March 18, 2020
Canada Teeters On Brink Of Recession
With Canadian economic growth already on precarious footing, the added shock of COVID-19, the rail blockades, and a collapse in oil prices is putting the country on the brink of recession, says the Conference Board of Canada in its ‘Canadian Outlook Executive Summary – Spring 2020.’ As the economy is hit by the slew of additional shocks, the Conference Board expects business investment and exports to post substantial declines and consumer spending to ease. As a result, economic growth will contract by a projected 2.7 per cent in the second quarter. Overall, it expects growth of just 0.3 per cent in 2020 followed by a rebound to 2.5 per cent growth in 2021. “Despite the fact that the global economy is currently shaken at its core, we expect to see growth resume in the third quarter, meaning that the economy will avoid a technical recession,” says Matthew Stewart, director economic forecasting at The Conference Board of Canada. “However, due to the unpredictability of the coronavirus, there are still huge downside risks to the outlook.”
Manufacturing Sales Edge Down Again
Manufacturing sales were down 0.2 per cent to $56.1 billion in January, the fifth consecutive monthly decline, says Statistics Canada. Sales decreased in nine of 21 industries, led by lower sales in the transportation equipment and petroleum and coal products industries. The food industry posted the largest gain. In volumes terms, manufacturing sales decreased 0.4 per cent. Sales were down in six provinces, led by Ontario and British Columbia. Quebec reported the largest monthly increase. Inventory levels for the month increased 0.4 per cent to $87.5 billion, following a 0.6 per cent decline in December. Inventories were up in 12 of 21 industries, led by the machinery (+5.1 per cent) and transportation equipment (+1.5 per cent) industries. These increases were partly offset by declines in the primary metal (-2.6 per cent) and petroleum and coal products (-3.2 per cent) industries. The inventory-to-sales ratio increased from 1.55 in December to 1.56 in January. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
CEOs Want To Slow Down Coronavirus
Jeff Kinnaird, president, Home Depot Canada, is among a group of CEOs from Canada’s largest organizations calling for the singular objective of slowing the pace of transmission of the coronavirus. In an open letter, they say they stand united in a shared battle against COVID-19. Since international experience demonstrates that social distancing is the only effective method and is in the best interests of their employees, their families, and their communities, they ask all employers to step up and do their part to protect the nation’s health and welfare. While this will have significant economic impact on businesses in the short term, it is critical to weathering this storm and will hasten the recovery, says the letter. Among the measures urged are stopping all non-essential travel, whether for personal or business reasons, and enabling employees to practice social distancing by facilitating work-from-home for all non-critical business functions. Signatories include Canada’s major financial institutions and its largest pension plans.
Watson Gloves Launches Recycled Gloves
Watson Gloves will release its WasteNot gloves into the market this spring. The gloves, made for gardening and landscaping, are made of recycled plastic bottles. More than one million plastic bottles are sold every minute and it takes up to 1,000 years for a plastic bottle to decompose. In an effort to become more environmentally-conscious, Watson Gloves reuses plastic bottles for material through WasteNot polyester yarn instead of creating virgin material. For one pair of seamless knit gloves, one 500mL plastic bottle is used, and for one pair of fabric printed gloves, two to three plastic bottles are used.
‘Truro Home & Outdoor Show’ Postponed
Due to current measures being taken to limit the spread of COVID-19, event promotion company Master Promotions has postponed its ‘Truro Home & Outdoor show.’ The show was scheduled to take place April 17 to 19 in Truro, NS. Once the Public Health Agency of Canada gives the go ahead to resume holding events, Master Promotions will reschedule the show.
Brampton Brick Has Fourth Quarter Loss
Brampton Brick Limited had a net loss of $11,006 for the fourth quarter of 2019, a decrease compared to net income of $991 in the fourth quarter of 2018. Revenues for the quarter were $32,919 compared to $34,244 for the same period in 2018, due primarily to a decrease in shipments in the landscape products business segment. This decrease were partially offset by higher revenues from the new concrete block plant acquired in February 2019. The company had an operating loss of $11,059 compared to an operating income of $2,136 last year. The masonry products segment revenues were $22,203, in line with $22,326 in the corresponding quarter of 2018. The landscape products segment revenues were $10,660 compared to $11,883.
March 17, 2020
February Has Strong Home Sales
National home sales were up 5.9 per cent on a month-over-month basis in February, making it one of the larger month-over-month gains of the past decade, says the Canadian Real Estate Association (CREA). With transactions up in about 60 per cent of all local markets in February, the big national increase was largely the result of a 15 per cent jump in activity in the Greater Toronto, ON, Area (GTA). Many other central and southern Ontario markets also posted sizeable sales gains between January and February. Actual (not seasonally adjusted) sales activity stood 26.9 per cent above February 2019, although sales were quite weak a year ago. February 2019 marked a decade-low for the month, so a good part of the big year-over-year gain reflects low levels of activity recorded at the time. February 2020 also benefited from an additional day due to the leap year. Transactions surpassed year-ago levels in about 80 per cent of all local markets, including all large urban markets. The number of newly listed homes jumped 7.3 per cent in February compared to January, more than erasing the declines of late last year. New supply gains were posted in a number of large markets, including Fraser Valley, BC; Calgary and Edmonton, AB; the GTA, Hamilton-Burlington, Kitchener-Waterloo, Windsor-Essex, and Ottawa, ON; and Montreal, QC.
Employment Legislation May Change Due To Coronavirus
The Ontario government will be introducing legislation to amend the Employment Standards Act, 2000 (ESA) in light of COVID-19 and employers need to understand the impact this will have on them, says Hicks Morley in an ‘FTR Now’ update. The proposed changes, if passed, would provide job protection for employees unable to work for a variety of reasons related to the COVID-19 outbreak. Employees will also not need to provide a medical note if they take this leave. Hicks Morley says employers should keep in mind that any policies dealing with employee absenteeism (including a sick leave policy) need to be sufficiently flexible to reflect the realities of the pandemic and should not be punitive in any way. In the absence of company paid sick benefit coverage or where benefits are exhausted, employees may be entitled to sickness benefits under the Employment Insurance Act (Act). The federal government says it will waive the mandatory one-week waiting period for Employment Insurance (EI) sickness benefits. In addition, employees may be eligible for a number of leave provisions that could apply in a pandemic situation. Employers must also be aware that they cannot threaten to discipline an employee exercising work refusal. Failure to comply may result in fines from the OHSA. Hicks Morley also warns employers to aware of data and cybersecurity risks with the rapid adoption of increased teleworking. The full update is available here
UFP Industries Acquires Quest
An affiliate of UFP Industries (formerly Universal Forest Products, Inc.) has acquired the operating assets of Quest Design & Fabrication and Quest Architectural Millwork, collectively known as Quest. Based in Texas, Quest specializes in designing, fabricating, and installing millwork and case goods for a variety of commercial uses, including builders’ sales centres, design studios, corporate offices, and healthcare facilities. Jon Deutser, president and CEO of Quest, will continue to run the company. “Quest is a great fit in our commercial construction business unit, which is a key component of our new UFP Construction segment,” says Matthew J. Missad, CEO of UFP. “Architectural millwork is part of our growth runway in commercial construction.”
Weiser Expands Line Of Microban Products
Weiser is expanding its partnership with Microban SilverShield technology. Weiser has been the exclusive residential lock partner of Microban, a manufacturer of built-in antimicrobial protection, for the past four years and was the first residential lock manufacturer to offer door hardware with Microban antimicrobial product protection. The product is currently available on select Weiser products and finishes to help inhibit the growth of bacteria on frequently touched door hardware surfaces in the home. The company is now working on expanding the technology into keyless entry and smart lock lines. It plans to release these products later this year.
Master Promotions Postpones Shows
Master Promotions, an event management company, has postponed two of its shows in response to measures being taken to protect public health against the spread of COVID-19. The ‘Fredericton Home Show’ and the ‘Spring Ideal Home Show’ have both been cancelled. The ‘Fredericton Home Show’ was scheduled to take place April 3 to 5 in Fredericton, NB, and the ‘Spring Ideal Home Show’ was to take place March 27 to 29 in Halifax, NS. The company will continue to monitor information from the Public Health Agency of Canada, provincial governments, and regional health authorities and reschedule once the ‘all-clear’ has been received.
National Hardware Show Postponed
Due to the outbreak of COVID-19, the National Hardware Show, which was originally scheduled to take place May 5 to 7 in Las Vegas, NV, has been rescheduled to September 1 to 3. It will be held at the Las Vegas Convention Center in Las Vegas. “We are working with our partners to find solutions to logistical and operational issues that may arise,” says Randy Field, group vice-president of Reed Exhibitions, the show management group. “We are here to help, but ask for their patience as we ensure all of our customers are taken care of.”
March 16, 2020
Retail Sales Growth In A Funk
Total retail sales growth in Canada is in a funk as it increased just 1.6 per cent for the year 2019 overall, says Ed Strapagiel, a retail consultant. Retail sales growth in 2019 was the lowest since 2009, when a decline of 2.9 per cent was recorded during the Great Recession. It is also apparent that all the major retail sectors contributed to the slow going in 2019. The underlying 12-month trend has been going downhill for most of the last two years. The shorter term three-month trend remains weak and no relief is in sight going into 2020. Retail sales were up just 1.4 per cent year-over-year in the fourth quarter of 2019, the weakest quarter of the year. eCommerce sales represented about 3.5 per cent of Canadian retailers’ sales for 2019. eCommerce sales were up 17.3 per cent year-over-year in the fourth quarter, much higher than location-based retail sales.
Home Hardware Cancels Spring Market
Home Hardware Stores Limited has cancelled its ‘2020 Spring Market,’ which was set to be held in St. Jacobs, ON, from April 5 to 7. “The health and safety of the Home Hardware community, our dealer-owners, team members, suppliers, business partners, and customers is, and will always be, our number one priority,” says Kevin Macnab, president and CEO, Home Hardware Stores Limited. “We understand that this is the first time in Home’s 56-year history that a Market has been cancelled. This event hosts over 7,500 attendees from across the country and we believe this precaution is necessary. This was a difficult decision, but the safety of our Home Hardware community and those in the Waterloo Region is paramount.”
Privacy Drives Global Fencing Market
Privacy and a fear of trespassing are two major reasons homeowners buy fencing, says a report by Transparency Market Research. It forecasts that the global fencing market will reach US$62.7 billion by 2027 at a compound annual growth rate of 3.6 per cent during the forecast period. Under type category, the metal fencing segment is expected to witness a massive traction during the forecast period. The dominance of the segment is the result of growing demand for metal fences due to their strength, lower maintenance, and long life. The residential sector is also expected to have substantial growth.
Nova Scotia Home Show Postponed
The Pictou County, NS, home show has been postponed due to the recommendation of the province’s chief medical officer of health, who has advised organizations to limit social gatherings of more than 150 people as a precaution to limit the spread of COVID-19. The event was to take place March 20 to 22. Show organizers say that once the all-clear has been received to resume holding events again, they will look at rescheduling the show.
Commodity Price Deflation Impacts Sales
Builders FirstSource, Inc. had net sales of $1.76 billion for the fourth quarter of 2019, a decrease of 2.9 per cent over net sales of $1.81 billion in the fourth quarter of 2018. The decrease was driven by the impact of deflation in commodity prices. Sales volume grew by an estimated 7.7 per cent with improvement across all three customer segments. Adjusted EBITDA was $109.3 million (6.2 per cent of sales) for the quarter, down 12.6 per cent compared to $125 million (6.9 per cent of sales) in the year-ago period. Net income was $41.4 million compared to $52 million and adjusted net income was $47.2 million compared to $53.1 million.
March 13, 2020
Points Programs Not Important To Brand Loyalty
While loyalty points programs have been a staple for many Canadian retailers, these programs do little to drive customer loyalty, says a report from KPMG in Canada. ‘Redefining customer loyalty: Beyond the points’ says as many as 60 per cent of Canadians say points programs and rewards are not important in keeping them steadfast to a brand. For the vast majority of consumers, loyalty means how likely they are to recommend a company or brand to friends and family (88 per cent), or that they want to – not need to – buy from a specific company (77 per cent). Traditional standards continue to drive brand loyalty. For example, Canadians rank product quality (74 per cent), product consistency (71 per cent), and value for money (60 per cent) as their top three brand loyalty considerations. In addition, a company's commitment to social responsibility is emerging as something that matters to consumers, with nearly 60 per cent of Canadians saying that it's important, very important, or extremely important to them that a company be committed to sustainability/environment.
Lowe's Canada Sets Emissions Target
Lowe's Canada has adopted a target to reduce its greenhouse gas (GHG) emissions to 40 per cent below its 2016 levels by 2030. Achieving this target will allow the organization to reduce its GHG emissions by 41,000 metric tons of CO2 equivalents, which can be compared to removing over 12,500 vehicles from circulation. To achieve its goal, Lowe's Canada is focusing first on the completion of a series of energy-efficiency initiatives that represent a total investment of over $24 million in its distribution centres and corporate stores across the country. During the coming weeks, Lowe's Canada will finish installing building management systems in several of its stores across the country, a project that began in 2018. By the end of 2020, 230 Lowe's, RONA, and Reno-Depot corporate stores will be equipped with an indoor and outdoor lighting automation system to optimize energy consumption, as well as automate and remotely control stores' heating and cooling so that energy is only used during business hours. The lighting systems in 162 corporate stores from the Lowe's Canada network will also be replaced by LED systems by the end of 2020. In 2022, it is estimated that these two initiatives will allow the organization to reduce its GHG emissions by approximately 8.6 per cent, relative to 2016.
Home Hardware Recognized As ‘Best Managed Company’
Home Hardware Stores Limited has been recognized for overall business performance and sustained growth with the ‘Canada’s Best Managed Companies’ designation. The ‘2020 Best Managed’ program award winners are among the best-in-class of Canadian owned and managed companies demonstrating investment in talent and technology, innovation in a competitive environment, and an increased focus on global competition. “We are honoured to be recognized for the second consecutive year with Platinum status as one of ‘Canada’s Best Managed Companies’,” says Kevin Macnab, president and CEO, Home Hardware Stores Limited. “At Home Hardware, we believe that strong talent and culture is a competitive advantage and we are proud to celebrate this designation with our teams and dealer-owners.” Winners of the award will be honoured at the annual ‘Canada’s Best Managed Companies’ gala in Toronto, ON, on April 1.
DEWALT Launches Two Chargers
DEWALT has launched a 12-Amp Fast Charger and 6-Amp Charger. These chargers are designed for use in tough jobsite conditions. The 12-Amp Fast Charger has the highest charge rate supporting the DEWALT 20V MAX and FLEXVOLT lithium ion battery systems, charging a DEWALT FLEXVOLT Battery to 80 per cent capacity in under 45 minutes (battery sold separately). It comes with Stage 1 and Stage 2 LED indicators which communicate to the user about the state of charge of their batteries. The 6-Amp Charger offers versatility for a wide variety of charging needs and charges a DEWALT 5.0Ah Battery to 80 per cent capacity in under 45 minutes (battery sold separately). Like the 12-Amp Fast Charger, the 6-Amp Charger also features the Stage 1 and Stage 2 LED indicators. It also features through-hole mounts, secure latching, double insulation and is compatible with batteries in the DEWALT 20V MAX, FLEXVOLT, and DEWALT 12V MAX systems.
Hicks Leads Canadian Tire Corporation
Greg Hicks is president and chief executive officer of Canadian Tire Corporation. He most recently served as president, Canadian Tire Retail. He succeeds Stephen Wetmore, who will retire.
March 12, 2020
BMR Gets Quebec Member
Ferme-Neuve, QC-based Ferronnerie Meilleur has joined BMR Group. Owners Normand and Jérémie Lachaîne, who have owned the store since 2001, joined the group because they wanted to work with a group that supports dealer-owners and understands how they do business. In addition to getting new exterior signage, the 7,500-square-foot store will begin renovations in the next few months to redesign the interior and achieve a more modern look.
Lowe’s Canada Wins At AQMAT Gala
Several Lowe’s Canada banner stores and employees in Quebec were recognized at the Quebec Hardware and Building Supply Association (AQMAT) eighth annual ‘Gala Reconnaissance’ held on March 7. Dominic Messier, store manager, L’Entrepôt RONA Granby, received the ‘on the rise’ award; Michèle Rivard, director of operations, RONA Quincaillerie du Plateau, Montreal, received the ‘best manager’ award; RONA Iberville, Saint-Jean-sur-Richelieu, received the ‘community’ award; and RONA Matériaux Pont-Masson, Alfred, Casselman, Mirabel, Rigaud, Roxboro, Salaberry-de-Valleyfield, and Sainte-Clotilde-de-Châteauguay, received the ‘outlook’ award. In addition, the Gala’s organizing committee honoured André Dion, former CEO of RONA, for his contribution to Quebec’s hardware industry. Serge Kingsley, store manager of L’Entrepôt RONA in Saint-Hyacinthe, Normand Beaumont, assistant manager of dealer-owned RONA Quincaillerie Gauvin, in L’Ancienne-Lorette, along with four other employees, were nominated in the loyalty category to highlight their long careers with the same organization in the Quebec hardware industry.
Bickert Launches Management Services For Small Business
Bickert Management Inc. (BMI) is a management agency and business services boutique based in Calgary, AB. The company has launched its Wellth Management concept for small business which focuses on the overall wellness of clients, on both a personal and professional level. BMI helps businesses and work environments with the goal to run with optimum efficiency and effectiveness. Leveraging virtual environments, economies of scale, pooled and shared resources, peer-to-peer accountability, and cloud technologies, BMI's services include aiding in human resources, day-to-day operations and administration, implementing technology development, honing marketing strategies, resource ROI analysis, and collaborative teamwork. The company was created to offer straightforward solutions to common problems. The Wellth Management program is designed to not only address the challenges of business owners but to help provide them with a well-balanced lifestyle.
INEO To Acquire Newman Loss Prevention
INEO Tech Corp., the developer of The Welcoming System for retailers, plans to acquire Newman Loss Prevention. Newman is an independent reseller of loss prevention products and services in Alberta and Saskatchewan. Based in Calgary, AB, Newman serves over 200 retail locations. INEO's acquisition of Newman includes acquiring ongoing contracts, customer lists, and inventory assets. Dan Newman, the principal of Newman, will join INEO as director of sales for the Prairie region. The transaction is expected to close within 30 days.
Roxburgh Named Director Of Innovation
Jason Roxburgh is director of innovation with Grabber Construction Products. Previously, he was a senior manager in product development and commercialization with USG.
Lignum Acquisition Drives CanWel Sales
CanWel Building Materials Group Ltd. had revenues of $293.4 million for the fourth quarter of 2019, an increase of 11.1 per cent over revenues of $264 million in the fourth quarter of 2018. Sales for the distribution segment increased by $32.8 million or 13 per cent year-over-year, largely due to the inclusion of the results from the Lignum acquisition in 2019, the 2018 acquisitions, and the company’s continuing focus on its product mix strategies and target customer base. The company’s sales by product group in the quarter were made up of 55 per cent construction materials, with the remaining balance of sales resulting from specialty and allied products of 37 per cent, and forestry and other of eight per cent. Gross margin dollars increased by 14.4 per cent to $44.2 million for the quarter compared to the year-ago period. Gross margin percentage increased to 15.1 per cent of revenues versus 14.6 per cent last year. Adjusted EBITDA was $18.4 million compared to $8.9 million in 2018. Net earnings increased to $3.4 million in 2019 compared to $370,000 in 2018.