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News

December 2, 2019

‘Showrooming’ Major Problem

‘Showrooming’ – when shoppers visit local businesses to try out or learn about a product, but then buy it from a big box store or online competitor – is a major problem for independent merchants heading into the busy holiday season, says the Canadian Federation of Independent Business (CFIB). In fact, 60 per cent of independent retailers say they have experienced showrooming, with a third of those saying it's having a significant impact on their business. "When customers go into independent stores to ask questions or try on merchandise and then take a picture or write down a model number so they can buy the item online, they might not be aware that they're not just taking away a sale, they're taking money away from their neighbourhoods. These are the shops that support local kids' hockey teams or donate to the community foodbank every Christmas," says Dan Kelly, CFIB's president. "They care about their customers and want to help and share their expertise, but their rent, their property taxes, and their employees need to be paid. Ultimately, when consumers take up the time of local retailers, but spend their money elsewhere, it's our communities that suffer." Shoppers aged 18 to 34 were more likely than older consumers to showroom shop, with three out of four admitting to having done it


Retail Sales Stumble Along

Canadian retail sales growth just keeps stumbling along slowly, says Ed Strapagiel, a retail consultant. Total retail sales gained just 1.5 per cent year-over-year on a not seasonally adjusted basis in the third quarter, a smidgen above the 1.4 per cent second quarter gain, but a drop from the 1.8 per cent increase in the first quarter of the year. After nine months of 2019, Canadian retail sales are up only 1.6 per cent compared to a year ago. That doesn't even cover price inflation and population growth. The underlying 12-month trend continues to dwindle and could end the year at an increase of about 1.5 per cent, which would make 2019 the slowest growth year since the Great Recession of 2009. Building material and garden equipment and supplies merchants were up 5.4 per cent in the quarter, which is a significant recovery from the 0.9 per cent gain for the first half of the year. Canadian eCommerce sales were up 31.4 per cent year-over-year for the three months ending September 2019. This was much higher than for location based retail which gained just 1.5 per cent.


Strong Growth Forecast For Smart Fridge Market

The global smart refrigerator market was valued at US$322.41 million in 2018 and is expected to reach $1,008.91 million by 2025 with a compound annual growth rate of 17.7 per cent over the forecast period, says a report from Brandessence Market Research. Smart refrigerators detect the type of items stored within and, using barcodes and RFID systems, keep track of details like expiration dates for food. They can connect with smartphones and provide information and even let owners know if the door was left open. Samsung last year launched a smart fridge that can recognize voices and provide personalized information. Increasing urbanization, disposable income, and rising adoption of smart devices is driving the market. As well, increasing technological advancements like wireless connectivity through smart phones and other smart devices is expected to positively impact the growth of the global smart refrigerator market. However, high cost is the hindering factor of the smart refrigerator market.


Texting Could Provide Competitive Advantage

Sixty-nine per cent of consumers across all age groups would like to be able to contact a business via text and 54 per cent are frustrated when they are unable to do so, says a report by EZ Texting, a provider of SMS marketing software for business. Overwhelmingly, businesses are unaware of consumers' communication preferences, with 54 per cent of consumers wanting to receive text promotions, but only 11 per cent of businesses delivering them. This means 89 per cent of businesses miss the opportunity to connect with consumers the way they want to be communicated with. Similarly, 83 per cent of consumers would like to receive appointment reminders via text, but less than 20 per cent of businesses utilize text to communicate. Additionally, despite the fact that consumers are 4.5 times more likely to respond to a text message than an eMail, businesses are still three times more likely to communicate with customers via eMail. This means that communicating with consumers via their preferred method – texting – can provide businesses with a competitive advantage. Those businesses that do use texting are seeing this already with 86 per cent reporting that texting offers higher engagement than eMail.


November 29, 2019

Physical Stores Reign Supreme For Holiday Shopping

Two-thirds of Canadian consumers plan to visit physical stores for their holiday shopping this year, 57 per cent plan to seek out online retailers, and over 30 per cent will shop both online and in-store, says a survey from JLL, a professional services firm. Twenty per cent of shoppers will pick up online orders at physical stores. Mobile continues to gain momentum as a shopping and research channel with almost 90 per cent of shoppers using their device during the shopping process. Yet, the survey shows that more than one-third of shoppers will get gift ideas by browsing in-store while 21 per cent will browse online only. The consensus among Canadians is that saving money is the most important shopping factor, followed by avoiding the hassle and crowds. On average, Canadians plan to spend $425 on gifts, while early shoppers will attribute a higher budget of $500 for their holiday spending. Shoppers will also shop at thrift and consignment stores and donate to charities this season.


Regal ideas Receives Industry Awards From NADRA

Regal ideas Inc., in partnership with Dr Decks and Neighborhood Fence and Decks, has received a number of awards at the ‘10th Annual North American Deck and Railing Association (NADRA) National Deck Competition.’ Regal ideas received first place for its Limitless Creations in partnership with Dr Decks; first place for its Alternative Deck in partnership with Dr Decks; second place for a manufacturer product in partnership with Dr Decks; third place for Illumination in partnership with Dr Decks; and third place for its Closed Porch in partnership with Neighborhood Fence and Decks. Andrew Pantelides, vice-president of marketing and business development for Regal ideas, was also recognized by NADRA for his commitments and involvement to growing the association. This year marked the 10th anniversary of the competition. It is open to members in Canada and the U.S.


Robust Growth Forecast For Modular And Prefabricated Buildings

Growth opportunities in the global modular and prefabricated buildings market look robust over the next six years, says a report from Frost & Sullivan. A global uptick in construction activities and significant cost, labour, and time savings in offsite construction are key factors driving market revenues toward $215 billion by 2025, with a compound annual growth rate of 6.3 per cent from 2018 to 2025. With a constantly evolving regulatory landscape, adopting more environmentally sustainable and regulatory-compliant construction practices will boost prospects and revenues in the more mature market in North America. “Despite increased construction costs from an off-site construction, a net saving of up to seven per cent is possible because of shortened construction periods,” says Prathmesh Limaye, senior analyst, chemicals and materials in infrastructure and mobility. “In addition, prefabricated buildings are increasingly being perceived as sustainable solutions for construction projects due to a growing usage of materials such as timber and aluminum composites that are more energy efficient than concrete.”


Renoworks Reports Loss

Renoworks Software Inc., a visualizer for the home remodeling and new home construction industry, had quarterly revenues of $1.06 million for the three months ended September 30, compared to $1.08 in 2018. Net loss for the fiscal quarter was $219,941 versus a profit of $61,292 during the same quarter a year ago. Design service revenues increased by 26 per cent to $389,691, compared to $308,899 for the same period last year, and 39 per cent of the third quarter's revenue in 2019 is attributable to annual recurring customer contracts.


November 28, 2019

Recovery In BC Quicker Than Anticipated

The housing market in British Columbia is forecast to see a recovery that is “much quicker than anticipated,” says a ‘BC Resale Market Housing Outlook.’ It says increases of 13 per cent and four per cent in province-wide resale transactions can be expected in 2020 and 2021, respectively, reaching 85,475 units, following the seven per cent decline experienced in 2019. This will still be below the high of nearly 100,000 units recorded in 2017. The reversal in trends can be attributed to steep mortgage rate declines combined with continued population growth, especially in Metro Vancouver and the Fraser Valley. Housing starts will reach 44,000 units in 2019, but many of these units were pre-sold prior to the downturn when market conditions were stronger. As pre-sales were sluggish throughout 2019, developers will be extra cautious. Project construction will be delayed in 2020 onwards and condo starts will likely be curtailed in 2020.


SMEs Optimistic For Future Growth

From economic uncertainty to geopolitical issues, the business landscape in Canada can present unique challenges for small- and medium-sized enterprises (SMEs). However, SMEs are optimistic about their potential for future growth despite external pressures from fierce market competition, changing customer demands, and disruptive technologies, says the third annual ‘American Express SME Pulse Survey.’ Not surprisingly, most SMEs, both in Canada and globally, say that driving revenue growth is their primary long term-objective. An overwhelming majority of Canadian SMEs expect to generate at least 75 per cent of that revenue through domestic sales. Today’s SMEs are adapting to meet ever-changing customer expectations and understand there is tremendous opportunity in being transparent when providing products and services that are ethically and sustainably sourced. As well, more than half plan to increase their use of technology and tools to collect and better analyze customer data. The report says technology will remain an area of continued focus for the over-whelming majority of SMEs, who say that applying the latest technology will continue to remain a key business challenge they plan to work hardest to address over the next three years.


ARW Truck Rolling Out Across Western Canada

ARW Truck Equipment Ltd. is expanding its service area to cover all of Saskatchewan, as well as northeast and southeast British Columbia. The company will service the Fort St. John, BC, area through its established ARW Truck facility in Grande Prairie, AB. In Saskatchewan, ARW has partnered with Cervus Equipment to be the authorized parts and service provider through their locations in Saskatoon and Regina. ARW Truck has been the exclusive factory-authorized sales and service dealer in Alberta for HIAB cranes, Moffett forklifts, and Multilift hooklifts since 1997.


Single Family Sales Fall

Sales of new U.S. single-family homes unexpectedly fell in October following recent strong gains, but the overall housing market remains supported by lower mortgage rates, says the Commerce Department. New home sales dropped 0.7 per cent to a seasonally adjusted annual rate of 733,000 units last month, held down by decreases in activity in the south and northeast regions. Sales surged 31.6 per cent from a year ago.


Canfor Announces Further Curtailments

Canfor Corporation will be curtailing operations at all British Columbia sawmills at the end of December. All sawmills, with the exception of WynnWood, will be curtailed for two weeks from December 23 through January 3, with operations resuming on January 6. WynnWood will be curtailed for five days. The curtailments are due to the high cost of fibre and continued weak lumber markets, which are making the operating conditions in British Columbia uneconomic.


55 Countries At Show

March 1 to 4, 2020, Cologne will once again become the meeting point for the international hardware industry. For four days, around 2,800 suppliers from more than 55 countries will present tools, products from the industrial supply, fasteners and fixings, fittings, and home improvement segments at EISENWARENMESSE - International Hardware Fair Cologne. The product offering of the exhibitors is complemented by an extensive and diverse event program that offers themes and occasions for communication that move the industry. For information, visit EISENWARENMESSE


November 27, 2019

Wholesale Trade Offsets August Decline

Wholesale trade rose one per cent to $65.1 billion in September, almost entirely offsetting the 1.2 per cent decline in August, says Statistics Canada. Sales were up in five of seven subsectors, representing 82 per cent of total wholesale sales. In volume terms, wholesale sales increased 0.9 per cent and in the third quarter, sales increased 0.8 per cent, the 14th consecutive quarterly increase. Quarterly sales increased in four of seven subsectors. Wholesale sales rose in nine provinces in September, representing 98 per cent of the total wholesale sales. Sales in Quebec recorded the largest increase in September, up 2.5 per cent to $12.2 billion following a decline of 2.2 per cent in August. The only province where sales declined in September was Manitoba which saw a 1.4 per cent decrease, the second consecutive decline. Wholesale inventories decreased 0.7 per cent to $92.3 billion in September, the second consecutive monthly decline.


Morin Bros. Join TIMBER MART

TIMBER MART will welcome a new commercial dealer, Morin Bros. Building Supplies Inc., on January 1, 2020. Located in Ottawa, ON, Morin Bros. Building Supplies was opened in March of 1986 by the three brothers - Claude, Daniel, and Gérald Morin. It offers a wide product assortment that includes gypsum, light steel framing, insulation, acoustical and speciality ceilings, doors and frames, wall coatings, and hardware. The business serves a mix of contractor customers from residential to commercial/institutional builders. “A number of American-based businesses are buying into our Canadian market share and we felt we needed to join forces with TIMBER MART to be better recognized by manufacturers and truly compete,” says Gérald Morin, part-owner of Morin Bros. Building Supplies. “We look forward to benefitting from the group’s buying power and their many other services that will sustain our growth in Ontario and amidst fierce U.S. competition.”


Home Sales Rebound From Near-Record Low

Single-family home sales, with 1,296 detached, linked and semi-detached houses, and townhouses (excluding stacked townhouses) sold, were up 178 per cent from last October’s near-record low and even with the 10-year average, according to Altus Group, the official source for new home market intelligence for the Building Industry and Land Development Association (BILD). Sales of condominium apartments in low-, medium-, and high-rise buildings; stacked townhouses; and loft units, accounted for 3,424 new home sales, down three per cent from October 2018, but still 13 per cent above the 10-year average. “Pent-up demand is gradually being released, aided by favourable mortgage rates and some increase in the availability of single-family product that is affordable to a broader range of buyers,” says Patricia Arsenault, Altus Group’s executive vice-president, data solutions. With a number of new projects coming to market in October, remaining inventory increased from the previous month to 19,718 units. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings. “Based on population projections, it is clear that the demand for housing in the GTA is not going away,” says David Wilkes, BILD president and CEO.


More Canadians Shop Online For Christmas

Forty per cent of Canadians say they are more likely to shop online for holiday gifts this year compared to last year. Among those shopping online, time saving (62 per cent), better stock and selection (59 per cent), and the ability to shop in peace without interaction with others (35 per cent) were identified as the top three reasons for shopping online instead of in-store, says the ‘2019 FedEx Holiday Shopping Survey.’ "There is an undeniable trend in Canada and globally toward a dramatic uptick in consumers' use of eCommerce. Canadians shop online versus in-store more than ever before with data showing that Canadians are 56 per cent more likely to shop online compared to just five years ago," says Lisa Lisson, president of FedEx Express Canada. However, with a rise in online shopping people also worry about package theft. Of those surveyed, 68 per cent were concerned about the threat of package theft and 29 per cent have experienced package theft in the past. It also found that 22 per cent of Canadian Gen Zs avoid online shopping as they are scared they will inevitably buy too much. This is more than triple the number of Boomers (seven per cent) with that same concern.


Walmart Expands Chinese Footprint

Walmart plans to open 500 new stores in China over the next five to seven years. That would more than double its footprint in China, which is expected to become the world's biggest grocery market by 2023. The expansion comes as China's huge economy is cooling. The country is grappling with slumping growth and a prolonged trade war with the United States. China's GDP growth dropped last quarter to its lowest level in nearly three decades and Beijing has been rolling out stimulus measures to jump start the economy. Chinese consumers, however, are still spending and that's been good news for Walmart. Its China sales grew 6.3 per cent last quarter compared to the same period last year, much higher than its 2.5 per cent growth worldwide.


Regal ideas Launches Pro Deck Builder Network

Regal ideas has launched DeckStars, a pro deck builder network. The program offers tools, training, and networking opportunities to deck builders and contractors across North America. “DeckStars now completes our turn-key merchandising, marketing, and go-to-market programs that connect consumers to certified installers and authorized dealers,” says Joe Jacklin, director of marketing and contractor development, who was brought on to lead the program. DeckStars.com offers program features, training dates, and locations. The consumer sections of the site will launch in early 2020 and feature local certified ‘DeckStars’ in Canada and the U.S.


Beacon Sales Up 4.9 Per Cent

Beacon Roofing Supply, Inc. had net sales of $2.03 billion for the fourth quarter of 2019, an increase of 4.9 per cent over net sales of $1.94 billion in the fourth quarter of 2018. Consolidated residential roofing product sales increased 12.7 per cent, consolidated non-residential roofing product sales increased 2.4 per cent, and consolidated complementary product sales decreased 3.2 per cent compared to the prior-year period. Net income was $27.4 million, compared to $48.3 million in 2018 while adjusted net income was $82 million compared to $84.1 million in 2018. Gross profit was $493 million compared to $491 million a year ago.


November 26, 2019

Building Construction Investment Rises

Total investment in building construction rose one per cent from August to $15.6 billion in September, says Statistics Canada. Investment was up for both the residential - 1.2 per cent to $10.8 billion and non-residential +0.4 per cent to $4.9 billion - sectors. Total investment grew 2.4 per cent from the second to the third quarter. Investment in the residential sector was up in five provinces in September, led by Ontario and Quebec. Nationally, investment in the single (1.4 per cent) and multi-unit (1.1 per cent) dwellings increased compared with August. In the non-residential sector, the commercial component increased 0.7 per cent with Quebec posting the largest increase. Nationally, the industrial and institutional components were largely unchanged. Investment in residential new construction was largely unchanged year over year at $16.6 billion in the third quarter.


BC Expands Secondary Suite Options

The British Columbia government is changing its building code to expand options for secondary suites in multi-family buildings. The change will give local governments the choice to allow secondary suites in side-by-side multi-family buildings such as duplexes, townhouses, and row housing. The changes do not apply to apartment-style buildings where units are above or below each other. The goal is to create more affordable housing, while ensuring buildings in BC meet health, safety, and energy-efficiency standards. Size restrictions for secondary suites are also being removed from the provincial building code which applies throughout BC except for some federal lands and the city of Vancouver. Secondary suites represent about two-thirds of all rental housing in the province. It will be up to municipalities to decide whether to embrace the changes and amend zoning and development bylaws to allow the secondary suites.


U.S. Construction In Good Health Overall

For the third quarter of 2019, the ‘Marcum Commercial Construction Index’ finds the U.S. industry in overall good health as 2020 approaches. However, ‘The Good, The Bad, and The Ugly’ identifies some causes for concern. On the positive side, the index points to increased public construction spending, growing backlogs, falling input prices, the ongoing U.S. economic expansion, a strong construction labour market, and interest rate cuts as key factors sustaining the construction industry’s momentum. For example, there was a 1.5 per cent increase in public construction spending in September and a 6.6 per cent increase year-over-year. In contrast, the report identifies several factors related to construction employment putting downward pressures on the industry. These include the continued lack of qualified construction workers to fill a historic high level of available construction jobs, which in turn is driving labour costs and producer prices higher. For the ugly, it identifies debt levels – corporate, governmental, and consumer – have risen massively due to the low interest rate environment and continued economic confidence. But while businesses have begun to slow their spending, consumers haven’t, which will translate into slower job growth and higher consumer exposure


Climate, ROI On Minds Of Homeowners

Coping with climate extremes, getting creative, and achieving better, longer-lasting performance that adds more ROI for the home improvement dollar are all top of mind for Canadian and U.S. homeowners this year, says the Metal Roofing Alliance (MRA). In its 2020 trends forecast, MRA says strength of the home exterior to prepare for climate extremes will be on top of homeowners’ minds. Delicate detailing is out, while the use of heartier exterior features that offer an almost ‘fortress-like’ feel and are meant to show off a home’s rugged resiliency are more popular than ever. Net Zero homes will also be important to homeowners next year. These homes are those deemed so energy efficient, they produce as much renewable energy as they consume. For roofs, homeowners will use bold colours. Metal is the second most popular roofing choice and those that choose metal are going with colourful colours that call attention to roofs rather than camouflage them. Natural light via skylights will also remain a major selling point for homes. With their ability to capture up to 30 per cent more light than standard windows, skylights help brighten up spaces that feel dark or cramped.


Heavy-duty Cabinet System Provides Garage Storage

Proslat’s Fusion Pro Series Cabinets provide storage and organization for the garage. They are manufactured from 19-gauge steel and feature heavy-duty drawers with mat liners. The dual wall doors have soft-close, zero clearance hinges and have ergonomically designed anodized handles. They are available in a blue satin finish with matching doors and drawers. The base unit consists of an extra large tool chest which can be mounted on feet for stationary storage or fitted with casters and handles to make it mobile. The cabinet system also features a work surface – a traditional stationary workbench or a mobile workstation.


Slight Sales Increase For ROCKWOOL

ROCKWOOL had sales of €706 million for the third quarter of 2019, an increase of 0.9 per cent over sales in the third quarter of 2018. EBIT was €100 million for the quarter, an increase of 2.8 per cent year-over-year, and EBIT margin was 14.1 per cent, up 0.1 per cent. Annualized return on invested capital reached 21.8 per cent compared to 22.8 per cent last year, a decrease of one per cent due to higher invested capital. The company’s insulation and system segments performed well in the North American market.


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