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Retailers, Wholesalers, and Manufacturers of Hardware, Building Supplies, Kitchen & Bath, Paint & Decorating, Lawn & Garden, and Other Allied Products.


January 5, 2018

Increasing Risks Ahead For Business Leaders

Canadian business leaders and entrepreneurs are facing an economy that is increasingly complex and unpredictable, says a report by Borden Ladner Gervais. Its ‘Top 10 Legal Risks for Business in 2018’ report shows they are not only affected by the policies of Canada’s federal and provincial governments, but also by international changes, such as the rise of populism and protectionism. The cost of doing business in Canada is constantly increasing at a time when other jurisdictions are reforming their tax systems to become more competitive. On the trade front, the coming into force of CETA in 2017 opened doors to the European Union market for Canadian businesses, but the renegotiation of NAFTA ‒ the country’s most important and successful trade agreement – and the strong stance of the president of the United States on this matter raise serious concerns. The withdrawal of the U.S. from the pact would have major consequences for all three countries involved. The report is at Legal Risks

Lowe’s Opens Fifth New Model Store

Lowe’s Canada has opened a new-model Lowe’s store in Gloucester, ON, in the Greater Ottawa Area. The store, formerly a RONA Home and Garden, now offers about 40,000 SKUs and features retail offering space totaling more than 169,000 square feet. This includes 74,965 square feet of retail sales space, an adjacent garden centre of 30,706 square feet, a covered lumberyard of 25,698 square feet, and an additional outdoor drive-through lumberyard of 37,940 square feet. It will offer a wider assortment of seasonal products and new categories including appliances and private label products. It will also target the contractor market with a rewards program, access to a drive-through lumber yard, charge accounts, and corporately-owned and operated delivery trucks.

Retailers Not Quite Ready For Voice Channel

Now that Google Home, Google Home Mini, and Amazon Echo are available in Canada, retailers have yet another consumer touchpoint – voice shopping. However, it’s not a touchpoint that has been very well leveraged yet in the U.S. where these voice devices have been available longer (Amazon Echo launched in 2014 and Google Home in 2016), finds a report by data firm Ugam. After heavily promoting its Alexa-enabled devices heading into the holiday season, Amazon featured very few gift promotions for sale by voice. On Cyber Monday, Amazon offered only one out of its 5,000 holiday deals via voice. However, Alexa deals were more competitive than Google Home. Google Home does not offer an equivalent to Amazon's 'Deal of the Day.' And when searching for Amazon Alexa deals products on Google Home, it offered exact matches only 30 per cent of the time and Google Home's prices on those products were higher. Interestingly, Walmart and Target were the top retailers on Google Home. That’s because most of Amazon's top competitors entered the voice commerce market by making offers via Google Home. Best Buy and brand Philips also did well on Google Home.

Lifetime To Acquire Filament

Lifetime Brands, Inc. plans to acquire Filament Brands, a portfolio company of Centre Partners. The acquisition will provide Lifetime with an enhanced portfolio of products, some with top positions in key product areas. It will also have access to a more diversified customer base. Filament brands include Rabbit, Chef’n, Taylor, Salter, and Springfield. The transaction is expected to close in the first half of 2018.

MiTek Makes Appointments

Richard Sullivan is vice-president, enterprise operational excellence, with MiTek Industries. Previously, he held numerous operational excellence executive management positions where he collaborated with senior leaders to drive value through continuous improvement. Rachel Seward is vice-president of enterprise communications and philanthropy. She has more than a decade of experience in designing, implementing, and leading communications, community engagement, and public relations for several prominent organizations.

January 4, 2018

Consumer Confidence Ends Year On Fire

Booming consumer confidence at the close of 2017 brought the Bloomberg Nanos Canadian Confidence Index to 62.2 for the week ended December 29, the highest since the last week of 2009, when the economy was just beginning to emerge from recession. The index shows that big-spending Canadian consumers, who showed no signs of letting up in 2017, are entering the new year in an exuberant mood. Bloomberg says the mood was buoyed by a booming job market, a strong housing market, and an end-of-year jump in commodity prices. “It certainly bodes well for the already strong economic expansion that surprised economists and policymakers in 2017. The big question in the new year is to what extent the economy decelerates from last year’s elevated levels, particularly with the Bank of Canada expecting to raise interest rates further. Much will depend on household spending, which has carried the country’s economy for years and accounted for just about all of its growth since the collapse of oil prices three years ago.”

Lumber Pricing To Remain Volatile

After the currency-driven global lumber price slump in 2015, market demand and prices both started to improve in 2016, says ‘Wood Markets 2018 – Outlook To 2022’ by International Wood Markets Group and Forest Economic Advisors (FEA)-Canada. While overall global demand improved modestly in 2017 – at only half the rate of 2016 – it has been supply disruptions and changing dynamics that created a wild and unpredictable market. All markets appeared to be at least good to strong in 2017, including the U.S. and Canada. One of the largest market variables in 2017 was the initiation of import duties on Canadian lumber shipments to the U.S. (announced in late April and including retroactive duties back to late January 2017). These duties were expected to cause huge disruptions and volatility and certainly did so as Canadian exporters successfully pushed up U.S. market prices to cover all of the import duties. The report says that the slow rate of growth in U.S. housing starts as well as supply-side impacts have already led to some major imbalances in wood markets; overall demand and market activity is anticipated to remain active and volatile again in 2018 and beyond.

Amazon To Acquire Target?

Amazon will acquire Target in 2018, predicts Gene Munster, Loup Venture co-founder. He says it is easy to see the value of this combination. Amazon’s vision of the future of retail channels includes a mix of mostly online and some offline and Target is an ideal offline partner because it has a shared demographic and a manageable but comprehensive store count. “Target’s focus on moms is central to Amazon’s approach to win wallet share. Amazon has, over the years, aggressively pursued moms though promotions around Prime … As for retail stores, Amazon’s acquisition of Whole Foods’ 470 stores along with testing of the Amazon Go retail concept is evidence that Amazon sees the future of retail as a combination of mostly online and some offline.” The acquisition of Target would increase Amazon’s store count by roughly 1,800.

LG Launches Deep-thinking Appliances

LG Electronics has created the ThinQ brand to identify its 2018 home appliances, consumer electronics, and services that utilize artificial intelligence (AI). LG ThinQ products and services have the ability to employ deep learning and communicate with one another utilizing a variety of AI technologies from other partners as well as LG’s own AI technology, DeepThinQ. In the U.S., LG already offers an extensive range of Wi-Fi enabled appliances featuring its LG SmartThinQ Wi-Fi connectivity. Users can manage all the appliances with one app at home or remotely. The system also works with voice control via the Google Assistant and Amazon Alexa. As well, every LG appliance with SmartThinQ technology is built on an open platform, which means they’ll work with evolving smart technologies and devices in the future.

Card Payments To Grow Rapidly Through 2022

Global card payments are set to rise by more than half to 500 billion by 2022, with growth in card usage to outpace growth in card numbers as a result of contactless technology and wider acceptance, says a report by RBR. It’s ‘Global Payment Cards Data and Forecasts to 2022’ shows that customers around the world are increasingly choosing cards to make purchases. The proliferation of contactless technology and the increasing frequency of contactless payments, especially for low-value purchases, have been key to the growth of card payments in many mature markets. RBR forecasts the total number of card payments worldwide to reach 483 billion by 2022, a 56 per cent rise compared with 2016. This is more than double the rate of growth in card numbers, which are projected to increase by 22 per cent over the same period. In more mature markets, growth will be characterized by local regulations mandating card acceptance for a widening range of merchant sector, and also by further penetration of contactless technology for lower-value payments.

January 3, 2018

Manufacturers See Small Gains In 2016

Total revenues reported by Canadian manufacturers increased to $664 billion in 2016, up 0.9 per cent or $6 billion from 2015, says Statistics Canada. This follows a decline of $5 billion (-0.8 per cent) in 2015. Total expenses were relatively unchanged, down $203 million or less than 0.1 per cent. Revenues from goods manufactured increased 0.9 per cent, up $5 billion to $620 billion and accounting for 93 per cent of all revenues earned by Canadian manufacturers in 2016. Total cost of materials and supplies kept pace with revenues from goods manufactured, increasing 0.9 per cent (+$3 billion) and accounting for 63 per cent of total expenses. For 2016, Alberta, New Brunswick, Newfoundland and Labrador, and Saskatchewan all registered a decrease in revenues from goods manufactured. These declines partly offset the increases in revenues from goods manufactured reported in the other provinces and territories, led by Ontario, Quebec, and British Columbia.

Retailers Can Expect Gift Cards

Canadian retailers can expect an influx of customers using gift cards in the coming weeks, says FedEx Canada. Its ‘Holiday Recommerce Survey’ shows that 52 per cent of Canadians planned on giving a gift card to their friends and loved ones this holiday season, with the most popular reason for giving gift cards cited as recipients can choose what they want. FedEx says gift cards provide a growth opportunity in online sales for retailers. Roughly half of shoppers say they will redeem their gift cards both online and instore, with just eight per cent saying they will redeem their gift cards online only. A third plan on using gift cards within a month of receiving them. The survey also shows that 77 per cent of Canadians plan to shop after the holidays to take advantage of bargains, with almost a third saying they will shop to buy that one gift they never received during the holidays.

Technologies Will Impact Retailers In 2018

The rebirth of bricks-and-mortar, the consumerization of B2B, and augmented reality in the home are three of the top eCommerce trends that will impact North American retailers in 2018, says eCommerce agency Absolunet. The firm says a new breed of retail stores and in-person experiences will begin to replace outgoing retailers, while business-to-business buyers’ expectations will push the need for business-to-consumer-like functionalities. At the same time, augmented reality will go from a novelty to a sales driver as brands roll out features that allow consumers to use their mobile devices to visualize items in their home or office before purchasing. Other trends from Absolunet include more amalgamation of online and instore sales, increased mobile payments, and customized shopping with artificial intelligence. The technologies for these trends already exist, but Absolunet expects the adoption and proliferation of them to grow substantially in 2018, changing the very nature of how companies do business.

Growth Forecast For Net-zero Energy Building Market 

The global net-zero energy buildings (NZEBs) market is projected to reach $78.79 billion by 2025, says a report by Grand View Research, Inc. Net-zero energy buildings are those buildings where ideally 100 per cent of their energy is generated and met with onsite renewable energy sources, thereby reducing the energy consumption over a span of time. Technological advancements coupled with stringent policies and programs are expected to considerably propel the demand and adoption of NZEBs. Zero Net Energy (ZNE) projects are targeting buildings such as schools, institutional buildings, corporate offices, and public buildings across the globe. The market is expected to gain traction over the forecast period on account of specified targets and regulations laid down by organizations striving to achieve sustainability and reducing carbon emissions. The regional laws, authorities, bodies, organizations, and concerned government departments are working with regional architects, designers, builders, contractors, equipment manufacturers, and material suppliers to promote self-energy sufficient buildings. The large number of successful projects with the use of current technologies and design approaches have created awareness among the population regarding how realistic and achievable the net-zero energy goals are. The industry is gaining momentum and is predicted to exhibit robust growth, creating lucrative opportunities for equipment producers, material suppliers, and service providers.

Beacon Completes Allied Acquisition

Beacon Roofing Supply, Inc. has completed its acquisition of Allied Building Products Corp. from building products group CRH plc. The company says the acquisition further strengthens its position in the U.S. and Canada with approximately 589 branches throughout all 50 states and six provinces. Along with an expanded exteriors geographic footprint, it has provided expansion into the interior business, including wallboard and suspended ceiling products. Beacon says it is now well-positioned to leverage Allied's various market advantages, including its established private-label business and robust eCommerce platform, to further its organic growth strategies.

FCL Has Strong Year

With increased revenues in 2017, Federated Co-operatives Limited (FCL) will return $408 million to its retail co-operatives across western Canada. For its fiscal 2017 year, the company had revenues of $9.8 billion from its energy, food, home and building, and agro businesses, a 17 per cent increase over the previous year. Net earnings were $575 million for the year.

January 2, 2018

Economy Will See Slighter Growth Next Year

As 2017 came to a close, the Canadian economy was on track to record its fastest pace of growth since 2011 thanks to strong consumer spending and a hot housing market, says the Conference Board of Canada. The labour market has also been remarkably strong with 329,000 new jobs created over the last year ‒ the fastest gain in a decade. Canada's economy expanded by three per cent in 2017, the fastest increase among the G7 countries. The board says this year, however, growth is expected to slow to a still-healthy 2.1 per cent. And, despite record-high debt loads, consumer spending will remain a driver of economic growth in 2018, but the pace of personal expenditure growth will moderate. As well, employment growth is set to weaken in 2018, mainly due to a tight labour market and an aging population. But, on a more positive note, a tightening labour market will help support wage growth, which had a weak start to the year. Wages are expected to grow by 3.1 per cent next year.

Housing Affordability Drops Drastically

Rising home ownership costs in Vancouver and Victoria, BC, and Toronto, ON, pushed overall housing affordability in Canada to its worst level since the end of 1990 in the third quarter of 2017, says the ‘Housing Trends and Affordability Report’ by RBC Economics Research. RBC's aggregate measure for affordability in Canada rose for the ninth consecutive quarter to stand at 48.7 per cent in the third quarter. Housing affordability is calculated as the share of household income that would be required to carry the costs of owning a home at market price. A higher number means ownership is less affordable. The Vancouver area experienced the sharpest affordability drop among Canada's major markets, reaching a new record high for the measure for any market in Canada at 87.5 per cent (up from 82.6 per cent in the second quarter). Meanwhile in Toronto, the affordability measure rose for the 13th consecutive quarter to a record-high 78.4 per cent for the area (up from 77.1 per cent in the second quarter). In Victoria, affordability continued to deteriorate with RBC's aggregate measure reaching a record-high of 61.5 per cent for the area (up from 58.8 per cent in the second quarter).

Castle To Sponsor Bonnechere Cup

Castle Building Centres Group Ltd. will once again co-sponsor the ‘Annual Bonnechere Cup’ along with Castle members W.M Keetch, C.A. Reiche, Eganvile Country Depot, and Hooks Building Supplies. The annual snowmobile race will take place February 16 to 18 in Eganville, ON.

GTA New Home Sales Slow In November

New home sales in the Greater Toronto Area in Ontario slowed slightly in November, with condo apartments continuing to drive the bulk of the sales and a record low number of new single-family home sales, says the Building Industry and Land Development Association (BILD). There were 3,473 new homes sold in November and about 91 per cent of these were condominium apartments in low, medium, and high-rise buildings, stacked townhouses, and loft units. While condo apartment sales were down eight per cent from November 2016, they were still 28 per cent above the 10-year average of 2,465. Sales of new single-family homes, including detached, link, and semi-detached houses and townhouses (excluding stacked townhouses) contributed only nine per cent (312 units) to total new home sales in November, down 82 per cent from last November, 76 per cent below the 10-year average of 1,319 for November, and a record low for any November for single-family sales since BILD started tracking in 2000.

Houseware Sales Continue Steady Rise

Retail sales in global housewares increased 2.4 per cent in 2016. This is half of the percentage increase posted in 2015 and similar to the previous two years (2.6 per cent in 2014 and 2.9 per cent in 2013), says the ‘2017 IHA State of the Industry Report’ by the International Housewares Association (IHA) and Raftery Resource Network, Inc. Total U.S. housewares expenditures increased six per cent in 2016 versus 2015; this also compares to average U.S. household total expenditures, which increased 4.7 per cent in 2016 versus 2015. The U.S. mass merchants/supercentres channel was the sales leader in all but one housewares product category in 2016. Department stores rose 1.3 per cent to be second highest share of sales. Specialty retailers, the third largest channel, saw a decrease in share of housewares sales for the second year in a row. Retail channels that operate both physical and virtual retail options for consumers (mass merchants/supercentres, supermarkets, warehouse clubs, and drug stores) saw percentage sales increase versus last year.

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