November 7, 2017
Vendor Double Dipping Condemned
Certain manufacturers and distributors need to respect their customers and not diminish the market by selling direct, says Nicolas Couture, chair of the Quebec Hardware and Building Supply Association (Association québécoise de la quincaillerie et des matériaux de construction – AQMAT) and owner of Danville, QC-based Couture TIMBER MART. He says AQMAT members are exasperated by those few companies that sell directly to building contractors and even individual consumers. He calls the practice unethical and counterproductive and says people and organizations within the industry need to speak up. With the industry’s slim margins, if retailers are also faced with diminished volumes, they won’t survive. “… we should take collective action to push all manufacturers and distributors to merely promote their brands to entrepreneurs and consumers, and to discourage the sale of their products directly to them. If not, let’s stand together and consider not carrying their products anymore,” he says.
Fall Home Sales Stronger In Toronto
Toronto, ON, area home sales rebounded by 12 per cent from September to October, pointing to a stronger fall market after a policy-driven pullback from a frenzied market that peaked earlier this year, says the Toronto Real Estate Board. In October, 7,118 homes were sold, up from the month before but down 27 per cent from October of last year. Sales in the first 10 months of the year slipped to 80,198, down 19 per cent from the same period in 2016. Sales have dropped more than 10 per cent from the record set in March before Ontario announced its housing plan.
Dodge Predicts Slight Rise In U.S. Construction
Total U.S. construction stars for 2018 will climb three per cent to $765 billion, forecasts Dodge Data & Analytics in its ‘2018 Dodge Construction Outlook.’ Single family housing will rise nine per cent in dollars, corresponding to a seven per cent increase in units to 850,000. Continued employment growth has eased some of the caution shown by potential homebuyers, while older Millennials in their 30s are helping to lift demand for single family housing. A modest boost will also come from rebuilding efforts in Texas and Florida after Hurricanes Harvey and Irma. Multifamily housing will retreat eight per cent in dollars and 11 per cent in units to 425,000. This project type appears to have peaked in 2016, helped by widespread growth across major metropolitan markets. Commercial building will increase two per cent, following a three per cent gain in 2017, and continuing to decelerate after the sharp 21 per cent hike back in 2016. Institutional building will advance three per cent, maintaining its upward track after this year's 14 per cent jump.
Consumers Not Getting Personalized Shopping Experiences
Consumers expect highly personalized shopping experiences from retailers and are willing to spend more money when brands deliver targeted recommendations, says a report by customer data platform Segment. However, the ‘2017 State of Personalization Report’ shows a majority of consumers are disappointed with the ongoing lack of personalization in their shopping experiences and, on average, 71 per cent express some level of frustration when their experience is impersonal. The proliferation of new devices and the rapidly evolving technology landscape has led to a ‘personalization gap’ in the shopping experience, and as consumers' expectations rise, brands are struggling to meet them. "Shoppers expect brands to remember who they are, whether they're on a digital channel or in-store. However, very few companies can actually deliver on these tailored experiences," says Peter Reinhardt, CEO and co-founder of Segment. "This is a profound data and technology problem that needs to be solved. The brands who get this right will reap the rewards as personalization and the customer experience will be the key differentiators for brands in the near future.”
Home Hardware Stores Receive Awards
Several Home Hardware stores have received ‘Readers’ Choice Awards’ from the Waterloo Region Record in their respective communities. Wellesley Home Hardware in Wellesley, ON, received Diamond status for three categories, as voted. The categories are ‘favourite building materials store,’ ‘favourite hardware store,’ and ‘favourite lumber yard.’ Swanson’s Home Hardware Building Centre in Kitchener, ON, received Gold status in four categories. Swanson’s HHBC was acknowledged by the local community as ‘favourite hardware store,’ ‘favourite building materials store,’ ‘favourite lumber yard,’ and ‘favourite paint and wallpaper store.’ Ontario Seed Home Hardware in Waterloo was selected for Waterloo Chronicle Readers’ Choice Awards for Diamond in both the ‘best shopping garden centre’ and the ‘best shopping hardware store’ categories. Each year, the papers host a community nomination site where members of the surrounding areas can recognize their favourite local business for excellence in the community in categories such as entertainment, home improvement, and food.
Amazon Opening Bigger Office In Vancouver
Amazon has signed a lease for a new office in downtown Vancouver, BC. The office is scheduled to open in 2020 and will be Amazon's second in Vancouver. The online retailer’s current Canadian workforce has grown to more than 5,000 full-time, full-benefit employees across Canada, spanning sites in British Columbia, Ontario, and Quebec. There are also tens of thousands of Canadian small businesses and entrepreneurs selling on Amazon.ca and they achieved a record-setting $1 billion in sales in 2016.
Uniboard Launches Laminates
Uniboard has launched 10 thermally-fused laminate designs. The collection is designed with realism and balance in mind and features three ‘urban cherries,’ three ‘dorato oaks,’ a redesigned exotic wood, a crosscut design, and two metallic greys. Each colour contains subtle variations which, when combined with its finishes, mirror the best of nature’s riches, the company says. The launch is supported by a complete co-product program including edge banding, 3DL, mouldings, and doors.
King Marketing Makes Management Changes
Mark Travers is general manager, Canada, with King Marketing. He has been with the company for six years, most recently in the role of national director of sales and service. Stephanie Kainz is national sales manager. She has been with the company for 11 years, most recently as western regional sales manager. Glenn Cunningham, who has been with King for nearly 12 years as national service manager, will now focus exclusively on managing the representative teams handling Home Depot and Canadian Tire stores across the country. Bill Robinson, who has been with King for 10 years, most recently as Ontario field supervisor, has assumed the newly-created role of national service manager for the Lowes Group (including RONA and Ace).
Wayfair Revenue Increases
Online retailer Wayfair Inc.’s direct retail net revenue was $1.2 billion for the third quarter of 2017, an increase of 41.9 per cent compared to the net revenue in the third quarter of 2016. Total net revenue was $1.2 billion for the quarter, up 39.1 per cent year over year. Gross profit was $280.3 million or 23.4 per cent of total net revenue while GAAP net loss was $76.4 million. Orders delivered in the third quarter of 2017 were 4.7 million, an increase of 38.1 per cent year over year.
Simpson Sales Increase
Simpson Manufacturing Co., Inc. had consolidated sales of $262.5 million for the third quarter of 2017, an increase of 14 per cent compared to consolidated sales of $231 million in the third quarter of 2016. North America net sales were $213.3 million in the quarter, an increase of eight per cent compared to net sales of $197.5 million. Canada's net sales increased primarily due to increased sales volumes and were not significantly affected by foreign currency translation. Consolidated gross profit was $119.9 million, an increase of six per cent compared to $113.5 million a year ago. Gross profit as a percentage of net sales decreased to 46 per cent from 49 per cent. Consolidated income from operations was $46.7 million for the third quarter, up two per cent over consolidated income of $45.8 million last year. Consolidated net income was $28.2 million compared to net income of $29.8 million.
November 6, 2017
Western Canada To Lead Economic Growth
Following strong economic results in 2017, western Canada remains on pace to lead growth in Canada again this year, says the ‘BMO Blue Book.’ Assuming real estate and consumer spending trends are sustained in Alberta and British Columbia, the region is expected to maintain combined growth above two per cent for 2018. Coming off strong results last year, British Columbia is expected to post a fourth consecutive year of GDP growth in excess of three per cent, hitting the 3.8 per cent mark in 2017. The province's performance is expected to moderate after that, assuming labour market and consumer spending trends remain steady. The housing market has picked back up as the impact of the province's cooling measures has faded. Even though benchmark prices were up 10.9 per cent year over year as of September, the province's lower unemployment suggests its labour market can support a higher cost of living more than elsewhere. For Alberta, following the challenges posed by last year's wildfires, it has shown resilience through rebuilding efforts across sectors. Coming out of 2016 with -3.8 per cent GDP growth, the province's strong bounce-back could potentially lead the country this year with 4.1 per cent growth in GDP.
Retail Workers Prefer Flexible Work
U.S. retail candidates value shorter work weeks and flexible shift patterns over compensation and benefits, says ManpowerGroup Solutions and the Retail Industry Leaders Association (RILA). ‘Inside the Heads of Job Seekers: U.S. Retail Candidate Preferences’ shows twice as many retail candidates want part-time work than any other industry and 31 per cent of retail workers also prefer to choose their own shifts versus 18 per cent across other industries. "Employers across the U.S. are experiencing talent shortages and retailers are not immune. The retail industry is competing for workers who seek new ways of working, value flexibility, and the ability to choose their own schedule," says Jim McCoy, vice-president of ManpowerGroup Solutions RPO and global practice leader. "To attract the brightest and best, employers need to develop an attractive employer brand and demonstrate that they can offer people flexibility, the option to better blend work and home, and the opportunity to develop their skills."
Interac Debit On Samsung Pay Now Available
Interac Debit on Samsung Pay is now available in Canada, says Interac Association/Acxsys Corporation. Consumers with debit cards issued by ATB Financial, CIBC, and Scotiabank that have Galaxy devices can now use it on Samsung Pay to pay for purchases at merchant locations that accept them. The Samsung Pay app is available to download exclusively in the Samsung Galaxy Apps Store.
Wolseley Raises Money For Special Olympics
Wolseley Canada’s first annual ‘Ontario Wolseley Classic Golf Tournament,’ held in September, raised $47,000 for Special Olympics Ontario. The tournament was inspired by Wolseley’s Winnipeg, MB, plumbing and HVAC/R branch, which has raised more than $300,000 for Special Olympics Manitoba over the last 12 years. All proceeds go towards supporting the programs and training of Special Olympic athletes. The tournament, held at The Club at North Halton in Georgetown, ON, saw a turnout of 140 golfers, including associates from 40 of Wolseley’s indirect supply and manufacturing vendors who also sponsored the event.
Giant Tiger Opens In Brampton
Giant Tiger Stores Limited has opened a location in Brampton, ON. The 25,300 square-foot store will be stocked with home and family fashions, groceries, and everyday necessities.
Earnings Slide For Western
Western Forest Products Inc. had adjusted EBITDA of $32.6 million in the third quarter of 2017, compared to adjusted EBITDA of $35.7 million in the third quarter of 2016. Net income for the quarter was $13.6 million compared to $16.8 million in 2016. Revenue was $285.2 million versus $322. 7 million. Lumber revenue was $212.5 million for the quarter, a decrease of 10 per cent from the year-ago period. Lumber production was 201 million board feet for the quarter, down from 248 million board feet in the third quarter of 2016. By-products revenue was $17.2 million compared to $17.1 million. Net income for the quarter was $13.6 million versus $16.8 million a year ago.
Rise In Net Income For Resolute
Resolute Forest Products Inc. had net income of $24 million for the third quarter of 2017 compared to net income of $14 million in the third quarter of 2016. Sales were $885 million in the quarter, essentially unchanged from the third quarter of 2016. The wood products segment had operating income of $64 million for the quarter and the company produced 531 million board feet, a 22-million-board-feet increase over the previous period. EBITDA for the segment was $73 million, a $21 million increase from the previous quarter.
November 3, 2017
U.S. Sets Finalized Tariffs
The U.S. Commerce Department will impose finalized softwood lumber import duties on several Canadian firms. It says duties on Canfor and Tolko will be just over 22 per cent, while Resolute Forest Products will see duties totaling just under 18 per cent. West Fraser will see duties of more than 23 per cent. J.D. Irving will pay slightly higher duties. All other producers will see duties of just under 21 per cent. Most Canadian producers actually saw their duties reduced from a preliminary ruling by the U.S. earlier this year. The U.S. government says exporters from Canada have sold softwood lumber in the U.S. market at 3.2 per cent to 8.89 per cent less than fair value due to government subsidies of 3.34 per cent to 18.19 per cent. Canadian Minister of Foreign Affairs Chrystia Freeland and Minister of Natural Resources Jim Carr called the U.S. decision against Canada's softwood lumber producers "unfair, unwarranted and deeply troubling." The federal government is reviewing its options, including legal action through the North American Free Trade Agreement and the World Trade Organization.
Businesses Could Benefit From Employee Financial Wellness
Many Canadians continue to struggle with high debt levels and some feel they have insufficient savings for the future, finds a report by the Conference Board of Canada. It says that Canadians’ workplace productivity and attendance may be affected by stress surrounding their personal finances and employers have a role to play in improving their financial wellness. More than a quarter of Canadians (28 per cent) report that they sometimes struggle to keep up with their financial commitments or are having real financial problems. Fortunately, most Canadian employers (74 per cent) feel that they have a responsibility to help their employees with their financial wellness. While many Canadian organizations are beginning to expand their financial education beyond their pension and retirement savings programs, most programming being offered by employers focuses strictly on information dissemination, such as webinars or information booklets. This report suggests that employers provide more interactive programming, including face-to-face initiatives, which may be more effective in helping employees achieve financial wellness.
Lowe’s Unveils RONA Building Centre Model
Lowe's Canada has unveiled the store model for its RONA building centres. The building centres segment represents small to medium stores, also known as ‘proximity stores,’ and accounts for close to half of Canada's home improvement market. RONA's Longueuil, QC, store will be the first of many to undergo the transformation, with an investment of more than $2.6 million. The retailer plans to have roughly 15 stores transformed to the new model by the end of 2018. "As we clearly stated a year ago, we are committed to RONA and the building centre model as one of Lowe's Canada's pillars of growth," says Serge Éthier, executive vice-president of RONA Proximity. "Our new RONA store prototype was developed with three goals in mind: better meet current needs and trends in renovation, establish ourselves as our customers' go-to destination for projects, and enhance our offering for contractors and pros, who account for a larger portion of building centre's client base than it is the case for big box stores."
Home Hardware Expands SmartBurner Line
Home Hardware Stores Limited has expanded its SmartBurner offering by adding a product SKU to stores across Canada. SmartBurner was originally listed with Home Hardware in 2014, but increased sales and consumer interest has prompted this expansion. Cooking is the leading cause of home fires and home-fire injuries. Pioneering Technology Corporation’s SmartBurner, with its patented temperature limiting control technology, helps prevent cooking fires before they start. This technology has been installed on more than 250,000 multi-residential stoves and cooktops throughout North America without a single reported cooking fire.
Businesses Should Protect Themselves Against Breaches
Data breaches can cost millions of dollars, but there are ways for companies to protect themselves, says security provider NordVPN. It says an average data breach costs companies around $7 million per year due to loss of customers, business disruption, the effect on brand reputation, fines, and more. Small businesses are especially at risk because many of them do not even have basic security tools in place, such as antivirus, firewalls, or encryption software. NordVPN discusses ways companies can make themselves more secure in the article, ‘VPNs Can Protect All Size Companies From Breaches,’ available on the Home Improvement Retailing website.
Andersen Acquires Fenêtres MQ
Andersen Corporation has acquired Fenêtres MQ Inc., a luxury window and door manufacturer headquartered in Sainte-Agathe, QC, with manufacturing locations in Canada and Italy. MQ specializes in serving the luxury residential and commercial segments and is known for its work on complex, historic renovations of grand scale. Andersen says the acquisition expands its product portfolio, increases its manufacturing capabilities, and broadens its geographic reach. The MQ brand will complement Andersen’s Architectural Collection.
Earnings Rise At Interfor
Interfor Corporation had net earnings of $16.8 million for the third quarter of 2017, an increase compared to net earnings of $15.1 million in the third quarter of 2016. Adjusted net earnings for the quarter were $20 million compared to $20.7 million. Adjusted EBITDA was $60.5 million on sales of $489.2 million versus adjusted EBITDA of $77.4 million on sales of $511.4 million. Total lumber production for the third quarter was 645 million board feet, 10 million board feet fewer than the prior quarter.
November 2, 2017
Canadians Like To Shop At Trusted Brands
Canadians say their trust in a brand is greatly increased by personal experience, responsiveness, transparency, fair pricing, and the endorsements of other consumers, says Robert Levy, president of BrandSpark International. “Shoppers look to retailers that they trust to deliver great value, strong selection, quality goods, and, when online, timely delivery. These endorsements are especially useful for shoppers who don’t regularly shop the category – particularly in eCommerce where many shoppers are still discovering the major players.” BrandSpark surveyed more than 5,000 shoppers to find out who their most trusted brands are. Leaders include Home Hardware, Home Depot, RONA, Dollarama, Canadian Tire, and Walmart. The study shows that the Canadian retail landscape is dotted with strong regional players and the most trusted retailers vary across Canada in many categories. This is particularly true for Quebec, where home-grown retailers are often most trusted. Additionally, shopping habits are evolving. While seven in 10 Canadians shop online in a typical month, in the coming year they expect to make a larger share of purchases online. For the online home improvement/renovation category, the top brands were Home Depot, Amazon, and RONA.
Americans Reach Record Confidence Levels
American consumers are the most confident they’ve been in nearly 17 years, says the Conference Board. The consumer confidence index was at 125.9 in October, up from a revised 120.6 in September, and the highest rating since December 2000. The index measures consumers’ assessment of current conditions and their outlook for the next six months; both rose in October. The board says a healthy job market contributed to the positive outlook, with unemployment at a 16-year low at 4.2 per cent. The index reading suggests the economy will continue at a solid pace for the remainder of the year.
SMEs Suffering From Bad Debt
Canadian small- and medium-sized enterprises (SMEs) admit they’ve suffered from bad debt over the past year, while many struggle to collect payments from customers on time stalling cash flow, says the ‘Global Business Monitor’ report by Bibby Financial Services (BFS). Almost half (48 per cent) of Canadian SMEs acknowledge that collecting payments from customers on time is the most problematic aspect of managing their cashflow. On average, customer payment times averaged 38 days, while U.S. SMEs receive payment in an average of just 23 days. Of these Canadian SMEs, 42 per cent are paid within 30 days compared to 50 per cent paid over 30 days. Additionally, in the past year, 31 per cent of Canadian SMEs have suffered from bad debt resulting in money owed that could not be recovered and an average write-off of $49,000. BFS says many businesses are not aware of funding solutions like factoring, which can help SMEs by releasing working capital from outstanding invoices and injecting it back into the business.
RH Launches Four-level Design Retail Experience
RH (Restoration Hardware Holdings, Inc.) has launched RH Toronto, The Gallery at Yorkdale. RH Toronto represents the latest iteration of the brand's design galleries and its continued foray into hospitality with a seamlessly integrated culinary offering by restaurateur and founding president of RH Hospitality, Brendan Sodikoff, which includes the RH Courtyard Café and Barista Bar. The store consists of four levels and nearly 70,000 total interior and exterior square feet, with artistic installations of home furnishings in a gallery setting, including entire floors dedicated to RH Interiors, RH Modern, and RH Outdoor. The space also includes an interactive Design Atelier, offering professional interior design services in a studio environment.
Sales Increase For Lumber Liquidators
Lumber Liquidators had net sales of $257.2 million for the third quarter of 2017, an increase of 5.4 per cent compared to net sales of $244.1 million in the third quarter of 2016. Net sales in comparable stores increased 3.8 per cent year over year. Gross profit increased 20.9 per cent in the quarter to $92.7 million from $76.7 million in the comparable period in 2016. Gross margin increased to 36 per cent in the third quarter of 2017 from 31.4 per cent in the third quarter of 2016. Operating loss was $17.3 million compared to an operating loss of $24 million in 2016. Net loss for the third quarter was $18.9 million compared to a net loss of $18.4 million in the year-ago period.
Huttig Sales Rise Four Per Cent
Huttig Building Products, Inc. had net sales of $199.6 million for the third quarter of 2017, an increase of four per cent versus net sales for the third quarter of 2016. Millwork sales for the quarter were flat at $97.6 million compared to 2016. Building products sales increased seven per cent to $82.6 million and wood product sales increased five per cent to $19.4 million. Gross margin was $41.3 million for the quarter, compared to $41.4 million in 2016. As a percentage of sales, gross margin was 20.7 per cent compared to 21.5 per cent. Adjusted EBITDA was $4.9 million in the third quarter compared to $9.2 million in the third quarter of 2016.
November 1, 2017
Authenticity Drives Business For Brands
Canadian Tire and Black & Decker will likely have a good year because they made the top 10 list of Canada’s most authentic brands, says Cohn & Wolfe. It’s ‘2017Authentic 100 Index’ shows the majority (92 per cent) of Canadian consumers acknowledge that if a company is authentic, it would drive a beneficial behaviour or attitude toward the brand's business. Furthermore, nearly two in three (60 per cent) of Canadians acknowledge increased purchase interest from brands if they are perceived to be authentic. While Canadians’ level of purchase interest driven by brand authenticity is high compared to other countries, only one in 10 Canadians (11 per cent) think brands today are ‘open and honest.’ This is significantly lower brand authenticity perception than the global average at 22 per cent. “The study shows that Canadians hold brands to higher standards than their peers in other western countries, yet many companies fail to deliver on consumers' expectations," says David Gordon, managing partner at Cohn & Wolfe Toronto. "As the research confirms, there's a strong link between brand authenticity and the ability to attract and retain customers and ultimately propel business growth. The brands that top the authenticity index are the ones that are able to master and demonstrate … key attributes that build a trusting relationship with the consumer."
UK Brand Debuts In Canada
UK small domestic appliance brand RUSSELL HOBBS is now available in Canada. The initial launch features the Russell Hobbs Retro Style Series, including coffeemakers, electric kettles, and toasters and will be available at London Drugs and Lowes Canada as well as online at Amazon.ca – with more retailers to follow. The series features a chic retro design with modern features and is available in both ribbon red and classic black. The company is part of Spectrum Brands’ consumer products portfolio.
Retail Sales Strengthen In Time For Sears
This is about the best time for Sears Canada’s liquidation, given the relative strength of Canadian retail sales, says Ed Strapagiel, a retail consultant. Many other retailers’ holiday season sales will still be impacted, but not by nearly as much if the market was weak. Later on, in 2018, these other retailers stand to benefit from Sears Canada’s demise. Strapagiel refers to the rise in retail sales, which were up 7.8 per cent year over year for the three months ending August, on a not seasonally adjusted basis. “That’s close to a record high for the last 10 years,” he says. “Furthermore, this strength is fairly broadly based across store types. Store merchandise is easily the most improved sector with sales up 8.8 per cent and Sears Canada’s liquidation could help boost these numbers over the next few months.
Account Takeover Fastest Growing eCommerce Fraud
Account takeover has replaced stolen financials as the fastest growing fraud threat for eCommerce websites in 2017, says a report by PYMNTS and Signifyd. While still representing only a fraction of the volume of stolen financials, in the second quarter alone, account takeover fraud rose by an alarming 45 per cent, putting online retailers at a loss of $3.3 billion. Across the board, the fraud rate for transactions valued over $500 was over 22 times higher than for transactions valued under $100. Fraud rates for transactions exceeding $500 increased from 10.93 per cent to 11.47 per cent, while transactions under $500 showed an overall decrease in fraud rate. Other than a slight bump last quarter, fraud has been on a downward trend for these industries.
Bitter Joins Spancan
Doug Bitter is director of purchasing with Spancan. Previously, he was with Taiga Building Products. He will succeed Mike Daniels, who is retiring at the end of this year.
Trex Has Strong Growth
Trex Company, Inc. had net sales of $140 million for the third quarter of 2017, an increase of 32 per cent compared to net sales for the third quarter of 2016. Sales for residential products were up 23 per cent to $131 million, while commercial product sales were $9 million. Consolidated gross margin was 39.4 per cent compared to 28.2 per cent in the prior year. Residential products gross margin expanded to 40.6 per cent. Net income was $20.1 million versus net income of $7.8 million in 2016.
Fortune Brands Has Growth In Quarter
Fortune Brands Home & Security, Inc. had sales of $1.35 billion for the third quarter of 2017, an increase of five per cent compared to sales in the third quarter of 2016. Operating income for the quarter was $201.8 million compared to $183.1 million. Plumbing sales increased 12 per cent in the third quarter, with growth in all channels. Cabinet sales increased two per cent from the prior year. Door sales outpaced the market and were up seven per cent driven by new construction activity in the wholesale channel. Security sales increased five per cent year over year in the core business driven by strong international and safety sales.