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News

December 12, 2018

IoT Changes Buying Patterns

The rise of the Internet of Things (IoT) has caused a sea of change in the buying patterns of customers and, by extension, the market strategies of retailers. eCommerce and mCommerce have virtually transformed every store into a distribution centre and retailers need to adopt technologies such as radio frequency identification (RFID), videos, cameras, and data analytics to keep track of inventory in each outlet and, eventually, enhance customer experience management. "Retailers are looking to empower their mobile workforce to enrich customers' purchase experience, and this will augment investments in technologies such as handheld readers and smart point-of-sale (PoS) solutions," says Ram Ravi, industry analyst for industrials at Frost & Sullivan. "RFID sales will get a further boost from the intensifying focus on loss prevention, inventory management, and customer behavior analysis."


Housing Starts Increase

The trend in housing starts was 210,038 units in November 2018, compared to 206,460 units in October 2018, says the Canada Mortgage and Housing Corporation (CMHC). "The national trend in housing starts increased in November, following four consecutive months of decline," says Bob Dugan, CMHC's chief economist. "While single-detached starts continued to trend lower in November, this was more than offset by a gain in the trend of multi-unit starts following several months of weakness." The standalone monthly SAAR of housing starts for all areas in Canada was 215,941 units in November, up from 206,753 units in October. The SAAR of urban starts increased by 2.2 per cent in November to 202,054 units. Multiple urban starts increased by 3.9 per cent to 151,596 units in November while single-detached urban starts decreased by 2.3 per cent to 50,458 units.


Lowe’s Open Fulfillment Centre

Lowe’s has opened a new direct fulfillment centre (DFC) just outside of Nashville, TN. The 1.1 million square foot facility will allow it to serve more customers and serve them quickly. Once fully operational, it will be able to deliver product to customers in 75 per cent of the country in two days or less. That means the facility will have the capacity to ship up to 100,000 packages every day.


Home Buyer Demand Remains Below Averages

Home buyer demand remains below long-term historical averages in the Metro Vancouver, BC, housing market. The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales totalled 1,608 in the region in November 2018, a 42.5 per cent decrease from the 2,795 sales recorded in November 2017 and an 18.2 per cent decrease compared to October 2018 when 1,966 homes sold. Last month’s sales were 34.7 per cent below the 10-year November sales average and was the lowest sales for the month since 2008. There were 3,461 detached, attached, and apartment homes newly listed for sale on the Multiple Listing Service (MLS) in Metro Vancouver in November. This represents a 15.8 per cent decrease compared to the 4,109 homes listed in November 2017 and a 29 per cent decrease compared to October 2018 when 4,873 homes were listed. The total number of homes currently listed for sale on the MLS system in Metro Vancouver is 12,307, a 40.7 per cent increase compared to November 2017 (8,747) and a 5.2 per cent decrease compared to October 2018 (12,984).


Canadians Spending On More Than Gifts This Season

Canadians are spending on more than just gifts this holiday season, with 92 per cent spending on entertaining, 71 per cent spending on holiday decor, and 69 per cent buying clothes and accessories for holiday events, says Ebates.ca. These secondary holiday expenses can add an additional $528 on average to the $602 Canadians are already spending on holiday gifts this season for a total of $1,130. Canadians consumers seem to have adopted Black Friday and Cyber Monday as their kick-off to holiday shopping with 40 per cent saying November is the most popular month to start their holiday gift buying. While most Canadians have already begun or even finished their holiday shopping, 35 per cent say they get their holiday shopping done just in the nick of time with 48 per cent saying they complete their holiday shopping in December. The majority of Canadians intend to do at least some of their holiday shopping online this year (83 per cent), dedicating on average more than one-third of their holiday budget to online shopping. Fifty-six per cent of consumers make a point of shopping at retailers that have coupons, 36 per cent use mobile apps or mobile payments, and 33 per cent use store mobile apps to make purchases. The majority of Canadians (87 per cent) typically purchase gift cards as holiday gifts.


December 11, 2018

Small Businesses Face New Taxes

Small businesses are facing a not-so-happy new year and will have to tighten their belts to deal with a host of new taxes, including Canada Pension Plan increases, new passive investment rules, and the federal carbon tax in several provinces, says the Canadian Federation of Independent Business (CFIB). CPP premiums will rise for five years for all Canadians starting January 1, 2019, and seven years for those earning over $56,000. This will reduce an employee's take home pay by up to $1,050 per year when fully phased in and reduce the payroll budget of every employer. Federal carbon taxes will begin to hit taxpayers in Saskatchewan, Manitoba, Ontario, and New Brunswick starting in the spring of 2019, rising each year for an additional three years. On top of higher taxes in 2018 for many family businesses due to new income sprinkling rules, small businesses with passive investment income above $50,000 per year will pay significantly higher corporate taxes starting in 2019. "We're on the precipice of an affordability crisis for small businesses," says Dan Kelly, CFIB president. "In fact, 84 per cent of small businesses in the four affected provinces say they can't afford the federal carbon tax announced last month on top of the CPP increases starting on January 1, 2019. This is on top of the incoming passive investment rules that will make it harder for small business owners to save for retirement, economic uncertainty, or upgrades to their equipment."


Building Activity Drops

Canadian municipalities issued $8.1 billion worth of building permits in October, edging down 0.2 per cent from September. Statistics Canada says the decrease was mainly attributable to lower construction intentions for industrial and institutional buildings. The value of non-residential building permits fell seven per cent in October to $2.9 billion. Eight provinces posted declines, most notably British Columbia. In the industrial component, the value of building permits fell 29.9 per cent to $439 million, the third consecutive monthly decrease. Declines were reported in nine provinces, with Manitoba the lone province to post an increase. The value of institutional building permits was down 8.7 per cent in October to $733 million, after posting an increase of 16.7 per cent the previous month. Lower construction intentions for hospitals, post-secondary institutions, and other government buildings were responsible for much of the decrease. In the commercial component, $1.7 billion worth of building permits were issued in October, up 2.2 per cent from the previous month. The gain was mainly attributable to higher construction intentions for office and retail complexes. In the residential sector, the value of building permits increased 4.2 per cent from September to $5.2 billion. Both multi-family and single-family dwellings posted gains.


Momentum Index Moves Higher

The ‘Dodge Momentum Index’ moved 5.3 per cent higher in November to 159.7 (2000=100) from the revised October reading of 151.7. The index is a monthly measure of the first (or initial) report for non-residential building projects in planning in the U.S., which have been shown to lead construction spending for non-residential buildings by a full year. November’s gain was due to a 9.4 per cent rebound for the commercial component of the index. The recent setbacks in the overall index were the result of declines in planning for commercial buildings and while such planning did rebound in November, the level remains below what was reported in late spring and early summer. This is consistent with the view that the commercial building sector may now be nearing a peak. Meanwhile, the institutional component of the index eased back 0.6 per cent in November. Plans for institutional building projects have remained generally stable during 2018, reflecting the influence of public funding as it relates to such projects as schools and transportation terminals.


Softwood Prices Waffle

The best description to characterize the movement of North American construction framing dimension softwood lumber wholesaler prices is "waffling," says the Lumber Reporter from Madison. It shows the benchmark Western Spruce-Pine-Fir KD 2x4 #2&Btr price landed exactly where it had been two weeks ago US$354 mfbm (thousand board feet), having lost one per cent (or $4) from the previous week's US$358. WSPF 2x6 exhibited the exact same price changes. Trading of lumber futures on the Chicago Mercantile Commission, meanwhile, went from being on-par with the cash market for the January 15 contract to a discount of approximately $10. Part of the reason for the drop in almost all lumber prices toward the end of 2018 is the wildfire in British Columbia in 2017. Those fires took out a significant amount of both immediate and longer-term timber supply from manufacturing facilities in that province. In this slowing time of year for building in North America, log buyers for China have been out actively sourcing wood in advance of spring break. This newer seasonal cycle, of large-volume log and lumber sales to Asia in the fourth quarter, tends to keep the bottom for annual Canadian and U.S. lumber prices higher than it was prior to 2011 when this new trend started emerging. It says lumber prices should start settling back into normal territory for the first quarter of 2019.


PaymentEvolution Launches Small Business Payroll Platform

PaymentEvolution, a payroll, payments, and benefits management solution for small- and mid-sized businesses, has launched the 'Small Business Payroll Solution' with Central 1 Credit Union. Incorporating the payroll platform from PaymentEvolution, clients of Central 1 can now make integrated payroll available to their business members and customers. Currently, banks connect to external payroll service providers, but don't have an integrated view of all their financial transactions built in, which results in many time-consuming side effects. This platform simplifies the entire payroll system by cutting payroll processing times, integrating the payroll with the company's credit union, calculating files and automatically paying taxes, and creating and clearing payments quickly.


Dion Joins Derby Building

Claude Dion is national account manager ‒ retail ‒ Canada at Derby Building Products Inc., manufacturer of the Novik and Tando brands of exterior cladding, announces. In this role, he will manage and lead all home improvement retail accounts in Canada. Most recently, he was a consultant and project manager for Meunier Industrial Tools, responsible for setting up a new store which opened in October of 2017. He also previously served as eastern Canada sales manager for Norske Tools, tool and hardware buyer for Reno Depot, and as merchandising director and national account manager for Innovak Group, Inc.


December 10, 2018

Montreal Home Sales Increase Six Per Cent

A total of 3,630 residential sales were concluded in the Montreal, QC, census metropolitan area (CMA) in November, a six per cent increase compared to the same month last year, says the Greater Montreal Real Estate Board (GMREB). It also represents a new sales record for a month of November and the 45th consecutive increase in transactions. Five of the six main areas of the Montreal CMA registered an increase in sales with Saint-Jean-sur-Richelieu and the North Shore leading the way with respective increases of 23 per cent and 14 per cent. The South Shore (eight per cent), the Island of Montreal (three per cent), and Laval (one per cent) also registered an increase in the number of transactions. Vaudreuil-Soulanges was the only area to register a drop in sales as transactions fell by eight per cent compared to November of last year. The increase in sales in November was spread across all three property categories. Condominium sales increased 10 per cent year-over-year, while sales of plexes rose six per cent and single-family homes jumped by three per cent.


Atlas To Acquire South Central Building Systems

Atlas Engineered Products Ltd. plans to purchase South Central Building Systems Ltd., of Carman, MB. The acquisition is part of Atlas' strategy to increase revenues through consolidations to focus on efficiencies, productivity, economies-of-scale, and buying power optimization. This consolidation will also help the company increase output and grow its customer base.


Governments Invest In Supply Chains Supercluster

The Canada government will invest up to $230 million for the AI-Powered Supply Chains Supercluster (SCALE.AI) based in Quebec. The funding will be matched dollar-for-dollar by private sector partners and the government of Quebec will invest $60 million to support the initiative. SCALE.AI brings the retail, manufacturing, transportation, infrastructure, and information and communications technology sectors together to build intelligent supply chains through artificial intelligence and robotics. The government says this supercluster is helping Canadian small- and medium-sized businesses take advantage of new opportunities and positioning Canada as a global export leader.


Levy Appointed SME Advisor

Sheldon Levy, an experienced innovation leader and CEO of NEXT Canada, has been named special advisor on scaling up small and medium-sized enterprises (SME) by the federal ministry of small business and export promotion. His principal role will be to advise on improving the scale-up ecosystem to support the ministry’s mandate to help Canadian SMEs scale up. There are over one million businesses in Canada, 99 per cent of which are small and medium-sized. These businesses create millions of jobs, increase Canada's productivity and grow the economy. However, growth remains a challenge for mid-sized businesses particularly and only 12 per cent of Canadian SMEs are currently exporting. The government has set a goal of doubling the number of high-growth firms by 2025 and increasing Canadian overseas exports by 50 per cent by 2025.


Net Sales Increase For Toro

For the fourth quarter, Toro Company had net earnings of $39 million on a net sales increase of 10.4 per cent to $539.3 million. For the fourth quarter, adjusted net earnings were $34.2 million compared to adjusted net earnings of $33 million in the comparable 2017 period, an increase of 6.7 per cent.


Regal Ideas Offers Contractor Training

Regal Ideas’ contractor training program will be a hands-on training day focused on everything from in-home sales and lead generation to job site installation of its products. It takes place December 20 in Milton, ON. Contractors and retailers can RSVP by eMail at marketing@regalideas.com


December 7, 2018

Retail Sales Keep Weakening

A total retail sales increase of 2.9 per cent in the third quarter was the weakest third quarter gain since 2015 and far lower than the 7.3 per cent gain recorded for the same period last year, says Ed Strapagiel, a retail consultant. Also, after nine months, year-to-date retail sales growth is up just 3.4 per cent and is likely to end the year even lower if current trends persist. One factor is gasoline prices, which helped shore up retail sales growth for much of 2018. That’s starting to change, with pump prices heading downward. With gasoline station sales excluded, the 2018 retail sales growth picture looks softer still and retail sales growth would be only a thin 1.8 per cent. Home furnishings stores' third-quarter retail sales were down 0.8 per cent versus a year ago and furniture stores declined 0.7 per cent. eCommerce represented about 2.8 per cent of total Canadian retail sales for the 12 months ending September 2018, including both pure play operators as well as the online operations of bricks-and-mortar stores. eCommerce sales were up 13.9 per cent year-over-year for the three months ending September 2018, but this is much less than the 31.3 per cent gain recorded in the same period a year ago. eCommerce retail sales gains are still in double digits and are still much higher than for location based retail, but growth is slowing down.


Amazon, Lowe's, Walmart Brands To Watch

Amazon, Lowe's Companies, Inc., and Walmart have made the 2019 list of 'brands to watch' by Denise Lee Yohn, a brand leadership expert. She says Amazon will continue to dominate headlines with increasing competition for its voice-activated services and devices and its unfolding retail strategy. For Lowe's, its recent decision to close nearly 50 stores could be part of a successful turnaround, she says. With Marvin Ellison at the helm and a new CIO, the company is working on improving its customer experience through advanced technology and rationalizing technology "so there's reason to be cautiously optimistic." Walmart continues to fight aggressively against Amazon and other competitors. It has been working on reinventing itself through acquisitions that shore up its specialty business expertise and strengthening its digital capabilities, as demonstrated by its 43 per cent jump in third quarter eCommerce sales. But the company still has organizational and cultural issues to overcome as Amazon continues to dominate the digital world while expanding its bricks-and-mortar offerings.


Jolie Home Comes To Canada

Jolie Home products are now available in Canada. The boutique paint brand offers colour options with countless custom colour mixes to help homeowners achieve finishes on their furniture, walls, cabinets, floors, and accessories. Jolie Paint is water-based, non-toxic, and quick-drying. The company also offers companion products and tools. As well, it offers customers the 'Everyday Guide' to aid them in identifying the style they want to achieve and find colours that are most compatible with their spaces.


Wallace Has New Role

Tammy Wallace is merchandise manager of housewares and home décor at Home Hardware Stores Limited. Previously, she was inventory analyst. She has close to 17 years of merchandise experience. She succeeds Jane Wall, who is retiring after 41 years at Home Hardware.


Dollarama Sales Rise

Dollarama Inc. had sales of $864.3 million for the third quarter of 2018, an increase of 6.6 per cent over sales in the third quarter of 2017. Comparable store sales increased 3.1 per cent year-over-year. Gross margin was 38.9 per cent of sales for the quarter, compared to 40.1 per cent of sales in the year-ago period. EBITDA was $214.6 million or 24.8 per cent of sales, up 3.5 per cent compared to the period last year. Net earnings increased to $133.5 million in the third quarter compared to $130.1 million in the same period a year ago.


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