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News

February 1, 2019

Businesses Need To Address Bullying, Harassment

Organizations that don't seriously address bullying, abuse, harassment, and discrimination (BAHD) in their workplaces will struggle to attract and retain good employees and suffer from poor productivity and profits, concludes a panel of experts speaking at the National Club in Toronto. The panel – Sheldon Kennedy, founder of Respect Group; Louise Bradley, president and CEO of the Mental Health Commission of Canada (MHCC); Pamela Jeffery, president of the Pamela Jeffery Group; and Soula Courlas, partner at KPMG – said experiencing BAHD in the workplace can trigger mental health problems and illnesses which, according to MHCC, are the leading causes of short‐ and long‐term disability in Canada. The economic burden has been estimated at $51 billion per year, almost $20 billion of which comes from workplace losses. The panelists say companies should start by instituting a culture of respect and zero tolerance for toxic behaviour in their organizations – a tone that needs to come straight from the CEO or the top of the organization. Systems need to be in place to support employees in raising these types of instances and they need to see them being dealt with effectively.


Fraud Costing Retailers In Many Ways

Almost half of U.S. eCommerce consumers say they have been a victim of credit card fraud where their card information was illegally used by someone else. That percentage grew with age, suggesting that becoming a victim is only a matter of time, says a report by Riskified. Among all respondent groups aged 31 or older, a majority of consumers were the victims of credit card fraud. Unfortunately for merchants, the obvious costs of fraud aren't the only costs. Half of customers say that they will not return to an online retailer after a fraud incident has taken place, meaning that the merchant will pay the cost of the fraud and lose future customers. And that's only part of the cost of fraud. Merchants often decline orders out of caution and previous research by Riskified found that fear of fraud costs even more than the fraud itself as merchants unnecessarily reject good customers. This survey bears that out, as 30 per cent of respondents reported having an order declined, and 57 per cent of those declines happen to returning customers, squandering the good will merchants had built. The survey further finds that roughly 42 per cent of shoppers who experienced a decline moved on, either abandoning the purchase completely (28 per cent) or shopping with a competitor instead (14 per cent). This survey shows how damaging it is when retailers don’t effectively manage their fraud, says Eyal Raab, vice-president of business development. “Making accurate decisions and approving good orders not only increases revenue now, it also makes happier, more loyal customers in the future."


Holiday Shopping Boosts Spend In Fourth Quarter

The final quarter of 2018 wrapped up with a three per cent increase in spend over the same period in 2017, says debit and credit payment processor Moneris Solutions Corporation. This increase marks the lowest for 2018 and the lowest quarterly growth in four years. "Every quarter of 2018 saw an increase in spend, but the increases overall were more tempered than in years past," says Angela Brown, president and chief executive officer of Moneris. "This is a trend we expect to continue throughout 2019, with spending to be cautious and growth to be moderate." Despite a busy holiday shopping season, October saw the largest spend increase in the quarter, up 5.2 per cent as compared to November (up 3.8 per cent) and December (up 1.6 per cent). The traditional shopping days of Black Friday, Boxing Day, and the final Friday before Christmas all saw year-over-year increases. The final quarter of the year saw Canadians continuing to embrace contactless payment solutions, with a 30.14 per cent increase in volume and a 27.68 per cent increase in transactions over the same time in 2017. While these increases continue to shrink quarter-over-quarter as more Canadians adopt contactless usage, the total share of contactless usage continues to rise. Nearly half (47.75 per cent) of all transactions during the quarter were made through contactless channels.


Continental Shuts Down New York Plant

Continental Building Products has shut down its Buchanan, NY, plant after a significant equipment malfunction resulted in an outage at the plant. The facility has a capacity of approximately 650 million square feet annually, which is approximately 20 per cent of the company’s overall capacity. While the Buchanan plant is down, the company’s plants in Kentucky and Florida will continue to deliver product to customers. These plants will be able to increase their production to offset a portion of the lost production from the Buchanan plant. However, because of capacity constraints, logistics, and product availability, these two plants will not be able to make up all of the lost production at the Buchanan plant. Therefore, for the duration of the shutdown, Continental expects to limit new orders for shipments normally delivered from the Buchanan plant. The plant will likely be shut down through the end of February to complete repairs.


Trio Inducted Into Hall Of Fame

Terry Davis, retired president and CEO of Home Hardware Stores Limited; Solly Feldman, founder of Accent Fairchild Group; and Dennis Nykoliation, retired president and general manager of Black & Decker Canada, president and CEO of CanWel Building Products, and president and general manager of GSW Building Products; will be inducted into the Canadian Hardware & Housewares Manufacturers Association (CHHMA) Hall of Fame. The hall was established in 1984 to recognize the achievements of industry leaders and pioneers. Since that time, 68 industry icons, inventors, business founders, and builders from the retail and manufacturing sectors have received the honour. This year, the honourees will be inducted at a luncheon held in conjunction with the annual CHHMA Spring Conference on April 2 in Mississauga, ON.


Strong Sales For Scotts

The Scotts Miracle-Gro Company had sales of $298.1 million for the first quarter of 2019, up 35 per cent from sales of $221.5 million in the first quarter of 2018. U.S. consumer segment sales increased nine per cent to $136.9 million. Adjusted gross margin rates for the quarter were 11.6 per cent. Loss from continuing operations was $82.6 million, compared to a loss of $20 million in the year-ago period.


January 31, 2019

Building Materials Lead Services Price Index

The Retail Services Price Index (RSPI) rose 1.4 per cent in the third quarter compared to the third quarter of 2017, mainly as a result of higher margins at building material and garden equipment and supplies dealers, says Statistics Canada. Margins were up in eight of the 10 major retail subsectors, representing 82 per cent of the retail sector surveyed. Building material and garden equipment and supplies dealers posted a margin increase of 10.3 per cent year-over year, marking 17 consecutive year-over-year increases. The growth was concentrated in the home centres industry which was up 4.9 per cent)as retailers reported higher selling prices. Sustained demand for building materials partly contributed to higher selling prices. Retailers at furniture and home furnishings stores recorded a margin increase of 5.4 per cent, as all industries in this subsector posted margin gains. Selling prices increased faster than vendor prices, resulting in higher margins. Moderating the growth of the RSPI were lower margins at general merchandise stores (down 3.3 per cent) and miscellaneous store retailers (down 1.6 per cent).


Retailers Moving Towards Unified Commerce Platform

Retailers understand the imperative for change as 94 per cent of retailers, up from 81 per cent last year, have indicated that they have or plan to implement a single unified commerce platform within the next three years, says BRP's '20th Annual POS/Customer Engagement Survey.' One of the key drivers of this change is the pervasiveness of ease-of use mobile devices, which offer tremendous opportunities for retailers. Retailers also understand they need to offer a seamless experience because today's customer journey crisscrosses channels. More than half of consumers say they are more likely to shop at a retailer that allows them to have a shared cart across channels. Security is also a key driver. BRP says today's retail environment requires security beyond retailers' current focus on payments and networks.


Report Addresses Gap In Low-carbon Building Skills

The Canada Green Building Council (CaGBC) has provided an action plan to close the low carbon building skills gap in the Ontario construction industry. With buildings accounting for 30 per cent of all greenhouse gas emissions, addressing the current gap in low carbon building skills is critically important if Canada is to reduce its emissions by 30 per cent below 2005 levels by 2030. In Ontario, the most populous province, the impact of the skills gap is estimated at $24.3 billion of gross domestic product (GDP) in foregone company revenues, with an additional $3.7 billion lost in foregone taxation. Its report, 'Trading Up: Equipping Ontario Trades with the Skills of the Future,' puts forward recommendations for new types of training, incentives, and construction processes that will help the trades workforce support the construction and mass retrofit of buildings that lower greenhouse gas emissions. Specifically, tradespeople need to be trained in areas such as how to build efficient building envelopes, install advanced mechanical systems, and maintain energy efficient furnaces, boilers, water heaters, solar panels and geoexchange systems. Creating more efficient building envelopes is critical to reducing greenhouse gases from the built environment, it says.


Boise Cascade To Sell Plywood Operations

Boise Cascade Company will sell its North Carolina-based plywood operations to an affiliate of Southern Veneer Products. Founded in 1998, Southern Veneer, located in Georgia, is a privately-held manufacturer of high-quality plywood, veneer, and wood by-products. Boise Cascade says the sale provides the best long-term option to continue to serve the furniture market and sustain employment at the mill into the future. Southern Veneer says the addition of the facility is a continuation of its plan to expand its geographic presence and build a diversified portfolio.


Ingersoll Rand Revenues Rise

Ingersoll Rand revenues were $3.9 billion, up eight per cent for the fourth quarter of 2018 compared to the same quarter in 2017. Operating income for the quarter was $447 million, up 16 per cent to operating income of $387 million. Operating margin was 11.5 per cent compared to 10.7 per cent. The climate segment revenues were up nine per cent with margins of 12.9 per cent. Industrial segment revenues were up four per cent, with margins of 12.9 per cent.


January 30, 2019

Consumers Support Companies With Purpose

Fifty-five per cent of Canadian consumers prefer to buy goods and services from companies that stand for a shared purpose that reflects their personal values and beliefs and are ditching those that don't, says research from Accenture. Companies that stand for something bigger than what they sell, communicate their purpose, and demonstrate commitment are more likely to attract consumers and influence purchasing decisions which improves competitiveness. "Purpose is more than companies simply responding to issues of the day. It's about having a genuine and meaningful commitment to important principles that consumers care about – such as health and wellbeing, natural ingredients, environmental sustainability, and fair treatment of employees – which inform every business decision," says Kelly Askew, a managing director at Accenture Strategy. "Many companies have neglected to convey purpose due to complacency or the fear of polarizing people which has allowed smaller players to rise." The research shows just over half of Canadian consumers want companies to take a stand on the social, cultural, environmental, and political issues close to their hearts. Moreover, 57 per cent of consumers say their purchasing consideration is driven by a company's ethical values and authenticity.


Retailers Must Prepare For VR

Virtual reality (VR) is forecast to generate $1.8 billion for retail and marketing in 2022 but, to reach that potential, retailers must increase consumer awareness of the technology's benefits to shopping, says the 'Virtual Reality in Retail: 2019 and Beyond' report by Pymnts. This is because some may still view the technology as more of a novelty than a sales opportunity. VR can address three key needs in retail - consumer engagement, accessibility, and a better way to share product information. It also has the potential to be much more personalized than artificial reality (AR) as it offers an experience that's completely immersive instead of projecting an altered image onto a person's surroundings. In the future, the ideal VR store will marry the speed and convenience of digital shopping with the tactile sensation of shopping in-store. There are certain areas in the retail industry where VR can be very beneficial, says Pymnts. For example, VR will be integral for industries where consumers often research items before they get to the store. With bricks-and-mortar stores becoming more like showrooms as eCommerce grows, offering a setting where customers can interact with this kind of technology could provide a new way for retailers to engage with consumers. With eCommerce, VR has the potential to take AR to the next level, effectively turning a person’s own home into a virtual store. Advances in VR may soon make it possible for people to experience 'hyper realities' ‒ an experience where users who touch a virtual object would feel as though they had touched a real one. Estimates show that the emergence of AR and VR will completely change the way that consumers shop by 2050. With that in mind, it's likely that consumers will want to move beyond simple mobile apps, especially as VR headsets become more affordable and eCommerce becomes the preferred way to shop.


Housewares Executives Prepared For Challenges

Coming off another successful year, many housewares executives say the industry is in a good position to weather whatever challenges come its way in 2019. While the possibility for substantial new tariffs on goods from China continues to loom large, many executives plan to continue to innovate, develop direct relationships with consumers, and invest in supply chain management to benefit their companies in 2019 and beyond, says the International Housewares Association (IHA). Global housewares spending rose to $364.2 billion, an increase of 2.5 per cent, in 2017. The IHA says it seems 2018 will end up another solid year for housewares sales. However, the many executives who source goods from China are closely watching the status of U.S.-China trade talks and weighing the possibility of additional tariffs. If there are additional tariffs, many executives say they have contingency plans in place. Some have already started to launch pre-emptive efforts where they’re able, including pushing factories for lower costs, changing materials, moving production to other countries, or temporarily de-emphasizing product categories originating from China.


More Brands To Sell On Amazon

While 54 per cent of global brands sell on Amazon today, nearly three-quarters (72 per cent) are forecast to be selling on the platform within the next five years, says a report from Feedvisor, a big data company. Amazon dominates brand eCommerce strategies; for 44 per cent of brands selling on Amazon, more than half of their total eCommerce sales come from the platform. One-third of the brands (32 per cent) selling on Amazon say it accounts for up to three-quarters of their overall eCommerce sales. It is evident that for the remaining brands, a significant opportunity exists to increase their share and capitalize on the platform’s profit potential. The report says new customer acquisition is Amazon’s strongest selling point. A significant majority of brands both selling on Amazon (97 per cent) and not currently selling on Amazon (84 per cent) agree the most compelling benefit to selling on the platform is acquiring new customers.


HDI Acquires Far West Plywood

Hardwoods Distribution Inc. (HDI) has, through its subsidiary Hardwoods Specialty Products US LP, purchased substantially all of the assets and assumed certain liabilities of Far West Plywood. Far West is a single site wholesale distributor located in Northridge, CA, that distributes architectural building products to customers that fabricate end-products to commercial, industrial, retail, residential, and institutional construction markets. Far West will operate under the Hardwoods Specialty Products brand name going forward. HDI says the acquisition represents a strategic fit of complementary product lines with minimal customer overlap.


3M Sales Slip

3M had sales of $7.9 billion in the fourth quarter of 2018, down 0.6 per cent compared to sales in the fourth quarter of 2017. Operating income for the quarter was $1.8 billion and operating margins were 22.4 per cent. Total sales grew 0.3 per cent in the safety and graphics segment and 0.1 per cent in the consumer segment. In the consumer segment, sales grew in home improvement and office supplies and declined in home care and consumer health care. Sales declined 0.3 per cent in the industrial segment and 4.5 per cent in electronics and energy. Sales grew 3.3 per cent in the U.S. and declined 2.8 per cent in Latin America/Canada.


January 29, 2019

China To Surpass U.S. In Total Retail Sales

China's retail sales this year are forecast to surpass that of the U.S. by more than $100 billion, says eMarketer in its latest worldwide retail and eCommerce forecast. This year, China's total retail sales will grow 7.5 per cent to reach $5.636 trillion. For comparison, U.S. retail sales will grow 3.3 per cent to reach $5.529 trillion. Growth rates are slowing for both countries, but China's growth rate will exceed that of the U.S. through 2022. "In recent years, consumers in China have experienced rising incomes, catapulting millions into the new middle class," says Monica Peart, senior forecasting director at eMarketer. "The result has been marked rise in purchasing power and average spending per person." eCommerce is also a major driver of China's retail economy, with sales growing more than 30 per cent in 2019 to reach $1.989 trillion. That means 35.3 per cent of China's retail sales occur online, by far the highest rate in the world. The U.S. lags far behind, with eCommerce on track to represent 10.9 per cent of its retail sales. China surpassed the U.S. in eCommerce sales in 2013.


Armstrong To Acquire ACGI

Armstrong World Industries, Inc. (AWI) plans to acquire the business and assets of Architectural Components Group, Inc. (ACGI), a Missouri-based manufacturer of wood ceilings and walls. ACGI capabilities and product solutions will complement and enhance AWI's existing wood ceiling and wall solutions, and further strengthen AWI's position in a category that is growing at a double-pace.


ICRI Launches Renewed Branding

The International Concrete Repair Institute (ICRI), an association of contractors, engineers, consultants, and manufacturers that work together to improve the understanding of and training within the concrete repair industry, has updated its branding to accentuate its membership. The organization's past branding had been in place since it was renamed from the International Association of Concrete Repair Specialists (IACRS) almost 30 years ago. The rebranding includes a new logo that reflects the organization's heritage and includes a tagline ‒ restore, repurpose, renew ‒ that emphasizes a focus on innovation and sustainability. The brand intends to evoke a modern message while projecting leadership, strength, professionalism, and innovation. The new ICRI branding also stresses the importance of displaying that it is forward-thinking, and inclusive to a wider, more diverse demographic, while keeping the international/global theme top of mind.


2018 Household Battery Recycling Rose

More than 2.7 million kilograms of household batteries were recycled in Canada in 2018, says Call2Recycle Canada, Inc., a national consumer battery collection and recycling program. This is an increase of three per cent over 2017 and a record for the organization. "Thanks to provincial regulations and partnerships with our collection network, including retailers and depots, Canadians are becoming increasingly aware of the importance of recycling batteries, resulting in record-high collections in 2018," says Joe Zenobio, president of Call2Recycle Canada, Inc. "We are committed to further investing in consumer accessibility, education, and awareness efforts across Canada to ensure we are growing the number of batteries diverted from Canadian landfills each year." Single use battery collections were higher than rechargeable collections. This is because many rechargeable batteries are now embedded in products where the device is not designed for battery removal. Collections of single use batteries increased by 5.8 per cent from 2017 for a total of 2.1 million kilograms.


Personalized, Specialty Products 2019 Houseware Trends

American consumers are searching for ways to customize their homes with housewares products that let them create personalized items, décor, and dining experiences. Many are interested in products that help them express their own individuality such as specialty craft beverages, smart home appliances that can be customized to their personal needs, and specialty cookware that allows them to re-create restaurant-quality meals or ethnic foods and flavours, says the International Housewares Association (IHA). Consumers are increasingly searching for personalization of products, services, and experiences. What's more, people are also increasingly projecting themselves as a brand and curating their own identity via social media. The creation and possession of highly individualized products and experiences is becoming a new status symbol and gives consumers the feeling of living uniquely. Products that represent these trends will be on display at the '2019 International Home + Housewares Show' to be held March 2 to 5 in Chicago, IL. For information, visit IHS Show


Whirlpool Has Strong Earnings

Whirlpool Corporation net earnings of $170 million for the fourth quarter of its 2018 fiscal year, an increase compared to a net loss of $268 million in the fourth quarter of 2017. Net sales for the quarter were $5.7 billion, flat compared to the same prior-year period. Excluding the impact of currency, sales increased 2.5 per cent. EBIT was $307 million, or 5.4 per cent of sales, compared to $249 million, or 4.4 per cent of sales in the year-ago period. The North America region delivered fourth-quarter revenue growth of approximately five per cent and strong earnings before interest and taxes (EBIT) margin expansion, despite soft industry demand and continued cost inflation.


January 28, 2019

Building Materials Leads Wholesale Sales Decline

Wholesale sales fell one per cent in November to $63 billion, more than offsetting the 0.7 per cent increase in October, says Statistics Canada. Sales were down in five of seven subsectors, representing about 82 per cent of total wholesale sales. The building material and supplies and machinery, equipment, and supplies subsectors contributed the most to the decline, while the motor vehicle and parts subsector posted the largest gain. In volume terms, wholesale sales decreased 1.2 per cent. Sales in the building material and supplies subsector declined for the second consecutive month, down 1.9 per cent to $9.1 billion in November. Decreases were recorded in all three industries, with the lumber, millwork, hardware, and other building supplies industry contributing the most to the decline. Wholesale sales were down in five provinces, accounting for about 81 per cent of total wholesale sales in Canada. Ontario and British Columbia contributed the most to the decline. Wholesale inventories increased for the third consecutive month, up 0.7 per cent to $88.9 billion.


U.S. Construction Starts Decline 10 Per Cent

New construction starts in December fell 10 per cent to a seasonally adjusted annual rate of $708.9 billion, continuing to retreat after November’s slide, says Dodge Data & Analytics. The December downturn reflected diminished activity for each of the three main construction sectors. Residential building pulled back eight per cent, due to reduced activity for both single family and multi-family housing. Non-residential building dropped 14 per cent, as its commercial building segment lost momentum following its heightened November amount. Non-building construction decreased nine per cent. For 2018 as a whole, total construction starts increased a slight 0.3 per cent to $789 billion. This came after seven per cent gains in both 2016 and 2017, as well as 11 per cent to 14 per cent gains from 2012 through 2015. Residential building in December was $300.6 billion with multi-family housing retreating 15 per cent. Single family housing in December dropped five per cent, settling back from the extended plateau that was present for much of 2018. The 2018 amount for residential building was $323.5 billion, up five per cent.


J.D. Irving To Hire 10,000

J.D. Irving, Limited, parent company of Kent Building Supplies, plans to hire 7,500 full time and 2,500 students over the next three years. Eighty-nine per cent of the jobs are in Atlantic Canada, where Kent Building Supplies is located. Across the organization, the company says the areas with the highest number of job opportunities include operations; shipping, supply, and logistics; retail sales; and finance. The three-year forecast is a result of anticipated retirements, business growth, and normal workforce turnover.


Lowe's Official NFL Sponsor

Lowe's Companies, Inc. has signed an exclusive, multi-year sponsorship with the National Football League as it official home improvement retail sponsor. The sponsorship grants Lowe's the ability to market on a national and local level throughout the year, including at key events such as the Super Bowl, NFL Draft, NFL Combine, NFL Kickoff, and in support of the NFL's Salute to Service. Lowe’s will be able to provide NFL experiences for customers and associates both during the regular season and off-season and will become the presenting sponsor of Super Bowl Experience beginning at Super Bowl LIV in 2020 in Miami, FL.


Renoworks Launches 3D Visualization Platform

Renoworks Software Inc. has launched FastTrack, an all-in-one platform for the home construction and remodeling industry. Requiring only an address, FastTrack leverages Renoworks' home visualization software and Geomni's aerial imagery and measurement technology to provide true-to-life visualization, interactive 3D models, and measurements to users without the need to physically take photographs or measurements of a home. Initially, it will launch specifically for roofing manufacturers, with active plans to include additional industry categories (for example, siding, doors, windows) in the first half of 2019.


eBay Canada Launches Small Business Exporting Initiative

eBay Canada, together with Halifax, NS, has launched ‘Retail Revival,’ a program designed to help small- and medium-sized retailers in Nova Scotia harness the power of eCommerce and global trade. It consists of free 12-month training, support, and educational program that leverages eBay's global marketplace to reach customers around the world. The program will include a dedicated customer service support team, digital tools, and subscriptions, promotional marketing from eBay, as well as additional education and resources from participating partners focused on small business and exporting. eBay's platform connects retailers to 177 million active buyers in 190 markets across the world. In Canada, 99 per cent of small retailers on eBay export to an average of 18 markets, compared to 12 per cent of traditional small businesses that engage in global trade.


Grainger Sales Rise

Grainger had net sales of $2,763 million in the fourth quarter of 2018, a five per cent increase over net sales in the fourth quarter of 2017. Gross profit for the quarter was $1,066 million, an increase of four per cent year-over-year. Gross profit was 38.6 per cent of earnings, a decrease of 20 basis points compared to last year. Net earnings were $209 million, an increase of 38 per cent. The company says key accomplishments included U.S. segment volume growth of eight per cent, a profitable fourth quarter for the Canadian business, and double-digit revenue growth for the single channel businesses.


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