HHIQ Q3 2024

H A RDL INE S.C A

C O N N E C T I N G

T H E

H O M E

I M P R O V E M E N T

I N D U S T R Y

THIRD QUARTER / 2024

HOME IMPROVEMENT QUARTERLY

Arman Mirza

Director, Pro Experience THE HOME DEPOT CANADA

F E AT U R E S T O R Y

HOME DEPOT SCALES UP FOR PROS The largest home improvement retailer in the world unveils its first Flatbed Distribution Centre in Canada to serve contractors

A L SO INSIDE

CANADA’S TOP 20 SURVEY OF THE Estimated retail sales, PRO SPECIALISTS store counts, market shares, and strategies from the top banners

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HOME IMPROVEMENT QUARTERLY

THIRD QUARTER / 2024 • VOLUME 14, NO. 3 330 Bay Street, Suite 1400, Toronto, ON M5H 2S8 • 416-489-3396 @Hardlinesnews • www.hardlines.ca

PRESIDENT Michael McLarney mike@hardlines.ca

VICE-PRESIDENT & PUBLISHER David Chestnut david@hardlines.ca

EDITOR Steve Payne steve@hardlines.ca

MARKETING & EVENTS MANAGER Michelle Porter michelle@hardlines.ca

ASSOCIATE EDITOR Geoff McLarney geoff@hardlines.ca

ART DIRECTOR Shawn Samson TwoCreative.ca

CONTRIBUTING EDITOR John Caulfield

ACCOUNTING accounting@hardlines.ca

ADMINISTRATIVE & SALES ASSISTANT Jillian MacLeod jillian@hardlines.ca

COVER PHOTOGRAPHY Larry Arnal arnalpix.com

SUBSCRIBER SERVICES ★ FREE TO HOME IMPROVEMENT DEALERS ★ To subscribe, renew your subscription, or change your address or contact information, please contact our Circulation Department at 866-764-0227; hhiq@mysubscription.ca.

Hardlines Home Improvement Quarterly is published four times a year by Hardlines Inc., 330 Bay Street, Suite 1400, Toronto, ON M5H 2S8. $25 per issue or $90 per year for Canada.

Subscriptions to the Continental United States: $105 per year and $35 per issue.

All other countries: $130 per year. (Air mail $60 per year additional.)

Canadian Publications Mail Agreement # 42175020 POSTMASTER: Send address changes to Hardlines Home Improvement Quarterly, 8799 Highway 89, Alliston, ON L9R 1V1.

All editorial contents copyrighted 2024 by Hardlines Inc. No content may be reproduced without prior permission of the publisher.

We have strength in numbers Our army of experienced sales and merchandising reps reach more stores nationally!

NUMBER ONE IN THE HOME IMPROVEMENT

INDUSTRY. ONLINE AND PRINT.

HHIQ is just one facet of the Hardlines Information Network.

Since 1995, we’ve been delivering the most up-to-date information directly to you online, in print, and in person.

Find out how you can get your message out with us. Contact: David Chestnut, Vice-President & Publisher

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877 844 5464

416-425-7992 • david@hardlines.ca

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2024-06-28 2:14 PM

CONTENTS

NEWSROUNDUP

PAGE 14

Peavey Industries to end its relationship with Ace in Canada

RONA has a new president/CEO —plus a new look for indies

Peavey CEO Doug Anderson talks about cautious growth

Canac’s growth continues with store opening east of Montreal Independents fared better post-Covid than big boxes: Hardlines report Timber Mart CEO Bernie Owens discusses the value of Air Miles for his dealers Upcoming Hardlines Conference to be held in the province of Quebec ABSDA Building Supply Expo “one of our best shows in decades” McMunn & Yates adds three stores in Manitoba Lee Valley Tools’ new Ottawaarea distribution centre is up and running Orgill steps up tech to serve its dealers, says CEO Boyden Moore

8

THIRD QUARTER / 2024

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EXCLUSIVE

CANADA’S TOP 20 HOME IMPROVEMENT RETAILERS A report on the activities of the leading banners during the past year THE LIST

of recent signings, 44 Description programs, and executive changes

THE BANNER MAP

famous flowchart showing 52 Hardlines’ the linkage between buying groups

THE DATA

rank the industry’s players by 66 We revenues, store counts, and market share

Hardlines Home Improvement Quarterly

www.hardlines.ca

2024-06-28 2:15 PM

V OL UME 14, NO. 3

THIRD QUARTER / 2024

DEPARTMENTS COVER STORY

SERVING CONTRACTORS AT SCALE look at Home Depot’s new 34 AFlatbed Distribution Centre.

PLUS interviews with Michael Rowe, Canadian division president, and Arman Mirza, director of pro experience

THE LEADERS

A CHAT WITH HOME HARDWARE’S KEVIN MACNAB retiring—but not 75 He’s before Kevin Macnab

makes the most of his firm’s 60th

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PRODUCT SPOTLIGHT

26 What’s new in paint and sundries

PUBLISHER’S MESSAGE

97 Why we’re going to Charlevoix

ENDCAP 98 P.E.I. Home Hardware

buys a furniture store

HUMAN RESOURCES

THE IMPORTANCE OF LISTENING TO EMPLOYEES a grocery giant is lifting 80 How morale. And how a pet supply

chain is attracting talent PRO CORNER

MARKETING

take the temperature 84 We of the GSD market and

is seriously vying to challenge 92 Who Canadian Tire’s Triangle Rewards?

WHAT’S NEW IN THE PRO DEALER MARKET

www.hardlines.ca

EDITOR’S MESSAGE

13 Covid hangover

contractor specialists

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Richard Darveau Get them all at the 28th Annual Hardlines Conference, October 22 & 23, 2024, at the beautiful Fairmont Le Manoir Richelieu.

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2024-04-12 PM 2024-06-28 2:21 2:19 PM

EDITOR’S ME S S AGE

STEVE PAYNE, EDITOR

OUR INDUSTRY’S COVID HANGOVER Retail sales dropped 3.5 percent in our industry last year, Hardlines calculates. How we did the math, what the implications are, and what the future holds.

A

s detailed in this issue, our industry actually contracted 3.5 percent in retail sales last year. That might not seem like much—given the negative numbers in annual reports from publicly-traded retailers. But in a year when inflation ran at 3.9 percent, as 2023’s Consumer Price Index tells us, that’s a hefty 7.4 percent drop in real spending by consumers.

All of these numbers were entirely predictable.

First, the Bank of Canada hiked its policy interest rate (its central rate at which it lends money to banks) from 4.25 percent in January of last year to 5.00 percent by mid-summer of 2023. That ground the real estate market to a halt—and nothing stimulates spending in our industry like people moving houses.

And two, most retailers had come off three hugely successful years with double-digit sales increases in 2020 (15.5 percent) and 2021 (11.3 percent). In 2022, the industry slowed down, but still posted an increase (4.2 percent). The lockdowns and lack of spending options in travel and entertainment were good for business in home improvement.

After the industry grew by a third during the pandemic, a soft landing was always

www.hardlines.ca

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going to happen. We aren’t officially in a recession—but it sure feels like one.

The good news is that a homebuilding boom is coming to Canada. We have no choice. Governments everywhere are trying to loosen construction permit red tape, stimulate the market, and provide funding.

Meanwhile, there are some people who will peruse this Top 20 issue and wonder where we get all our data from. It’s a huge task that our editorial team takes months to complete. We collect surveys from both independent and corporate dealers on business conditions. We take into account store openings, closings, and banner changes. We look at retail square footage. We compare our industry with StatCan data on the retail trade. We look for the fine print in annual reports from American firms where they break out Canadian sales (usually towards the back of the document).

All of this goes into a giant spreadsheet we affectionally call The Big Kahuna.

Order the Hardlines Retail Report (visit hardlines.ca) to get your own summary of its calculations.

“

Between 2020 and 2022, the industry grew by a third. This is a slowdown that was always going to happen.

”

steve@hardlines.ca

Hardlines Home Improvement Quarterly

THIRD QUARTER / 2024

13

2024-07-02 7:58 AM

NEWSROUNDUP OF THE HOME IMPROVEMENT INDUS TRY

Visit Hardlines.ca for breaking news in the Home Improvement Industry

PEAVEY INDUSTRIES TO END ITS RELATIONSHIP WITH ACE IN CANADA

R

ed Deer, Alta.-based Peavey Industries LP will end its relationship with Ace Hardware International on Dec. 31 of this year. Peavey has been the licensee of the Ace banner in Canada since 2020.

In a release, Peavey said that the decision “underscores the growth trajectory that Ace Canada has experienced, evolving from Peavey Industries LP’s acquisition of the Ace Canada master licence from Lowe’s in 2020. This period has been filled with shared aspirations for growth and a steadfast commitment to supporting local Canadian-owned retail.”

The original deal had some knocks against it from the very start. Peavey signed the deal to take over the Ace licence in Canada at the end of 2019, just weeks before the world was shut down by Covid. The licence had previously been held by Lowe’s Canada, which inherited the Ace business as part of Lowe’s acquisition of RONA inc. three years earlier.

The irony of that deal did not escape the management at Ace Hardware Corp. in the U.S. (its headquarters are in Oak Brook, Ill., a suburb of Chicago). Lowe’s happens to be one of Ace’s biggest competitors in the U.S. With the move of Ace to Peavey Industries, the future of the venerable brand, which sits atop some 5,800 stores in 60 countries, appeared more secure than ever. While Lowe’s Canada always maintained a commitment to those smaller Ace dealers, it had plenty of other changes to cope with as it faced Covid, then new owners of its own.

With Peavey, the Ace business was back

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in the hands of a Canadian company— and a western-based one at that. Under the leadership of CEO Doug Anderson, Ace was another part of Peavey’s trajectory as a truly national retail hardware company, with “aspirations for growth and a steadfast commitment to supporting local Canadianowned retail.”

But it had to develop a wholesale business to supply the more than 100 Ace dealers that came along with the deal. Many of these are smaller hardware stores serving rural or remote communities. But even these fit with Peavey’s vision to support “small retailers and local communities that are the backbone of our economy.” Peavey’s own banner, Peavey Mart, consists entirely of corporatelyowned farm and hardware stores, many serving secondary and rural markets.

As some Ace stores are building centres, Lowe’s Canada continued supplying them with building supplies until Peavey made a deal with Sexton Group in Winnipeg to manage that side of the business.

But the one-two punch of pandemic and the slowing Canadian economy that followed took its toll. Over time, the number

Hardlines Home Improvement Quarterly

There are more than 70 Ace stores in Canada who will be affected by the recent decision by Peavey Industries to end its relationship with Ace Hardware in this country at the end of 2024. of Ace dealers was reduced, some through banner conversions and some through culling by Peavey as it sought a good fit with the Ace dealers themselves. Now, there are just over 70 Ace dealers in Canada.

“Over the past few years, the retail landscape has faced numerous challenges, including the global pandemic, supply chain disruptions, inflation-induced consumer behaviour changes, and increased operational costs, particularly in smaller, remote markets,” Peavey explained in the release. “These factors have prompted a strategic re-evaluation by Peavey Industries LP leading to the decision to end our relationship with Ace Hardware International.”

Peavey said its relationship with Ace dealers in Canada will be “business as usual” until the end of the year. During that time, Peavey says it remains committed to supporting the Ace dealers. “We pledge to maintain open communication and provide assistance and guidance to all affected parties.” www.hardlines.ca

2024-06-30 12:33 PM

KNOWLEDGE IS POWER. Stay in the know every single week with HARDLINES. Subscribe online at Hardlines.ca

RONA HAS A NEW CEO AND A NEW LOOK FOR AFFILIATES

www.hardlines.ca

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RONA ADDS SIX MORE AFFILIATE DEALERS RONA inc. has welcomed six new dealers as independent affiliates. They are RONA Quincaillerie Saint-Jean-Baptiste in Quebec, RONA Manotick and RONA Timmins in Ontario, RONA Lac La Biche and RONA Olds in Alberta, and RONA Agassiz in British Columbia.

C

hange is in the air at RONA inc. with the announcements, in rapid succession, that it has a new look for affiliated (independent) dealers, it will say goodbye to its Réno-Dépôt banner in Quebec, and it has a new president and CEO, J.P. (Jean-Pierre) Towner.

Towner joined RONA inc. as CFO in October 2023. He replaces Andrew Iacobucci, who joined the firm as president and CEO exactly one year prior to Towner’s appointment, following a 20-year career in the grocery industry. Before joining RONA, Towner spent three years at Dollarama as CFO; prior to that he served as EVP and CFO at Pomerleau Inc., a commercial construction company based in Saint-Georges, Que. Two days after the new president and CEO was announced, RONA revealed that it was fully launching a new visual identity for its stores owned by affiliates (independents). “The goal of this initiative is to turn the spotlight on RONA independent dealers by showcasing their entrepreneurial side, while leveraging the notoriety of the RONA brand,” the company said in a release.

Introduced at RONA Connexia (RONA inc.’s meeting for independents) last fall, there are a number of distinctive elements in the new look for affiliates. They include the creation of a logo specific to dealer-owners, which includes their company name, “to help customers easily identify RONA stores owned by independent dealers,” the company said. The new look also includes design of a new outdoor pylon bearing the words “Dealer Owner.” There will be a sticker displayed on the main door of the stores, bearing the words “Dealer Owner” and the year the store was founded. There will also be “creation of wall panels presenting the history and values of each store.”

BRIEFLY

ALBERTA STORES SWITCH TO HOME HARDWARE

The first store to get RONA’s new look for affiliates was RONA Iberville. Shown are the father-daughter owners, Raynald and Audrey Archambault.

On the corporate store side, RONA announced in May that it would extend its utilization of the new RONA+ banner that was originally conceived as a replacement for Lowe’s when that company sold its stores in Canada, including RONA, to private equity firm Sycamore Partners.

Three of the Réno-Dépôt stores in Quebec had been rebranded RONA+ by the time the company announced that the pro-focused banner would be gone by the end of the year. Sixteen more Réno-Dépôt stores will be converted to RONA+. One Réno-Dépôt will be closed (in Quebec City).

And that is not the end of the RONA+ conversions. RONA Home & Garden Waterdown, near Hamilton, Ont., is being converted now, while RONA Home & Garden Winnipeg and RONA l’Entrepôt Quebec City will celebrate their reopenings this fall.

Two stores in Alberta, Medicine Hat Home Hardware Building Centre and Alta-Wide Building Supplies, have joined the Home Hardware banner. The stores are owned by Lisa and Mark Brumm, who also own a third store in the province, Sylvan Lake Home Hardware Building Centre, which became a Home store in 2023.

HOME HARDWARE GOES TO THE BALLGAME Home Hardware Stores Ltd. and the Toronto Blue Jays have launched the BeautiTone Balcony at Toronto’s Rogers Centre. The BeautiTone Balcony features two tiers of standing room and a reserved group space for up to 40 guests. BeautiTone, Home Hardware’s private label paint brand, is the Jays’ official paint.

AD CANADA RECOGNIZED AD Canada has been recognized as a Great Place to Work for the second year in a row, according to the Top Workplace rankings by Energage LLC, an HR technology company.

In addition, AD Canada has been recognized in the ranks of 2024 Best Workplaces in Canada among firms with fewer than 100 Canadian employees.

Hardlines Home Improvement Quarterly

THIRD QUARTER / 2024

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2024-07-02 8:02 AM

NEWSROUNDUP

PEAVEY CEO DOUG ANDERSON TALKS ABOUT CAUTIOUS GROWTH

P

eavey Industries, the Red Deer, Alta.based retail farm and hardware chain, announced recently that it would no longer be the licensee of the Ace Hardware brand in Canada, effective Dec. 31, 2024. (See page 14.)

Hardlines sat down with Peavey Industries’ CEO, Doug Anderson, to discuss the growth of his chain before the Ace announcement was made.

Peavey will count on its Peavey Mart banner as well as its MainStreet Hardware brand to drive its business going forward.

The hardware and farm lines are supplied from Peavey’s distribution centres in Red Deer, Alta., and London, Ont., while LBM is supplied through an agreement with Winnipeg-based Sexton Group.

Recently, Anderson shared his concerns for the economy, which is affecting retail in general. In addition, many of the farm communities that his stores serve have been further challenged by droughts and water shortages. He identified some growth in the latter part of last year, but inflation and

Staff at the new Peavey Mart store in Steinbach, Man., which opened in March. high interest rates are impacting customers everywhere. “But we’ve seen some strength in the new year,” he adds.

The company is not standing still.

Anderson points to a new Peavey Mart in Steinbach, Man., which opened in March.

The 28,800-square-foot building features a 1,440-square-foot greenhouse and even has a dog-washing station.

While he sees further opportunities for new Peavey Mart stores across Canada, he stresses the caution he expressed earlier.

“It’s just about us making sure that the timing is right—and recognizing that the timing for aggressive expansion is not now.”

Looking ahead, however, he does identify both the Maritimes and British Columbia as opportunities for future strategic growth.

Anderson adds that Peavey Mart’s digital presence has been strong, especially following a series of upgrades implemented over the past six months, including better content and enhanced search capabilities, “and customers are responding nicely.”

CANAC’S GROWTH CONTINUES WITH STORE OPENING EAST OF MONTREAL Quebec home improvement retailer Canac has a new store in Sorel-Tracy, Que., roughly midway between Montreal and TroisRivières. The location opened in May. Store manager Gilok Chang Kai was joined by members of the Laberge family who own Canac, Canac general director Martin Gamache, and merchandising director Daniel Châtelain. Elected officials on hand included Sorel-Tracy mayor Patrick Péloquin.

“The media define us as a big box, but we operate on proximity,” Châtelain said,

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HHIQ_3Q_24_News.indd 16

describing the close cooperation across departments. The store clocks in at more than 40,000 square feet and boasts a building materials warehouse of over 31,000 square feet, along with an outdoor lumber yard.

Charles Laberge, Canac’s senior business development manager, noted that there is “strong potential in our market for entrepreneurs looking for specific guidance” on products.

All staff positions in the store have already been filled. Some employees were wooed

Hardlines Home Improvement Quarterly

from competitors, while others are locals who jumped at the chance to quit their commute to Montreal.

The privately owned chain is in the midst of a $200 million, five-year expansion effort.

Its Walmart-style strategy of everyday low pricing over promotional specials appeals to Quebecers. Since the takeover of RONA by Sycamore Partners, a New York-based equity fund, Canac has touted itself as a homegrown alternative. The retailer’s next opening is slated for the fall in Rivière-du-Loup. www.hardlines.ca

2024-06-30 12:33 PM

INDEPENDENTS FARED BETTER POST-COVID THAN BIG BOXES: HARDLINES REPORT

W

hile every retailer faced their challenges through the pandemic, Hardlines has data that shows some did better than others. In fact, the groups representing independent dealers actually pulled ahead of the big box retailers.

That trend is borne out by data in the 2023 Hardlines Retail Report, which gathers sales and intel to the end of 2022 to track the size and growth of the retail home improvement industry in Canada. Much of that data is drawn from our survey of the retail dealers and managers themselves.

According to the Retail Report, during the first two years of the pandemic, 2020 and 2021, the industry enjoyed tremendous growth. According to the Hardlines data, by 2022, sales remained strong, but yearover-year increases started to normalize.

While overall sales growth in the industry was up over 11 percent in 2021, those gains were tempered in 2022, up overall by 4.6 percent—still a healthy increase.

Broken down by store format, those increases varied according to retail type.

Building centres enjoyed the strongest growth by far in 2022, with overall estimated sales up 6.5 percent from 2021. At the other end of the spectrum, hardware stores had the smallest gain in 2022, up only 1.3 percent year over year. Hardware stores had grown almost 16 percent in 2021, as consumers sought out the convenience factor of local hardware retailers.

Big box stores, however, with their larger formats and bigger overheads, were impacted more seriously by the slowdowns in 2022. Their estimated collective sales were up only 2.7 percent.

The 2024 edition of the Hardlines Retail Report, which uses year-end data from 2023, will be available in July. For more information, contact Jillian MacLeod at the Hardlines World Headquarters: jillian@ hardlines.ca.

Independents have fared better than big boxes recently. Part of this is due to better branding, such as Home Hardware’s paint brand shown here.

www.hardlines.ca

HHIQ_3Q_24_News.indd 17

BRIEFLY

CASTLE ADDS TWO MEMBERS Castle Building Centres Group has signed Eastcut Wood Building Solutions in Trenton, N.S. The business is owned by Donald MacDonald, who founded the business in 2019. Castle has also added O’Connor Hardware in Oro-Medonte, Ont. Founded in 1996, it is under the new ownership of Brent and Sarah Johnston.

KENT RELOCATES STORE IN RIVERVIEW, N.B. Kent Building Supplies has opened a new store on Findlay Blvd. in Riverview, N.B. It replaces another location that is now closed on Coverdale Rd. The new location opened in April with a contractor event before its grand opening. It hosted some 30 vendors and attracted 250 pro customers.

CANADIAN TIRE AMONG MOST TRUSTED BRANDS Canadian Tire has been recognized as one of Canada’s most trusted brands. In Léger Marketing’s Reputation 2024 study, Canadian Tire landed in the third spot, behind international brands Google and Sony. Last year, it ranked number four.

RONA IN B.C. HIT BY $330,000 FINE FOR DAMAGED RACKING A storage rack that had visible damage or wear, according to a WorkSafeBC report, cost a Penticton, B.C., RONA store a $330,507 fine recently. WorkSafeBC is the province’s safety agency. It sometimes conducts random investigations of workplaces involving construction materials. The rack in question was subject to a “stop use” order from the agency. However, the store did not repair or replace the rack, the report said. In addition to the worn or damaged racking, “No information was available about the rack’s rated capacity or loading or unloading instructions,” the WorkSafeBC report said.

Hardlines Home Improvement Quarterly

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2024-06-30 12:33 PM

NEWSROUNDUP

TIMBER MART CEO BERNIE OWENS DISCUSSES THE VALUE OF AIR MILES FOR HIS DEALERS

L

oyalty programs are playing an increasingly important role in the offerings of many home improvement retailers. And the movement last September as Home Hardware joined Scotiabank’s Scene+ program, which includes partners like Sobeys, IGA, Foodland, and FreshCo , bears out how much effort is going into finetuning these programs.

One customer points program that took a hit was Air Miles Canada. It was once a national leader and Canada’s “most recognized” loyalty card program. It had steadily built up its retail partners in this country since 1992.

However, in February 2021, Air Miles Canada began to decline sharply. Lowe’s Canada left the program, along with its brands RONA and Réno-Dépôt. Two months later the program suffered a further setback when the Liquor Control Board of Ontario left the program. In 2022, Staples Canada abandoned Air Miles. The biggest blow of all might have been the defection the same year of Empire Co., the parent of Sobeys, Safeway, Farm Boy, Foodland, IGA, and other grocery stores (which are now members of rival program Scene+).

In the retail home improvement industry, two major brands, Kent Building Supplies in Atlantic Canada, and TIMBER MART nationally, continue to use Air Miles. Most recently, the loyalty program added a new twist. Air Miles Receipts offers a way to “layer over” existing retailer programs by allowing consumers to scan their receipts with an in-program app and earn bonus points and offers.

“I do believe there’s value for the dealers that Air Miles can deliver,” TIMBER

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BRIEFLY

GMS REPORTS Q4, ANNUAL RESULTS Gypsum Management & Supply Inc. announced Q4 sales of US$1.41 billion, up 8.4 percent from a year earlier. Net income declined 25.4 percent to $56.4 million, compared to $75.6 million in the previous Q4. For its fiscal year 2024, which ended April 30, GMS saw sales grow by 3.2 percent to $5.5 billion.

Annual net income came to $276.1 million, a 17.1 percent decrease from $333.0 million in 2023.

HOME DEPOT COMPLETES PURCHASE OF PRO SUPPLIER SRS The Home Depot has completed its acquisition of SRS Distribution, Inc., a building products distributor with more than 760 locations across 47 U.S. states. The deal, first announced March 28, is worth about US$18.25 billion. SRS serves professional roofers, landscapers, and pool contractors, with a sales force of 2,500 and a fleet of some 4,000 trucks. Home Depot expects the acquisition to accelerate its growth with the residential contractor and builder with bulk orders.

CANADIAN TIRE IS BUILDING A NEW STORE IN KITCHENER, ONT. MART president and CEO Bernie Owens told Hardlines. He expects that the new ownership by BMO will add more “anchor” users that will rebuild the program’s profi le.

In fact, Owens shares that the issuance of Air Miles points by TIMBER MART dealers increased in 2023. “That shows there’s still value in it.” The program, he adds, is available at the discretion of each dealer, who can evaluate its merits for their own markets.

“I look at Air Miles and say, ‘what are the options out there?’ It’s to build loyalty for dealers at an affordable cost.” He believes BMO has an opportunity to provide better analysis that can help dealers understand their customers. “If these points systems don’t add value to our dealers, we’ll have to look somewhere else.”

Hardlines Home Improvement Quarterly

Canadian Tire Corp. is building a new store at the Stanley Park Mall in Kitchener. The new Canadian Tire store, which is forecast to open this fall, will replace the existing Canadian Tire store at Victoria and Frederick streets in Kitchener. The new store will occupy the location vacated by Walmart at the mall.

HOME HARDWARE NAMES CHIEF RETAIL OPERATIONS OFFICER Home Hardware Stores Ltd. has announced the appointment of John Pierce as chief retail operations officer. Reporting to CEO and president Kevin Macnab, he will oversee field operations, dealer support functions, business development, real estate and construction, store design and space planning, Home’s Innovation Centre, communications, events, and public relations. Pierce’s previous role was VP of retail business development.

www.hardlines.ca

2024-07-02 8:04 AM

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NEWSROUNDUP

OCTOBER HARDLINES CONFERENCE TO BE HELD IN THE PROVINCE OF QUEBEC

T

his fall marks the 28th annual Hardlines Conference, an event which has long been unique in Canada for drawing the entire industry together. No matter which banner the attending dealers belong to, or which products (from hardlines to building supply) the delegate vendors are supplying them with, they have met at the Hardlines Conference every October.

The conference was traditionally held in the Toronto and southern Ontario areas.

But last year, the Hardlines team decided that, in order to better represent the national industry, it would take its premiere event on the road—to Whistler, B.C. The huge success of that event propelled Hardlines to continue the national tour.

This fall, the conference will be held in Charlevoix, Quebec, east of Quebec City, on Oct. 22 and 23, 2024. A spectacular hotel, the Fairmont Le Manoir Richelieu is the venue. Hardlines’ collaborator this year is AQMAT, Quebec’s building materials and hardware trade association.

The Outstanding Retailer Awards will mark the centrepiece of the Hardlines Conference at the awards gala on the evening of Oct. 22. Once again, eight of the industry’s top retail stores will be honoured—all the way from Best Hardware Store, to Best Large Surface Retailer, and Young Retailer of the Year, among others.

The speakers line-up is, all the way through, probably the strongest in the history of the Hardlines Conference.

Delegates will hear from some of the biggest retailers in the industry, such as Alain Ménard, senior vice president of RONA inc., and Sherri Amos, director of dealer support at Home Hardware Stores Ltd. The largest Quebec-owned home

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The Fairmont Le Manoir Richelieu will be the spectacular venue of the Hardlines Conference on Oct. 22 and 23, 2024.

improvement retailer will be represented

by Alexandre Lefebvre, CEO of BMR Group.

Specialty retailers will come to the podium, too. Tools retailer extraordinaire Lee Valley Tools will be represented by their president and CEO, Jason Tasse. One of the most important pro dealers in the country, Gibson Building Supplies, will be present in the person of their CEO, Michelle Chouinard-Kenney. IKEA, one of the most successful retailers in world history, will be represented by the Canadian division’s sustainability manager, Heléne Loberg.

The European home improvement industry has many lessons for Canada. The Hardlines Conference is pleased to welcome to our shores for the first time David Collas, general manager of Les Mousquetaires group, based in France. The retail group includes one of the most influential powers in European home improvement retailing, Bricomarché, among other banners.

Some speakers will provide insights

Hardlines Home Improvement Quarterly

into the important component parts of home improvement retailing. Wellknown broadcaster and HR expert Pierre Battah provide lessons from his leadership firm. Housing and land economist Peter Norman, from Altus Group, will give his annual analysis of the dollars and cents side of the general economy and how our industry fits in. The conference will even have an appearance from Hugo Girard, former world champion strongman.

Finally, Richard Darveau, president of AQMAT, and Michael McLarney, founder of Hardlines Inc., will provide their analyses of the state of the industry, what we’ve come through, and what probably comes next.

The 28th Annual Hardlines Conference will be held at the Fairmont Le Manoir Richelieu, on Oct. 22 and 23, 2024, east of Quebec City.

Retail dealers and their staff get special pricing. Contact michelle@hardlines.ca for your discount! And check out the full line-up of speakers on pages 10 and 11. www.hardlines.ca

2024-07-02 8:05 AM

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NEWSROUNDUP

ABSDA BUILDING SUPPLY EXPO “ONE OF OUR BEST SHOWS IN DECADES”

T

he Atlantic Building Supply Dealers Association (ABSDA) held its annual Building Supply Expo trade in March at the Halifax Convention Centre.

“Our trade show floor space was totally sold out for the first time at the Halifax venue,” said Denis Melanson, ABSDA president.

The meet and greet opening night on March 5 drew a crowd of close to 600 people. Live music was supplied by The Kiln Dried Studs. “They decided to forgo their fee and play music for us in exchange for a donation to the IWK Heath Centre’s children’s hospital in Halifax,” Melanson told Hardlines. The ABSDA committed $3,000 to the cause—and real estate entrepreneur Adam Barrett, who has just purchased three RONA stores in the Halifax area, matched the $3,000 donation.

A third, anonymous donation of $2,500 to IWK children’s hospital soon followed.

Kiln Dried Studs’ drummer, Steve Foran, sold band T-shirts through the night to supplement

Trade show space at the ABSDA show in March, held in Halifax, was totally sold out for the first time at this venue. the donation. All told, over $12,000 was raised for IWK at the ABSDA Expo.

At the awards gala on March 6, 720 attendees saw Ryan Buck of Buck’s Home Building Centre, Bridgewater, N.S., win the award for Young Leader of the Year.

Retailer of the Year went to Yvon Godin, a TIMBER MART dealer from Neguac, N.B. The Salesperson of the Year award went

to Sheldon Atkinson, Gentek. ABSDA’s Industry Achievement award went to Kevin Pelley from Kohltech Windows.

“Expo 2024 will go on record as one of our best shows in the past decades,” said Melanson. Next year’s ABSDA Building Supply Expo will return to Halifax on Mar. 5 and 6, 2025, to celebrate the association’s 70th anniversary.

McMUNN & YATES ADDS THREE STORES IN MANITOBA McMunn & Yates, the home improvement chain based in Dauphin, Man., has 22 stores in western Canada, with 16 of them in its home province of Manitoba. Now, the opening of three new locations expands the retailer’s reach in the West.

“This was our acquisition of the Canadian Lumber stores, owned by Henry and Brenda Friesen, in the southern Manitoba communities of Winkler, Morden, and Altona,” says McMunn & Yates president Jason Yates.

The three stores are in the southern part of Manitoba, not far from the U.S. border. They

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had comprised the business that was founded in 1987 by Henry Friesen and his father Harry Friesen. When the Friesens decided to sell their shares, McMunn & Yates acquired the stores in the summer of 2023.

The majority of McMunn & Yates stores are spread through the centre of the province, including the retailer’s home city of Dauphin, with additional locations close to the TransCanada Highway from Steinbach to Winnipeg to Brandon. The most northerly store is in Thompson, Man. There are also two stores in Saskatchewan and two in northwestern

Hardlines Home Improvement Quarterly

Ontario. The southern expansion takes the company into fresh territory.

“This region is a busy and active area of Manitoba and is a nice fit for our store model,” says Yates.

Even though the acquisitions took place almost a year ago, Yates explains the timing of the recent openings. “We have been working on renovations and merchandising changes the past several months. We co-ordinated the new store opening sale to be in conjunction with our annual anniversary sale held at our other stores.” www.hardlines.ca

2024-06-30 12:34 PM

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2024-07-03 11:01 AM

NEWSROUNDUP

LEE VALLEY TOOLS’ NEW OTTAWA-AREA DISTRIBUTION CENTRE IS UP AND RUNNING

L

ee Valley Tools has opened its Auto-Store, a “micro-fulfi lment centre” in Carp, a community in eastern Ontario that is part of the city of Ottawa.

The facility has allowed Lee Valley to consolidate 36,000 square feet of picking operations into 6,000 square feet, freeing up space to expand manufacturing.

The facility boasts 18,000 bin locations and 42 shuttles or bots on top of the structure to retrieve products for warehouse pickers. With the new system, the 200-plus operators in the DC can process over 250 orders in an hour. That’s more than double the previous output.

In a release, president and COO Jason Tasse said the DC is “more than a business decision: it’s a commitment to our roots here in Ottawa and prosperity for the Canadian economy.” In 2023, Lee Valley Tools celebrated its 45th year in business.

Through the implementation of technology, the company will work

Lee Valley Tools’ new micro-fulfilment centre boasts 18,000 bin locations and 42 shuttles or bots to retrieve products. to elevate efficiency and augment job satisfaction and protection for employees.

The investment in modernizing operations is expected to enhance business operations and production during peak shopping periods, reducing handling times, and increasing order efficiency.

The automatic picking system has been in the works since the early days of Covid.

At that time, the company recognized the critical importance of online sales and began a series of initiatives to strengthen that part of its business. Automating parts

ORGILL STEPS UP TECH TO SERVE ITS DEALERS, SAYS CEO BOYDEN MOORE Orgill Inc., the Memphis-based hardware wholesaler, has a range of customers in Canada. It supplies independent hardware and building supply dealers in every region of the country. The distributor has sales of close to US$4 billion, shipping more than 75,000 SKUs from seven distribution centres in the U.S. and one in Canada. But despite its size, this company is working hard to keep up its technology cutting edge.

Boyden Moore, Orgill’s president and CEO, spoke with Hardlines during the company’s

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Spring Dealer Market, held in Orlando, Fla., earlier this year. He shared how Orgill is moving forward, with a strategy that has included a new tech lead, dealer-targeted online supports, and even robots.

“A few years ago we brought in a new CIO/ CTO role, Mark Hamer,” says Moore. “His charge from me was to modernize our technical infrastructure. He’s made some big gains for us.”

Now, even AI is being used. This includes 70 robots at Orgill’s DC in Tifton, Ga. The robots are doing demand picking and they

Hardlines Home Improvement Quarterly

of the picking process will free up the company to re-direct employees to more essential, higher-paying functions.

“By investing in manufacturing and automation, we are strengthening our foundation and helping employees with tasks that involve undesirable work, like repetitive lifting and walking all day,” said Tasse.

“The more efficient we can make our operations, the more flexibility we have to adapt to disruptions that may occur during seasonal hiring periods and can scale appropriately as needed.”

work overnight moving stock around based on the next day’s orders. “So the pick cycle is efficient when the workers come in the next day,” Moore says.

“We’re using artificial intelligence to see how the pick waves are coming and how they could be rearranged in the modules to be the most efficient when the people come in.”

Technology has been updated and refined for Orgill’s dealer customers, as well. Dealer services include an integrated e-commerce product that is hosted on a dealer’s own website. The platform gives customers access to anything the dealer sells, not just the products supplied from Orgill. www.hardlines.ca

2024-07-02 8:06 AM

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BY GEOFF McLARNEY

S P O T L I G H T

Interior paint protects from stains and mildew Valspar Canada’s Accolade Interior Paint + Primer applies flawlessly with an ultra-smooth finish and long-lasting colour. It is made with an advanced stain-blocking formula and gives a mildew-resistant finish to keep projects looking beautiful for longer. Exceptional durability provides resistance against scuffs and scrubs to ensure hard work lasts. www.valspar.ca

Exterior surfaces weather-ready in two hours Valspar’s Medallion Plus Exterior Paint + Primer provides all-season beauty and protection with a flexible finish that resists cracking and peeling. Its Rain Ready technology means projects can be ready in just two hours. The formula guards the freshly painted surface from runs, blisters, or water marks once rain showers begin. www.valspar.ca

Brushes are easy to clean A favourite of both Pro and DIY customers, the Purdy XL applicator works in all types of environments, both interior and exterior. These medium-stiff brushes are designed for latex- and oil-based paints, primers, and stains. The polyester blend bristles are easy to clean and offer superior durability and abrasion resistance. Ideal for walls, ceilings and trim, the brushes come with handles in a variety of shapes and sizes for optimal comfort. www.purdy.com

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Hardlines Home Improvement Quarterly

2024-06-28 2:32 PM

PAINT & SUNDRIES SPOTLIGHT

Brushes pair with Minwax Coatings An applicator designed specifically for Minwax Woodcare Coatings is now available in Canada! These specialty stain brushes ensure flawless application, maximize coating performance, and conveniently fit into Minwax quart cans for less cleanup.

With consistent packaging designs between coatings and applicators, customers get a seamless shopping experience and easier selection. Stainless steel ferrules help to resist corrosion, while natural hardwood handles provide added comfort. www.minwax.ca

Waterborne sealer highlights hardwood beauty Bona SuperSport ClearSeal is a completely clear waterborne sealer that dries quickly and is easy to abrade. With a clear formulation and no added pigments, the product highlights the natural beauty of any maple hardwood sport floor. SuperSport ClearSeal provides an initial layer that prevents the finish from penetrating into the wood. It maintains the appearance of colorants applied prior to seal coat and provides a more consistent and uniform wear layer. www.bona.ca

A neglected hue’s chance to shine Sherwin-Williams’ “Loneliest Color” (Kingdom Gold SW 6698) spotlights an overlooked shade. Kingdom Gold SW is described as “a luminous hue that under pressure, emerges refined and stunning.” Set apart by its green undertones and high saturation, Kingdom Gold suggests abundance, nourishment, and the culmination of hard work. www.sherwin-williams.com

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S P O T L I G H T

Resists rust and dries quickly Stanley’s Rustmax XT Anti-Rust Enamel is available in white or black (flat or gloss), or seven other pre-mixed colours. It provides twice the coverage per can of lesser competing products, allowing up to 30 square feet of coverage.

Its 15-minute fast dry minimizes downtime, allowing parts manipulation within minutes. The brush-on version dries in six hours. www.stanleytools.ca

Coating kits outlast standard paints Rust-Oleum’s HOME Transformations kits are more durable than standard paint and require no stripping, sanding, or priming. Each contains a 118ml Original Krud Kutter Cleaner Degreaser, an 887ml HOME Transformations Base Coat, and an 887ml Home Transformations Top Coat. Three options are available. The Cabinet Coating Kit is offered in 45 colour options and is suitable for laminate, melamine, and wood. The Countertop Coating Kit is available in 39 colour options and is suitable for ceramic tile, laminate, melamine, porcelain tile, and wood. The Floor Coating Kit comes in 34 colours options, in Matte and Semi-Gloss finishes, and works on a variety of substrate floors. www.rustoleum.ca

Easy recoating paired with crack and peel resistance Woodluxe is a premium all-weather exterior stain that helps protect and beautify siding, decks, porches, fences, and furniture. Its advanced formula minimizes film buildup, cracking, and peeling, while allowing for easier recoating. Woodluxe delivers one-coat coverage with minimal lap marks for a consistent finish.

It’s suitable for a variety of vertical and horizontal surfaces, including decks, wood fences, and outdoor wood furniture. www.benjaminmoore.ca

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Hardlines Home Improvement Quarterly

www.hardlines.ca

2024-06-28 2:32 PM

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2024-06-28 2:33 PM

S P O T L I G H T

Painter’s tape comes off clean after 14 days FrogTape Pro Grade painter’s tape combines the value of a traditional blue painter’s tape with PaintBlock technology. PaintBlock forms a micro-barrier sealing the edges of the tape to prevent paint bleed and deliver sharp paint line performance. Designed for use with latex paint, it allows for 14-day clean removal, masking cured painted walls and trim, glass, and metal. www.shurtape.com

Spray paint preserves fabric’s feel Sico Perma-Flex Exterior Fabric spray paint provides maximum UV protection for fabrics such as vinyl, leather, rugs, etc. It offers coverage in eight colour options while preserving the soft feel of fabric. It also dries in 5 minutes, making it ideal for those looking for a quick solution. www.sico.ca

Paint and primer covers a range of surfaces Sico Perma-Flex All Surface is an indoor and outdoor paint and primer that uses a lacquer-based technology to deliver an ultra-durable finish on surfaces ranging from as wood and metal to plastic and glass. In addition to the five-minute dry time, All Surface will not run or drip thanks to a unique spray pattern that covers with fewer spray passes than a traditional conical spray paint. All Surface is available in 24 colour options. www.sico.ca

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Hardlines Home Improvement Quarterly

www.hardlines.ca

2024-06-28 2:32 PM

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COVER STORY

HOME DEPOT CANADA

G N I V R SE S R O T C A R T N O C E L A C S T A Home Depot Canada’s director of pro experience, ARMAN MIRZA, talks about his company’s first Flatbed Distribution Centre near Toronto 34

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Hardlines Home Improvement Quarterly

Photography: Larry Arnal

BY STEVE PAYNE

Home Depot Canada executives, pictured l-r: Serge Carestia, vice-president, supply chain; Harry Lafferty, general manager, Flatbed Distribution Centre; Luca Gagatek, director, supply chain distribution; Arman Mirza, director, pro experience; Mario Singh, supply chain manager.

www.hardlines.ca

2024-07-02 8:13 AM

www.hardlines.ca

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COVER STORY

HOME DEPOT CANADA

Home Depot Canada’s new Flatbed Distribution Centre (FDC) in Mississauga, Ont. measures 600,000 square feet overall. Approximately half of the space is dedicated to the pro-focused FDC. The other half is a Bulk Distribution Centre (BDC) serving Home Depot stores in the Greater Toronto Area and surrounding areas.

H

ome Depot Canada has opened a new Flatbed Distribution Centre (FDC) to supply the bulk needs of contractors. It’s in Mississauga, Ont., near Toronto Pearson International Airport. It will ramp up the scale, quite significantly, of the company’s ability to serve contractors with larger needs than can adequately be served from the stores.

Hardlines took a tour of the facility recently, accompanied by Arman Mirza, director of pro experience for Home Depot Canada, as well as senior supply chain executives from the company.

The facility measures 600,000 square feet overall. Approximately half of the space is dedicated to the pro-focused FDC. The other half is a Bulk Distribution Centre (BDC) serving Home Depot stores in the Greater Toronto Area.

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When the facility is fully operational this summer, some 54 Home Depot stores will be able to ship directly out of the FDC to contractor jobsites on flatbed trucks with Moffetts or boom trucks, with

“

products from stores at scale, which is the way the Home Depot previously did it, was difficult.

This is the first FDC in Canada. There are already 17 FDCs in the U.S., the first one

What the FDC does is, one, bring the scale to the table so pros can deal with us as a one-stop shop. But also, two, we offer the breadth because we also offer [pro products] through our stores.

the pros maintaining their own relationships with the stores. Contractors who need bulk supplies—especially the heavy, large, unwieldy products that go into construction projects—will benefit from the FDC, the company says. Shipping such

Hardlines Home Improvement Quarterly

”

opening in 2020 in Dallas, Texas. The company says there will be lots more—including in Canada. Home Depot is clearly going after the contractor market big time, on a scale that it could never imagine when it was founded in 1978. www.hardlines.ca

2024-07-02 8:15 AM

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COVER STORY

HOME DEPOT CANADA Pros now make up almost 50 percent of the retailer’s sales, the company says, in the U.S. The Canadian division lags slightly behind that percentage, but we are quickly catching up in this country, says Mirza.

A SUPPLY CHAIN SPECIALIST

Mirza has worked for Home Depot for 13 years, 11 of which were in the supply chain.

He’s been director of pro experience for two years. Prior to that, Mirza was at Loblaw Cos. in their supply chain. And before that, he was with a consultant serving retail clients—again with a supply chain focus.

So nobody knows better than Mirza that contractors have unique supply needs. The sector wasn’t being fully served by shipping bulk products out of Home Depot Canada’s 182 stores.

The disadvantages of using that model were obvious. Entire aisles of stores would have to be closed while the forklifts went to work on big orders of drywall or lumber, disrupting the store, and inconveniencing other customers. The stores were adequately set up for smaller contractors. But not for the big game contractors that Home Depot has set its sights on.

Toronto’s FDC was up and running last fall—and it is just completing its ramp up.

This summer, it will be fully operational.

It started, Mirza says, by offering next-day delivery for orders placed by 1 p.m., and that has now been moved to a 4 p.m. cut off. This summer, that is expected to move to even later—with an 8 p.m. deadline for orders.

The rollout of the FDC parallels other pro initiatives. For example, by 2025, Home Depot Canada aims to offer payment on receipt for large pro orders, as opposed to The Flatbed Distribution Centre takes up about half of the brand new facility near Toronto Pearson International Airport. The other half is a Bulk Distribution Centre serving regional Home Depot stores. Both will be fully up and running this summer.

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Hardlines Home Improvement Quarterly

www.hardlines.ca

2024-06-28 3:27 PM

payment at time of purchase. And the retailer is looking at ways to offer fixed pricing on commodities to contractors and builders that are pricing jobs out months in advance.

THE PRO STRATEGY OVERALL

Every time you check the news, politicians are promising to invest billions in new housing in this country. There’s no doubt

“

“It’s our approach to go after the opportunity,” he replied. “To provide a quick and consistent and enjoyable experience for our pro customers. Everything we do in our strategy is customer-backed. We talk to our pros about what they are looking for, and how we can make it easier for them to do their jobs, including building more housing.”

“The experience we want to provide is

Everything we do in our strategy is customer-backed. We talk to our pros about what they are looking for, and how we can make it easier for them to do their jobs. that Canada faces the worst housing shortage since after World War 2. The industry is likely at the start of its biggest boom since that era, too. We asked Mirza about what the strategy is for Home Depot. www.hardlines.ca

HHIQ_3Q_24_HomeDepot.indd 39

”

fast delivery, consistent service, and the depth of inventory they need to do those bigger jobs.”

Nothing in the business landscape today wasn’t transformed by the pandemic. That

Arman Mirza, director of pro experience at Home Depot, inspecting stock at the Flatbed Distribution Centre with Harry Lafferty, the general manager of the facility. The two experts in supply chain distribution have served a combined 42 years with Home Depot in Canada. includes e-commerce, a big part of Home Depot’s roll out of the FDC. “During Covid we scaled up our e-commerce option and introduced a curbside pick-up option. It was safer for our customers and associates. Those options continue to be offered today because, again, we want to be customer-led. Overall, for the pro, we have the brands they want at the value they expect, and the service they need. Our job is to make their job easier and that’s what guides us every day.”

The ability of the pro to order online on their devices is part of the strategy, of course. And Home Depot’s payment terms could possibly change, too. “A lot of the pros who are doing larger jobs, they have the expectation that they should pay when

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COVER STORY they get the product,” Mirza said. “So that’s scheduled for 2025: pay upon receipt. It’s something we are working towards and will require an upgrade of our systems.”

What about pros recent experiences with rampant inflation, when in 2021, contractors took many a bath on fixed price contracts that they had signed before Covid?

Industry stats at the time showed that a thousand board feet of framing lumber cost an average of $550 before Covid hit. That rose within a year to $1,500.

Will Home Depot allow contractors to lock in futures prices of lumber? “This is our theme of listening to our customers,” Mirza replies. “It requires some system changes and partnering with partners in the financing space. And making sure we can support that pricing over the longer term. We’ll need to think through those to do items and plan out that capability. So, when we

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HOME DEPOT CANADA do launch it, it’s what the customers want and they have a great experience.”

A UNIQUE CUSTOMER BASE

There’s no question that serving the serious home builder (or commercial builder) from the same facilities that serve the general public is problematic.

“

sales force for larger accounts that can use the FDC, they can use the stores, and they can partner with some of our vendors to go direct in some cases.”

“Home Depot also has a brand called HD Supply, which is a company that offers maintenance, repair, and operations (MRO) services for their clients. Like in the hospi-

One of the differentiators of our offering is: pros know us as a great place to shop for what they need, especially when they need something quickly and urgently.

“The uniqueness of those types of customers is scale,” Mirza said. “And part of the FDC is about scaling up for those larger projects. And we also have a dedicated

Hardlines Home Improvement Quarterly

”

tality space, or the institutional space.” The Home Depot’s plan for the pro customer includes the MRO sector—again, enhanced by the FDC. Finally, the Home Depot isn’t getting into the pro game for the first time. It already knows a significant amount about its contractor customers—and they know about Home Depot, too.

Mirza sums it up this way: “One of the differentiators of our offering is: pros know us as a great place to shop for what they need, especially when they need something quickly and urgently. How we’re adding to that perception is dealing with them on their larger projects.”

“In their current state they may be dealing with multiple suppliers. They may have to go to their drywall supplier for drywall, to their lumber supplier for lumber—so they’re dealing with multiple partners, negotiating different prices, getting a different delivery experience, getting multiple deliveries. There’s friction in the process of dealing with multiple partners.”

“What the FDC does is, one, bring the scale to the table so they can deal with us as a one-stop shop; but also, two, [we can] offer the breadth because we also offer [pro products] through our stores.”

“So it’s, one, scale, and two, one-stop shopping.” www.hardlines.ca

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Untitled-2 41

2024-06-28 2:37 PM

COVER STORY

HOME DEPOT CANADA

BY MICHAEL McLARNEY

AN INTERVIEW WITH MICHAEL ROWE

The head of Home Depot’s Canadian operations talks frankly about the opportunities for growing the company’s pro business with new services and facilities

C

anadians are turning more and more to contractors to get their home repairs and renovations done, says Michael Rowe, president of Home Depot Canada. And his company is evolving to meet that demand. In conversation with Hardlines, he shares his enthusiasm for the latest, and likely the biggest, step the retailer has made in recent years to cater to pros more effectively.

That initiative is a new Flatbed Distribution Centre (FDC), which opened late last year in Mississauga, Ont., west of Toronto. The 300,000-square-foot FDC is designed to get large loads of products directly to contractor jobsites. It receives and fulfils pro orders sent in by area stores, taking the pressure off those stores to manage the large orders themselves.

Those orders, typically too big for one store to ship, are instead shipped directly to the contractor from the FDC. Home Depot Canada is currently getting the FDC up and running at full capacity to fill an important part of the retailer’s supply chain. This summer, the facility is expected to ship orders on behalf of 54 Home Depot stores in and around the Greater Toronto Area. The 300,000-square-foot FDC shares space with an equally large Bulk Distribution Centre (BDC), which ships commodities to the stores themselves.

AIMING TO GROW THE PRO BUSINESS

The rollout of the FDC parallels other pro initiatives. For example, by 2025, Home Depot Canada aims to offer payment on receipt for large pro orders, as opposed to payment at time of purchase. And the Michael Rowe, president of Home Depot Canada, says the ratio of pro customer sales in his division is close to the 50 percent of revenues south of the border.

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Hardlines Home Improvement Quarterly

www.hardlines.ca

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“

There are lots of spaces we’re evaluating right now and working with our real estate teams to identify appropriate population growth and centres.

”

retailer is looking at ways to offer fixed pricing on commodities to contractors and builders that are pricing jobs for clients months in advance. The company also renamed its contractor loyalty program to Pro Xtra to align with the U.S. program of the same name. “Renaming this was quite an accelerator for us,” Rowe says.

Canada’s largest home improvement retailer remains committed to its consumer business and expects to build more stores to serve those channels. Meanwhile, Home Depot recognizes the importance of the pro customer and sees huge growth potential in that sector. In fact, in the U.S., 10 percent of its customers are pros and builders, but they account for almost 50 percent of Home Depot’s sales.

According to Rowe, the Canadian division lags when it comes to attracting pros, but that’s changing and the new FDC is key to making that happen. “The ratio of pros here in Canada is very, very close now.

We’re not far behind.”

NEW DC—AND MORE STORES?

The new Flatbed Distribution Centre, which has a fleet of large flatbed trucks delivering products by next day if orders are place as late as 4 p.m. (a deadline the company is working to push to 8 p.m.) will go a long way to putting Home Depot on the radar of Canadian contractors. And as the country expands its new housing programs, the potential is huge. But Rowe is still not satisfied. “There’s more to do, clearly.” www.hardlines.ca

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That includes the likelihood of even more FDCs in Canada. There are already 17 in the U.S., with more planned. “We’ll add more BDCs and FDCs in smaller markets.” Rowe wouldn’t confirm other locations or timelines. “We’re largely figuring out ourselves how many FDCs.” The obvious suspects are expected to be on the list: Vancouver, Edmonton, possibly Calgary, and Montreal.

One thing Home Depot Canada has not done in recent years is open a new store. The last one was in 2015 in Vaughan, Ont., north of Toronto. That brought the Canadian division’s store count up to 182. Since then?

Nothing in nine years.

Arman Mirza, director of pro experience with Home Depot Canada, stands on a loading ramp at the FDC with (background) Mario Singh and Harry Lafferty, supply chain experts.

The company in Atlanta said last year that it expected to build 80 new stores in five years—but it did not specify how many of them would be in Canada. “We’re constantly looking,” said Rowe. “There are lots of spaces we’re evaluating right now and working with our real estate teams to identify appropriate population growth and centres.

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CANADA’S

TOP 20

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BY THE EDITORS OF HARDLINES

CANADA’S

TOP20 TOP 20 HOME IMPROVEMENT RETAILERS 44

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www.hardlines.ca

2024-06-28 3:19 PM

After industry retail sales increased by about a third during the pandemic, last year the long-awaited flattening out arrived.

Hardlines calculates that home improvement retail sales dropped by 3.5 percent in 2023.

Interest rates are part of it, but so are the related effects of inflation. In the next 15 pages we analyze Canada’s Top 20 banner groups. www.hardlines.ca

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Hardlines Home Improvement Quarterly

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CANADA’S

TOP 20

T

he drop off in sales continued in 2023 after pandemic-created, record-smashing increases for most home improvement retailers in 2020 and 2021—leading to a year of transition in 2022, in which the industry grew by less than the rate of inflation.

Inflation settled down to an average of 3.9 percent in Canada last year, but our industry’s retail sales dropped by 3.5 percent. That means, for 2023, the industry was off a whopping 7.4 percent in constant dollar terms.

The Bigger They Come The Harder They Fall was a smash hit for Jimmy Cliff in 1972. The Jamaican reggae singer’s song could provide the soundtrack for

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a Hardlines presentation about 2023’s numbers. After all, the biggest home improvement retailer in the world, Home Depot, reported a drop of 3.0 percent in revenues worldwide last year—and comp store sales declined 3.2 percent. The number two on our list, Home Hardware Stores, doesn’t release its sales figures to the public, but we believe it likely felt the pinch, too. RONA inc., our number three, experienced a drop in a year in which it closed some big boxes. And publicly-traded Canadian Tire’s consolidated retail sales dropped 3.9 percent last year. All told, the top four home improvement retailers didn’t have banner years.

1. THE HOME DEPOT CANADA HQ: Toronto, Ont. 2023 RETAIL SALES: $11.565 billion STORES: 182

Like other retailers in 2023, Home Depot experienced a drop in sales after three years of unprecedented growth in home improvement, driven by the pandemic. Whereas some retailers called the year sobering or slow, Ted Decker, chair, president, and CEO of the world’s biggest home improvement retailer called it “a year of moderation.”

Such was the official statement from the top of a company with US$339 billion in market capitalization (at the time of writing). Moderation meant a year in which Home Depot did US$152.7 billion in revenues, a decrease of 3.0 percent from fiscal 2022. Gross profit was US$51.0 billion, or 33.4 percent. Net earnings were reported at

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Hardlines Home Improvement Quarterly

www.hardlines.ca

2024-07-02 8:19 AM

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TOP 20 US$15.1 billion, or 9.9 percent, a full percentage point down from the 10.9 percent the company earned in 2022. Still the company managed its drop in traffic well, keeping inventory turns more or less constant at 4.3 last year compared to 4.2 in 2022. And Home Depot’s common shares rose 9.7 percent during 2023, ending at US$346.55— still far from the record of US$415.01 on the last day of 2021.

But with a drop in sales of 3.0 percent, combined with an average inflation of 4.1 percent in the U.S., and 3.9 percent in Canada, 2023 was an unexceptional year for Home Depot. Comp store sales were down 3.2 percent. But Decker also called 2023 a “year of opportunity.” What opportunity?

To gain market share, in part, with a return to store openings. Eight new stores were opened in the U.S. last year, and five new stores were opened in Mexico.

Since 2008, the Home Depot has looked at increasing store productivity—and lately e-commerce—which represented 14.8 percent of the company’s sales last year, as a driver of growth rather than new stores.

In this country, there have been 182 Home Depot stores for nine years now, with the last opening of an orange big box on April 30, 2015, in Vaughan, Ont., just north of Toronto. It remains to be seen whether Canada will be included in the 80 new stores Atlanta predicted last year that it would open before the end of 2027. Home Depot already has 2,335 stores in North America, including the U.S., Canada, Mexico, Puerto Rico and the U.S. Virgin Islands.

The Canadian division did participate in a major construction project—of a DC, not a store—last year. Home Depot says its flatbed distribution centre (FDC) in Mississauga, Ont., northwest of Toronto, will serve 54 of its stores in the Greater Toronto Area. It will ship direct to largescale builders with heavy products at scale.

The 600,000-square-foot facility is divided into an FDC and a “stock and flow” facility to serve the stores.

Overall, Canada’s FDC aligns with

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strategy south of the border, which is set to take on the pro market much more seriously. Michael Rowe (see interview on page 42 of this issue), president of Home Depot Canada, told Hardlines that the FDC will have a major impact on how it serves pros in the Greater Toronto Area, the seventh largest big box centre in North America.

2. HOME HARDWARE STORES HQ: St. Jacobs, Ont. 2023 RETAIL SALES: $9.093 billion STORES: 1,036

While Home Hardware no longer shares its exact sales figures with Hardlines, we continue to keep them near the top of our list of top retail groups in the country. It has some 1,036 points of sale across Canada, operating under the following banners: Home Hardware (hardware), Home Hardware Building Centre (home centre), Home Building Centre (lumberyard), and Home Furniture (home goods, appliances, and décor).

Hardlines Home Improvement Quarterly

About seven years ago, the company began to reposition itself as a retail company, moving away from its focus on providing wholesale services to its dealers, who are also Home Hardware’s shareholders.

Current president and CEO Kevin Macnab inherited this mandate, and spent five years implementing and guiding the company through new territory. Despite the repositioning, the company remains focused on supporting those dealers in the markets they serve.

Home Hardware is celebrating its 60th birthday this year. The company got its start in the small town of St. Jacobs, nestled in the heart of southern Ontario’s Mennonite country, back in 1964. That’s when Walter Hachborn, Henry Sittler, and silent partner Arthur Zilliax laid the groundwork for what would become Canada’s largest dealer-owned home improvement retailer.

Throughout that time, the company has had only four CEOs, starting with Hachborn himself. www.hardlines.ca

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CANADA’S

TOP 20 Macnab announced in May that he will soon retire, agreeing to stay on to help his replacement during the transition.

The company’s anniversary being the backdrop for reconsidering and redefining Home Hardware’s guiding principles.

Home Hardware’s purpose is to improve life at home. “Our vision is for home to be Canada’s most trusted and preferred home improvement experience. So we’re very focused on experience,” said Macnab.

One trend that Home Hardware is taking advantage of is the tiny homes market.

Through its Beaver Homes and Cottages and the Backyard Package Projects program, Home is developing smaller, affordable secondary living spaces—some as small as 200 square feet.

Home Hardware has encouraged its dealers through the years to expand their assortments and become full-line home centres, but it still sees the value of traditional hardware stores, including in urban markets, where real estate is expensive. But the company recognizes the importance of having stores in those markets, where accessibility becomes a plus for Home’s growing online presence.

Home has invested heavily in updating its online fulfilment capabilities and now provides quick turnaround on e-commerce orders either to area stores for pick-up or

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F LE directly to customers’ homes. Shipments are made through its three distribution centres, in St. Jacobs, Ont., Debert, N.S., and Wetaskiwin, Alta. It also has a manufacturing and distribution facility in Elmira, Ont., near the St. Jacobs head office. There, the company produces its own line of paint, as well as other chemical products.

The contractor customer is important to Home Hardware dealers and the company has introduced many services and programs to better serve the pro. The latest initiative is a contractor credit card. Developed in partnership with Scotiabank, the Scotia Home Hardware Pro Visa Business Card has been designed to support the trades and construction customers. The new card ties in with Home Hardware’s existing Scene+ loyalty program, which was introduced in September 2023 after Home Hardware parted ways with Aeroplan.

3. RONA INC. HQ: Boucherville, Que. 2023 RETAIL SALES: $8.454 billion STORES: 425

RONA was a Canadian-owned business operating stores under the RONA, Réno-Dépôt, and Dick’s Lumber banners until 2016, when it was acquired for US$2.3 billion by Lowe’s Cos., based out of Mooresville, N.C. Lowe’s had opened

Hardlines Home Improvement Quarterly

its first stores in Canada in 2007 and continued to operate those big boxes alongside the various RONA banners. It also began gradually converting larger-surface RONA stores to the Lowe’s banner—except in Quebec, where the RONA and Réno-Dépôt names were sacrosanct.

Lowe’s shareholders, concentrated in the U.S., always struggled to wrap their heads around this multi-banner strategy.

The company was also unaccustomed to the wholesaling role it played to the many independent affiliate dealers under the RONA banner. During the Covid lockdowns, housing permit pressure placed particular stress on Lowe’s operations in Canada, always more dependent on LBM than its U.S. business.

Consequently, Lowe’s sold the Canadian business in February 2023 to Sycamore Partners, a based private equity firm based in New York City. The transaction included all of Lowe’s Canada’s retail brands: RONA, Lowe’s, Réno-Dépôt, and Dick’s Lumber.

As a result, RONA is once again a private company—albeit still an American one—for the first time since it went public in 2002. It has maintained its head office in Boucherville, Que., on the South Shore of Montreal, and continues to operate and service a network of some 425 corporate and affiliated dealer stores across Canada.

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CANADA’S

TOP 20 ALLIANCE INTERNATIONAL LLC

DO IT BEST (U.S.)

HOME HARDWARE STORES

Home Hardware Building Centre

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THE HOME DEPOT (U.S.)

CASTLE BUILDING CENTRES GROUP

OCTO HARDWARE

RONA INC.

THE HOME DEPOT CANADA

HD Supply Canada

Big Box Stores

RONA

Traditional Building Centres

Contractor Stores

Home Building Centre

Home Hardware

Home Furniture

AD CANADA (FORMER TORBSA)

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RONA Affiliated Dealers (Independents)

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PEAVEY INDUSTRIES

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Dick’s Lumber Specialty Dealers

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NOTE: The placement of the groups in this chart does not intend to rank them in any way, but merely to show how they are related.

©2024 Hardlines Inc.

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www.hardlines.ca

2024-06-28 3:19 PM

SOLLIO COOPERATIVE GROUP

INDEPENDENT LUMBER DEALERS CO-OPERATIVE

TIMBER MART

Kent Building Supplies

BMR GROUP

FOUNDATION BUILDING MATERIALS (U.S.)

SPANCAN

A.R.E.N.A.

GMS INC. (U.S.)

BYCO

FEDERATED CO-OPERATIVES LTD.

ALLROC Tool

Co-op

FBM CANADA

WSB Titan

DELROC INDUSTRIES

Sexton Group

Windsor Plywood

UFA Farm and Ranch Supply

Potvin & Bouchard

Lefebvre & Benoit

BMR Express

BMR Pro

BMR Expert

Agrizone

Emard Bros.

Lumber Company Ltd.

Fries Tallman Lumber (1976) Inc.

Igloo Building Supplies Group

Matério Laurentiens Inc.

Watson Building Supplies

Shoemaker Drywall Supplies

Le Groupe Beauchesne

Yvon Building Supplies

J&H Builder’s Warehouse

Les Entreprises P. Bonhomme Ltée

L. Villeneuve & Cie (1973) Ltée

Jacques Laferté Ltée

Slegg Building Materials

BC Ceilings Ltd.

Rigney Building Supplies

D.L. Building Materials

Copp Building Materials Ltd.

Bytown PRO

McMunn & Yates Building Supplies Ltd.

www.hardlines.ca

HHIQ_3Q_24_TOP20.indd 53

Simcoe Block Ltd.

Soo Mill & Lumber Company Ltd.

Star Building Materials

Turkstra Lumber Company Ltd.

United Building Products

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CANADA’S

TOP 20 The new owners also set about phasing out the Lowe’s banner in Canada beginning in the summer of 2023. A few such stores simply closed, but most were converted to a newly created RONA+ banner, which is also being used to replace Réno-Dépôt locations in Quebec. RONA+ is also taking the place of some RONA Home and Garden locations, as well as certain RONA L’entrepôt stores.

Last October, the business grew through an acquisition by its Dick’s Lumber segment. ZyTech Building System, based on Balzac, Alta., makes and distributes building components and engineered wood products. The purchase is meant to allow Dick’s to capitalize on the developer and builder market in the western provinces.

Major executive shakeups took place at RONA in 2024. Just before press time, president and CEO Andrew Iacobucci departed.

His replacement was an internal candidate, J.P. (Jean-Philippe) Towner, formerly the CFO. RONA inc. has reduced its staff, too.

The company announced two waves of layoffs, the first related to the closing of two of its DCs. That created 300 layoffs.

A major reorganization followed in June 2023, which included the elimination of 500 more positions.

In the spring, the company welcomed six new affiliates in Quebec, British Columbia, and Alberta. RONA also completed the sale of its distribution centre in Terrebonne, a suburb of Montreal, to BMTC Group, a Montreal-based holding company, with a lease-back deal. The cessation of regular operations at the facility had been announced back in January.

4. CANADIAN TIRE HQ: Toronto, Ont. 2023 RETAIL SALES: $7.723 billion* STORES: 502

* hardware and home improvement only Canadian Tire Corp. is a unique Canadian retail phenomenon. It has 502 stores under the Canadian Tire banner (which Hardlines measures for the Top 20

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rankings) and all are owned by Canadian Tire associate dealers. They range in size from 3,200 to about 100,000 square feet, with the largest one in Ottawa measuring 136,000 square feet in size.

Canadian Tire offers more than 186,000 products in 205 product categories across five divisions: Automotive, Fixing, Living, Playing, and Seasonal & Gardening. Most of the Canadian Tire stores also provide automotive services.

Like other publicly-held retail home improvement companies, Canadian Tire saw its revenue and profits get squeezed through 2023. Hit by lower customer demand and higher-than-expected inventories, revenue and sales were down. The company was further affected by a fire at one of its distribution centres in the Greater Toronto Area. Operating efficiencies that resulted from the fire were estimated to cost Canadian Tire $32 million.

“Our performance last year fell short of our expectations as our team continues to navigate a challenging macroeconomic environment,” said Greg Hicks, president and CEO of Canadian Tire Corp.

Hardlines Home Improvement Quarterly

For the full year, Canadian Tire’s consolidated retail sales were $18.50 billion, down 3.9 percent. Consolidated retail sales, excluding petroleum, decreased 3.1 percent and consolidated comp sales were down 2.9 percent. Consolidated revenue for the company declined 6.5 percent to $16.66 billion.

Revenue, excluding petroleum, decreased by 6.1 percent compared to the same period last year, with the decline in the retail segment partially offset by financial services growth.

“In the near-term, we are taking a measured and cautious approach to our operating plans. While the pace of our investments has slowed, we remain committed to our strategy as we balance tough short-term decisions with our long-term objectives,” added Hicks.

The company has made huge inroads with its online sales strategy. That strategy has been supported by the company’s Triangle Rewards program, which applies to all Canadian Tire-owned banners, including Sport Chek and Mark’s. The development of the membership in Triangle Rewards has increased basket size and shopping www.hardlines.ca

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CANADA’S

TOP 20 frequency among members compared to non-member customers.

The company made some staff cuts during the last quarter of 2023. The initiative resulted in targeted headcount reductions to reduce staffing levels by three percent, or about 200 people. In addition, the elimination of open job vacancies was expected to take company’s headcount down by another three percent compared to 2022.

And some changes occurred with existing staff. Michael Magennis, a 30-year veteran merchant at Canadian Tire, and most recently SVP general merchandising, got a new role earlier this year. He is now SVP, petroleum and special initiatives. Micheline Davies is now Canadian Tire’s chief merchant. She was formerly SVP, automotive.

Canadian Tire continues to invest in, and expand, its range of private-label products. Proprietary brands now account for a significant percentage of the stores’ sales.

Through two product development labs, in Calgary and Toronto, the retail chain is trying to bring 12,000 newly-developed SKUs to market by the end of 2025.

F LE both the retail home improvement and GSD businesses in its provinces (see separate report on Kent). In Ontario, Turkstra Lumber weighs in at some 11 locations.

Then there is Bonhomme in Quebec and Bytown Lumber in the Ottawa/Gatineau area. Combined, the Bonhomme/Bytown group represents some 10 outlets, and they are major players, too. BMR Group buys through the ILDC, bringing their 275 stores into the buying power of the ILDC. Copp Building Materials in the London, Ont. market is legendary for its local clout. In Western Canada, Federated Co-operatives buys through the ILDC, bringing 104 home and garden and farm stores into the mix.

ILDC member McMunn & Yates is up to 22 stores in southern Manitoba, with its three stores acquired from Canadian Lumber having their grand reopenings in May 2023. All told, ILDC represents the fifth largest buying power in this industry when it sits down to negotiate with vendors. It is a member of the hardlines buying group Spancan.

Distribution G.I., in January of this year.

A very healthy dealer presence at TIMBER MART’s “hybrid” buying show in Toronto in February 2024 showed that TIMBER MART is a national force. The group offers a store identification program without mandating that the dealer takes it.

In fact, president Bernie Owens pointed out to Hardlines that the majority of his dealers do not fly the TIMBER MART banner, preferring to rely on their own brand. Owens sees this as a strength of the buying group.

“It’s about adding value to the independent dealer without adding a heavy cost to them,” he said.

TIMBER MART is watching its loyalty partner, Air Miles, go through interesting times after it was bought by the Bank of Montreal in 2023. More than a few major retail partners of Air Miles have left the program, but Owens believes that new loyalty partners are coming. In fact, Owens told Hardlines that the issuance of Air Miles points by TIMBER MART dealers went up last year. “That shows there’s still value in it,” Owens said. TIMBER MART members are not mandated to belong to Air Miles.

Kent Building Supplies is the other remaining member of the Air Miles program in our industry.

6. TIMBER MART 5. INDEPENDENT LUMBER DEALERS CO-OPERATIVE HQ: Ajax, Ont. 2023 RETAIL SALES: $4.442 billion STORES: 500

Celebrating its 60th anniversary this year, the Independent Lumber Dealers Co-operative (ILDC), is a buying group that features some of the most powerful regional chains in the LBM business. Take for example its sole Atlantic Canada member, Kent, which is typical of the influence ILDC wields. It has 48 stores including a lot of big boxes. Kent absolutely dominates

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HQ: Calgary, Alta.

2023 RETAIL SALES: $4.262 billion STORES: 603

The biggest news from the past year for TIMBER MART, the national building supplies buying group, was the opening of a new three-acre LBM distribution facility in Winnipeg in October 2023. It sits within a six-hour radius of the group’s dealers in Saskatchewan, Manitoba, and northwestern Ontario. It joins existing DCs in Langley, B.C.; Mount Forest, Ont.; and St-Nicolas, Que. Quebec growth is important to TIMBER MART. It announced the signing of a major independent dealer in Montreal,

Hardlines Home Improvement Quarterly

7. SEXTON GROUP HQ: Winnipeg, Man. 2023 RETAIL SALES: $3.442 billion STORES: 394

Sexton Group was founded in 1985 by Ken Sexton, who had also started Kenroc, one of Western Canada’s largest gypsum specialty dealers, in 1967. The Sexton Group acts as a traditional buying group, representing almost 400 points of sale, negotiating with 200-plus suppliers. It is different in one respect in that it’s privately owned—a www.hardlines.ca

2024-07-03 7:55 PM

Putting our members first in everything we do.

“ Hear about our story at

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We had so much to learn in our first year of business and always felt Sexton’s support along the way. The entire team is approachable & willing to help. As a newer business, we have never once felt insignificant. From the president to sales to accounting, we know Sexton is just a phone call away and that responsiveness to all members is their biggest commitment. Sexton Group acts as an extension of our own team with a personal investment in our success.

We would not be where we are today without the Sexton Group.”

—Devon & Kelsey Brooks, Brooks Building Supplies

Our Promise to You: Our strength as a buying group is built on four major advantages: We’re a dedicated team of industry professionals focused on your success.

We negotiate competitive programs and leverage our strong relationships with vendors to resolve any issues quickly for you. We have a first-class accounting team that promptly delivers accurate rebate payments as promised.

Driven by our members’ success.

Sexton-BROOKS-OriginalDesign-HHIQ-fullpage.indd 59

2024-06-28 2:42 PM

CANADA’S

TOP 20 fact the company says enables it to manage costs and structure with a firm hand.

Today, it is part of the Sexton Family of Companies, which consists of the Sexton Group buying group, Kenroc Building Materials, Pan-Brick Inc., and wholesale distributor Builders Choice.

Sexton was once strongest in the west, reflecting its roots in Winnipeg. But the group has expanded successfully across eastern Canada. At the beginning of the year, Suzanne Walsh was promoted to business development director, expanding her territory nationally, with Sexton’s business development managers reporting to her.

Her mandate has been to increase Sexton’s presence in Quebec and in Atlantic Canada, regions that the group has room to grow in.

Sexton has a strategic alliance, formed in early 2021, with Ace dealers in Canada.

Through the alliance, Sexton members now have access to the Ace Hardware banner and a strong hardlines distribution from Peavey Industries in Red Deer, Alta., which owns the licence to Ace in Canada. All that is likely to change at the end of the year, when Peavey will relinquish the licence.

One strength of Sexton Group is the large number of modular or pre-fab home builders, partially thanks to Walsh’s early recruitment efforts.

F LE consistently over the last decade and a half, selling what the group says is the lowest cost of affiliation and the lowest cost of materials. Consequently, the newest stores built by members tend to have their own personal identity, with a “You Are the Brand” store identification. This seems to have replaced, in many recent cases, the yellow and blue Castle brand image that was first developed in 1995. To that extent, Castle is today less of a brand and more of a buying group.

Whatever the chosen branding for a new Castle store is, it seems to be working.

Castle has signed multiple new members over the past year, many of them from competing groups. Some of the recent new members are in Edmonton, Alta.; Colborne, Lucknow, Milton, Nipigon, Oshawa, Toronto, and Wingham, Ont.; Chertsey, Que.; and Louisdale and Trenton, N.S., among other communities.

10. BMR GROUP HQ: Boucherville, Que. 2023 RETAIL SALES: $1.463 billion STORES: 275

9. CANAC HQ: Quebec City, Que. 2023 RETAIL SALES: $1.492 billion STORES: 32

8. CASTLE BUILDING CENTRES HQ: Mississauga, Ont. 2023 RETAIL SALES: $1.963 billion STORES: 326

Castle celebrated 60 years in business last year. It got its start in 1963 as BOLD Lumber (“Buying Organization of Lumber Dealers”) and changed its name to Castle in 1982. Around 1997, it launched a twin buying group for commercial dealers, Commercial Builders’ Supplies.

Castle has grown its membership

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to those values, family values like ours,” general director Martin Gamache told one newspaper in the summer of 2023.

This past spring, Canac broke ground on the site of a new store in Rivière-du-Loup, Que., purchased way back in 2017. In May it held a grand opening in Sorel-Tracy, about an hour east of Montreal. It has another store in the works just west of Montreal, in Salaberry-de-Valleyfield, for 2025.

The retailer is also investing $10 million in the expansion and renewal of its store in Quebec City’s Charlesbourg district. The store was lifted onto beams and moved by truck in what marketing director Patrick Delisle called “a maneuver you don’t often see.”

This major player in the Quebec City region, formerly known as Canac-Marquis Grenier, is also the largest independent home improvement chain in the province.

It follows a Walmart-style everyday low pricing model and has more than a dozen stores in the Quebec City region alone.

Canac’s offering runs the gamut of home products from hardware, plumbing and electrical, to paint, floor coverings and seasonal products. Its pricing is especially aggressive in commodities.

Since the takeover of RONA by Sycamore Partners, Canac is jockeying with BMR for the position of a Quebec-owned alternative. “I don’t believe [RONA] can go back

Hardlines Home Improvement Quarterly

BMR Group is a member of the Independent Lumber Dealers Co-operative (ILDC) and since 2015 the retail division of Sollio Groupe Coopératif (formerly La Coop fédérée). It describes itself as the largest wholly Quebec-owned home improvement retailer.

BMR boasts some 275 retail outlets, with the greatest concentration in its home province but also a growing number of dealers in Ontario and the Maritimes, especially New Brunswick. It’s also a wholesaler with its own distribution facilities in Quebec, including a 350,000-square-foot hardware warehouse in Boucherville and three LBM DCs comprising 170,000 square feet in Longueuil, Quebec City, and Jonquiere.

BMR operates multiple banners. The standalone BMR brand covers home centres catering to the general DIY customer with a mix of hardware and building materials.

Proximity stores are grouped under the BMR Express banner and large-format www.hardlines.ca

2024-07-02 8:24 AM

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CANADA’S

TOP 20 stores under BMR Extra. BMR Pro is targeted toward the contractor customer, while Agrizone stores serve a farm and ranch customer base.

In the summer of last year, the group announced that it was joining the A.R.E.N.A. Alliance. As the first Canadian partner of the European-based buying organization, BMR now has access to products that the alliance sources from overseas, such as outdoor living products from East Asia.

Hardlines was on the scene last November when BMR held its annual buying show and gala in Quebec City. CEO Alexandre Lefebvre told us that while efforts for expansion continue in Ontario and New Brunswick, the group also has national ambitions. “The rest of Canada is still very much on the radar. Realistically, it’s going to have to come through acquisitions,” he said.

11. KENT BUILDING SUPPLIES

F LE Whirlpool, and GE, and the retailer will ship directly to customers’ homes.

In addition to its Canadian group affi liations, Kent joined the European group A.R.E.N.A. in February of this year. Kent is the purchasing alliance’s ninth partner and its second in Canada; BMR Group came aboard last June. Both BMR and Kent also buy hardlines through the hardware buying group, Spancan. Other members of the A.R.E.N.A. Alliance include Groupement Les Mousquetaires in France and Germany’s hagebau.

“We look forward to leveraging our volume and category management experience to support A.R.E.N.A. negotiating strategies and provide improved deals to all partners,” said Michael Simms, VP retail at J.D. Irving Ltd., at the time.

12. DELROC INDUSTRIES HQ: Langley, B.C.

HQ: Saint John, N.B.

2023 RETAIL SALES: $977 million

2023 RETAIL SALES: $1.159 billion

STORES: 137

STORES: 48

Delroc is a privately-owned buying group that operates some 137 stores, with its roots dating back to Dryco Building Supplies in 1973. Entrepreneur Brun Mauro started with a single Dryco Building Supplies store, which was a GSD. In the beginning, Mauro had his brother, Vince, as a partner, as well as Gerry Malinka and Ken Kabush. The Mauro family eventually became owners, with the second generation of Mauros, Daniel and Anthony, both sons of Bruno, as current national operations manager and director of Delroc, respectively.

Delroc, as a buying group, grew out of Dryco’s need for buying power. Along the way it picked up members such as Windsor Plywood (see separate listing), Northern Building Supplies, and Peace River Building Products. Windsor Plywood is the largest

Kent is a major regional chain that has 48 stores throughout Atlantic Canada.

The company is part of the J.D. Irving Ltd. group of companies, as well as a member of the I.L.D.C. buying group.

It has stores in two main formats, traditional home centres and big boxes. They sell to both DIY and contractor customers, but like so many other home improvement retailers, it has been ramping up its focus on pros in recent years. The latest new store is a relocation of an older store in Riverview, N.B. The new location ramped up in April with a contractor event before its grand opening.

Kent made a significant expansion of its product mix late last year when it began selling heavy appliances in some of its stores and online. Brands include Samsung,

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Hardlines Home Improvement Quarterly

of the Delroc members, with some 52 stores in Canada. Delroc, no longer strictly a GSD buying group, calls itself “Canada’s most cost-effective construction and building materials buying group,” a claim that most buying groups tend to make. Dryco itself is still growing, opening an outlet in Kelowna, B.C., in July 2023.

13. GMS CANADA CANADIAN HQ: Vaughan, Ont. 2023 SALES: $850 million STORES: 32

GMS Canada is yet another GSD buying group that has been purchased by an American company in the last decade.

Formerly known as WSB Titan, when it was in Canadian hands, the group was purchased by GMS (Gypsum Management and Supply) Inc. of Tucker, Georgia, in 2018, for US$627 million. By that time, WSB Titan had grown to become one of Canada’s biggest GSD buying entities. It got its start in 2009 buying for three of Canada’s largest GSD chains: Shoemaker Drywall Supplies on the Prairies, Watson Building Supplies in Ontario, and Beauchesne Group in Quebec.

Nowadays, the connection with Watson at the corporate level continues with Paul Green, who was Watson’s president, now serving as president of GMS Canada. The two most recent acquisitions (both 2023) of the Canadian group are Home Lumber and Building Supplies, in Victoria, B.C.; and Blair Building Materials, in Maple, Ont. GMS Canada has members from Vancouver Island (where Slegg Building Materials has some 10 outlets) to Quebec (DL Building Materials in Gatineau). There are 14 outlets in B.C., seven in Alberta, one in Saskatchewan, one in Manitoba, nine in Ontario, and one in Quebec. www.hardlines.ca

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CANADA’S

TOP 20

F LE

Market share by province Rank Province

14. AD BUILDING SUPPLIES CANADA HQ: Mississauga, Ont. 2023 RETAIL SALES: $801 million STORES: 45

Established in 2021, AD Canada business unit was formed to bring together four Canadian AD divisions under one umbrella, including the newest one at the time, the Building Supplies Division. This unit was formed when the buying group TORBSA merged into AD to form the basis for the new division in July 2022. (That division is what is measured here.—Editor).

The former TORBSA dealers are focused in southern and central Ontario, with the exception of its largest member, Crown Building Supplies in Surrey, B.C. The group has been gradually adding members since it become AD Canada.

AD Canada’s Missisauga headquarters is attached to a 50,000-square-foot distribution centre that services all the group’s divisions. Rob Dewar is the president of AD Canada; the Building Supplies Division is overseen by Paul Williams, who had formerly headed up TORBSA.

15. FEDERATED CO-OPERATIVES HQ: Saskatoon, Sask.

2023 RETAIL SALES: $512 million STORES: 104

Federated Co-operatives Ltd. is a $12.46 billion diversified business based in Saskatoon. As one of the largest companies in Saskatchewan, it supplies everything from groceries and ag products to building materials and fuel to 161 local Co-ops

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Market Share

1

Ontario

32.9%

2

Quebec

22.1%

3

Alberta

12.8%

4

British Columbia

12.2%

5

Saskatchewan

4.4%

6

Manitoba

4.2%

7

Nova Scotia

3.8%

8

New Brunswick

3.4%

9

Nfld. & Lab.

2.8%

10

P.E.I.

0.7%

11

N.W.T.

0.3%

12

Yukon

0.2%

13

Nunavut

0.1%

and two affi liate members across western Canada. Representing over 26,400 employees, these co-ops serve 2.1 million members and even more non-member customers through 1,600-plus retail locations in more than 650 communities.

FCL supports 160 local co-op organizations in 600 communities serving 2.2 million members across western Canada with a vision of “building sustainable communities together.” A big part of the co-op model is its patronage dividends, which are paid back to retail associations—something, Smith says, that sets the co-ops apart from other businesses.

A big part of Federated Co-operatives’ business is its retail home improvement

Hardlines Home Improvement Quarterly

stores. Its hardlines division, Home and Building Solutions, provides significant returns to FCL. Cody Smith is director of HABS. Smith’s HABS division in turn represents $560 million at retail through 104 home centres—88 of them with lumberyards. The balance of the stores are ag centres that are “hybrids” and carry LBM. HABS also feeds some hardlines into the co-op grocery and c-stores.

Growth for the home improvement business has included adding more focus to LBM sales in recent years, as well as increasing the distribution network. That includes a distribution centre that opened near Calgary in late 2022, and the opening of another DC in Fort Saskatchewan toward the end of 2023.

One area of FCL’s business that’s growing in importance is its private labels. Smith says the company continues to invest in its house brands, which, he says, are recognized and trusted by co-op customers.

There are some guidelines around which types of products to focus on. “We’re typically looking at private label to be a product that’s unique and different in the marketplace. And where there’s opportunity, we use it on our import program as well.”

The HABS merchandising team remains focused on Canadian-made products and adds new ones to its roster each year.

16. PEAVEY INDUSTRIES HQ: Red Deer, Alta.

2023 RETAIL SALES: $475 million STORES: 92

Peavey Industries got bigger four years ago when, in 2020, the Red Deer, Alta.based firm acquired the Ace license for Canada—from Lowe’s Canada, three years before they exited the country. It will give up the Ace business in Canada at the end of www.hardlines.ca

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CANADA’S

TOP 20

F LE

Market share by store type

Building Centres 3,109 STORES 52.2%

Canadian Tire* 502 STORES 13.1%

Hardware Stores 953 STORES 6.6%

Big Boxes 301 STORES 28.0%

* Home category only, excluding sporting goods and auto.

Total home improvement stores by province/territory

Total stores 4,865

Yukon 17

Newfoundland and Labrador

Northwest Territories

176

19

Nunavut 6

Prince Edward Island 39

British Columbia 606

Nova Scotia 192

Alberta 610

Saskatchewan 295

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New Brunswick Manitoba 248

Hardlines Home Improvement Quarterly

Ontario 1,394

Quebec

171

1,095

www.hardlines.ca

2024-06-28 3:20 PM

Top 20 banner groups 2023 retail sales ($millions) Rank

Company

2023

2022

Change

Stores

Notes

1

Home Depot Canada

$11,565

$12,070

-4.2%

182

Sales do not include HD Supply Canada.

2

Home Hardware Stores

$9,093

$9,376

-3.0%

1,036

3

RONA inc.

$8,454

$8,857

-4.6%

425

Includes RONA, Réno-Dépôt, and Dick’s Lumber.

4

Canadian Tire

$7,723

$8,081

-4.4%

502

Home category only, excludes sporting goods, auto, and non-related products.

5

ILDC

$4,442

$4,644

-4.3%

500

Sales include separately-listed BMR, Federated Co-operatives, and Kent.

6

TIMBER MART

$4,262

$4,362

-2.3%

603

7

Sexton Group

$3,442

$3,643

-5.5%

394

8

Castle Building Centres

$1,963

$1,971

-0.4%

326

9

Canac

$1,492

$1,400

6.6%

32

10

BMR Group

$1,463

$1,574

-7.1%

275

11

Kent Building Supplies

$1,159

$1,188

-2.4%

48

12

Delroc

$977

$968

0.9%

137

13

GMS Canada

$850

$832

2.2%

32

14

AD Canada Building Supplies

$801

$786

1.9%

45

15

Federated Co-operatives

$512

$560

-8.6%

104

16

Peavey Industries

$475

$496

-4.2%

92

17

UFA

$433

$445

-2.7%

34

18

Patrick Morin

$408

$415

-1.7%

21

19

FBM/Winroc

$421

$411

2.4%

27

20

Windsor Plywood

$350

$343

2.0%

52

TOTALS

$56,368

$58,312

-3.3%

TOP 4

$36,835

$38,384

-4.0%

www.hardlines.ca

HHIQ_3Q_24_TOP20.indd 67

Sales include separately-listed UFA.

Sales include separately-listed Windsor Plywood.

Includes Peavey Mart and MainStreet Hardware, but does not include wholesale sales to Ace Canada stores.

Owned by Home Hardware/Groupe Turcotte. Not included in Home Hardware sales above.

Sales of banners inside other Top 20 buying groups have been backed out of these totals to avoid double-counting.

Hardlines Home Improvement Quarterly

THIRD QUARTER / 2024

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2024-07-04 6:10 AM

CANADA’S

TOP 20 2024. Earlier, in 2016, Peavey had acquired the Canadian retail operations of the Tractor Supply Company (TSC), giving it a significant boost to its store network in Ontario, and also some stores in Manitoba.

The former TSC stores in Canada are all now branded as Peavey Marts.

Collectively, Peavey’s two main brands are about equally divided into hardware, farm, and building supplies stores. The hardware and farm lines are supplied from Peavey’s distribution centres in Red Deer and London, Ont., while LBM is supplied through an agreement with Winnipegbased Sexton Group.

Peavey Industries president Doug Anderson told Hardlines that during the next little while, because of economic uncertainty, Peavey’s growth will be “pretty cautious.” But Peavey is continuing to grow, including this spring the opening of a new 30,000 square foot Peavey Mart in Steinbach, Man. As wildfi re season kicks off again, Peavey’s markets are likely to be further challenged by droughts and water shortages. “We have quite a bit of concern on that front,” Anderson said. “But you still have to feed and contain your animals, so that part of the business remains strong.”

Looking ahead, Anderson identified both the Maritimes and British Columbia as opportunities for future strategic growth.

17. UNITED FARMERS OF ALBERTA CO-OPERATIVE HQ: Calgary, Alta.

2023 RETAIL SALES: $433 million STORES: 34

UFA remains in growth mode, continuing to add fuel stations in B.C., Alberta, and Saskatchewan, taking it further afield

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F LE

Market share of Top 20 Retail Groups Rest of the Industry $2.562 billion 4.4%

Top 20 Retail Groups $56.212 billion 95.6%

from its home province, from where it manages a network of 34 UFA Farm & Ranch Supply stores. Last year, UFA launched an enhanced online platform called MarketPLACE, the result of a partnership with Mirakl, an enterprise marketplace technology provider. The platform was

Hardlines Home Improvement Quarterly

further customized by UFA’s own digital, product strategy, and tech teams. With this new platform, shoppers can choose products from outside vendors along with any products carried by UFA. The products can then be picked up with the UFA products at their local UFA Farm & Ranch Supply store. www.hardlines.ca

2024-06-28 3:20 PM

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CANADA’S

TOP 20 Earlier this year, UFA staked out its growth intentions with the creation of a new position, chief sales officer. An agricultural supply chain veteran, Steve Kovacs, was hired to fi ll the key role in Calgary.

“Steve’s appointment comes at an opportune moment for UFA,” said president and CEO Scott Bolton. “He brings the perfect mix of finance expertise and sales and marketing, along with a strong appreciation for the agri-food industry and the critical role that producers play in ensuring the stability of the global food supply.”

18. PATRICK MORIN HQ: Saint-Paul, Que. 2023 RETAIL SALES: $408 million STORES: 21

Groupe Turcotte, a network of seven Home Hardware stores in Quebec, partnered with Home Hardware Stores Ltd. corporate to buy Patrick Morin in February, 2021. Patrick Morin had previously been a member of ILDC. It continues to maintain its own banner and branding.

Patrick Morin’s retail sales for 2023 amounted to about $408 million. The company is looking to nearly double its footprint over a decade-long $25 million project.

In order to support that growth, Patrick Morin doubled the surface of its distribution centre earlier this year. The facility was expanded by 150,000 square feet to a total area of more than 340,000 square feet. It includes 52 loading docks and a 400,000-square-foot lumberyard.

Patrick Morin himself, the chain’s founder, died in December at the age of 96.

He and his wife Denise Benny opened their first store in Ste-Marcelline-de-Kildare, in Quebec’s Lanaudière region, in 1960.

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F LE

19. FOUNDATION BUILDING MATERIALS CANADA

was sold in 2016 to Foundation Building Materials Inc. of Santa Ana, California, for US$325 million. FBM Inc. now has more than 300 locations in North America.

Some 27 of them are in Canada, mostly ex-Winroc, with seven locations in B.C., seven in Alberta, two in Saskatchewan, one in Manitoba, and 10 in Ontario.

CANADIAN HQ: Calgary, Alta.

2023 RETAIL SALES: $421 million STORES: 27

What is now the Canadian Division of FBM used to be known as Winroc, which was founded as a single-store GSD in Winnipeg (hence the name) by Wayne Jack in 1971. Back then, Winroc was just one of the many gypsum supply chains that were populating the industry—other groups included Winroc’s competitor, Kenroc, in Regina, and Delroc in Langley, B.C. All of them morphed into full-service building supply buying groups, because the wallboard-only phenomenon was short-lived.

Winroc was sold to Superior Plus LP, a publicly-traded chemical company based in Toronto, in 2004. They held it for 12 years, until Superior Plus’s construction division, including Winroc and SPI,

Hardlines Home Improvement Quarterly

20. WINDSOR PLYWOOD HQ: Langley, B.C. 2023 RETAIL SALES: $350 million STORES: 52 (in Canada)

Windsor Plywood is second only to Canadian Tire in our industry by the misleading nature of its name. Sure, Windsor Plywood sells plywood, but it is a full-scale building supply store—mostly operated on the franchise model. It is one of the rare Canadian building supply stores to operate south of the border (without having been acquired by U.S. interests). In addition to its 52 stores in Canada, it has four

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2024-06-28 3:20 PM

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CANADA’S

TOP 20

F LE

in Washington state and one in Montana.

Founder Randle (Randy) Jones passed away just before Christmas 2023 at the age of 89. He had founded Windsor Building Supplies in 1969, with a single store in Surrey, B.C. Jones was a business student at the University of British Columbia when he got a job at Steward & Hudson Lumber Co. in his hometown of Victoria in 1952. He later bought the company before coming up with the idea for Windsor Plywood.

Windsor is known for specialty wood products and also sells lumber, hardware, doors, floors and mouldings. Randy and his wife and business partner, Fran, founded the Windsor Plywood Foundation many years ago, with projects chosen by the individual stores. It has given tens of millions of dollars to worthy causes in B.C. and western Canada.

WANT THE FULL STORY? The HHIQ Top 20 is just a fraction of the info we have for you in the 2024 Hardlines Retail Report and 2024 Hardlines Market Share Report.

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Hardlines Home Improvement Quarterly

www.hardlines.ca

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Get a new perspective from industry leaders What’s in Store A free podcast series from Hardlines that features interviews with industry leaders from all parts of the home improvement industry. Listen while you are in the car, or from the comfort of your office.

You will be entertained, educated and that much more connected to the industry!

RECENTLY ADDED PODCASTS

Pierre Battah*

Tanja Fratangeli

Nicole Gallucci

Barry Eidt

Hardlines President and podcast host Michael McLarney interviews Pierre Battah, a leading HR advisor in Canada and best-selling author of Humanity at Work: Leading for Better Relationships and Results. Pierre shares HR wisdom and focuses on engagement, which has a direct connection to sales and profitability.

Pierre offers great advice on why the HR team does not replace the employee’s relationship with the boss.

Hardlines Assistant Editor Geoff McLarney and Senior Editor Steve Payne interview Nicole Gallucci, professor at Loyalist and George Brown Colleges and author of Life Blueprint: A Step-by-Step Guide for Creating an Extraordinary Life.

She shares her insights on intergenerational collaboration in the workplace, including the arrival of Gen Z, and how AI is going to impact the way we work.

Hardlines President and podcast host Michael McLarney interviews Tanja Fratangeli, IKEA Canada’s head of people and culture. In this episode, she shares her perspective as a leader who promotes IKEA’s values of inclusivity, openness, and honesty. It’s an interesting take on how a Canadian company fits and develops its HR strategy as part of a global company.

Hardlines Editor and podcast host Steve Payne interviews Barry Eidt of Arthur, Ontario Ace and winner of the Hardlines Young Retailer of the Year Award. Barry tells about growing up in and growing up with the family business, and how he got into co-owning stores with his father. He talks about the division of responsibilities in the business, and how he pulled off the investment financially at a young age.

Plus many more podcasts to choose from! * Pierre Battah is an award-winning author and workplace leadership specialist. He is a long-time workplace columnist for CBC/Radio-Canada, a TEDx presenter, a former senior manager in HR and was previously an associate professor in management at Mount Allison University.

Pierre is fluently bilingual in French and English, holds an MBA and professional designations in HR, management consulting and as a professional speaker. His book Humanity at Work, Leading for Better Relationships and Results won gold at the 2020 Nautilus Book Awards in the US. Pierre is speaking at the 2024 Hardlines Conference in Charlevoix, Q.C. on October 22nd and 23rd. Scan here for more details!

Listen today for free at hardlinespodcast.ca The Hardlines Podcast Series has been made possible through the support of:

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THE LEADERS

BY MICHAEL McLARNEY

HOME HARDWARE BOSS TALKS ABOUT HIS COMPANY’S OPPORTUNITIES AND CHALLENGES IN ANNIVERSARY YEAR

Home Hardware Stores Ltd. is 60 years old. Starting with 122 dealers and $4 million in revenues in year one, the dealer-owned banner now counts almost 1,100 dealers and retail sales approaching $10 billion

H

ome Hardware is pulling out all the stops to make hay during its 60th birthday year. The company, which is the largest Canadian retailer in the industry, got its official start in the small town of St. Jacobs, nestled in the heart of southern Ontario’s Mennonite country, in 1964.

The idea for a dealer-owned cooperative was hatched by Walter Hachborn and Henry Sittler—with their lawyer, Arthur Zilliax, as silent partner. The trio already owned Hollinger Hardware, a wholesaler in the town, but they had seen about a thousand hardware stores in Canada close over the preceding decade. “They couldn’t compete with the (American) mass merchandisers,” Hachborn told Canadian Press in 1999.

“I thought there had to be a way.”

“The Way” came to Hachborn from an article in an American trade journal called “The Case for the Dealer-Owned Cooperative.” He visited a prominent hardware co-op south of the border on a factfinding mission—in which he was warmly received. The co-op apparently looked at Canada as a frozen, northern land far away.

It was of no competing interest. Hachborn was even shown how the company worked in intimate detail. He knew that something similar would work in Canada.

At a meeting at the Flying Dutchman Motel in Kitchener, Ont., in 1963, Hachborn proposed that the 122 independent stores www.hardlines.ca

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Home Hardware’s president and CEO, Kevin Macnab, is just the fourth person to run the storied hardware co-op. He recently announced his intention to retire. in attendance buy out Hollinger Hardware.

The new company had its first day of business on Jan. 1, 1964.

GRASSROOTS GROWTH

With a history that spans 60 years, Home Hardware Stores Ltd. has a legacy to be proud of. That legacy includes grassroots growth and expansion that now represents some 1,036 dealers nationwide. Those stores represent a variety of formats under the Home Hardware, Home Building Centre,

Home Hardware Building Centre, and Home Furniture banners.

Throughout that time, the company has had only four CEOs, starting with Hachborn himself. Hardlines spoke recently with Home Hardware’s current president and CEO, Kevin Macnab, about what’s in store for both customers and Home Hardware dealers during the anniversary year ahead. That includes a campaign that focuses on how Home Hardware dealers and head office workers support their local communities.

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CUT THE CLUTTER As a store owner or manager, we know you are swamped with “too much information.” That’s why Hardlines can email you DealerNews in a simple-to-read format, once a month. It tells you what the most successful home improvement retailers are doing—without the clutter.

Each issue of Hardlines Dealer News features: 4 News about smart tactics from savvy dealers 4 Photos of brilliant merchandising (Merch Matters) 4 Photos of innovative ideas (In Our Store) 4 News from buying and dealer groups That’s it. Nothing but useful info to increase your sales.

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LBM Macnab has recently announced his intention to resign in the near future. In the meantime, he shared his thoughts about Canada’s largest dealer-owned home improvement retail group.

“We’ll be highlighting the incredible way the home team, our dealers, and corporately give back to their communities and we’re going to commemorate 60 years of business with 60 stories of goodwill that will be shared both internally and with community media,” he says. “We’re doing a lot this year, but I particularly like that 60 Acts of Kindness Campaign.”

Macnab says customers will see special sales and promotions to celebrate the 60th and promises some great deals for customers. And he expects the events to create

“

unity and understanding throughout the company.”

He sees these guiding principles as crucial to guiding the company into the future following a series of changes within the company—changes, he says, which are largely complete. “Our purpose, simply put, is to improve life at home. Now, that can be home with a capital ‘H’ as part of our dealer network. But it also means a store experience with lower case ‘h’ for our customers to improve life.”

“Our vision is for home to be Canada’s most trusted and preferred home improvement experience. So, we’re very focused on experience,” he says. “And our mission is to serve communities through our strong independent dealer network, by providing

We all know additional housing in Canada is an absolute necessity. We can and will play a part in helping address the housing shortage by providing expert advice and quality price.

pride for the dealers. And the Homecoming dealer market in September in Toronto will be an occasion for further celebrating their collective achievements. The festivities are a welcome addition for an industry that is coming off a slow year in 2023 and a soft start to 2024. Macnab points out that the company has been supporting the dealers to ensure their growth.

“The key to our success is our dealers and we’ve been working really hard to support them, enabling them to grow their businesses with their customers, or growing their footage.”

GUIDING PRINCIPLES

Macnab then talked about how the company’s newest milestone has served a larger purpose. “We’ve used our 60th anniversary to clarify Home Hardware’s purpose, vision, and mission. These are Home’s guiding principles, which will drive our decision making,” Macnab says. “They create www.hardlines.ca

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”

superior home improvement experiences with helpful advice, competitive prices, and quality products.”

HOUSING WILL HELP

Macnab foresees that current economic and political trends will mean positive news.

There is an opportunity for the retail home improvement industry as Canada shapes its housing policy to increase the number of homes in this country.

“We all know additional housing in Canada is an absolute necessity. We can and will play a part in helping address the housing shortage by providing expert advice and quality price. But in addition to that, we have a national partnership we’ve established with Skills Canada to help develop skilled tradespeople—because, of course, the country needs that.”

That expected push to build more housing, he adds, will be good for Home Hardware and for the entire industry.

THE LEADERS “That’s going to benefit us and benefit the sector.”

In the meantime, Macnab points out that the company has been supporting the dealers to ensure their growth.

“The key to success is our dealers and we’ve been working really hard to support them, enabling them to grow their businesses with their customers, or growing their footage.”

POINT OF PRIDE

He expects the events surrounding the anniversary will build pride for the dealers. And the Homecoming dealer market in September in Toronto will be a showcase for further celebrating their collective achievements.

The anniversary milestone comes amidst a time of great change for Home Hardware.

The company was historically focused primarily on its shareholders—the dealers themselves. But in a shift that actually began under Macnab’s predecessor, interim CEO Terry Davis, a new strategy was begun to put the end customer front and centre.

As the company calls it, the move has been from being a hardware wholesaler to a retail company.

“Over the last few years we’ve been very focused on the end consumer to better support our dealers. We’ve made changes to strengthen our product assortments as well as implementing the Scene+ loyalty program, over the last few years,” he says.

“So we have made changes—and change is never easy. And sometimes there’s pushback. But what I would tell you—we’re at a point now where we’ve been through the biggest elements of change and dealers are seeing the benefits of the work we’ve done.”

Macnab adds that the company conducted its first-ever dealer satisfaction survey last year, “and we received positive results from it.” All told, Macnab is pleased with the birthday plans, the array of advertising and promotional programs, “all those things that generate excitement for dealers and customers.”

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INTRODUCING HARDLINES PREMIUM What it includes:

Having a subscription to the weekly Hardlines newsletter has always been the best way to keep in touch with the changes and trends in hardware and home improvement retailing.

And paying for the Hardlines subscription has always meant special benefits for you that our ordinary readers simply can’t get.

Every Monday morning, Hardlines provides up-to-date news, offer. insightful articles, and industry intel that no one else can kind Your ongoing support is important to us. I know it sounds of part are you makes n criptio r-Subs of corny, but your Membe our Hardlines Family.

And now, the benefits of that Member-Subscription are stronger than ever. The savings you can get from the many other products we offer will quickly make up for the cost of your Member-Subscription. So please make sure your to company’s Member-Subscribers are up to date—and be sure take advantage of the other savings we offer.

s!

Finally, thank you for your years of support. It really matter Best regards,

Michael McLarney President, Hardlines

✔ Hardlines Weekly Report ✔ Breaking News ✔ HHIQ magazine subscription* ✔ Pro Dealer magazine subscription* ✔ Hardlines Classifieds: One 250-word 2-week classified ad, logo included, per year for FREE. Additional classifieds receive 15% discount. ✔ 20% discount on Annual Reports ✔ 20% discount on Hardlines Conference and ORA Gala tickets *One issue per office quarterly. Additional issues available for discounted price.

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OUR BRANDS Previously Hardlines Weekly Newsletter. This newsletter arrives in your inbox first thing every Monday morning.

Packed with the latest news, trends analysis, interviews with industry leaders, and statistics on housing and retail, we ensure our subscribers start the week fully informed.

Hardlines Home Improvement Quarterly is an industry trade publication carefully designed to meet the needs of the modern home improvement decision maker. Each issue is filled with the latest trends shaping home improvement retailing. It provides the latest strategic intelligence on the industry’s top retailers and suppliers—what they are doing to gain market share, strengthen their operations and improve their position in the marketplace. And it tells stories about the independent dealers who are winning in their local markets.

Hardlines Pro Dealer is a brand new quarterly trade magazine featuring content designed to lift the revenues and profitability of contractor specialist dealers. The ultimate resource for LBM dealers, GSDs, & specialty dealers serving the homebuilding & ICI industries across Canada. Premiere issue mails October 2024!

Breaking News, an exclusive for Hardlines Premium Members. If something big breaks in the industry, you’ll be the first to know!

The Annual Retail Report includes everything we know about the industry, newly expanded with more analysis and data than ever before! Featuring industry sales data as of yearend 2022 and up-to-date analysis of marketplace trends.

This is without a doubt our most popular “must-have” Report. This report contains proprietary information about the industry that’s not available anywhere else. We make it easy for you to plan—and to present your plans—for the year ahead. No Sales Director or Marketing Manager should be without this indispensable industry intelligence tool.

Reach a targeted audience of home improvement managers and executives with Hardlines Classified Ads. Our Classifieds appear each week in our Subscriber-Member publication, Hardlines Weekly Report, which goes out to managers, executives, and leading retailers every Monday morning.

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Hardlines Classifieds are immediate, affordable, and most of all highly targeted to the top talent within this industry.

Oct. 21-23, 2024

Fairmont Le Manoir Richelieu C H A R LE VO I X , Q U E B E C

The Annual Market Share Report includes information on the market share in every store format, region and province.

This report features sales by province and region of every hardware and home improvement retailer in the country, market share broken down by store format, charts, and graphs to visually represent all data, and more!

As the only national event for the home improvement industry that is open to all banners and suppliers, we take great pride in being able to host top retailers and buying group executives from across the country, as well as leading wholesalers and manufacturers. Join your colleagues and customers for two incredible days of information and trends, as well as a fantastic networking experience.

FOR MORE INFORMATION SCAN HERE: Questions? Email jillian@hardlines.ca

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HUMAN RESOURCES

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THE IMPORTANCE OF LISTENING WHEN YOU’RE IN CHARGE

Deb Craven, the first non-family member to be president of Ontario grocery chain Longo’s, recently gave a presentation on how management lifted employee engagement

L

istening is a core competency.

People don’t do it very well.”

Those blunt words were at the core of Deb Craven’s recent presentation on Longo’s “listening” project, in which the 39-store southern Ontario grocery chain conducted meetings with its various departments to find out what employees really felt about their jobs. And what could be improved.

Craven made the remarks at the Retail Council of Canada’s HR conference, held in April. Craven has had a stellar career in retail. She came to Longo’s five years ago—where she is now president since June 2023—after a stint in Calgary as senior vice-president of finance for two of Canadian Tire Corp.’s biggest brands: Sport Chek and Mark’s.

She’s also worked in c-suite roles for Purolator and Nike—and has had various experiences at accounting consultancy and service provider Deloitte.

When Craven, a grocery industry outsider, arrived at Longo’s, one of her first challenges was changing the employee engagement numbers. They had stalled.

“

“

of Longo’s employees that were engaged—a measure of employee morale and job satisfaction—had been 68 percent in 2020, 69 percent in 2021, and then 67 percent in 2022 and 2023.

“We were stuck,” Craven said.

Leave pauses (when people are speaking).

Don’t fill in those pauses with your interpretation of what you’ve heard.

For years, Longo’s had made it a habit of measuring employee engagement through a survey sent out to all 6,000 of the company’s employees. The percentage

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A NEED TO DIG DEEPER

Liz Volk, the grocery chain’s chief human resources officer, pointed out to Craven that those were just numbers—without much

Hardlines Home Improvement Quarterly

context. There was a need to dig deeper into the stalled numbers and find out what was holding employees back. Volk proposed “listening sessions” with the staff and Craven agreed.

To get useful information, it was decided to focus on specific departments of the firm for each session. The distribution centre staff, which had “been through the ringer,” Craven says, after a recent massive expansion, were chosen for an early listening session. The engagement numbers had actually gone down in the warehouse.

Craven and Volk agreed to “engage with them and listen to them. Let’s not assume we know what the problem is.”

The virtual platform Microsoft Teams was chosen for the first session, Craven said. www.hardlines.ca

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Deb Craven was appointed president of Longo’s, a southern Ontario grocery chain, in May 2023. She is the first president from outside of the family firm.

This was a mistake. “It was a long hour. A lot of crickets. The lesson was, don’t start a new initiative where you hope to get feedback on Teams!”

And then: “Are we really going to do this four more times?”

Subsequently, live sessions were tried.

“Holding the sessions in person is well worth the investment.” Employees were

arranged at tables of four, with a leader from each table reporting to the larger group.

That arrangement provided anonymity, Craven said.

Listening sessions have been extended to most departments at Longo’s, including marketing, merchandising, HR, supply chain, and others.

“We’ve seen significant improvement in the engagement survey we just completed with our DC team,” Craven said.

Craven, as a new president in an unfamiliar industry, said that the sessions gave her confidence.

The upper management, of course, had presuppositions about what was holding the employees back from full engagement.

“We thought it was salary/compensation,” Craven said. “But it wasn’t.”

THE TOP THREE CHALLENGES

The top three challenges at Longo’s were accountability (Craven called it the “elephant in the room,” workload, and something called “team member voice”—the freedom to speak up when something was awry or a system could be improved.

For any retailers thinking of trying their own listening sessions to see what can be improved, Craven had some tips for senior leaders. “Leave pauses (when people are speaking). Don’t fi ll in those pauses with your interpretation of what you’ve heard.

Have a good poker face. Prepare for a lot of emotions. Have someone as a scribe so you can focus on the conversations.”

Finally, as good as the listening meetings were, Craven gave advice on what to do to “keep the momentum going.”

Longo’s decided to divide the improvements into various piles. “There are actions we could do within the next 30 days,” Craven said. “A few months, a bit longer. And actions we don’t think we will do at all.”

HOW PET VALU ATTRACTS RETAIL TALENT

The HR lead from the largest pet retailer in Canada shared some secrets about how it promotes career opportunities when it hires

N

ot everybody can see the career opportunity in front of them.”

That was the unfortunate truth about getting hired into a frontline retail position these days. It was expressed

by Carlo Sicoli, director of business development with Schulich Exec Ed, York University, at the Retail Council of Canada’s recent HR conference in Toronto.

Sicoli was interviewing someone whose HR strategy definitely about presenting

“

www.hardlines.ca

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career opportunities to job applicants.

Farheen Visram is director, talent and training, at Pet Valu, Markham, Ont. This specialty pet retailer has grown to over 600 stores. It’s the largest pet store chain in Canada. And it’s known for the quality of its frontline staff.

Pet Valu has to hire very high-quality staff. After all, it faces fierce competition—at often lower prices—from box stores, WalMart, grocery stores, and, yes,

Farheen Visram is director, talent and training, at Pet Valu, Markham, Ont. She says that the search for talent is the biggest task facing any retailer. hardware stores. Pet Valu needs pet lovers and pet experts on its staff. Visram talked about how it gets them.

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EMPOWERING YOUR STORE AND THE PEOPLE WHO DRIVE IT Hardlines HR Advisor is a monthly e-newsletter designed to keep you informed about staffing issues in the retail home improvement industry.

Are you having trouble finding good people? Or getting rid of a problem worker? Do you have a vision for guiding and coaching your team, and yourself, to take your business and your career to the next level? Hardlines HR Advisor is filled every month with insights and tips to help you.

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F LE Sicoli led off the conversation with a talk about onboarding. “It used to be you’d get a beautiful folder, all about the company,” and then you’d be put on the floor.

Visram says those days are over. “We have to rise to the challenges of long-term growth in our workforce.” That starts with a Pet Valu training program that motivates, educates, and persuades employees that there is a potential lifelong opportunity at Pet Valu.

“We’ve got ACEs that are now owners of franchises,” Visram said.

What are ACEs? They are Animal Care Experts, a designation that is attained by employees after months of study at Pet Valu.

Visram explained what the process of training frontline staff involves.

Every employee at Pet Valu who reaches the 180-day mark, with self-paced learning online as well as manager training along the way, has a graduation ceremony. Then there is the animal enthusiast training program as well as the much-vaunted ACE program.

FINDING TIME TO TRAIN

A difficulty familiar to dealer-owners in our industry of home improvement is when to train. Hardware stores, for example, can be crazy busy in the summer. Pet Valu divides its time up by individual stores, depending on their particular traffic patterns.

The “red zone” is where employees should be focused totally on sales.

Customers are the only priority. The “blue zone” is coaching time. Each franchisee will map out red zones and blue zones for its teams.

Training involves animal health, animal psychology including problem behaviours, nutrition, accessories, and services. But one of the things that is most difficult to teach— in the pet industry as well as our own—is how to sell.

“Coaching people on how to sell is not as easy as we thought,” Visram admitted.

“We found that managers are saying, “I know how to sell the products but how do I communicate that?” So Pet Valu has

Every employee at Pet Valu who reaches the 180-day mark, with self-paced learning online as well as manager training along the way, has a graduation ceremony.

www.hardlines.ca

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HUMAN RESOURCES ramped up its personal sales training, to coach the coach.

Engaged employees will usually find a way to sell—and finding a way to get them engaged is Visram’s department’s primary goal.

Again, it’s about presenting Pet Valu as a career option. “We start with our managers. We need to make sure they are well equipped to talk about the growth opportunity.” Pet Valu connects employees to its brand by consistently featuring its employees in its ads.

CAREER DISCOVERY DAYS

Next, Pet Valu recently launched “career discovery days.” These are podcast-style conversations involving peer groups of leaders from throughout the organization, talking about what the opportunities are for career advancement.

“We show, for example, what does a day in the life of a leader in the supply chain look like?” Visram said. “It’s all about opening that door to provide an increasing the visibility of the role.”

And, of course, Pet Valu takes advantage of these sessions to hire for opportunities that have come up. “Here’s the open role,” Visram says. “And we record the session.”

Visram said Pet Valu would love to do career discover days in person, but given how the workforce is distributed, it’s not possible right now.

The human resources managers in attendance at this seminar were obviously very aware that such initiatives cost money.

“HR is always resource-strapped,” Sicoli succinctly put it. Where is the investment going to come from?

Visram pointed out that HR departments always have to point to the return on investment on hiring, and training, and engaging employees. Pet Valu does it throughout its operations. And partnering with marketing helps to provide funds that sell the organizational opportunities.

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PRO CORNER

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SELLING MORE GYPSUM

BY JOHN CAULFIELD

As with any commodity product, the great GSDs know it is as much about service as product and price

O

n April 19, Coastal Drywall Supplies, a distributor with three branches in New Brunswick and Nova Scotia, coordinated with Pinaud Drywall + Acoustics, a local contractor, to deliver and place over 100 lifts of drywall (26 boards to a lift) at the jobsite of The Mills Residences, a mixed-use apartment community with 220 suites, whose construction in downtown Halifax, N.S., is scheduled for completion in late summer.

This delivery feat—which Coastal touted on its Facebook page the following day— speaks to the competitive importance and

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centrality of customer service and logistics for Gypsum Specialty Dealers (GSDs). GSDs may be relatively few in number but they play outsized roles in helping Canadian contractors meet the demands of their commercial and residential clients.

“Service is the name of the game in drywall,” said Daniel Porter, Coastal’s general manager. “Early morning, late night, whenever.”

“Our vision is to be the best,” added Brian McCormick, president of Regina, Sask.-based Kenroc Building Materials, a GSD with 15 locations. “That means more

Hardlines Home Improvement Quarterly

than just moving product from Point A, our distribution centre, to Point B, the customer’s jobsite. Performance is paramount, so when our customer has a problem, we have a problem.”

HOMEBUILDING DRIVES GYPSUM SALES

Drywall is a staple of construction and renovation, and it’s typically a volume sale. For example, the construction of a 2,400-square-foot home requires between 10,000 and 12,000 square feet of drywall, assuming 1,500 square feet of waste, www.hardlines.ca

2024-07-02 8:26 AM

estimates Mitch Wile, a longtime GSD veteran who currently runs The Cedar Shop in Calgary, which sells cedar products and construction packages.

The Coastal/Pinaud drop mentioned above illustrates how exponentially larger commercial demand can be. Despite Canada’s three-year homebuilding slump, drywall production is expected to grow at a compound annual rate of 6.6 percent to nearly $3 billion in value by 2032, according to a recent forecast by Expert Market Research.

Vying to supply construction and reno projects is a host of drywall-centric dealers and distributors that vary by size, market penetration, product mix, and corporate ownership.

Most of these companies are regional, with branches in a couple of markets or provinces. Examples include Acadia Marjam, founded in 1992, whose eight branches serve the Maritimes, and Pacific West Systems Supply, launched in 1983, now with eight branches in British Columbia and Alberta.

Other GSDs and drywall-focused buying groups serve multiple provinces, and their organizations can include traditional lumber and building materials dealers.

Slegg Building Materials, with 10 lumberyards on Vancouver Island, B.C., since 2015 has been owned by what is now

“

currently has more than 260 locations in North America.

GMS Canada had 37 retail-distribution points in six provinces—before it concluded a very big deal, indeed, just before press time. It announced in mid-May that it had acquired seven-location Yvon Building Supplies, a specialty building products distributor to the Greater Toronto Area and other regions of Ontario. The price was $196.5 million and, for that, GMS will hope to see many years generating at least $190 million in revenue, as Yvon did in the year ending Feb. 29, 2024.

Performance is paramount, so when our customer has a problem, we have a problem.

—Ken McCormick, Kenroc

GMS Canada, which started out in 2009 as WSB Titan (the initials signify Watson Building Supplies, Shoemaker Drywall Supplies, and Beauchesne Group, which merged that year). Watson and Shoemaker agreed to be acquired, in 2018, by Tucker, Ga.-based Gypsum Management & Supply (GMS Inc.), a publicly traded company that www.hardlines.ca

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For the year ended April 30, 2023, GMS reported that its Canadian sales were about 12.2 percent of its parent’s total. That puts GMS Canada in the region of $850 million for its most recent fiscal year.

For the past eight years, California-based Foundation Building Materials, with more than 300 dealers in North America, has

Southern Ontario’s Watson Building Supplies is one of the founding members of WSB Titan Inc., which was acquired

by GMS (Gypsum Management & Supply Inc.) of Tucker, Georgia. owned FBM Canada, with 27 locations (including two that are heavily into tools) in five provinces. FBM Canada can trace its roots to 1967 as Winroc, which Wayne Jack started after he and his business partner, Ken Sexton, parted ways.

Sexton, the longtime leader of Sexton Group, launched a rival GSD in 1967, Kenroc, whose locations are also members of Sexton, confirmed Steve Buckle, Sexton Group’s president. Since December 2022, Sexton Group and Kenroc have been controlled by the private equity firm PFM Capital, although McCormick said that Kenroc’s locations maintain operational independence.

Then there is Delroc Industries, a buying group based in Langley, B.C., with 38 members that operate about 140 points of sale from coast to coast. They generate close to $1 billion in annual retail sales, confirmed Derrick Gray, Delroc’s general manager.

The brand name Delroc sounds like a GSD but, in actual fact, it has grown to a

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PRO CORNER fully-fledged building supply group. Almost 60 of those locations operate under the banner of Windsor Plywood, the building materials retailer that was one of Delroc’s first members when the group formed in 1974.

GMS, Delroc, and Kenroc allow their locations to retain their in-market branding, whereas stores owned by FBM Canada market themselves under the corporate banner.

COMPETITION ABOUNDS

Western Canada and Ontario appear to be where GSDs are most prevalent. Mitch Wile, the former GSD manager, said there are 13 GSD locations in Calgary alone.

Regardless of the market, however, GSDs must cope with the fact that most building supply dealers stock drywall on some level.

Buckle estimated that 80 percent of Sexton Group’s dealer-members sell drywall.

Buckle noted that there is only a handful of retailers large enough to buy drywall in quantities that can compete with the GSDs. “Our relationship with vendors is strategic and sophisticated, and we have to be prepared to make a commitment” to larger inventories, he said.

Other gypsum competition comes from traditional LBM groups. In Atlantic

F LE Canada, stiff competition comes from Kent Building Supplies. TIMBER MART, meanwhile, has claimed in the past to be the largest single group selling gypsum in Canada.

Home Depot is so eager to get into the gypsum supply business that it has opened a 300,000-square-foot Flatbed Distribution Centre in Mississauga, near Toronto airport (see page 34 for this story) which will deliver direct to jobsites for some 54 Home Depot stores.

In Nova Scotia, the nine-store Payzant Building Products, a Home Hardware member, is striving to become more of a player in drywall distribution, confirmed Greg Smith, Payzant’s chief operating officer. That ambition coincides with Payzant’s recent opening of a 60,000-square-foot distribution center in Fall River, N.S. Payzant has already dedicated delivery vehicles to handle more drywall orders.

Smith explained that Payzant is moving in this direction because some developers and contractors won’t buy from dealers that can’t deliver the “entire package” for a construction or renovation project. Drywall may be a low-margin commodity, but “it gives you access to [the sale] of other product classes,” such as joint compound, steel studs, ceilings, and insulation, said Smith.

GSD sources agree as well that reliable and consistent customer service and delivery are what determine competitive advantage. Paul Green, president of Vaughn, Ont.-based GMS Canada, said that what sets his organization’s dealers apart is their ability to “load the building,” meaning that no matter a project’s scale, GMS Canada can deliver and place drywall to the building’s height and depth. Undergirding GMS Canada’s delivery services is a fleet that includes 350 heavy trucks, 73 trailers, and 120 light passenger trucks.

Delroc’s Gray explained that drywall is a low-margin product partly because of the investment required to stock and sell it. It requires larger warehouses for inventories, prohibitive land costs related to expanding those buildings, and specialized delivery vehicles that include crane trucks that can cost $500,000 each.

Profit, for GSDs, is a service proposition that, said Gray, requires professional delivery crews that prevent damage to the product and the property, and safely expedite dellvery turnaround times.

Steve Buckle, CEO of Sexton Family of Companies, which includes both independent building supply yards and Kenroc GSD locations, says his firm’s relationship with vendors is both strategic and sophisticated.

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The “trick” to achieving profitability, added Green, is to leverage loading costs by selling the “entire mix” of complementary products: steel studs, insulation, drywall tape, mud, and tools; and ceilings.

Pro customers are also more likely to shop GSD locations for specialty drywall—such as moisture-resistant and VOC-absorbing wallboard, flexible and lightweight panels, and foil-backed boards.

COMPETING WITH LBMS

More than a decade ago, an MBA candidate at Simon Fraser University, David Boyce, published a 96-page thesis that, in sometimes excruciating detail, proposed a growth plan for the GSD Dryco Building Supplies—whose owner Bruno Mauro launched Delroc—that entailed starting a business that specifically targeted exterior renovation contractors. The new business, named Professional Renovation Contractor Supply (PRCS), would reorient three locations that feature product lines in which Dryco had virtually no market share: specialty windows and doors, residential roofing and siding, and plywood and lumber.

At the time, Dryco was reeling a bit, having closed two locations in 2010 that it had acquired only three years earlier, and having given up on a line of manufactured stone it got into in 2006.

Boyce estimated that the PRCS stores would collectively generate $3.36 million in new revenue in their first year of operation.

These stores, he contended, “have the potential for significant revenue and longterm profitability growth since the business would be targeting an untapped customer base. Dryco can enter this industry at a much lower cost … due to [its] existing infrastructure.”

His naivete notwithstanding, Boyce’s thesis turned out to be prescient, industry wise. Except for lumber, the product mix of GSDs often resembles an abbreviated version of what traditional building supply outlets sell. Two of Coastal’s branches are heavier into roofing, and also sell and deliver plywood and tools, confirmed Porter. FBM Canada’s locations carry access doors and fasteners, along with drywall-related equipment like scaffolding. On its

“

FBM Canada’s locations carry, in addition to drywall, access doors and fasteners, along with drywall-related equipment like scaffolding. FBM is based in Santa Ana, California. complimentary assortment includes stucco, tools, roofing, and EIFS products.

When asked where Delroc’s growth opportunities might lie, Gray singled out adding more LBM dealers to Delroc’s membership. He also saw opportunities in “amalgamations” through acquisition, and for entrepreneurs to service niche market segments.

In addition to the major acquisition of Yvon Building Supplies this year, GMS Canada added two new dealers in 2023—

The “trick” to achieving profitability is selling the “entire mix” of complementary products: steel studs, insulation, drywall tape, mud, and tools; and ceilings.

website, Delroc lists among the products its dealer-members offer aluminum railings, paint and sundries, flooring, garage doors, plumbing, and millwork. Kenroc’s

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Hardlines Home Improvement Quarterly

”

Jawl Lumber Corp., which operates on Vancouver Island as Home Lumber & Building Supplies; and Blair Building Materials in Greater Toronto. Green said www.hardlines.ca

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PRO CORNER

F LE

Yvon Building Supply, a GSD (and more) in the Greater Toronto Area, was recently acquired by GMS Inc. (Gypsum Management and Supply) of Tucker, Ga. that GMS will meet future demand by opening new stores, staying active on the acquisition front, expanding its complimentary product mix in such categories as stone, brick, insulation, tools, equipment related to roofing, and decarbonization; and leveraging technology with its customers.

Kenroc, said McCormick, will pursue “profitable growth,” by adding locations and generating more business from existing ones. “Volume and efficiency are important,” which for smaller pro customers might boil down to invoice accuracy.

McCormick also believed that private ownership remains a competitive advantage in a market still marked by mergers and acquisitions.

TARIFFS ON DRYWALL IMPORTS

Right now, drywall supply doesn’t seem to be an impediment to growth. The Canadian government’s ongoing imposition of high tariffs on U.S. drywall imports has had a somewhat stabilizing effect on prices, said Gray of Delroc. He and other sources also noted that new production capacity is being

added. CGC, the Canadian division of U.S. Gypsum, has invested $210 million to build a 220,000-square-foot drywall plant on 214 acres in Wheatland County, Alberta. Last year, CGC also disclosed plans to revitalize and relaunch a gypsum quarry in Little Narrows, N.S. Once fully operational, the quarry will produce up to two million tons of raw gypsum material per year, which could mitigate raw material shortages that have had suppliers relying on synthetic gypsum.

One wild card in the supply-and-demand deck could be the federal government’s $5 billion affordable housing strategy to unlock 3.87 million new homes by 2031,

which includes a minimum of two million net new homes on top of the 1.87 million homes expected to be built anyway by that time. If fully executed, that plan would increase drywall demand to an extent that pressures availability.

None of the sources interviewed for this article sounded overly concerned about product availability. Kenroc’s McCormick conceded that the government’s objectives “might push the upper limits of [manufacturer] capacity.” But Buckle of Sexton Group expressed some skepticism about reaching that goal. “Most markets in Canada are ‘sold out,’ ” meaning that choice land is already spoken for, he said. So any new construction “is all about land development, regulations, and permits. It’s an end-to-end issue.”

Of greater concern about future growth is labor and driver availability. “The big [dealers and groups] will get bigger, but there are still too few people who are looking at GSDs as a career,” lamented Wile. “The industry needs to sell itself better.” Kenroc’s McCormick agreed. “The first barrier [to growth] is labour,” he said.

Home Depot Canada is upping its competition with GSDs in the form of a Flatbed Distribution Centre, which will ship direct to pros in the Greater Toronto Area. See page 34 for more.

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COMING IN FALL 2024!

PRO Dealer The ultimate resource for LBM dealers, GSDs, & specialty dealers serving the homebuilding & ICI industries across Canada

CON

S ER

$25.7 billion 42%

S MER SU

According to the Hardlines 2023 Retail Report, the home improvement retail/dealer industry last year was measured at $61.1 billion.

PRO BU ILD

SIZE OF THE INDUSTRY IN CANADIAN DOLLARS:

$35.4 billion 58%

Hardlines PRO Dealer is a brand new trade magazine featuring content designed to lift the revenues and profitability of contractor specialist dealers.

SPACE CLOSING

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Operations ■ Financial Management ■ E-Commerce ■ Marketing to Pros ■

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Sales Management ■ Inventory/ERP ■ Building Regulations ■ Products ■

PUBLICATION

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FOR ALL INQUIRIES PLEASE CONTACT

David Chestnut, Vice-President and Publisher 416.725.7992 • david@hardlines.ca Hardlines-PRO-Dealer-fullpage.indd 1

2024-06-28 3:59 PM

MARKETING

F LE

LOYALTY PROGRAM MUSICAL CHAIRS CONTINUES

BY STEVE PAYNE

Retailers continue to switch up their points programs—both consumer and pro—in our industry. An update on the latest changes.

W

hen a hardware distributor— especially a huge one—launches its own loyalty program, you know they’re important. Memphis-based Orgill Inc., which serves a growing number of independent dealers in Canada, got into the loyalty program game in 2019. Its program, which it calls FanBuilder, allows a dealer to build their own loyalty program the way they want it—though FanBuilder is also ready to go right out of the box.

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At the other end of the scale, the very biggest retailer loyalty programs in Canada have had a changing of the guard. Air Miles, which once reigned supreme as the biggest loyalty program in the country, hit the skids in recent years. Retailers defected from it en masse.

Approaching its 30th anniversary in Canada early in 2021, Lowes, RONA, and Réno-Dépôt left the program. They were soon followed by Staples, Rexall, and the Liquor

Hardlines Home Improvement Quarterly

Control Board of Ontario. Grocery giant Empire Co., which includes the Sobeys and Safeway brands, followed suit.

Most recently, Metro, the grocery chain, announced that its Ontario stores will no longer accept Air Miles cards later this year. Metro has already gone with another loyalty program for its Quebec stores called Moi Rewards, in partnership with RBC. Right now, the program is also available in Quebec. In Ontario and New www.hardlines.ca

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Brunswick, the Moi program is offered at Jean Coutu stores.

There was a reason for all the ship-jumping with Air Miles. Its parent companies in both Canada and the U.S. fi led for bankruptcy on both sides of the border last spring. BMO, already one of the biggest partners that Air Miles had, took over ownership. They have pledged to give Air Miles new life. It remains to be seen if Air Miles can reverse its fortunes. www.hardlines.ca

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NEW IDEAS FOR AIR MILES

The brand is certainly trying new things.

A new concept called Air Miles receipts, announced recently, allows consumers to scan their receipts (from other stores, even those with competing programs) with an app to earn bonus points and offers. This is a new concept in loyalty: “layering over” existing retailer programs.

Then, on May 22 of this year, Air Miles announced it had signed an exclusivity deal

with Pharmasave, its Canadian independent drugstore partner, that will make it easier for consumers to collect points at Pharmasave’s almost 900 stores. Those that participate, that is. Not all independent retailers choose to, including the members of TIMBER MART, which is continuing to partner with Air Miles as a group.

“I do believe there’s value for the dealers that Air Miles can deliver,” says the president and CEO of TIMBER MART, Bernie

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MARKETING Owens. He expects that new partners will continue to be added to the Air Miles roster.

He points out that TIMBER MART dealers issued more Air Miles points in 2023 than they did in 2022. “That shows there’s still value in it,” says Owens. The program, he adds, is available at the discretion of each dealer, who can evaluate its merits for their own markets.

“I look at Air Miles and say, ‘what are the options out there?’ It’s to build loyalty for dealers at an affordable cost.” But Owens adds a cautionary note: “If these points systems don’t add value to our dealers, we’ll have to look somewhere else.”

CANADIAN TIRE: THE NEW LEADER

Canadian Tire was arguably the founder of the loyalty program industry when it launched Canadian Tire “money” in 1958.

The brainchild of the co-founder of the company, A.J. Billes, the idea was to put a Canadian Tire advertisement in every Canadian’s wallet. It certainly worked out brilliantly.

Then, Canadian Tire took the idea digital in 2012, and rebranded the name of the program as Triangle Rewards in 2018. More than 11 million Canadians are members of the program. It’s undoubtedly the largest loyalty program in our industry. And Canadian Tire counts on the data it produces, as well as the loyalty aspect, to drive its sales forward and allow it to make informed decisions. The data aspect is something that A.J. Billes could never have foreseen when he came up with his marketing-only concept.

Last year, Canadian Tire added a new layer to its Triangle Rewards program

F LE with Triangle Rewards Select, a fee-paying option that provides deeper offers than the free program. Triangle Rewards cards are useable throughout the range of Canadian Tire banners, including Sport Chek, Mark’s, PartSource, and Helly Hansen. Today, the retailer claims that 70 percent of Canadian households are Triangle members. And those customers spend more, and more often, than non-members.

Now, following a year where Canadian Tire, like so many other hardlines retailers, saw sales slump in 2023 and in the first quarter of this year, the company is putting even more emphasis than ever on its points program.

The retailer is holding what it calls “our biggest rewards event of the season” with a series of promotions that will give shoppers the chance to earn multiple rewards, called stacking, with the “Triangle Max Stack Event,” held for a week in May. According to a release, “This one-of-akind event [allowed] Canadians to purchase amazing items at reduced prices, stack exclusive offers on select products and earn 15-times to 50-times bonus CT money that they can then use towards the purchase of other items across their favourite Canadian Tire banner store.”

One promotion let users earn storewide bonus offers: members who spent $150 or more earned $30 in additional CT Money and those purchases over $250 earned $50 in bonus CT Money. In addition, an assortment of stackable offers were available throughout the week, including the ability to earn extra points on specific products.

Finally, earlier this year, Canadian Tire Corp. has forged a joint arrangement with

A new concept called Air Miles receipts allows consumers to scan their receipts (from other stores, even those with competing programs) with an app to earn bonus points and offers.

Petro-Canada that ties together their loyalty programs. Through the new loyalty partnership, Canadian Tire’s Triangle Rewards members can earn Canadian Tire Money at Petro-Canada, and Petro-Points members can earn and redeem their points at Canadian Tire’s Gas+ locations. In addition, members of each respective loyalty program continue to earn existing benefits, including savings and rewards on fuel and other purchases.

BIG BOX LOYALTY FOR PROS

When RONA (then owned by Lowe’s) and Réno-Dépôt left Air Miles in 2021, they didn’t replace it with one of the other twenty-odd Canadian Tire has recently added a new layer to its Triangle Rewards program with Triangle Rewards Select, a feepaying option that provides deeper offers and promotions.

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consumer loyalty programs in Canada. The company said it would, instead, focus on daily low prices, personalized offers, and its recently-formed VIPpro program, run by Kinetic Commerce, a Toronto-based firm.

VIPpro was launched as exclusive to contractors, provided a 5.0 percent discount on everything (10 percent on paint), bulk discounts, a price-match guarantee, early opening hours, and—especially important to pros—a 365-day return policy.

Home Depot Canada, meanwhile, has made moves of its own on its pro loyalty programs in recent years. For years, it had a U.S.-based program, Pro Xtra, launched in 2012, that was not available in Canada under that name. Now the Canadian division has renamed its contractor loyalty program to Pro Xtra to align with the U.S. program.

“Renaming this was quite an accelerator for us,” the president of the Home Depot Canada, Michael Rowe, told Hardlines in the cover story for this issue (see page 34).

But, as with RONA, Home Depot’s pro loyalty program is exclusive to companies—it is not intended for the general consumer. Whereas Pro Xtra in the U.S. allows a consumer/homeowner to sign up for the program, this is not the case in Canada, where applicants to Pro Xtra are directed to the pro desk in Home Depot stores (where presumably their credentials as real contractors will be vetted).

Home Hardware Stores Ltd. left Aeroplan and replaced it with Scene+, a wide-ranging loyalty program associated with Scotiabank.

Meanwhile, the third operator of big box home improvement stores in Canada, Kent Building Supplies, continues with Air Miles— as it does for its standard format stores.

HOME HARDWARE AND SCENE+

Joining the game of loyalty group musical chairs in our industry, Home Hardware Stores Ltd. has left the Aeroplan card and replaced it, last September, with Scene+, a wide-ranging loyalty program associated with Scotiabank. As its name suggests, a cinema chain, Cineplex, partnered with the bank to launch Scene+ back in 2007.

Back then, it was a minnow compared to the dominant Air Miles, but now it has overtaken its rival to become the most important multi-retailer loyalty program in the country. Grocery giant Empire Company Ltd., jumped ship from Air Miles to Scene+ in 2022. That means that Home Hardware is partners via Scene+ with some of the most important grocery brands in the country— like Sobeys, IGA, Foodland, and FreshCo. And there’s more. A number of prominent restaurant brands are in Scene+, as well as Expedia.ca, the travel booking site.

RONA’s VIPpro was launched as exclusive to contractors, provided a 5.0 percent discount on everything (10 percent on paint), bulk discounts, a price-match guarantee, early opening hours, and a 365-day return policy.

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Since it switched to Scene+, Home Hardware has made strides to launch an updated loyalty program for pros, too. At the beginning of 2024, again in partnership with Scotiabank, the Scotia Home Hardware Pro Visa Business Card was launched. It is replacing the long-standing Top Notch Rewards program at Home Hardware, which will be terminated at the end of June 2024.

Said Laura Baker, Home Hardware’s chief marketing officer, “Every Home Hardware and Home Hardware Building Centre can offer the Pro credit card. It’s a great opportunity for our pros to have the flexibility and a Scotia credit card with up to $500,000 of revolving credit on that.”

“We’re so excited to partner with Scene and Scotiabank on these two programs, loyalty and credit,” says Baker. She notes of the Expedia partnership, “That’s something that’s very attractive to contractors, as well—that is travel points.” That flexibility increases the ability of pros to earn and use points and ease doing business. “I think it’s just going to be a game changer for us, in terms of offering that.”

The new pro credit card features a variable interest rate, no annual fee, a 21-day interest-free grace period on new purchases, and credit limits up to $500,000. The new pro card is designed to let contractor customers manage their expenses with Visa Spend Clarity for Business, a web-based tool that allows users to track expenses and stay on budget.

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AD INDEX

ADVERTISERS: THIRD QUARTER / 2024 ACCEO

69

JRTech Solutions

23

AD Canada

65

Kidde

21

Auto-Stak

87

King Marketing

7

BMF

63

Kohltech

57

BMR

47

Leviton

41

Cape Cod Siding

61

National Hardware Show

74

Castle Building Centres

99

NHPA

29

Diablo Tools

89

Orgill

2, 3

ogasys.com adhq.com

autostak.com

bmfonline.com bmr.ca/becomeadealer capecodsiding.com youarethebrand.ca diablotools.com

Doman

32, 33

Dupont

jrtechsolutions.com kidde.com kingmkt.com

kohltech.com leviton.com nationalhardwareshow.com ihiconference.org orgill.com

Richelieu Hardware

6

37

RONA

19

Gentek

49

Saint-Gobain

4, 5

GSW

31

Sexton

59

Gillfor

51

Seljax

71

10, 11, 73, 76, 78, 79, 82, 91

Taiga

100

TIMBER MART

25

domanbm.com dupont.com gentek.ca/align gsw-wh.com gillfor.com

Hardlines hardlines.ca

Home Hardware home-owner.ca

JELD-WEN jeld-wen.ca

IN THE

12

reliablefasteners.com rona.ca/becomeRONA saint-gobain.com sextongroup.com seljax.com taigabuilding.com

timbermartmember.ca

54, 55

NEXT THE 2025 PRODUCTS ISSUE ISSUE OF HHIQ: AS REQUESTED BY DEALERS!

PLUS: • We Interview Ten Great Buyers • Credit Management for Pro Stores

HOME IMPROVEMENT QUARTERLY

Publication Date: October 11, 2024 • Ad Reservations: August 23, 2024 (contact david@hardlines.ca) • Ad Material Due: September 13, 2024

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PUBLISHER’S COMMENT

DAVID CHESTNUT, VICE-PRESIDENT & PUBLISHER

THE FIRST HARDLINES CONFERENCE IN QUEBEC On Oct. 22 and 23, the 28th Annual Hardlines Conference will take place in Charlevoix, Quebec. This will likely be the most important conference in our history.

H

ardlines Inc. took its annual conference on the road last year. The success we had in Whistler, B.C., last fall was phenomenal. After 26 years holding the most important conference in our industry (we humbly say) in the Toronto area, it was time. And the industry welcomed the change in venue with open arms.

Thanks go to Thomas Foreman, head of the BSIA of B.C., who put on a trade show and awards night during the Whistler event—and helped to welcome us to the West Coast.

The B.C.—and western Canadian support—from retailers last year really showed us how important the conference has become.

It’s not surprising. This industry has been evolving for decades, but the changes we’ve seen over the past five years have been unprecedented. E-commerce means that every hardware and building supply dealer in our industry is competing for sales with some of the biggest companies on the planet.

Getting staff at all—let alone the best possible employees—has become a challenge for all dealer-owners and corporate store managers.

The role of digital media in our marketing efforts has completely upended the notion of advertising—and brand presence. www.hardlines.ca

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Powerful private equity firms have taken over some of the most successful Canadian retail banners in our industry— putting to rest the notion that it’s going to be “business as usual” after the pandemic.

It’s not going to be—ever. In this brave new world you either get educated about the currents of change or you go out of business.

Tracking the changes in the industry is what the Hardlines Conference is all about.

This October, we will take the conference on the road again, to Quebec, a province that has shown the way in retail innovation in our industry.

Quebec has brought us RONA, BMR, Patrick Morin, and Canac. Quebec has provided us with some of our most impressive vendors and sales agents.

And Quebec has led the way thanks to the illuminating insights of AQMAT, the province’s hardware and building supply association.

We thank AQMAT’s Richard Darveau for collaborating with us this year to make the 28th Hardlines Conference in Charlevoix, Quebec, a “must attend” for anyone who wants to lift their fortunes in this rapidly changing industry.

“

The over-all success of the 2024 Hardlines Conference in La Belle Province would not happen without the support of AQMAT!

”

david@hardlines.ca Hardlines Home Improvement Quarterly

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F LE

BY GEOFF McLARNEY

HARNESSING THE POWER OF ANOTHER BANNER

For years, Callbecks Home Hardware in Summerside, P.E.I., has been complemented by an adjacent Home Furniture outlet. By converting it to the Leon’s banner, the Callbecks are taking it to the next level

C

allbecks Home Hardware Building Centre is no new kid on the block.

“We kind of have a history,” secondgeneration owner Duane MacDonald reflects. Duane owns the business with his brother, Dave.

“Callbecks has been around for 125 years.

My father, Ron, had been with the business for 55 years.” The elder MacDonald worked for the Callbeck family before taking the business over from them. Ron has since retired.

When Ron bought the business from the Callbecks, the transaction did not include the rights to the Leon’s furniture franchise that the Callbecks had introduced to Canada’s smallest province. As a result, the MacDonalds opened a store in Summerside under Home Hardware Stores’ own Home Furniture banner to complement the offerings of Callbecks Home Hardware.

The Callbecks later sold the Leon’s licence to another group, D. P. Murphy of Charlottetown. Duane in turn finally bought the franchise. There was just one

“

We’re with one of the biggest hardware brands, and now one of the biggest furniture brands, too.

catch: the bricks-and-mortar Leon’s store in Charlottetown had already been sold to another buyer.

No problem: Duane simply consolidated both operations at the Summerside site.

“They had the rights but had sold the

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building, so we brought it here.”

The existing Home Furniture store had already been through some upgrades that helped smooth the transition, “We had had an expansion just prior,” Duane explains, drawing on some of the existing warehouse space. “But we still have to do renovations,” he added, as the respective banners have “some different requirements.”

For Duane, the building supply and

”

furniture businesses complement each other. “It’s a different industry altogether but it ties in. Anyone who has a new home needs furniture and appliances.” The juxtaposition also helps drive paint sales: “People get new furniture; they need paint.”

Hardlines Home Improvement Quarterly

Callbecks Home Hardware Building Centre has been in business for 125 years. But its not resting on its laurels. Recently, the owners obtained a Leon’s Furniture franchise for the family business.

The setup, says Duane, “allows us to sell the whole package in a way our competitors can’t.” And the adoption of the Leon’s banner has “made us bigger, with access to more lines.”

Duane sees in this new chapter the opportunity to leverage the power of two great brands to the benefit of both. “We’re with one of the biggest hardware brands and now one of the biggest furniture brands, too.” And customers benefit from an offering that supports them during every step of construction and renovation.

The approach is summed up by the slogan the MacDonalds have devised for their combined enterprises: “From foundations to furnishings.” www.hardlines.ca

2024-06-30 12:03 PM

At Castle, we do things differently! Our primary focus is to empower our independent dealers by delivering the lowest cost-of-goods partnered with the lowest cost-of-buying-group-affiliation. Castle gives you the liberty to run your business your way. This is why Castle is the fastest-growing buying group in Canada.

Learn what Castle can do for your business!

“I’ve seen firsthand just how Castle supports family-run businesses. They are the most well-managed and cost-conscious buying group, which means our expenses as a dealer are next to nothing. We run our business that way, every day, and it’s good to know that our buying group does the same.”

Kirk MacCallum, MacCallum Building Supplies Miramichi, NB

Kirk MacCallum (left) and Dale MacCallum (right)

Learn more at youarethebrand.ca Castle-HHIQ3Q2024.indd 1

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2024-06-28 2:53 PM

Water resistant flooring made for hand talkers.

Artfloor RIVER | Heron

Made in Europe, Artfloor Laminate Flooring is your best choice for living spaces that are meant to be lived in with 72 hour water resistant flooring and your choice of 8mm and 12mm thicknesses.

It starts with a single scan. From there, our integrated technologies and adept delivery systems ensure Taiga customers get certainty delivered with every product.

Whatever it takes.

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We know what you want, where it is, and when you need it.

taigabuilding.com

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2024-06-28 2:53 PM