sales rose 3.4 per cent to a record high $55.5 billion in November, mainly due to higher sales in the transportation equipment, petroleum and coal product, and chemical industries, says Statistics Canada. Overall, 12 of 21 industries, representing 81 per cent of the manufacturing sector, posted increases in November. Sales were up in nine provinces in November, with most of the gain in Ontario. Following two consecutive months of declines, sales in Ontario increased 5.8 per cent in November to $25.4 billion. The lone provincial decrease was in Manitoba, where sales were down one per cent to $1.5 billion. This was the second consecutive monthly decline and was largely due to lower sales of durable goods. However, sales for January to November were 4.9 per cent higher compared with the same period in 2016. Inventory levels rose for the second consecutive month, up 0.9 per cent to $75.4 billion in November. Inventories were up in 12 of 21 industries, led by the transportation equipment (1.6 per cent) and petroleum and coal product (4.4 per cent) industries. The inventory-to-sales ratio fell from 1.39 in October to 1.36 in November because the increase in sales was much larger than the increase of the inventories. Unfilled orders declined 0.9 per cent to $86.4 billion in November. New orders fell 1.8 per cent to $54.7 billion in November, following a 5.2 per cent gain the previous month.
Increased Renovations Forecast For U.S.
The coming year is expected to be another robust one for U.S. residential renovations and repairs with growth accelerating as the year progresses, says the Leading Indicator of Remodeling Activity (LIRA) by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that homeowner spending on improvements and repairs will approach $340 billion in 2018, an increase of 7.5 per cent from estimated 2017 spending. “Steady gains in the broader economy, and in home sales and prices, are supporting growing demand for home improvements,” says Chris Herbert, managing director of the centre. “We expect the remodeling market will also get a boost this year from ongoing restoration efforts in many areas of the country impacted by last year's record-setting natural disasters.” The centre says that despite continuing challenges of low for-sale housing inventories and contractor labour availability, 2018 could post the strongest gains for home remodeling in more than a decade. Annual growth rates have not exceeded 6.8 per cent since early 2007, before the Great Recession hit.
Integration Key To Successful Marketing
The benefits of a well-integrated and customized ad campaign are substantial, boosting campaign effectiveness by 57 per cent, yet fewer than half of all campaigns utilize these benefits, finds an AdReaction study by Kantar Millward Brown. What's more, marketers and consumers have different views on whether campaigns successfully fit together. Most marketers (89 per cent) believe their campaign strategies are integrated, but just over half (58 per cent) of consumers agree. To resolve this disconnect, Kantar Millward Brown suggests integrating more campaign cues, starting with a strong campaign idea, invest only in channels that have a clear role in the campaign, and customize the content for each channel. The firm says as media channels continue to fragment and evolve, smart marketers will see the opportunities to connect with consumers in new, meaningful ways.
Cioffi To Manage Lowe’s Canada Affiliate Dealers
Tony Cioffi, senior vice-president and chief financial officer at Lowe’s Canada, is now responsible for the affiliate dealers. He joined Lowe’s Canada in 2016.
January 19, 2018
Non-residential Building Construction Continues Rise
Investment in non-residential building construction totaled $13.7 billion in the fourth quarter, up 1.6 per cent over the previous quarter, marking a third consecutive quarterly increase, says Statistics Canada. Nationally, gains were reported for all three components (institutional, industrial, and commercial), led by spending on institutional building construction, up $117.2 million to $3.9 billion. Provincially, increases were posted in five provinces in the fourth quarter, with Ontario reporting the largest increase. In Alberta, total investment in non-residential construction was at its lowest level since the third quarter of 2013.
U.S. Builder Sentiment Slides
U.S. homebuilders are taking a step back from their tax cut euphoria and starting the year on a slightly less sanguine note. Builder sentiment fell two points to 72 in January, says the National Association of Home Builders (NAHB) in its housing market index. The downward move comes after the measurement hit an 18-year high in December, following the passage of the Republican tax cut plan. Any reading above 50 is considered positive sentiment. The index stood at 67 in January 2017. Building material price increases and shortages of labour and lots were ranked as the top problems faced by builders in 2017 and the vast majority of them expect both to get worse in 2018. Of the sentiment index's three components, current sales conditions dropped one point to 79, sales expectations in the next six months fell one point to 78, and buyer traffic fell four points to 54. The HMI gauge of future sales expectations has remained in the 70s, a sign that housing demand should continue to grow in 2018.
Lowe’s Opens Alberta Store
Lowe’s Canada opened its 62nd store under the Lowe’s banner in Canada. Located in Red Deer, AB, the store offers 86,300 square feet of retail space with an adjacent 17,300-square-foot garden centre. It will offer an extensive assortment of appliances, a year-round selection of barbecues, seasonal products for patio and holidays, a variety of snow blowers and other outdoor power equipment, and a broad selection of fashion plumbing. It will also feature home and outdoor décor, organization products, building materials, and power and hand tools.
Maersk, IBM To Create Blockchain Supply Chain
Maersk and IBM will establish a joint venture to provide more efficient and secure methods for conducting global trade using blockchain technology. The aim of the company will be to offer a jointly developed global trade digitization platform built on open standards and designed for use by the entire global shipping ecosystem. It is intended to address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones. The cost and size of the world's trading ecosystems continues to grow in complexity. More than 80 per cent of the goods consumers use daily are carried by the ocean shipping industry. The maximum cost of the required trade documentation to process and administer many of these goods is estimated to reach one-fifth of the actual physical transportation costs. By reducing barriers within the international supply chain, global trade could increase by nearly 15 per cent, boosting economies and creating jobs.
ESL Provider To Employ AR
Electronic shelf label (ESL) provider Displaydata has partnered with location services platform Aisle411. Aisle411’s platform allows retailers to develop searchable store maps to help customers better navigate through stores. A mobile app will utilize item search along with other personalized augmented reality (AR) features. Users can search for a product by general term, specific brand name, or product UPC. Once they find the product on the app, they can tap it and begin navigation via a top-down view of the store. Once the customer arrives in front of a product, the Displaydata ESLs can deliver real-time promotional or product information. The AR can also help shoppers discover promotional or product information strategically placed throughout the store, based on the customer’s shopping habits or preferences.
McKenna Promoted At Walmart
Judith McKenna will be president and chief executive officer of Walmart International, effective February 1. This is the company’s second largest operating segment and includes Canada. She has been with the company since 1996.
January 18, 2018
Moderate Growth Projected For Retailers
Retail markets in North America and Europe, the Middle East, and Africa (EMEA) are projected to each grow approximately three per cent over the next five years to $5.5 trillion and $6.07 trillion in sales respectively, says a study by Zebra Technologies Corporation. The study, conducted with IHL Group, projects eCommerce to eclipse $1.5 trillion by 2021. As well, 2017 saw more retail store openings than closures and openings are expected to continue to outpace closures through 2021. Technology spending among retailers should also rise approximately three per cent over the next three years as retailers continue to evolve their operations to support unified commerce and provide a modern, engaging customer experience. Among North American retailers expecting growth of more than five per cent, 60 per cent say faster sales growth as a key driver for changes in store operations while 52 per cent cite the shift in sales to online purchases. Interestingly, 52 per cent identified same-day delivery as a key warehouse operations driver and consumer demand is encouraging retailers to improve the instore returns process and enhance their fulfillment and delivery strategies.
Quebec Sees Record Annual Residential Sales
Residential sales last year in Quebec have finally surpassed the sales record that was registered in 2007, says the Quebec Federation of Real Estate Boards (QFREB). There were 82,639 residential sales concluded in 2017, a six per cent increase compared to 2016. This was the third consecutive annual increase in sales and surpasses the record 80,647 transactions that was registered in 2007. Condominium sales stood out for the year with a 15 per cent increase year over year. Sales of single-family homes and plexes posted more modest gains of three per cent and four per cent, respectively. Among the metropolitan areas, Montréal and Gatineau stood out with respective sales increases of eight per cent and six per cent.
Checkpoint Launches Underfloor Inventory Management
Checkpoint Systems, a supplier of electronic article surveillance (EAS) and radio-frequency identification (RFID) solutions for the retail industry, has launched an underfloor RFID antenna called UF-1. The system uses traditional EAS antennas, but with patented RFID reader technology, providing a large read range with the benefit of harnessing the power of RFID data to improve inventory management within an invisible solution. UF-1 is suited to a wide array of projects, from those wanting aesthetically pleasing, open entrances to malls that restrict the use of traditional EAS antennas across their openings and retailers that need wide, obstruction free store doorways. The underfloor RFID-enabled solution can identify the direction of a tag passing over the antenna, whether into the store, out of the store, or along the door. It is also able to determine if an item is simply located nearby the exit or potentially being stolen – minimizing false alarms.
Royal Releases 2018 Colour Palette
The colour combinations of brownstone, heritage blue, Harvard slate, weathered grey, storm, and sterling represent Royal Building Products’ ‘2018 Exterior Colour Palette of the Year.’ The palette takes cues from the continued trend of deeper, richer colours dominating the exterior design space across Canada and the U.S., says the company. The popularity of the colour blue among homeowners also played a role in the selection of the palette. “We continue to see homeowners gravitating towards darker, bold colours and then mixing in neutrals when it comes to their exterior design choices,” says Kriss Swint, director of interactive strategy and design, Royal Building Products. “Blues are still dominating the colour space while cooler tones, such as brown and grey, are gaining more popularity as well.”
Mobile Technology Provides Opportunities Despite Challenges
Retailers deploying instore mobile effectively are projected to have an increase of as much as 146 per cent in sales growth, says research by Stratix and IHL Group. Stratix says these increases may be attributed to the personalized experience of shoppers interacting with an instore association through mobile devices. Moreover, sales associates can complete the purchase during the point of conversation as customers shop, offering the opportunity for associates to upsell and cross-sell merchandise. And, while using instore mobile resulted in monumental opportunities for some retailers, the survey also reveals many other retailers face significant challenges implementing this technology. Challenges include not having proper applications, lack of training and support, lack of acceptable payment options, and the complexities of mobile security. Stratix says that embracing a third-party service to manage, support, and deploy mobile devices would be a beneficial investment.
Strong Sales For Fastenal
Fastenal Company had net sales of $1,088.5 million for the fourth quarter of 2017, a 14.8 per cent increase over net sales of $947.9 million in the fourth quarter of 2016. The acquisition of Manufacturers Supply Company increased sales growth by 1.4 percentage points. Fastener products represented 35 per cent of sales for the quarter. Gross profit, as a percentage of net sales, decreased 97 basis points to 48.8 per cent in the quarter, from 49.8 per cent in the year-ago period. Operating income, as a percentage of net sales, declined 57 basis points to 18.7 per cent from 19.3 per cent a year ago. Net earnings were $152.4 million for the fourth quarter, up 32.8 per cent from net earnings of $114.8 million in 2016.
January 17, 2018
Economic Growth Fuels Business Confidence
Higher than expected economic growth in 2017 will fuel Canadian business confidence in 2018, leading to a jump in planned investments by small- and mid-sized enterprises (SMEs), says a study by the Business Development Bank of Canada (BDC). The study finds SMEs plan to make $140.5 billion in investments this year, a three per cent increase over 2017, mainly to support their growth. The upswing is due largely to a surge in business acquisition plans, a long-expected trend driven by Canada’s aging population and the retirement of baby boomer entrepreneurs. Business owners expect to spend 79 per cent more on acquiring other businesses in 2018, or $18.9 billion, up from $10.6 billion in 2017. The study also shows a shift in investments with more spend on human capital and less on brick and mortar. The lack of qualified personnel is the leading obstacle to making investments, with chronic labour shortages especially pronounced in rural Quebec and Nova Scotia. Spending on research and development (R&D) and employee training will rise by a total of $2.4 billion this year, reflecting a long-term shift in the way Canadian businesses invest.
Castle Gets Saskatchewan Member
Saskatoon, SK-based LKQ Building Supply has joined Castle Building Centres Group Ltd. Owner Ken Spetz has been in the construction industry for more than 30 years specializing in finishing and restoration products and services. He says that when he decided to go into retail, he wanted a buying group with a multitude of options to grow his business based on his own unique needs and market. The new retail location will operate as a specialty supply store for local contractors.
Atlantic Provinces Lead Non-residential Building Construction
Total investment in non-residential building construction in Canada increased 1.2 per cent in 2017 compared with 2016, says Statistics Canada. Spending on both institutional building construction ($380 million or 2.6 per cent) and industrial building construction ($257.5 million or 3.5 per cent) were the drivers behind the total annual increase. Total investment in commercial construction was unchanged from 2016 to 2017. Among the Atlantic provinces, New Brunswick reported a total increase in spending in non-residential construction of $195.4 million, up 27.5 per cent compared with 2016. In western Canada, Manitoba was the lone province to post an increase in the total investment in non-residential construction, up 8.1 per cent or $140.9 million in 2017, led by higher investment in commercial building construction.
Fiberglass Insulation Demand To Remain Steady
Demand for fiberglass insulation is forecast to advance 2.9 per cent per annum to $4.4 billion pounds in 2021, says the Freedonia Group. Fiberglass is projected to remain the most widely used insulation material due to favourable characteristics such as installation and handling advantages over other insulation materials. It also provides high R-values and superior resistance to mould, moisture, and insect damage. Residential buildings are projected to be the fastest growing market and maintain the largest share of demand through 2021. Demand in the residential market will continue to benefit from the efforts of homeowners to increase energy efficiency.
Strong Residential Sales In Montreal
A total of 44,448 residential sales were concluded in 2017 in the Montreal census metropolitan area (CMA), an increase of eight per cent compared to sales in 2016, says the Greater Montreal Real Estate Board (GMREB). This was the third consecutive annual increase in sales. All property categories registered an increase in sales in 2017. Condominiums clearly stood out as sales of this property category jumped by 17 per cent. Sales of plexes increased by six per cent and sales of single-family homes rose by three per cent. All six main areas of the Montréal CMA saw sales growth in 2017 with Vaudreuil-Soulanges (13 per cent), the Island of Montréal (11 per cent), Saint-Jean-sur-Richelieu (nine per cent), Laval (six per cent), the South Shore (five per cent), and the North Shore (four per cent). As well, 2017 was a good year for luxury properties, as sales of single-family homes at $1 million or more increased by 20 per cent and sales of condominiums at $500,000 or more rose by 42 per cent.
Spectrum To Sell Battery Business To Energizer
As part of its strategy to focus on consumer brands, Spectrum Brands Holdings, Inc. will sell its global battery and lighting business to Energizer Holdings, Inc. The company will use the net proceeds to reduce debt and reinvest in its core businesses. “Through this transaction, we are making progress towards repositioning ourselves with an increased focus on our remaining businesses of hardware and home improvement (HHI), global auto care and pet, and home and garden,” says Andreas Rouvé, chief executive officer of Spectrum. The transaction is expected to close before the end of the year.
January 16, 2018
December Home Sales Surge
National home sales rose 4.5 per cent from November to December, says the Canadian Real Estate Association (CREA), with actual (not seasonally adjusted) activity up 4.1 per cent year over year. The number of newly-listed homes climbed 3.3 per cent from November to December while the MLS Home Price Index in December was up 9.1 per cent over December 2016. As well, the national average sale price advanced by 5.7 per cent over last year. The increase in home sales via the MLS Systems was the fifth consecutive monthly increase, fully recovering from the slump last summer, says CREA. Based on a comparison of the sales-to-new listings ratio with its long-term average, more than two-thirds of all local markets were in balanced market territory in December 2017, with 4.5 months of inventory on a national basis at the end of December 2017. The measure has been moving steadily lower in tandem with the monthly rise in sales that began last summer.
Pro Show Designed For Contractors
Home Hardware Stores Limited welcomed contractors, renovators, builders, and tradespeople from across the Kawarthas region in central Ontario to its Annual ‘PRO Show’ Monday in Peterborough. It expected more than 800 contractors to brave the wintery weather and take in the 65+ hardware and building material suppliers featured at the show. Contractors in attendance also participated in ‘Contractor Skills Competitions’ which included a driver drill competition, a golf challenge, a strong arm competition, and a basketball toss. There were also seminars on engineered wood systems, composite decking, rigid continuous insulation and spray foam for air sealing and the building code, and synthetic roof underlay. “The shows are one of the many ways in which Home Hardware Building Centre and Home Building Centre locations help home builders, renovators, and tradespeople see new products. These shows allow us to show our appreciation to the professional contractors and reinforce the many ways in which we work to be the building centre of choice for both contractors and homeowners,” says Alec Thompson, contractor communications marketing manager at Home Hardware Stores Limited
Digitization Top Trend For Retailers
Becoming a digital organization is the number one trend for the retail and consumer services industry, finds a survey by CGI. Its ‘2017 CGI Client Global Insights’ also shows that improving the customer experience is the top business priority, with digital technologies as important as the instore physical experience. CGI says that in order to drive competitive advantage, retailers need to focus on customer-centric programs that integrate digital and physical channels as well as data analytics to deliver a precise, informed, and seamless retail experience in real time. Retailers should also focus on optimizing operations and IT modernization to improve time to market and the overall customer experience. CGI has launched its Retail Xp360 platform that enables retail and consumer services organizations to deliver a real-time customer experience across all channels, while accelerating their digital transformation. The platform is designed to meet the increasing demand for more products, services, and information delivered instantly in an omni-channel and personalized manner.
Orgill Picks District Manager For Western Canada
Colin Carey is district manager for western Canada with Orgill, Inc. Previously, he served as a sales representative in northern Alberta and Saskatchewan. As district manager, he will be supporting Orgill customers throughout British Columbia, Alberta, Saskatchewan, and Manitoba.