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News

May 19, 2017

Building Materials Lead Retail Services Price Index

The Retail Services Price Index (RSPI) declined 1.3 per cent in the fourth quarter, with five of the 10 major retail subsectors posting margin declines, says Statistics Canada. Of the 10 major retail sectors, building material and garden equipment and supplies dealers recorded the highest year-over-year margin growth (+8.4 per cent), followed by electronics and appliances stores (+4.6 per cent). Food and beverage stores (-2.8 per cent) registered the largest retail margin decrease, followed by general merchandise stores (-2.4 per cent). Building material and garden equipment and supply dealers helped to moderate the decline and had an increase of 1.3 per cent. Compared to the fourth quarter of 2015, the RSPI was up 1.1 per cent.


Successful Leaders Focus On Others

The most successful leaders focus on others, says Ken Jenkins, ‎president of Castle Building Centres Group Ltd. Writing on his blog, ‘Insights,’ he says leaders can mobilize people and teams to be a part of one of many worthwhile causes. “It’s a rewarding experience few of us ever forget.” He says that entrepreneurs have personalities that are well-equipped to finding and meeting the needs of others. He has had the good fortune to have met some remarkable members of the home improvement community who have stepped up to the plate when the need arose. Claude Lacroix, the owner of Gatineau and Cantley, QC-based Quincaillerie Touraine, designed a floor plan and donated labour and materials for the family of a little boy who sustained serious brain injuries. Paul Lobb, president of Vicwest Building Products, is a supported and board member of Renos for Heroes, which renovates the homes of returning servicemen and servicewomen. Jenkins challenges everyone in the industry to make the time and step to make a difference. “I guarantee you’ll find it to be the greatest team-building exercise you’ll ever experience, and you’ll become a stronger leader and better person for it.”


eCommerce Plays Bigger Role In Home Improvement

U.S. online sales of home improvement products that span everything from plumbing and hardware to storage and décor have grown 41 per cent in the 12 months ending March 2017, says the NPD Group. The eCommerce home improvement market reached $10.9 billion in sales for the year. With the exception of outdoor living, online sales of each major segment of the home improvement market grew in the 12 months ending March 2017 and almost every category tracked within those segments experienced double-digit online dollar growth. The fastest growing categories last year were plumbing pipes and fittings, light bulbs, and ceiling fans, and the categories with the largest online sales gains were home décor, light fixtures and lamps, and area rugs.


Metal Roofing Gains Market Share

In the re-roofing segment, metal roofing is the fastest-growing material among homeowners in the U.S., says the Metal Roofing Alliance. Metal roofs have an overall market share of 11 per cent in the re-roofing segment and some of the reasons consumers choose them include the ability to customize colour and style; reduction of landfill waste by installing directly overtop asphalt shingles; and the reduction of cooling and heating energy use, saving homeowners up to 25 per cent in utility bills. In fact, homes with metal roofing show a rate of 85.9 per cent cost recouped in the national average and a six per cent resale value gain over homes roofed with asphalt.


Homeowners Want Smart Technology

Over a quarter of U.S. homeowners consider integration of smart technology as very important to their renovation (28 per cent), up from 2015 (25 per cent), says the sixth annual Houzz & Home survey. This is especially true for recent homebuyers, who are more likely to prioritize integrating smart technology during renovation projects (35 per cent for first-time buyers versus 31 per cent for repeat buyers and 27 per cent for long-time homeowners). At the same time, integration of home automation technology also increased overall in 2016 relative to 2015 (21 per cent versus 19 per cent, respectively). One-third of recent home buyers are investing in home automation installations (33 per cent) compared to just 16 per cent of long-term owners.


Revenue Rises At Walmart

Wal-Mart Stores, Inc. had total revenue of $117.5 billion for the first quarter of its fiscal year 2018. This is an increase of 1.4 per cent over total revenue in the first quarter of 2017. Net sales at Walmart International for the quarter were $27.1 billion, a decrease of 3.5 per cent. Operating income for Walmart International was $1.2 billion for the first quarter, basically flat compared to operating income in the year-ago period. eCommece sales for Walmart U.S. increased 63 per cent year over year.


Masonite Sales Slide

Masonite International Corporation had net sales of $487 million in the first quarter of 2017, a slight decrease over net sales of $489 million in the first quarter of 2016. Excluding the impact of foreign exchange, net sales would have increased one per cent. Net income for the quarter was $24 million versus $18 million a year ago. Adjusted EBITDA decreased to $53 million from $58 million. North American residential net sales were $338 million, a three per cent increase over the first quarter of 2016. Architectural net sales were $72 million, a two per cent decrease over the first quarter of 2016. Total company gross profit decreased three per cent to $96 million from $98 million last year. Gross profit margin decreased 50 basis points to 19.6 per cent.


May 18, 2017

Manufacturing Sales Hit Record High

Manufacturing sales increased one per cent to a record $53.9 billion in March, reflecting higher sales in the transportation equipment and food industries, says Statistics Canada. Overall, sales were up in 16 of 21 industries, representing 71 per cent of the Canadian manufacturing sector. Sales of durable goods rose 1.3 per cent to $28.4 billion, while sales of non-durable goods increased 0.7 per cent to $25.4 billion. In constant dollars, manufacturing sales in volume terms rose 0.2 per cent. Sales in current dollars advanced in the wood industry by 3.1 per cent. Total inventories increased 1.2 per cent to a record high $72.7 billion in March. This was the fourth consecutive increase in inventories, with 17 of 21 industries posting higher levels. The inventory-to-sales ratio was unchanged at 1.35 in March. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.


Duradek Launches Brand Refresh

Duradek has developed a brand refresh and new logo. The release follows the launch of its website (www.duradek.com), which the company says is the cornerstone of the brand refresh. This new brand identity keeps the traditional, recognizable features that the Duradek logo has maintained over the last four decades, but with a new graphic representation that offers a modern look to take the Duradek family of products into the future. The timing of this brand refresh is aligned with a shift in management. Co-owners, John Ogilvie and Bob Ogilvie, will maintain corporate management roles, but have passed the operational management functions to the company’s team of leaders. The logo updates for Duradek and its Durarail and Tiledek brands will roll out throughout 2017.


Cards To Dominate Global Contactless Transactions

The global value of contactless transactions made via payment cards, mobile and wearables, is forecast to reach $1.3 trillion by 2019, more than doubling from an estimated $590 billion in 2017, says Juniper Research. Contactless card levels will continue to dominate transaction values, accounting for 80 per cent of total contactless transactions in 2019. The research forecasts that contactless transactions via debit/credit cards will exceed $2 trillion globally by 2021. Juniper found that in 2016, while cards accounted for well over 90 per cent of transactions by value in many European markets (for example, rising to 99 per cent in Spain), in the U.S. the position was reversed. Mobile wallets accounted for 90 per cent of the total contactless transactions in the U.S.


Home Improvements More Likely For Wealthy

U.S. households likely to do home improvement projects are 4.8 times more likely to have an estimated net worth of at least $274,000 and are 2.4 times more likely to donate to a charitable cause when compared to households unlikely to take on home improvement projects, says Infogroup. Additionally, households more likely to take on lawn and garden projects are 3.3 times more likely have an estimated net worth of at least $540,000, 5.1 times more likely to be a religious donor, and 4.3 times more likely to be an SUV buyer than households unlikely to do lawn care projects. The data analysis creates a more complete picture of the consumer, says Mike Iaccarino, chairman and CEO of Infogroup. “Looking into [consumer] lifestyles and other demographics, we can paint a picture that marketers can use to better understand who they should be targeting with their messages as well as what the message should entail.”


Revenues Flat For Ace Hardware

Ace Hardware Corporation had consolidated revenues of $1.2 billion for the first quarter of 2017, an increase of 0.1 per cent over the first quarter of 2016. Net income for the quarter was $28.3 million, an increase of $2.2 million or 8.4 per cent compared to the same quarter last year. Retail revenues from Ace Retail Holdings were $52 million in the first quarter, an increase of 2.8 per cent over the first quarter of 2016. Wholesale gross profit was $146.2 million, an increase of $12.9 million, and retail gross profit was $25.1 million, an increase of $1.1 million from the first quarter of 2016. The retail gross margin percentage was 48.3 per cent of retail revenues in the first quarter of 2017, up from 47.4 per cent last year.


Louisiana-Pacific Sales Up 21 Per Cent

Louisiana-Pacific Corporation had sales of $611 million for the first quarter of 2017, an increase of 21 per cent over sales of $505 million in the year-ago quarter. Net income for the quarter was $55 million compared to $10 million and non-GAAP adjusted income from operations was $112 million compared to $52 million in the first quarter of 2016. The oriented strand board segment had net sales of $268 million for the quarter, compared to $217 million in the year-ago period. The siding segment had net sales of $214 million compared to $181 million. The engineered wood products segment had net sales of $82 million, up 14 per cent from the previous year.


May 17, 2017

Home Depot Sales Up 4.9 Per Cent

The Home Depot had sales of $23.9 billion for the first quarter of fiscal 2017, a 4.9 per cent increase over sales of $22.8 billion in the first quarter of fiscal 2016. Comparable store sales for the first quarter were up 5.5 per cent. Net earnings for the quarter were $2 billion, an 11.7 per cent increase compared with net earnings of $1.8 billion in the same period of 2016. Gross profit was $8.2 billion, a 4.7 per cent increase over gross profit of $7.8 billion a year ago. Online sales grew by approximately 23 per cent over the year-ago period.


Businesses Slow To Accept Electronic Technology

Only 17 per cent of Canadian small- to medium-sized businesses (SMBs) are using payment tools such as electronic invoicing, an online marketplace, or an eCommerce enabled website, says a study by PayPal Canada. The study shows Canadian SMBs are not harnessing the power of eCommerce to sell where their customers are shopping – 80 per cent of Canadians shopped online in 2015 – and it shows up on their bottom line. Businesses that accept online payments as a complement to their offline revenue stream reported an average revenue of $175,000, which is more than double businesses that operate without online payment capabilities ($80,000). Businesses that only accept payments online reported an average revenue of $150,000. However, a significant majority of Canadian SMBs are not ready to participate, let alone compete, in the digital economy. The study shows that 83 per cent of Canadian SMBs do not accept any form of online or mobile payment and 71 per cent of this group said they would never consider selling online.


Qualico Chooses Conasys

Real estate development company Qualico has selected the Conasys Homeowner Care platform for all of its homebuilder divisions. Developed by Constellation Homebuilder Systems, Conasys is an interactive smart portal that gives homebuyers access to warranty manuals, construction and maintenance alerts, and a one-click service request system. For the developer, the platform tracks and manages warranty requests and provides a centralized and automated communication for customer updates. The platform allows developers to stay connected with their homebuyers from the moment they buy to the end of their warranty period and beyond.


Payzant Awarded Young Retailer Of Year

Matthew Payzant, general manager of Payzant Home Hardware Building Centre in Lower Sackville, NS, has been awarded the ‘2017 Young Retailer of the Year Award’ in the category of operating multiple locations by the North American Retail Hardware Association (NRHA). The NRHA, now in its 21st year, recognizes the next generation of aspiring independent home improvement retailers as well as individual achievements of retailers 35 years and younger throughout the U.S. and Canada. Selected from different retail categories, winners were chosen based on a number of criteria including career accomplishments, community involvement, hardware industry education, and extracurricular activities.


Clorox Has Third Quarter Gains

The Clorox Company had sales growth of four per cent for the third quarter of 2017 compared to the third quarter of 2016, with volume growth of seven per cent for the same period. Margin for the quarter increased 130 basis points to 44 per cent from 45.3 per cent in the year-ago quarter, when gross margin increased 210 basis points. Earnings from continuing operations were $172 million, an increase of eight per cent over the same quarter in 2016. The cleaning segment had seven per cent sales growth for the third quarter of 2017 over the third quarter of 2016; the household segment had four per cent sales growth; the lifestyle segment had a three per cent sales decrease; and the international segment had three per cent sales growth. In the international segment, decreases in Latin American countries were offset by gains in Canada.


May 16, 2017

Home Sales Decline

National home sales fell 1.7 per cent from March to April, says the Canadian Real Estate Association (CREA). April sales were down from the previous month in close to two-thirds of all local markets, led by the Greater Toronto, ON, Area (GTA) and offset by gains in Greater Vancouver, BC, and the Fraser Valley, BC. Actual (not seasonally adjusted) activity was down 7.5 per cent year-over-year, with declines in close to 70 per cent of all local markets. Sales were down most in the lower mainland of British Columbia, where activity continues to run well below last year's record-levels. The GTA also factored in the decline, with faded activity compared to record levels set in April last year. The number of newly listed homes jumped 10 per cent in April, led overwhelmingly by a 36 per cent increase in the GTA. Housing markets in the Greater Golden Horseshoe in Ontario also saw similar percentage increases. The jump in new listings and drop in sales eased the national sales-to-new listings ratio to 60.1 per cent in April compared to 67.3 per cent in March.


Buchanan Hardware Joins Castle

Buchanan Hardware has joined Castle Building Centres Group Ltd. The Port Loring, ON, retailer was founded in 1929 and now plans to expand into the LBM market. Currently, the retail hardware store sits on a five-acre lot and includes a garden centre and gas bar business.


Home Hardware Gets Quebec Member

La Sarre, QC-based Roberge et Fils Inc. has converted its store banner to a Home Hardware Building Centre. In addition to the building centre, the company has a door and window plant, all owned by Simon Gaignard, Richard Racine, and Sylvain Rouleau, who purchased the company in 2016. To celebrate the new banner and 100 years in business, the dealer-owners have planned a renovation to expand the store’s sales surface area from 12,000 to 14,500 square feet. This increase will allow the store to rotate and expand its inventory.


Huttig Partners With American Fasteners

Huttig Building Products, Inc. has partnered with American Fasteners Co. (AFC) to expand its fastener offering. AFC will produce collated fasteners offered under the Huttig-Grip brand, including plastic-strip round-head framing nails as well as paper-tape metal-connector nails. Huttig says the production will complement its already comprehensive fastener offering.


Richer Joins Fortune Brands

Mark-Hans Richer is senior vice-president, chief marketing and innovation officer, of Fortune Brands Global Plumbing Group, a division of Fortune Brands Home & Security, Inc. He brings more than 26 years of experience to the position, most recently in a similar position with Harley-Davidson, Inc.


Seminar Focuses On Duty To Repair

The Strata Property Act and standard bylaws on repairing and maintaining common property will be the focus of Associa British Columbia’s ‘The Strata Corporation’s Duty to Repair and Maintain’ seminar. It takes place May 30 at the Holiday Inn Vancouver Centre in Vancouver, BC. For more information, visit www.associaonline.com


Resolute Sales Down

Resolute Forest Products Inc. had sales of $87 million in the first quarter of 2017, down one per cent compared to the first quarter of 2016. The company had a net loss of $47 million for the quarter compared to a net loss of $8 million in the year-ago period. Its operating loss was $6 million, compared to an operating loss of $18 million a year ago. Adjusted EBITDA declined by $2 million for the period, to $61 million. Operating income for the market pulp segment was $7 million, $3 million more than the fourth quarter of 2016; operating income for the wood products segment was $20 million, an increase of $3 million over the previous quarter.


Earnings Up For Interfor

Interfor Corporation had net earnings of $19.7 million for the first quarter of 2017 compared to net earnings of $800,000 in the first quarter of 2016. Adjusted EBITDA for the quarter was $60.3 million on sales of $456.8 million versus $33.4 million on sales of $433.9 million in the first quarter of 2016. Total sales for the lumber segment were $389.6 million versus $348.9 million in the year-ago period.


May 15, 2017

Canadian Tire Tests Home Delivery

Canadian Tire stores will begin testing home delivery later this year. Stores currently offer only click and collect-in-store, although online shopping is available at its other banners, including Mark's, Sport Chek, ProHockey Life and Atmosphere. Canadian Tire retail has been relatively late to online sales, a weakness in the company's overall eCommerce strategy. Speaking at the company's annual general meeting CEO Stephen Wetmore said it has no fewer than 30 eCommerce initiatives underway at the moment, providing critical learning on everything from search optimization to website experience to back-end fulfilment options.


CertainTeed Gets Anti-dumping Resolution

CertainTeed Gypsum Canada has received some resolution to its anti-dumping complaint. Just over one year ago, the company filed an anti-dumping complaint against U.S. dumped imports of drywall in Western Canada to establish fair competition for Canadian manufacturers and preserve Canadian jobs. May 1, Western Economic Diversification Canada announced the Drywall Support Program. The program, which continues through May 31, provides relief to western and northern Canadian drywall contractors and builders as well as residents of Wood Buffalo following the duties imposed on U.S. imported drywall. Investigations, evaluations, and findings of the Canada Border Services Agency and the Canadian International Trade Tribunal confirmed CertainTeed Gypsum Canada's case that there was significant U.S. importer dumping at material dumping margins of 95 to over 200 per cent which was injuring and threatening to domestic manufacturers.


Gen Z Have Distinct Expectations Of Brands

More than any generation before them, Gen Z has distinct expectations of brands with regard to customer service and engagement through emerging channels, finds a study by American Express. ‘Raising the Bar: How Gen Z Expectations Are Reshaping Brand finds that Gen Z is already financially empowered, with 81 per cent making purchases on their own, has mobile spending power, with 59 per cent having made a purchase via mobile app in the last year, and that they have high expectations from brands when it comes to gaining their trust. Forty-six per cent of Gen Z respondents say that data security and privacy is a must-have to keep their business.


Dodge Momentum Index Loses Steam

The Dodge Momentum Index fell 5.1 per cent in April to 133.8 from its revised March reading of 140.9. The index is a monthly measure of the first (or initial) report for non-residential U.S. building projects in planning, which have been shown to lead construction spending for non-residential buildings by a full year. April’s decline was due to a 12 per cent drop for the institutional component of the index, while the commercial component rose a meager 0.1 per cent. Since early 2016, the index has gained substantial ground, albeit in a saw-tooth pattern, increasing by over 20 per cent through March this year. Despite April’s decline, the broad upward trend for the index remains present, suggesting that construction activity still has further room to grow in 2017. The planning data’s strengthening over the past year stands in stark contrast to the 2014 to 2015 period, when the index saw little improvement, gaining just four per cent in that 24-month span.


Energy Efficiency Drives Heating Equipment Market

The U.S. heating equipment market is anticipated to reach US$4.98 billion by 2025, says a report by Research and Markets. Growing demand for energy efficient heating equipment and favourable government initiatives are projected to augment market demand over the coming years. Boilers and furnaces are extensively used heating systems in the residential sector. In addition, electric furnaces are gaining wide preference as they require less maintenance, are one of the least expensive, and are free from harmful emissions. The growth of the housing and construction sectors for single and multi-unit dwelling is expected to boost the demand over the coming years. Favourable federal and state policies in the U.S. are projected to further drive the demand. Installing energy efficient heating system qualifies residential buyers to claim 10 per cent of the cost of labour, professional preparation, and cost of installation. Rising awareness of greenhouse emissions has led to replacement of old heating equipment by new energy efficient solutions thereby facilitating the market growth.


Boise Cascade Income Doubles

Boise Cascade Company had net income of $10 million in the first quarter of 2017 compared to net income of $5 million in the first quarter of 2016, an increase of 102 per cent. Sales for the quarter were $974.4 million compared to $880.6 million, an increase of 11 per cent. Wood product sales were $325.7 million for the quarter, compared to $303.5 million a year ago, a seven per cent increase. Building materials sales were $815.7 million compared to $717.3 million, an increase of 14 per cent.


Scotts Miracle-Gro Sees Decrease

The Scotts Miracle-Gro Company had sales of $1.2 billion for the second quarter of 2017, a decrease of three per cent versus sales of $1.24 billion in the second quarter of 2016. The decline was driven primarily by a seven per cent decrease in sales in the U.S. consumer segment. Margin rates were 41.7 per cent for the quarter, down 20 basis points from a year ago. Income from continuing operations was $165.3 million compared with $225.8 million while adjusted income was $168.7 million compared with $186.6 million a year ago.


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