August 18, 2017
June Manufacturing Sales Decline
Manufacturing sales fell 1.8 per cent to $53.9 billion in June, following three consecutive monthly gains, says Statistics Canada. The declines were mainly due to lower sales in the petroleum and coal product, transportation equipment, and chemical industries. Sales were down in 15 of 21 industries, representing 72.1 per cent of the manufacturing sector in Canada. Sales of non-durable goods declined 2.2 per cent, while sales of durable goods were down 1.5 per cent. In constant dollars, sales declined one per cent, indicating that lower volumes of manufactured goods were sold in June. Sales decreased in eight provinces in June, led by Ontario and Quebec. Manufacturing inventories edged down 0.2 per cent in June, for the second consecutive month. The inventory-to-sales ratio increased from 1.34 in May to 1.36 in June. Unfilled orders fell 2.1 per cent to $87.3 billion.
Building Materials Lead U.S. Retail Sales
Spending on building materials led retail sales in the U.S. in July. Retail sales increased by 0.6 per cent over June on a seasonally adjusted basis, triple the revised 0.2 per cent growth seen in June, says the National Retail Federation (NRF). Sales increased by 3.5 per cent year over year, a continuation of the growth seen in June and long-term trends. The numbers exclude automobiles, gasoline stations, and restaurants. Soft or declining prices for retail goods continue to hold down the dollar amount of sales reported even though unit volume was up, says NRF. Building materials and supplies stores had the highest categorical increase at 1.2 per cent over June and 8.5 per cent unadjusted year-over-year. Online and other non-store sales increased 1.3 per cent seasonally adjusted over June and 11.4 per cent unadjusted year-over-year. The July numbers come as retail continues a long-term pattern of increased sales. Total retail sales have grown year-over-year every month since November 2009.
Executive Bonuses Reflect Retail Industry Challenges
Volatility in the retail industry is affecting senior retail executives’ earnings, says research by organizational advisory firm Korn Ferry. The firm conducted an analysis of 40 North American retailers with annual sales between $1 billion and $50 billion, representing nearly two million employees. The study found that 73 per cent of retailers paid little or no bonuses to senior executives in 2017 for 2016 performance. Thirty-five per cent paid no bonus and 38 per cent paid only small bonuses to their executives. In fact, the percentage of retailers paying no bonuses to executives has steadily increased during the last five years. In 2017, 35 per cent of retail senior executives received no bonus, compared to 10 per cent in 2013, 11 per cent in 2014, 25 per cent in 2015, and 25 per cent in 2016. Only 15 per cent of the retailers paid senior executives their target or above bonus amount in 2017.
Walmart Sales Down One Per Cent
Walmart International had net sales of $28.3 billion for the second quarter of 2017, a one per cent decrease over net sales in the second quarter of 2016. Total revenue for the quarter was $123.4 billion, an increase of $2.5 billion, or 2.1 per cent. Comparable sales for Walmart U.S. increased 1.8 per cent with traffic growth of 1.3 per cent. eCommerce growth remained strong with net sales growth of 60 per cent and gross merchandise volume growth of 67 per cent.
Profit Slides For Masonite
Masonite International Corporation had net sales of $250 million for the second quarter of 2017, a one per cent increase over net sales of $514 million for the second quarter of 2016. Net income was $27 million versus $33 million. For the quarter, adjusted EBITDA was essentially unchanged at $69 million. North American net sales were $368 million, a six per cent increase over net sales in the year-ago period. Architectural net sales were $74 million for the quarter, a five per cent decrease from the 2016 period. Total gross profit decreased three per cent to $107 million from $111 million.
August 17, 2017
NAFTA Changes Will Impact SMEs
Nearly one-third (28 per cent) of Canadian small businesses that trade with the United States and/or Mexico say that the potential renegotiation of the North American Free Trade Agreement (NAFTA) will alter their export and import plans, finds a new survey by the Canadian Federation of Independent Business (CFIB). The survey comes as the renegotiation of the three-nation trade deal has now begun. Small- and medium-sized enterprises (SMEs) in Canada are key stakeholders in the tri-lateral pact which helps to facilitate approximately US$1 trillion in trade between Canada, the U.S., and Mexico. Data from Industry Canada shows that, of all the firms in Canada that export, over 90 per cent are considered small businesses. Importantly, one in three of the small businesses surveyed say that “favourable free trade agreements” influence their trade decisions. CFIB has recommendations for the agreement that include ensuring free flow of labour; including a chapter specifically addressing needs and challenges of SMEs; simplifying rules; and making sure trade remains as duty-free as possible.
IKEA Opening Halifax Store
IKEA Canada will hold the grand opening of its Halifax, NS, store on September 27. The 330,000 square-foot store will include a showroom and market hall, as well as a restaurant and a SMALAND children's play facility. It will also offer services such as home delivery, assembly, planning, and returns. IKEA Halifax is the first new store to open as part of IKEA Canada's plan to double the number of stores by 2025 and expand from coast to coast. The retailer also has plans to open a store in Quebec City, QC, in late summer 2018.
Retailers Not Ready For mCommerce
mCommerce (mobile commerce) presents opportunities for retailers to increase sales, but the retailers aren’t keeping up with technology, says a survey by StackAdapt. The ‘2017 Omni Survey’ shows that 53 per cent of consumers have used their smartphones to make online purchases at least once and 11 per cent make more than half of their online purchases using a mobile device. Female consumers in households with children under the age of 18 are more likely to make online purchases on their mobile device than men. At the same time, more than 82 per cent of consumers using mobile to make online purchases say at least one thing prevents them from making an actual purchase. The most common reason (54 per cent) is due to the small screen. Poor landing page experience trails in second place (33 per cent). “Unfortunately, a large number of marketers still don't see how under-developed their current systems are when uncovering a customer's journey on mobile and subsequently aren't investing in mobile solutions,” says Vitaly Pecherskiy, chief operating officer of StackAdapt. “The reality is that consumers today bounce from one device to another and brands will not uncover a customer's purchase journey using the old system. As a result, they have developed a blind-spot for customers accessing their sites through mobile.”
CGC Launches Liquid Waterproofing Membrane
CGC Inc. has launched CGC Durock Brand Liquid Waterproofing Membrane, a seamless application for use in commercial and residential tile and stone applications. The product only requires a one-coat application when installed over smooth surfaces and is suitable for wet areas from showers (including steam showers), flooring assemblies, countertops, and more. The membrane is a polymer-based fluid application designed to be rolled, brushed, troweled, or sprayed. CGC Durock Brand Liquid Waterproofing Membrane is available nationwide through tile and flooring distributor channels.
Builders FirstSource Has Sales Increase
Builders FirstSource, Inc. had net sales of $1.8 billion for the second quarter of 2017, a 9.9 per cent increase over net sales for the second quarter of 2016. Gross margin for the quarter was $460.8 million, an increase of $42.5 million over the same period a year ago. Gross margin percentage was 25 per cent, an increase of 10 basis points from 24.9 per cent in the second quarter of 2016. Net sales were $37.9 million compared to net sales of $29.4 million in the year-ago period. Adjusted EBITDA for the second quarter was $124 million, or 6.7 per cent of sales, compared to adjusted EBITDA of $116.7 million, or seven per cent of sales in the second quarter of 2016.
Sales Grow For Newell Brands
Newell Brands Inc. had net sales growth of 5.1 per cent to $4.1 billion for the second quarter of 2017, compared to net sales of $3.9 million in the second quarter of 2016. Core sales growth for the quarter was 2.5 per cent. Gross margin was 36.4 per cent compared with 28.4 per cent in the prior year. Operating income was $423 million, or 10.4 per cent of sales, compared to $138 million, or 3.6 per cent of sales a year ago. Net income was $223 million versus $135 million in the prior-year period.
August 16, 2017
Home Sales Decline Again
National home sales fell 2.1 per cent from June to July, the fourth consecutive monthly decline, says the Canadian Real Estate Association (CREA). Actual (not seasonally adjusted) activity in July stood 11.9 per cent below last July's level while the number of newly-listed homes edged back by 1.8 per cent from June to July, led by Toronto, ON. Sales were down from the previous month in close to two-thirds of all local markets, led by the Greater Toronto Area (GTA); Calgary, AB; Halifax-Dartmouth, NS; and Ottawa, ON. With sales down by about the same amount as new listings in July, the national sales-to-new listings ratio was little changed at a well-balanced 53.5 per cent. By contrast, the ratio was in the high-60 per cent range in the first quarter of 2017.
Lowe’s Converting Gloucester RONA
Lowe's Canada will convert its Gloucester, ON, RONA Home and Garden store to the Lowe's banner. The store will undergo an extensive renovation that will include construction, departmental sequencing of new racking and re-merchandising, branding, and IT conversion. Employees will be trained on new product knowledge and customer service. The location will also offer its Contractor Rewards Program for commercial customers, which will provide access to a drive through lumber yard, charge accounts, and an enhanced assortment in key contractor categories include lumber, building materials, millwork, tools, and hardware. The conversion is expected to be complete by the end of 2017.
Service And Timeliness Create Satisfaction
When a salesperson spends time talking with a consumer about the qualities of windows and patio doors, satisfaction increases significantly, says a report by J.D. Power. Despite this, the ‘2017 Windows and Patio Doors Satisfaction Study’ shows fewer than two-thirds (61 per cent) of customers indicate they spoke with a sales associate at length about these products. Satisfaction increased significantly with customers who spoke with a sales associate at length and customers whose salesperson explained the ordering process. The study shows that timeliness is crucial, too, as satisfaction is significantly higher among customers whose windows and/or patio doors were delivered on the date promised than among those whose delivery did not arrive on the promised date. From a customer advocacy and loyalty perspective, 79 per cent of ‘delighted’ windows and patio doors customers say they ‘definitely will’ recommend the brand to others, compared with the study average of 45 per cent. Also, among ‘delighted’ customers, 73 per cent say they ‘definitely will’ repurchase the brand, compared with the study average of 41 per cent.
Rapid Increase Expected For Plastic Roofing Demand
Plastic roofing demand is projected to advance to 35.6 million squares in 2021 at the most rapid pace of all low-slope materials, says the Freedonia Group. Demand gains for plastic roofing will be driven by such factors as strong consumer interest in the use of thermoplastic polyolefin (TPO) membranes due to their favourable performance properties; contractor preference for single-ply membranes instead of multi-ply built-up roofing (BUR) systems; widespread availability of easy-to-install self-adhesive membranes; and rising use of environmentally friendly white and light-coloured roofing materials. TPO membranes have seen the most rapid growth over the past decade – and will continue to see demand gains going forward – due to their favourable performance properties and low cost. However, each type of plastic roofing has attributes suitable for use in low-slope roofing applications.
Home Depot Sales Strong
The Home Depot had sales of $28.1 billion for the second quarter of 2017, a 6.2 per cent increase from sales of $26.5 billion in the second quarter of 2016. Comparable store sales for the quarter increased 6.3 per cent year over year and comparable sales for U.S. stores increased 6.6 per cent. Net earnings for the second quarter were $2.7 billion compared with net earnings of $2.4 billion. For the quarter, appliances, flooring, and pro-heavy categories were the key big ticket drivers of U.S. transactions. Sales growth for Canada and Mexico was roughly 23 per cent year over year and online sales were 6.4 per cent of total sales.
Home Products Push Griffon Revenue
Griffon Corporation had revenue of $473.3 million for the third quarter of 2017, an increase of two per cent compared to revenue in the third quarter of 2016. Net income was $9.6 million for the quarter compared to $7.6 million in the prior year quarter. Adjusted EBITDA was $53.2 million, a decrease of eight per cent over last year. The home and building products segment had revenue of $276.5 million, an increase of eight per cent compared to the prior-year quarter. Adjusted EBITDA for the segment was $33.1 million, an increase of three per cent.
August 15, 2017
Lowe’s Offers Solar Energy Services
Solar Brokers Canada and its affiliate Green Lion Eco Group have joined forces with Lowe's Canada to create Lowe's Solar, which will provide solar energy installation services to homeowners throughout the province of Ontario. The initiative comes after the completion of a successful pilot program in select Lowe's stores in the Toronto, ON, area. Customers can meet with trained solar consultants at all Lowe's retail locations across the province to review feasibility scenarios for their home, learn about available Ontario government incentives, and discover the benefits of solar energy. These solar consultations will be facilitated using interactive digital display kiosks that provide insight into a solar installation. The partnership expands Solar Brokers Canada's market reach across Ontario, while also supporting Lowe's Canada's efforts to help its customers reduce the environmental impact of their homes and their renovation and construction projects.
Dodge Momentum Index Stumbles
The Dodge Momentum Index fell in July, dropping 3.3 per cent to 135 from its revised June reading of 139.6. The index is a monthly measure of the first (or initial) report for non-residential building projects in planning in the U.S., which have been shown to lead construction spending for non-residential buildings by a full year. The move lower in July was due to a 6.6 per cent decline in the institutional component of the index, while the commercial component fell 1.1 per cent. This month continues a recent trend of volatility where a string of gains is interrupted by a step backwards in planning intentions. Despite the decline from June to July, the index is 6.9 per cent higher than one year ago, which suggests further moderate gains in construction activity throughout the year.
Omnichannel Experience Has Room For Improvement
A study that about the current personalization and omnichannel sophistication across desktop, mobile, and in-store buying touchpoints finds 40 per cent of retailers are missing basic personalization opportunities and more than one-third are not streamlining the in-store shopping experience. The ‘State of Omnichannel Commerce: A Mystery Shopping Study’ by Kibo shows some notable progress for retailers in providing omnichannel shopping experiences. However, the numbers show there is room for improvement. For example, 70 per cent of personalization experiences on an eCommerce site only happen when the shopper is logged into an account; 40 per cent of retailers don’t send an eMail following an abandoned cart and, of those who did, zero offered an incentive to purchase. Also, 16 per cent of retailers have inconsistent pricing between the store and their eCommerce site. As well, although a majority of retailers had signage promoting omnichannel offerings and guiding in-store foot traffic, 37 per cent are missing the opportunity to streamline the in-store shopping experience with basic communication.
JELD-WEN Appointment Correction
The announcement on Monday of Marianne Thompson’s appointment was incorrect. The news item indicated that Thompson had just joined JELD-WEN when, in fact, she has been promoted to senior vice-president, North American sales. She has been with the company for 16 months. Previously, she was vice-president of sales and marketing with Alexandria Moulding. Home Improvement Retailing apologizes for any inconvenience caused by this error.
Resolute Reports Net Loss
Resolute Forest Products Inc. had a net loss of $74 million for the second quarter of 2017 compared to a net loss of $42 million in the second quarter of 2016. Sales for the quarter were $858 million, down four per cent compared to sales in the year-ago period. The company had an operating loss of $447 million while adjusted EBITDA increased by $22 million to $83 million. The company had an operating loss of $47 million for the second quarter, compared to an operating loss of $18 million for the same period in 2016. Operating income for the wood products segment was $45 million, an increase of $25 million versus the previous quarter.
Sales Increase For Continental
Continental Building Products, Inc. had net sales of $120.6 million for the second quarter of 2017, a three per cent increase over net sales of $117 million in the second quarter of 2016. Net income for the quarter was $12.4 million compared to $12.7 million a year ago. EBITDA was $34.1 million compared to $35.1 million. Operating income was $21.6 million, compared to $23.2 million. Wallboard volumes increased to 467 million square feet (MMSF) for the second quarter, compared to 643 MMSF in the prior year quarter.
RCC To Offer Accessibility Training
Retail Council of Canada (RCC) will launch a retail-specific training workshop and webinar series to make it easier for retailers to comply with Ontario's accessibility laws. The program is part of the ‘EnAbling Change’ project with the government of Ontario and will help retailers learn what they need to do to comply with legislation that aims to improve accessibility in areas that impact the daily lives of people with disabilities. The compliance reporting deadline is December 31. This year's series will consist of a workshop held at the RCC offices in Toronto, ON, on September 29 as well as a series of five webinars. The first webinar, entitled ‘How to Comply’ is on August 22. The webinars are free and open to all retailers. For more information, visit www.retailcouncil.org
August 14, 2017
Small Business Confidence Remains Stalled
Canada's small business optimism failed to pick itself up in July, slipping 0.2 points to 60.7, says the Canadian Federation of Independent Business’ (CFIB) ‘Business Barometer.’ “Below par results in Ontario are continuing to weigh down cross-country confidence,” says Ted Mallett, chief economist with CFIB. “We also saw small declines across western Canada which muted stronger results in Manitoba, Quebec, and the Atlantic region. Overall the results are mediocre by historical standards, but in line with the sentiment we’ve seen over the last half of last year. The strongest industry results came from health and professional services, as well as manufacturing and wholesale sector businesses, each with index levels above the 65 mark. Agriculture, natural resources, and retail sectors saw the biggest falls, each sitting barely above the 50 mark. On a scale between zero and 100, an index above 50 means owners expect their business performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.
KOHLER Presents Best Products On Tour
KOHLER is building brand awareness for its best products of 2017 at its global ‘Bold KOHLER Experience Tour.’ Products this year include its bidet toilet seats, which have long been considered a luxury item, but are becoming an increasingly common addition to the bathroom. They are available in pricepoints from starter to luxury. Other toilet options include the ‘Revolution 360’ swirl flushing technology that keeps the bowl cleaner longer than a conventional flush. Skirted toilets offer a trim look and are easy to clean. They are installed with the ReadyLock system where the skirted trapway installs to the floor flange and attaches to the toilet, eliminating the need to drill holes. Most Kohler toilets are available in 10 colours.
Equipment Rentals To Remain Steady
Steady gains are forecast for the equipment rental industry through 2021, says the American Rental Association (ARA). In Canada, the latest five-year forecast continues to call for accelerating revenue growth each year, starting with a 2.7 per cent increase in 2017 to reach $5.12 billion. Total rental revenue in Canada is expected to grow another 3.2 per cent in 2018, 4.7 per cent in 2019, 5.1 per cent in 2020, and 5.6 percent in 2021 to reach $6.14 billion. U.S. equipment rental revenue should reach $42.9 billion in 2017, up 4.3 per cent over last year. U.S. rental revenue is estimated to grow five per cent in 2018, 5.8 per cent in 2019, 4.4 per cent in 2020, and 3.9 per cent in 2021 to reach $59.4 billion combined for the three segments of the industry, including construction/industrial, general tool/light construction, and party/special event.
Taiga Has Sales Gains
Taiga Building Products Ltd. had sales of $379.8 million for the first quarter of its fiscal 2017 year compared to sales of $325.5 million in the first quarter of 2016. Gross margin dollars for the first quarter increased to $33.7 million compared to $31.4 million in the same quarter last year. Gross margin percentage for the quarter was 8.9 per cent compared to 9.7 per cent. Net earnings increased to $5 million from $4.8 million, while EBITDA was $14.3 million compared to $13.5 million.
Sales Rise For Clorox
The Clorox Company had an increase of three per cent in both volume and sales for the fourth quarter of its fiscal year 2016 compared to the fourth quarter of 2015. Gross margin for the quarter was 45.7 per cent, an increase of 30 basis points from gross margin of 45.4 per cent in the year-ago quarter. Earnings from continuing operations were $202 million compared to $165 million a year ago. The cleaning segment had four per cent volume and two per cent sales growth for the quarter. The household segment had five per cent volume and four per cent sales growth. The lifestyle segment had a one per cent decrease in volume and two per cent increase in sales.
Conference Covers Retail Topics
Disruptive technologies in retail, changing consumer habits, and the changing face of analytics are just some of the topics that will be addressed at the ‘ICSC Research Connections Conference.’ It takes place October 22 to 24 at the Westin Harbour Castle in Toronto, ON. For more information, visit www.icsc.org