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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.

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.

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

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.

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.

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!

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. Your ad will also reside on our Classifieds page.

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

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.

At the next Hardlines Conference, you will join your colleagues and customers for two incredible days of information and trends, as well as a fantastic networking experience. This year’s speaker line-up includes execs from RONA, Federated Co-operatives Ltd, North American Hardware & Paint Association, Altus Group and many more.

The 2023 Hardlines Conference Series is taking place at Fairmont Chateau Whistler, Whistler, B.C. on October 17th and 18th, 2023.

THIRD QUARTER / 2023 • VOLUME 13, NO. 3

330 Bay Street, Suite 1400, Toronto, ON M5H 2S8

PRESIDENT

Michael McLarney mike@hardlines.ca

EDITOR

Steve Payne steve@hardlines.ca

ASSOCIATE EDITOR

Geoff McLarney geoff@hardlines.ca

CONTRIBUTING EDITOR

Rob Blackstien

ADMINISTRATIVE ASSISTANT

Jillian Macleod jillian@hardlines.ca

VICE-PRESIDENT & PUBLISHER

David Chestnut david@hardlines.ca

MARKETING & EVENTS MANAGER

Michelle Porter michelle@hardlines.ca

ART DIRECTOR

Shawn Samson TwoCreative.ca

ACCOUNTING accounting@hardlines.ca

COVER STORY PHOTOGRAPHY

Danielle Giguère photo-portrait.com

HardlinesHomeImprovementQuarterlyis 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, 1550 Caterpillar Rd, Mississauga, ON L4X 1E7.

All editorial contents copyrighted 2023 by Hardlines Inc. No content may be reproduced without prior permission of the publisher.

CONTENTS

NEWSROUNDUP

After the boom, 2023 results forecasted to drop

Survey of dealers reveals low use of e-commerce

RONA opens first urban store in the west

Whistler conference will gather movers and shakers

Two retailers divvy up Bed, Bath & Beyond leases

Wolseley’s latest opening contains high-end showroom

CHPTA wants to introduce an industry code of conduct

Canadian Tire hit by major DC fire and gets sued

An interview with Orgill’s VP of human resources

AQMAT conference advocates shorter store hours

IKEA’s third ‘plan and order point’ opens near Montreal

Loblaw is the latest big retailer to sell appliances

Mathieu Moisan and Marianne Moisan of BMR Paulin Moisan, Saint-Raymond, Quebec

TOP20

HOMEIMPROVEMENT RETAILERS

A report on the activities of the leading banners during the past year

54

Hardlines’ 2023 graphic showing the linkage among the buying groups and banners in our industry

We rank the leading retail groups by their brand and buying affiliation

Matthew Myers

Home Store Owner Ridgetown, ON

STEVE PAYNE, EDITOR

WHEN THE TIDE GOES OUT

Warren Buffett, the world’s fifth richest man, is famous for having once said (referring to a bad recession): “Only when the tide goes out do you discover who has been swimming naked.” He was obviously talking about companies who were carrying too much debt, too much inventory, or were just being badly managed during good economic times—but still making money.

Buffett knows about economic cycles. He’s profited from them to accumulate a net worth of some US$118 billion—more than twice the size of the Canadian retail home improvement industry.

In 2022, we calculate the size of our industry—at retail (to end users)—at just over $61 billion. (Turn to page 46 for our annual Top 20 Retailers analysis.) The nation’s home improvement retailers grew their sales by 4.6 percent last year. With a national inflation rate of 6.8 percent in 2022, that means the industry contracted, in real dollars, for the first time since the Covid home improvement gold rush.

So, is the tide going out?

RONA thinks so. Just over four months after it had been acquired by Sycamore

Partners, a New York City-based private equity firm, it announced a serious restructuring that involved eliminating 500 positions, citing its need “to reflect new market realities.” Meanwhile, Home Depot, the world’s largest home improvement retailer, updated its year-end 2023 revenue forecast to between minus three and minus five percent. Lowe’s Cos. predicted slightly better results, but not by much. Canadian Tire has noted, in its investor calls, that consumers are shying away from big ticket items.

So, what is the risk to your store as the tide begins to turn?

First of all, it’s worth remembering that the industry grew by 34.4 percent during Covid (comparing 2019 year-end industry sales with 2022 revenues). If we appear to be heading for a slowdown, it was entirely predictable. And if you are a well-run operation belonging to a well-run banner group, you will be able to keep swimming with your dignity intact.

steve@hardlines.ca

Last year, the home improvement industry experienced negative real growth, Hardlines calculates

Just before press time, RONA announced a restructuring that will eliminate 500 positions.

AFTER THE PANDEMIC BOOM, 2023 SALES ARE PREDICTED TO DROP

When Home Depot missed its revenue expectations for Q1, it reduced its 2023 fiscal year forecast. The world’s largest home improvement retailer predicted that sales will decline between two and five percent this year. Previously, the company had said sales in 2023 would be flat.

Revenue for the quarter was $37.26 billion versus $38.28 billion expected (all figures USD). Comp sales fell 4.5 percent in the quarter. First quarter net income was $3.87 billion, down from $4.23 billion a year earlier.

Home Depot had reported a healthy performance in 2022, with sales up 4.1 percent following two of the best years of growth for the company—and the industry—in decades. But the market was already slowing through 2022, as LBM prices tumbled back down from the historic highs seen during the first two years of the pandemic.

Forecasts by all the big home improvement retailers have tended to be moderate for the rest of this year, as the momentum from home improvement and reno investments begins to tail off. Couple that with the Bank of Canada hiking its central rate multiple times—to combat inflation, it says. That inflation is affecting essential sectors such as food costs, and people are simply spending their money elsewhere. Home Depot said that customers were buying fewer big-ticket items.

The results fit a trend that independent dealers are already seeing—a slowdown in 2023 versus a year of growth in 2022.

Canadian Tire Corp. shared similar pain in its Q1 results call, as overall net income fell 3.4 percent year over year. Comp sales for its

Canadian Tire stores were down 4.8 percent. According to Greg Hicks, president and CEO of CTC, in a call to analysts, the outlook is more cautious moving through 2023.

“Given the macro backdrop combined with what we are seeing in the performance of our business, we are expecting a more constrained demand environment as we look forward, especially in the first six months of this year,” Hicks said. (Surely the most genteel way of saying, ‘People are buying less’ that we’ve heard in a long time!—Editor.)

Like Home Depot, Canadian Tire has seen a shift in spending patterns by its customers. Discretionary spending has slowed, including for larger-ticket items, while its so-called “essentials” category has been moving a lot more product, especially automotive SKUs and pet supplies.

The expectations of independent dealers across Canada indicate they are facing the same concerns.

Hardlines surveyed hardware and home improvement dealers earlier this spring and found that most are facing flat sales for 2023. The average for all dealers that responded is a decline of 0.7 percent. There were some

highs—a few respondents in Ontario expect five or even 10 percent gains this year, and Saskatchewan dealers were most positive overall, on average expecting a two percent gain. In Nova Scotia, some dealers expect gains of seven, eight, and even 10 percent, despite their concerns about sourcing and product shortages.

However, most dealers in the survey anticipate zero growth in 2023. Dealers that expected a real drop in sales were typically forecasting a decline of 10 percent—and a few cited expected downturns of 20 and 25 percent. The dealers predicting the greatest anticipated losses are generally strong independents who had big gains in 2022, following a banner year for the entire industry in 2021.

Dealers will have a hard time maintaining the momentum of the past three years. The slowdown began last year: after a strong first quarter, the industry saw sales drop off as interest rates and inflation sped up, coupled with falling LBM prices.

In fact, Hardlines has calculated a modest gain by the industry in 2022 of 4.6 percent, but one that was still below the national inflation rate of 6.8 percent last year.

The world’s largest home improvement retailer predicted in May that its revenues will drop this year.

SURVEY OF INDEPENDENT DEALERS REVEALS LOW USEAGE OF E-COMMERCE

The statistics don’t lie: revenue earned from retail e-commerce is estimated to exceed one trillion dollars in 2023 in the U.S. alone. According to both the U.S. Census Bureau and financial services provider Fundera, 16 percent of all American retail purchases are made on e-commerce sites. Global online sales are predicted to total US$6.3 trillion this year.

But for independent hardware stores and building centres in this country, the reality is quite different. No question, during Covid dealers figured out ways to accommodate their customers with virtual service, including curbside pickup. But that interaction was not always digitally driven. Especially in smaller communities, the telephone is often the preferred way to connect. Hardlines’ latest survey of dealers bears this out.

According to the survey, Canadian hardware and building supply dealers that sell online averaged, in both cases, 0.9 percent. But the overall industry average of online sales for independents, not including Lowe’s and Home Depot stores, is barely 0.1 percent, because the majority of dealers cite no online sales.

There are exceptions to this data. Brent Perry of Alf Curtis Home Improvements, a Castle dealer with three stores based in Peterborough, Ont., admits his online sales aren’t much higher than those of his fellow dealers. But he says it’s not about how much you’re selling online; it’s about being there, about having a presence. (You can read more about this business’s digital activities on page 108—Editor.)

And Perry’s online presence has been assisted by Orgill, the giant Memphis-based

hardware distributor, which has introduced a suite of new e-commerce options for its dealer customers. Dubbed Impact eCommerce, the service was presented at the latest Orgill Spring Dealer Market, held earlier this year. The platform enables dealers to sell products online with a truly transactional site.

Dave Audette admits he has a “love/ hate relationship” with his store’s online business. He and his wife, Jessica, are the owners of Lorette Home Hardware, about 20 minutes south of Winnipeg. At seven percent of overall sales, their store’s online business far exceeds the national average for independent dealers.

Dave told Hardlines that, in the week before we spoke, the store received 31 e-commerce orders. They ranged from bone meal fertilizer and fasteners to a gazebo, one order for a barbecue and a lawn mower, and some gardening kits. Other items that sell really well online, he adds, include showers, especially by Maax and Mirolin. In fact, those items sell two times better online than in-store.

BRIEFLY

ALBERTA, ONTARIO DEALERS JOIN SEXTON GROUP

Calgary’s Mountain View Building Materials Ltd. has joined Sexton Group. Tracy Seibert and her late husband Doug founded Mountain View in early 2006. Today, the family business is owned and operated by their sons Joel and Brad, recently joined by third partner Sheila Carr. Meanwhile, Slack Lumber of York, Ont., south of Hamilton, has also joined Sexton. The owners are Mykel Spinks, Nicholas McCollum, and Jonathan Lowenberg.

CALGARY’S STAR BUILDING MATERIALS TO EXPAND

Star Building Materials in Calgary has unveiled an ambitious expansion plan that will greatly increase its output and capacity. The $53 million investment is expected to double the dealer’s production of trusses, engineered wood products, prefabricated wall panels, and interior finishing production. It will also add more than 140 new jobs. Star has operations in Calgary, Edmonton, and Winnipeg.

GMS ACQUIRES BLAIR BUILDING MATERIALS

GMS Canada Inc., the specialty building products distributor, has bought Blair Building Materials, which has one location in Maple, Ont., immediately north of Toronto. “We are excited to have Blair Building Materials join GMS Canada and our group of strong, in-market branded companies,” said Paul Green, president of GMS Canada. The company sees the move as a way for GMS Canada to increase its market density in the Ontario market.

Dave and Jessica Audette

RONA AFFILIATE DEALERS OPEN BANNER’S FIRST URBAN STORE IN THE WEST

BMR SIGNS DEALER IN GODERICH, ONT.

Leis Lumber Co. Ltd. in Goderich, Ont., has joined BMR Group. A family business for almost 20 years, it has a store redevelopment project slated for completion by the end of the summer. Leis Lumber boasts a 26,000-square-foot floor space, a large lumber yard, and a fleet of 12 trucks servicing an area spanning three counties.

WALMART USING AI TO NEGOTIATE WITH VENDORS

Walmart is now using AI to negotiate with vendors. It started publicizing its use of AI during the pandemic, but now, Bloomberg reports, the world’s largest company is using AI to haggle with vendors for some of its supplies—starting with shopping carts. Walmart is reported to be using a chatbot provided by California-based Pactum Inc., a firm that specializes in “autonomous negotiation software.”

RONA ADDS STORES

A

midst all the changes at RONA inc., with new ownership (Sycamore Partners) and a new banner strategy for its Lowe’s stores, the company continues to develop its other retail footprints.

One format that has been growing quietly is RONA’s urban store. It’s smaller than RONA’s building centres or big boxes, and the stores are strategically located in urban settings. They can be in a shopping centre or in a downtown area.

Even with their small retail spaces, RONA’s urban stores carry a reduced selection of building materials, but with no lumber yard. The stores also offer a small selection of appliances, supported by online ordering.

“In essence, regular RONA hardware stores are in every market throughout Canada, while an urban RONA store is one in the heart of a major city only,” says a spokesperson from RONA inc. A few of the

urban stores already exist in Ontario and Quebec—RONA Bélanger in Montreal’s east-end neighborhood of Rosemont is one example.

Now, the retailer has established its first urban format store in western Canada. Two former RONA employees, Michael Trentalance and Al Tsuchiya, now the owners of the T&T Hardware Group, have joined RONA’s independent dealer network with their store, RONA Walnut Grove, in Langley, B.C. The 5,500-squarefoot location is getting a 2,200-square-foot expansion to offer up to 650 new SKUs of select building materials and plumbing products.

‘‘With the uniqueness of our distribution network and corporate stores within the Canadian markets, we can support this type of store better than anyone in our industry,” says Philippe Element, vice-president, RONA dealer sales and support.

Paul Sharpe, owner of the RONA store in Guelph, Ont., has acquired BFD RONA Building Centre in nearby Kitchener, Ont. Major renovations have already been completed, including a new pro desk and a lumber yard redesign. RONA has also signed Vantage Building Supplies in Vegreville, Alta., as an affiliate dealer. The owners are investing more than $1 million to expand the existing 4,500-square-foot retail space in two phases, adding a total of 5,500 square feet.

AD ADDS TORONTO DEALER

Senso Group Building Supplies Inc. is the newest member to join AD, the North American hardware buying group. Senso has joined AD’s Building Supplies - Canada division (formerly TORBSA). Senso has three divisions of its own: building supplies, construction equipment and rentals, and waste management. The building supplies business was established in 2011.

Al Tsuchiya (left) and Michael Trentalance are expanding their RONA urban store in Langley, B.C., with added plumbing and building materials.

Canada Join

Convert your business to the ACE banner.

Create

ACE Canada Dealer service and support includes:

 100% Canadian owned

 Three banners to choose from: ACE Hardware, ACE Building Centre, ACE Country & Garden

 No franchise fees

 Buying power of multi-brand Canadian retail leader Peavey Industries LP

 Distribution Centres located in Red Deer, Alberta and London, Ontario

 International ACE brand recognition

 Retail focused programs

 Click & Collect eCommerce program

 Flyer program tailored to Canadian consumers

 Dedicated ACE Canada Business Development teams

 ACE Canada Dealer Buying Shows (Virtual and in person)

 LBM Supply partnership with industry leading Sexton Group

 Globally proven retail training programs

ACE Canada is expanding to a community near you!

ACE Hardware - Arthur, Ontario

ACE Hardware - Arthur, Ontario

OCTOBER’S HARDLINES CONFERENCE IN WHISTLER WILL GATHER THE MOVERS AND THE SHAKERS

The theory of retail can be complicated, evasive, and elusive. The practice of retail is all that, plus lots of hard work, luck—good and bad— and big heartedness. Three speakers at this fall’s Hardlines Conference embody all of those traits. They’ll share their stories and insights at the stunning Fairmont Chateau Whistler, B.C., Oct. 17 and 18.

Geneviève Gagnon is the head of three businesses in Quebec. She is CEO of a chain of building centres called Gagnon La Grande Quincaillerie (“The Great Hardware Store”). She also operates a wholesale business, Évolution Distribution. Finally, she runs a truss and wall panel manufacturing division called Évolution Structures.

Move with us now to central British Columbia, to the small community of Mackenzie, a remote town with a population of just 3,800 people. There, Marilyne and Sylvain Laferriere own and operate Ace Victory Building Centre. We invited the Laferrieres to share their story at our conference, their wins and their challenges. They were keen to take the podium. But, warned Sylvain,

“It won’t all be good news.”

In 2005, motivated by their frustration with a lack of products and services in the area, Sylvain and Marilyne purchased an existing business in town. They renovated the store, added product lines, and Victory Building Centre Ace was born.

Senior execs from RONA and Federated Co-operatives will also take the stage at the Hardlines Conference.

Cody Smith is director of Home & Building Solutions, the hardware and LBM division of Federated Co-operatives Ltd. Since joining FCL in 2000, Smith has held various positions in Home & Building Solutions and was promoted to director in

2018. Under his leadership, the department provides strategic partnership and services to over 90 Co-op Home Centres across Western Canada. These stores collectively represent more than half a billion dollars in retail sales, making FCL one of the retail giants of western Canada.

The changes at RONA earlier this year were seismic. Lowe’s Cos. sold its Canadian assets to Sycamore Partners, a New York City-based private equity firm. Now, it is moving forward on behalf of its independent dealers—representing more than $2 billion at retail—says Jean-Sébastien Lamoureux, senior vice-president, RONA affiliates, wholesale and public affairs. He will bring to the Hardlines Conference the latest news from RONA—once again a private company, returning to its roots.

As executive vice-president of merchandising, Jim Inglis helped forge a completely new path for Home Depot, one that is still having repercussions in the industry today. Later, he would hold executive roles at Sodimac, South America’s leading home

improvement retailer; Hornbach, a leader in Europe; as well as other powerful big box operators around the world. Inglis’s book, Breakthrough Retailing: How a Bleeding Orange Culture Can Change Everything, has been called the best book about home improvement retailing in history. (Get yours for free when attending the conference.)

This year, Hardlines is proud to work closely with the Building Supply Industry Association (BSIA) of British Columbia in presenting this world-class event. The BSIA is celebrating its 85th anniversary this year, and the association’s birthday celebration will be an important part of the proceedings. The BSIA will also host a trade show at the venue in Whistler.

The 27th Annual Hardlines Conference will be held at the Fairmont Chateau Whistler resort Oct. 17 and 18, 2023. Retail dealers and their staff get special pricing. Contact michelle@hardlines.ca for your discount! And check out our full line-up of speakers on pages 44 and 45.

The 27th Annual Hardlines Conference will be held at the Fairmont Chateau Whistler resort Oct. 17 and 18, 2023.

CANADIAN TIRE, PUTMAN INVESTMENTS ACQUIRE LEASES FROM BANKRUPT BED, BATH & BEYOND

Earlier this year, Bed, Bath & Beyond (BB&B) sought bankruptcy protection—on both sides of the border—and closed its 54 stores in Canada. Canadian Tire Corp. made a deal in April to acquire the real estate leases of 10 former BB&B locations, representing 242,000 square feet of retail space, for $1.6 million. CTC will turn six of the sites into Mark’s stores. These will be relocations of existing Mark’s stores in Grande Prairie, Medicine Hat, Red Deer, and Strathcona County, Alta.; Langley, B.C.; and Oakville, Ont. CTC says the new sites represent larger, more convenient locations.

Ancaster, Ont. Putman intends to launch a new brand: rooms + spaces. It will be led by Greg Dyer, the former general manager of Bed, Bath & Beyond.

Putman Investments already owns Toys “R” Us, Sunrise Records, FYE (For Your Entertainment), HMV UK, and T. Kettle (formerly Davids Tea). Hardlines interviewed the 39-year-old Putman and found him bullish on the future of—not just his rooms + spaces brand—but bricks and mortar retail in Canada in general.

Putman Investments is all family money, Putman said, with sales from the 25 companies it owns approaching $4 billion.

The remaining four BB&B sites acquired by CTC will become home to four new Pro Hockey Life stores, a brand that Canadian Tire purchased in 2013. This move will bring the Pro Hockey Life store count up to 20.

“Following our 10th consecutive quarter of growth in Q4 2022, Mark’s is continuing to build on its incredible momentum in the Canadian market by strategically relocating six retail spaces to more convenient and larger sites,” said PJ Czank, president, Mark’s. “These relocated stores will feature more products and deeper assortments of our best brands to meet the needs of our customers in Alberta, British Columbia, and Ontario.”

Meanwhile, at least 21 more locations of the bankrupt BB&B have been acquired by Doug Putman, head of his family’s company, Putman Investments, based in

In addition to its flagship retailers, the company owns distribution, manufacturing, and real estate. “We take no outside investment, so everything we buy, we own 100 percent.”

Putman has earned a reputation for being a retail turnaround specialist. He buys troubled retailers at a discount. “They are just companies that are out of fashion, or not doing well, and they’re just kind of at the end of their life,” Putman said. “People say to me, why did you get into the distressed [retailer] business? The answer was simple, I didn’t have enough money to buy a good business!”

Putman’s first retail investment was troubled Sunrise Records. He became a significant global player in the recorded music bricks-and-mortar space when he subsequently bought HMV UK. He has confounded sceptics who thought that online

“They are unfashionable businesses, for sure, but they do fantastically well,” Putman says. “We hit it perfectly with vinyl… and with an explosion in pop culture products in general, whether it’s T-shirts or paraphernalia.”

Putman once said that he didn’t want to invest in anything that didn’t have “unlimited upside.” Does rooms + spaces have that upside? To Putman it does: “I think we’ve got this potential. Are we going to have a large market share in certain areas? No. But I think we can have a good share.”

music vendors would drive his record shops out of business.

“

” They are unfashionable businesses, for sure, but they do fantastically well.

Doug Putman is head of his family’s Putman Investments firm, based in Ancaster, Ont.

WOLSELEY’S LATEST OPENING CONTAINS SHOWROOM FOR HIGH-END FIXTURES

Why should hardware and home improvement dealers be interested in the latest opening by industrial plumbing and heating supplier Wolseley? Because it’s another example of how the lines between channels are getting blurred.

In recent years, Wolseley has updated its merchandising and its overall offering to contractors and trades. But its new outlet in Ajax, Ont., on the east side of the Greater Toronto Area, features a recent new addition to the Wolseley offering: “Studio,” a showroom that features higher-end fixtures and fittings.

The Wolseley Studio has a separate entrance and a more upscale feel than the rest of the store. The expanded offering includes highend faucets and lines of bath hooks and towel racks. There is also an in-house designer to help contractors offer suggestions for their end-user customers and to put together a full package for a project.

There are currently 225 Wolseley locations in Canada and only 25 of them have a Studio, but watch for more to come. “We have plans to open more showrooms across Canada in coming years in those markets where it makes sense,” says David Stern, Wolseley’s vice-president for eastern Canada.

The target customer, he adds, is the residential contractor, typically someone doing a reno versus building a new home. The first Studio showrooms appeared in western Canada, and

the first one in Ontario was in an outlet in Hamilton. Another half a dozen stores that will open in coming years will have the showrooms, says Stern, including two that are expected to open this year. “We see this as part of our sales proposition to our plumbing contractors.”

CHPTA WANTS TO ESTABLISH A CODE OF CONDUCT FOR OUR INDUSTRY

The Canadian Home Products Trade Association (CHPTA) has been monitoring the grocery industry as that channel works toward establishing a business “code of conduct” between grocery retailers and their suppliers. Now the CHPTA wants to implement a similar initiative for the hardlines industry.

According to CHPTA president Sam Moncada, his association’s goal is to leverage the final version of the grocery industry agreement and introduce a similar code of conduct for hardware, housewares, and home improvement products. “We’ve been talking and collaborating with grocery producers as they’ve worked for years and

years on this, and they have a draft that they’ve shared with us,” says Moncada.

The grocery industry is looking to have its code of conduct implemented by the end of 2023, according to federal agriculture minister Marie-Claude Bibeau. Though grocery retailers have come to the table to work on this, delays have come from their inability to find a common ground, Moncada notes.

The need for such a code in the hardlines industry is underscored by the sheer size of the retailers and their ability to dictate terms—often changing them after a deal has been signed. Moncada cited a recent mandate from one retailer that added an approximately one percent back-end charge.

Manufacturers do understand that circumstances can change, says Moncada, but leaving the vendors out of the negotiations is counterproductive. “When a retailer arbitrarily changes the terms without consultation, it definitely hurts the manufacturers.”

The federal government received a draft of the grocery code last November, the result of more than a year of negotiations between industry groups representing farmers, food processors and suppliers, independent grocers, and national retail chains. They worked with a governmentappointed mediator. Using the grocery initiative as a template, says Moncada, “we want to invite all the players in the hardware and home products categories to the table to talk.”

Wolseley intends to expand its high-end Studio concept in more stores this year.

CANADIAN TIRE HIT BY MAJOR DC FIRE—AND GETS SUED BY ROBOTICS FIRM BECAUSE OF IT

perations at one of Canadian Tire’s major DCs were completely shut down for several weeks after a large fire on Mar. 15 damaged the A.J. Billes Distribution Centre on Goreway Drive in Brampton. All of the employees at the facility were safely evacuated, the company says.

The 1.3 million-square-foot A.J. Billes Distribution Centre distributes goods nationally. The company said that the suspension of the facility’s operations negatively impacted Canadian Tire’s first quarter results, released on May 11.

“Priority inventory” was transferred to other Canadian Tire distribution centres, the company says, and temporary distribution facilities were deployed. The losses to the firm include damaged or destroyed inventory, building damage, and the costs of cleanup and repairs.

Canadian Tire also has two other DCs in the area on the west side of the GTA. One of them is a state-of-the-art bulk facility measuring 1.4 million square fee, in Bolton, Ont. (sometimes referred to as the Caledon DC). It is 20 kilometres northwest of the stricken A.J. Billes facility. The company also has a second DC in Brampton, 14 kilometres to the west of the closed DC,

WRLA

on Hurontario St. This DC was completed last year—and is also considered state-ofthe-art. It measures 1.3 million square feet.

In May, a warehouse robotics firm filed a statement of claim against Canadian Tire over what it said was damages to its business because of the fire. Calgary-based Attabotics specializes in inventory storage and supply chain systems, helping companies compete against the likes of Amazon.

The start-up was working with Canadian Tire to develop robots that “move and pick in three dimensions,” according to the company’s website, to reduce the inefficiencies of “legacy” row-and-aisle warehouse systems.

The damages incurred by Attabotics, according to the claim, include “loss of reputation, business opportunities, goodwill, market share, and/or loss of profit.” The fire occurred because of Canadian Tire’s “wrongful conduct, statutory breaches, breaches of contract, gross negligence, willful misconduct, negligence, and recklessness,” the claim alleges.

Attabotics is a startup that raised $71.7 million in new funding at the end of last year to help it develop its business. Funding came through Export Development Canada, with involvement from the Ontario Teachers’ Pension Plan Board, taking the company’s total funding to $165.1 million.

LAUNCHES AD CAMPAIGN TO RECRUIT WORKERS TO INDUSTRY

The number one topic among dealers and suppliers country-wide is labour and how tough it is to find people. That problem is being acutely felt in western Canada, where it’s a constant topic at meetings of the Western Retail Lumber Association.

The search for good talent is made even more difficult by the low profile the home improvement industry has with potential new hires. Because the opportunities are

not widely known, WRLA launched a giant ad campaign in the spring to promote awareness of the retail home improvement industry and the potential it has for new recruits.

Called “Let’s Go Build,” the campaign’s target market is western Canada, using print, digital, and social media. The message of the ads seeks to connect people who are looking for their next career move with the businesses in this industry.

“For years we have talked about how rewarding it is to work in the LBM industry and have often commented on how this may be one of the best kept secrets, which needs to change,” proclaims a message on the WRLA website. “This is where Let’s Go Build comes in. Let’s Go Build is a dedicated campaign designed to raise awareness of our industry and share the incredible diversity of available career options.”

Fire ravaged this Canadian Tire distribution centre northwest of Toronto.

ORGILL’S FAMILY-OWNED STATUS GOOD FOR WORKERS, VP OF HR SAYS

Laura Freeman is the executive vice-president of human resources and chief human resources officer at Orgill, Inc. She joined the company earlier this year and Hardlines had the chance to sit down and talk with her.

Before joining the giant Memphisbased hardware wholesaler, Freeman spent seven years heading up HR as chief people officer at Schnucks Markets, a family-run chain of supermarkets in the American Midwest.

Despite the differences in the two businesses, Freeman found some similarities that made the transition an easy one. Like Orgill, Schnucks is a privately held familyowned business. “There’s some really great things about that—not being publicly traded,” Freeman said.

Her grocery gig was with a company

that’s almost 90 years old, while Orgill is also venerable, having been founded more than 175 years ago. “You don’t find companies like that very much, that are kept in the family.” Freeman says the values and culture of a family-based business is something “that really means a lot.”

She says the changes happening in the workforce during the pandemic had started well before the arrival of Covid. “Even preCovid we were seeing our workforce change. It did not all of a sudden start changing; it was just accelerated.”

With up to four generations working side by side at Orgill, an HR leader’s job is interesting, Freeman said. “You really have to think about that employee proposition across all different areas and then across all the different generations you have in your workforce today.”

QUEBEC INDUSTRY CONFERENCE ADVOCATES SHORTER STORE HOURS

Quebec industry group AQMAT welcomed more than 150 participants earlier this year to its 2023 Decision Makers Conference. It was held at the Centre de congrès de SaintHyacinthe under the theme of “Finding ways to reduce our uncertainties.”

Hosted by AQMAT CEO Richard Darveau, the event presented the results of a survey of dealers and consumers on how hardware stores can best meet their communities’ needs in a time of staffing crunches and unpredictable costs. Both groups of respondents agreed in preferring to reduce store hours, such as by returning to Sunday closures, rather than sacrificing the availability of employee expertise.

In presenting the results, Stéphane

Gendron, vice-president at market research firm CROP, stressed that hardware stores join computer stores at the top of the list of retail sectors in which customers rank knowledgeable staff as a top priority.

Gendron also pointed to a disparity in the perception of customers, most of whom see themselves as able to browse a hardware store autonomously, and dealers, who estimate that a majority of shoppers require assistance. “That’s good news: if we concentrate on the consumer [who needs help], we don’t waste the employee’s efforts.”

The audience was also treated to a panel discussion about a new service, Périscope, a data-driven platform AQMAT is developing to help to dealers, buying groups, distributors,

and manufacturers to navigate supply-chain and hiring decisions.

Samuel Nadeau, financial director at Couture TIMBER MART, represented the dealer’s perspective. Mélanie Belley, sales director at CanWel, spoke to the manufacturing and distribution side, while Évolution Distribution’s Martin Ménard addressed the concerns of buying groups.

Following the panel, conference guests gave collaborative feedback on the design of the platform’s dashboard. Among the themes emerging from the discussion were the need for training in the use and interpretation of Périscope data. Materials prices and construction starts were ranked as the most critical indicators users would need to consult.

AQMAT will next gather its members on Nov. 11 at its 11th Recognition Gala, to be held at Montreal’s Fairmont Queen Elizabeth Hotel.

Extracted from an in-depth interview with Laura Freeman in our sister online publication, Hardlines HR Advisor.

Laura Freeman is the executive vicepresident of human resources and chief human resources officer at Orgill, Inc.

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IKEA CANADA’S THIRD ‘PLAN AND ORDER POINT’ SHOWROOM OPENS NEAR MONTREAL

Getting closer to customers with additional locations and expertise has been a strategy for IKEA Canada in recent years. With only 14 stores in this country, the retail giant is prioritizing making access to its product lines easier. Its “plan and order point” outlets are small shops staffed by IKEA specialists who can consult with customers on product selection and installations.

The newest IKEA plan and order point opened in Brossard, Que., on April 18. It’s located in the Quartier DIX30 shopping centre on the south shore of Montreal.

The Brossard point joins similar outlets in Boisbriand, Que., and Kitchener, Ont. IKEA says it plans to open several more plan and order points in Canada.

The new showrooms will not offer products for purchase on-site. Rather, customers will be able to schedule appointments with IKEA specialists. A selection of home furnishings will be available to touch and try, including products that require installation and design expertise—provided by IKEA staff.

“We know that many of our customers in the Montreal area face significant travel

time to [go to a full-sized] IKEA, which is why we’re excited to bring the IKEA experience and our home furnishing expertise closer to our customers in Brossard, Quebec,” said Sandy Evinou, east market area manager at IKEA Canada.

LOBLAW IS THE LATEST BIG RETAILER TO SELL APPLIANCES

Real Canadian Superstore, the big box format for the Loblaw grocery chain, is now carrying heavy appliances in a pilot at its store in Milton, Ont. The retailer is teaming up with Canadian Appliance Source (CAS) with a store-within-a-store model.

The pilot features more than a dozen brands, including LG, Kitchen Aid, Samsung, Bosch, and Frigidaire. At 1,900 square feet, the storewithin-a-store concept will be operated by CAS appliance experts and offer the same service, terms, and conditions as standalone CAS stores. Customers will also be able to redeem PC Optimum points on major appliance purchases in this area of the store.

The first pilot will be expanded “to a small number of additional Real Canadian Superstore locations across the country later this year,” according to a release.

CAS was started in 2008 and now has almost 40 locations. They are concentrated in major cities like Toronto, Vancouver, and Montreal, but the retailer also has locations across the Prairies and in Nova Scotia.

The appliance market is a strong one for home improvement retailers, albeit a relatively new one. The market for appliance sales opened up more than a decade ago when Sears, the leading appliance seller in North America, began its decline. Sears carried a range of brands, including its own Kenmore label. At its peak, it owned almost half the appliance market in the U.S., but even by 2003, Lowe’s was in second place with almost 14 percent of the market, while Home Depot was also growing that category during that time.

Lowe’s brought appliance sales with it to Canadian Lowe’s stores when it took over RONA inc. in 2016.

At one point, Sears Canada had 140 locations plus about 900 catalogue and online pick-up locations. When it closed its doors, Home Depot was quick to follow the Lowe’s lead in filling the gap. Sears Canada closed its last store in January 2018, and soon after a newlook RONA store was introduced that featured an expanded appliance selection, following the model of the Lowe’s stores in Canada.

Other retailers followed suit. Home Hardware eventually made the foray into heavy appliances, and the category now constitutes an important part of many of its stores—even hardware stores, where dealers can take special orders for appliances.

Loblaw is selling heavy appliances in a test at its Real Canadian Superstore in Milton, Ont., in the Greater Toronto Area.

BY GEOFF M c LARNEY

Kitchen&Bath SPOTLIGHT

Scandinavian simplicity meets Japanese texturing

The Tenon kitchen faucet collection combines Scandinavian simplified design with Japanese textures and natural elements for a soft, modern flair. Drawing on this inspiration, the collection includes a teak wood handle and incorporates clean lines and calming details. It’s available as a pulldown faucet, smart faucet with motion control, and a pulldown bar faucet.

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Pull-down faucet combines minimalism and practicality

The Etre pull-down kitchen faucet from DXV looks to the era of machine-age modernism, with its focus on functionality, practicality, and purpose. Etre’s minimalist lines are complemented by knurling, a precision-engineered texture that enhances grip on the spray head and lever handle while adding a hint of interest to these key touchpoints.

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Knobs and pulls come in multiple finishes

Richelieu’s collection of knobs and pulls is available in new trendy finishes and styles. Choices include matte black, bronze, orion grey, and brushed gold. For a more experimental style, while staying in line with new trends, items with contrasting finishes and textured materials will work well.

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Soft-modern meets hard-edge

The Deckard collection embodies soft-modern design by incorporating curves into the familiar sleek, hard-edge motif of modern aesthetics. The clean, horizontal lines in this design create a precise aesthetic as the contrasting subtle curves offer balance. The small footprint of this faucet and the thin profile of the spout and handle make for a clean design that’s optimum for any modern space.

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Shower kit is easy to clean and warranty-protected

Maax’s Begonia Carbon 36 x 36 polystyrene centre drain shower features a three-piece polystyrene wall with three convenient shelves.Designed for easy cleaning, the shower kit sits on a textured base with drain included. The pivot door can be installed on the right or left. Made in Canada, it comes with a one-year residential warranty.

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Switch easily between flow and spray

Available in an array of finishes, the Grohe Essence single-handle kitchen faucet combines a distinctive style with features engineered for the modern home. It’s equipped with pull-out spray control, a 360° swivel, and a tough, scratch-resistant surface. The dual spray setup with toggle function switches between regular water flow and spray without turning off the water.

This bidet is equipped with ergonomic controls

The AquaWash Slim Non-Electric SpaLet Bidet Seat from American Standard has a sleek, low profile and is equipped with features that ensure a comfortable cleansing experience. An ergonomic side handle controls dual, self-cleaning nozzles for effective, independent front and back cleansing. Designed to fit on most elongated toilets, the AquaWash Slim Bidet Seat requires no electric outlet and is easy to install.

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Faucet serves a hard-working room

Whether it’s considered the mud room, utility room, or laundry room – it’s one of the most essential spaces in the home and yet one of the most overlooked from a design perspective. Moen enhances this space with the Arbor pulldown laundry faucet, which offers the durability needed to last in this hard-working room with features such as extended reach, flexibility, and enhanced flow rate to tackle any job while improving style.

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New colour choices for refined-granite sinks

Blanco’s Silgranit kitchen sinks are now available in new colours. Volcano Gray is a matte, versatile mid-tone grey inspired by volcanic ash and natural clay with subtle hints of brown to reflect warmth. Soft White is a dove grey with nuances of beige that adapts well to both warm and cool tones. It’s influenced by untreated elements and materials, like sandstone and linen.

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Cleaning up is within reach

Sleek and statuesque with just a taste of raw-edged industrial design, the ergonomic Montay incorporates a pull-down spray head at just the right height for no-reach cleanup. All the hidden inner workings are made to last as long as its modernist exterior adorns your kitchen. ca.pfisterfaucets.com

A faucet to reach any part of the sink

Pfister’s Lita collection unites simplicity and elegance in one effortlessly sleek design. The pivot lever controls both volume and temperature with one movement. The pull-down spray head can be detached and extended to reach any area of the sink. The Lita Collection includes pull-down kitchen, pull-down bar, and pot-filler faucets in polished chrome and stainless steel to create a coordinated look. ca.pfisterfaucets.com

Filtered and standard water in one spot

Blanco’s new Catris Flexo is a two-in-one faucet delivering both filtered and unfiltered water on demand. It connects seamlessly to all common water filtration systems. The semi-professional faucet has an insulated pull-down dual spray with a magnetic docking arm that delivers filtered water through a discrete waterspout.

www.blanco.com/ca

Flair to inspire the home cook

Neera’s soft, clean, transitional lines look beautiful in repose while the culinary option hints contemporary flair. This faucet is packed with features for chefs and foodies alike and available in the most current finishes.

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Drip-free durability and a sturdy handle

With a traditional design enhanced by classic details, the Glenmere bathroom faucet provides smooth, sturdy handle construction, boasts drip-free performance, and offers a durable metal drain for reliability. These hallmarks of an American Standard faucet give the Glenmere an everyday practicality and enduring beauty for today’s bathroom.

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Get the best of classic and contemporary

The Lindor collection combines both traditional and modern elements to pair well with any home design. With a variety of faucet options, plus matching tub and shower and accessories, Lindor makes it easy to create a cohesive look throughout the bathroom. Available accessories include a pivoting toilet paper holder, double robe hook, towel ring, and towel bars.

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Leviton’s Decora Edge wiring devices provide the classic appearance and superior performance of Decora devices in a new, easier-to-install, safer design. The line consists of Single Pole and 3-Way Switches and a Tamper-Resistant 15-amp Duplex Receptacle. Innovative installation features such as color-coded lever terminals (including the ground terminal) for faster, efficient wiring, a larger strap with a unique tongue and groove alignment feature for quicker trim out on multi-gang installations, and no exposed metal parts for safety, make Decora Edge ideal for new home construction and MDU projects as well as retrofit applications.

Innovative installation features such as color-coded lever terminals (including the ground terminal) for faster, efficient wiring, a larger strap with a unique tongue and groove alignment feature for quicker trim out on multi-gang installations, and no exposed metal parts for safety, make Decora Edge ideal for new home construction and MDU projects as well as retrofit applications.

Installers using Decora Edge will experience an installation process as unique as it is practical. The color-coded levers provide the foundation for quick installation by helping to rapidly identify the correct terminal for wiring, including a first of it’s kind lever terminal for the ground wire. The lever termination feature assures a positive connection has been made. This patent pending design also has a snap feature with an audible “click” so installers can be confident with every termination.

Applications

Living/Family Rooms, Bedrooms, Kitchens, Bathrooms, Home Offices, Hallways and Basements.

THE SMART PRICING INDICATOR

BY JIM INGLIS

Many retailers measure success by focusing on their profit and loss statement. This puts a spotlight on the gross margin percentage, since all expenses are deducted from that number. Therefore, it would seem that the higher the gross margin percentage, the more net profit can be achieved, assuming that expenses are held constant. However, this is only half the equation. It ignores the balance sheet, which has the inventory number—a significant element of the investment required to operate the business.

The better way to evaluate success is using the GMROI ratio, which compares the gross margin dollars from the profit and loss statement with the inventory numbers found on the balance sheet. GMROI is a measurement of the actual gross margin dollars generated in a specific time period, divided by the average inventory at cost during that period. This becomes a great

TABLE 1: Margin Does Not Define Profitability

•

•

•

Objective is to maximize gross profit dollars not margin percentages

tool to compare the productivity of departments, categories, or even individual SKU productivity.

Inventory is the major element in the retail business that affects the investment in working capital. Each time a retailing operation turns its inventory, it spins off gross margin dollars that its management can take to the bank. It is not the gross

margin percentage that is most important. It is how often a retailer can generate real returns on the working capital invested in inventory.

MARGIN VERSUS GMROI

Let’s look at a hypothetical situation. Say you’re evaluating the financial performance of a store that has both a hardware department and a lumber department. Both departments have an inventory that totals one million dollars at cost. The hardware department is making 50 percent gross margin. The lumber department is operating at a 25 percent gross margin. But the inventory turnover is quite different. Which is the most profitable department?

You cannot answer this simply by looking at the gross profit margin. You must also know the inventory investment and the rate of turnover of that inventory. We can see such a comparison in Table 1.

While in Table 1, the gross margin percentage of the lumber department was half that of the hardware department, it nevertheless generated twice the gross profit dollars. Therefore, it is not possible to judge the productivity and profitability of a business by looking solely at the gross margin

Jim Inglis, Home Depot’s former executive VP of merchandising, has also held executive roles at Sodimac, and Hornbach, among other global powers.

percentage. The analysis is incomplete without knowing the relevant inventory turnover ratios.

The GMROI index tells us which department or category in a retail store is the most productive. Lumber, for example, is a commodity product with a small number of relatively high-volume items that should turn much faster than the hardware

margins tend to have a strong relationship to normal inventory turns. This relationship is best expressed in the GMROI ratio. If the demand for a product is highly price sensitive, you may find that driving your pricing down leverages turnover by increasing sales. As turnover increases, the GMROI ratio will increase. If the demand for an item is somewhat inelastic, changing

return on retail square footage instead of gross margin return on inventory investment as a measure of productivity. This is the kiss of death for most stores in general, and home centres in particular.

In our previous example regarding the pricing of lumber versus hardware, the lumber products are obviously large and require extra space to stock and load. Measuring return of gross margin on the space required would tend to make the case that the store should decrease or eliminate the lumber department, in order to give more space to the hardware department, which is more compact. This would create a huge decline in the company’s sales and profits.

department, with its thousands of specialized nuts, bolts, and fittings. Hardware requires a broad assortment of products, resulting in lower inventory turns. Yet both departments could achieve similar GMROI results. In the case of lumber, we will most likely increase GMROI by focusing on increased inventory turnover. In the case of hardware, increasing GMROI will most likely be achieved by focusing on increasing gross margins.

Low margin products tend to be the faster-selling, commodity-type products, while slow-selling products are less price sensitive and tend to have higher gross margins. The market seems to understand that there is a relationship between margin and inventory turnover since prices and

the price may not increase sales or inventory turn; but raising the gross margin percentage may increase gross margin dollars. Therefore, increasing the price will leverage gross margin dollars. In this case, as gross margin percentage increases, the GMROI ratio will increase.

GMROI MEASURES MERCHANDISING COMPETENCE

The job of the merchant is to understand demand dynamics and set the price that will most likely increase GMROI. This requires the merchant to have an exceptionally good understanding of the market and of the customer, in order to predict the customer’s reaction to a change in price, up or down. The goal is always to maximize gross margin dollars. This is accomplished by finding that sweet spot for the right price. Once again, the success of business and pricing strategies is driven by deep understanding of the customer’s perception of your brand and their response to your pricing decisions.

MEASURING THE RIGHT VARIABLE

Some consultants and professors will encourage retailers to use gross margin

First, you would lose much of the lumber sales, which drive related sales throughout the store. A strong lumber department creates demand for more hardware sales. You, obviously, also lose those gross margin dollars that the lumber department was providing. Expanding the hardware department would most likely drive the slow two turns to an even lower number, with a negative impact on GMROI.

This would be a good example of using accurate data to make a detrimental decision. Having both a strong lumber department and a strong hardware department is necessary for a destination project store. It’s a synergistic 1+1=3 equation. In other words, offering a project solution by supplying both lumber and the necessary hardware provides extra value to the customer. The whole is greater than the sum of its parts.

Make sure you are using the right metrics to measure your success. The formula to evaluate pricing acumen is GMROI.

Another example: The department that generates the most store traffic and sales in many home centre stores around the world is the garden and outdoor living department. This category of products has the unique ability to bring the customer back to the store multiple times throughout the year as the seasons change. Yet it is space intensive and cannot be justified on gross

Some consultants and professors will encourage retailers to use gross margin return on retail square footage instead of GMROI as a measure of productivity. This is the kiss of death for most stores in general, and home centres in particular.

margin per square foot. However, a wellrun garden department in a home centre can generate an extremely high inventory turnover ratio and lead to a very favourable GMROI.

and by smart pricing. Smart pricing that increases GMROI can only be achieved if the decisions are clearly focused on customer perception and made by people who can understand the impact of a price

(Editor’s note: These topics are explained in chapter 13 of Breakthrough Retailing.) Rational pricing demands good data and a complete market analysis of the pricing for every SKU in your product mix.

Maximizing gross profit dollars requires the merchant to go through a decision tree based on the customer’s perception of prices combined with a hypothesis of their likely response. Perhaps you’re asking, “What is the right or ideal GMROI number?” The answer is always the same, a higher number than last period.

CONSTANTLY INCREASING GMROI

The merchants’ job is to drive GMROI up. It should therefore be the major metric in setting their compensation package. The merchant can positively impact gross margin dollars and inventory turnover by designing the optimum model stock

change from the customer’s standpoint. Implementing a policy of smart pricing will, most likely, result in both markdowns and markups, as you put yourself in your customer’s shoes and use benchmarking and price elasticity analysis to set rational pricing that maximizes gross profit dollars

Retailers are always competing against their own numbers by finding new ways to price right and thereby gain the customer’s business today and the customer’s trust for tomorrow. While it is impossible to increase gross margin percentage every quarter without destroying the business, it

While it is impossible to increase gross margin percentage every quarter without destroying the business, it is very possible to increase GMROI every quarter.

is very possible to increase GMROI every quarter, as we properly interpret and respond to the customer’s price perception, while maintaining smart inventory management.

THE INVENTORY FACTOR

Another way the merchant impacts GMROI is by creating a more efficient model stock, which is composed of a SKU matrix that sets the store assortment of items based on feature, benefit, and price point.

Most merchants are constantly looking to add more items to the product mix, on the mistaken notion that more SKUs will automatically generate more sales. This is an oversimplification that often proves false. The customers do not really want more items, they simply want the right item for their need. The easier you can make it for

the customer to zero in on the right products for their project, whether in the store or on the internet, the more you become the customer’s first choice to shop.

Instead of a product mix with redundancy and duplication, retailers need to make their stores easy to stock, easy to sell, and easy to buy. The same logic applies in making items on the website easy to locate, easy to distinguish, and easy to buy.

Overburdening the store with more and more SKUs makes it difficult to manage the display area without adding more manual labour to juggle the many items in a limited space. This also often results in being out of stock on the best-selling items, as valuable space is used for products with less customer demand.

An abundance of items with limited differences can make selling difficult for the

salespeople. Too many SKUs with feature benefit redundancy can cause a customer to become frustrated and actually delay an intended purchase. This is true both off-line and online. Keeping the choices simple and logical will make the shopping experience more self-service, which is always the best service.

Over-assortment with redundant product ranges is a far too common practice and a major sin of most retailers. When the merchant tries to jam 50 pounds of stuff into a 25 pound bag, something has to give.

The customer loses because the store is: • Harder to stock. Salespeople are busy moving merchandise and stocking shelves instead of assisting customers. The store management is more likely to hire people with strong backs

instead of strong product knowledge and experience.

• Harder to sell. When there is too much redundancy in the product mix, the salespeople cannot understand all the variations and, therefore, are of little help to the customer trying to make a decision. In fact, a confused salesperson will avoid helping a customer if they are not confident of their own product knowledge.

• Harder to buy. Having too many SKUs in the space available prevents the customer from quickly finding the product display, getting point-of-sale information, and

more items than the competitor simply for bragging rights. This, unfortunately, is the direction merchants often receive from management. It is particularly grievous with regard to the internet and e-commerce assortments. There seems to be a race to out-SKU Amazon, without understanding the high cost of warehousing and logistics, in addition to the working capital tied up in the multitude of long-tailed products. Millions of SKUs produced by manufacturers may or may not be in demand at the mass-market level. Stocking some of these products in the store may be justi-

lowest-cost price. Only when retail space becomes limited and, therefore valuable will vendors vie for shelf space and offer their lowest-cost price. Systematic line reviews will lower item costs while eliminating redundant inventory and, in some cases, unnecessary vendors. Both of these factors will positively impact GMROI. This same logic can be applied to increase the productivity of the many products sold online.

When you have redefined the appropriate model stock, you must control the depth of inventory in a store. The big danger here is that products may be reordered with the objective of filling the shelf space to make the store look good, instead of having a balanced inventory that works good [sic].

easily obtaining the product for purchase. In addition, it often forces needed inventory of the better sellers off the sales floor and into storage areas, when they are not readily available to customers. Even more likely is an out-of-stock situation, as display space and inventory dollars are tied up in slow-moving items.

Looking only at the average inventory turnover for the total store to determine appropriate inventory is misleading. A closer examination of subclasses and SKUs within the product mix will generally show an incredible number of items that are slow sellers and turning well below the department average, while the best sellers are spinning too fast to assure a consistent in-stock position. The average turnover number may seem to be within acceptable standards, but the customers may be frustrated and not well served if the store is out of the one item they need. The inventory level of every SKU needs to be set by the rate of sale and safety stock required for that specific item.

Merchants need to avoid racing to have

fied, while it may make sense to offer some additional items on the website. However, not everything made or offered by a manufacturer should be stocked in the store or even offered on the website. The rule must be to offer items that customers truly want to buy and then be able to deliver in a timely manner.

Smart merchants are curators who design model stock assortments, both off-line and online, to assure maximum choice of features and benefits for their customers with a minimum of needless redundancy and duplication. To this end, they must conduct systematic line reviews aimed at consolidating SKUs and vendors, in order to create a more efficient supply chain.

SKU DISCIPLINE CREATES COST SAVINGS

Line reviews deliver a dual benefit, in that reducing the SKU count forces vendors to compete for the limited shelf space. This often results in cost reductions. When a vendor does not have to compete for shelf space, the retailer will not be obtaining the

Optimum inventory levels are dynamic and based on individual stores. The correct depth of inventory must be set by looking at each store’s sales by item and setting a safety stock that is adjusted by a logarithm applied to the dynamics of lead times and that store’s sales trends.

This whole process is best managed by computerized logarithms. Of course, provision should be made for human adjustment when outlying factors are involved that are not programmed into the logarithm. This requires proper education, as well as discipline to assure that the computerized orders are not overridden for the wrong reasons. It is also imperative that the inventory data maintained in the computer’s perpetual inventory number be accurate and dependable. A credible reorder system demands the data generated be dependable to project rational reorders on a store-by-store basis.

This article is an excerpt from Chapter 14 of Jim Inglis’s superb book, Breakthrough Retailing: How a Bleeding Orange Culture Changes Everything , available from Amazon.ca. You can see— and meet—Jim Inglis at the Hardlines Conference in Whistler, B.C., on Oct. 17 and 18. Inglis will be giving two presentations, the second one a workshop.

JIM INGLIS

Merchants need to avoid racing to have more items than the competitor simply for bragging rights. There seems to be a race to out-SKU Amazon, without understanding the high cost of warehousing and logistics.

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Kim Peffley

Director of Organizational Development & Consulting, NHPA

Kim Peffley began her career over 25 years ago, working at her family-owned True Value, and then served as General Manager for a seven-store Ace chain. As a certified Everything DiSC® Facilitator and Consultant, Peffley uses her industry-specific retail management and leadership experience to offer professional training and support to retailers.

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Two days of presentations in scenic Whistler, B.C., featuring some of the world’s leading retail leaders. Plus networking with dealers and industry leaders from across Canada. The ideas and connections you’ll gain from this event will super-charge you and your business for years to come.

October 17 & 18, 2023

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SERIES

Well, that was a great ride. After posting gains of 14.8 percent in 2020 and 7.9 percent in 2021, the Canadian home improvement retail industry plateaued in 2022. This was to be expected. The consumer frenzy for hardware and building supply products was dampened by multiple interest rate increases and declining commodity prices. Plus, the opening up of other places for customers to spend their money, as pandemic restrictions lifted, slowed sales.

Hardlines estimates our industry grew 4.6 percent to $61.135 billion, while the Consumer Price Index was up nationally 6.8 percent. So, the industry experienced a 2.2 percent decline in real terms, after inflation.

Still, the industry grew by 34.4 percent during Covid. In 2019, preCovid, Hardlines reported an industry size of $45.5 billion. Last year’s $61.135 billion was a tremendous feat. And this, in a year in which commodity prices tumbled. To give just one example, the mill price of Western Spruce-Pine-Fir 2x4 had traded at US$1,600 per thousand board feet in the spring of 2021. It was down to $360 per thousand board feet by early June 2023, according to the Canadian Forestry Service. The industry is still being impacted by commodity price declines. And this will likely continue throughout the rest of this year.

In the next 12 pages, Hardlines Home Improvement Quarterly brings you an analysis of the industry, the Top 20 players, and a recap of the major news events that played out.

1. THE HOME DEPOT CANADA

HQ: Toronto, Ont.

2022 RETAIL SALES: $12.070 billion

STORES: 182

Home Depot Canada is a division of The Home Depot, a U.S. company based in Atlanta. Overall sales reached US$157.4 billion last year, an increase of 4.1 percent over the previous year. The retailer had a total of 2,007 stores in the U.S., Canada, and Mexico at the end of fiscal 2022.

In Canada, Home Depot has 182 stores, a number that has remained unchanged for several years. However, the Canadian division continues to grow, staying firmly in place as number one in this year’s Hardlines

Top 20 listing.

Instead, growth comes from optimizing the output of existing stores, while investing heavily in online sales. This latter strategy

took off during Covid, as it did for so many other retailers. An estimated 10 percent of Home Depot’s sales in Canada come through online transactions.

Home Depot operates 11 distribution centres in Canada. They represent a combination of bulk facilities, direct fulfilment centres, and “stock and flow” campuses. For its core replenishment DCs, Home Depot Canada has leveraged the U.S. Rapid Deployment Centre model and adapted it to Canada with its two largest facilities, in Vaughan, Ont., and Calgary, Alta., serving as “stock and flow” depots.

Near the end of 2020, Home Depot announced the acquisition of HD Supply Holdings, Inc., a distributor of maintenance, repair, and operations (MRO) products. Our calculations of Home Depot Canada’s sales do not include HD Supply.

The big box retailer’s customer focus remains fixed on both the homeowner and the contractor. During Covid, when many specialty stores, including home décor outlets, were not deemed “essential” and had to remain closed, Home Depot used this as an opportunity to expand its soft lines, adding more home décor SKUs to its stores and online assortments. The retailer has been pushing its assortments from more traditional looks to become more style conscious.

At the same time, growing sales to the pro customer remains an ongoing strategy. Overall, the Home Depot organization reports that four percent of its customers are pros, but they account for almost half of all sales. Part of that strategy includes getting product deliveries to jobsites as quickly as possible with same-day deliveries in some major markets. Other nods to pros include designated parking, special carts for pros, enhanced online options for tracking orders, and “fast lane” checkouts.

To support workers in its stores, Home Depot Canada has turned to more technology. Its associates have been armed with “HdPhones” to keep them in touch with inventory levels and each other. An app

called Sidekick was added to the devices that guides associates to prioritize the highest demand product, which shelf to restock, and the location of the excess product on overhead shelves.

2. HOME HARDWARE STORES

HQ: St. Jacobs, Ont.

2022 RETAIL SALES: $9.376 billion

STORES: 1,046

Home Hardware Stores Limited continues to experience steady growth yearover-year, as it invests in its operations and retail execution at store level among its existing member dealers, and actively recruits new members. The company has three distribution centres across the country: Debert, N.S.; St. Jacobs, Ont.; and Wetaskiwin, Alta. It also has a paint and chemicals manufacturing and distribution facility in Burford, Ont.

The company goes to market with four distinct retail formats. Hardware stores

flying the Home Hardware banner are typical hardware and housewares stores, often serving as the “general store” for a local community. Two banners represent the company’s building supply stores: home centres (Home Hardware Building Centre) and building centres (Home Building Centre). Home also has a handful of Home Furniture stores across Canada. While some are standalone, the majority are part of a Home Hardware Building Centre.

Historically, Home has operated as a wholesaler supplying its member-dealers. Those members have been the focus, the customer within the organization. Under president and CEO Kevin Macnab, Home Hardware has made a tangible shift in corporate direction. Macnab, who will celebrate his fifth anniversary with Home Hardware this fall, is the first president to come from outside the company. Home Hardware has embraced a cultural shift to become a “retail company” rather than a

wholesaler. The focus now is on the retail end-user as the target customer.

In his efforts to update the company, Macnab insists on keeping the dealer-owner at the forefront. The transformation the company is undergoing can be done, he says, effectively within the dealer-owned model that preserves the strong corporate culture that makes Home Hardware unique.

Home Hardware has been refining its focus on contractors and trades in recent years. A program called Home Hardware PRO was rolled out in 2020. It includes more emphasis on heavy duty power tool lines, such as the launch of Cat power tools, part of a move to help Home Hardware dealers compete more effectively for the pro dollar. Since 2017, Home has been actively pursuing the maintenance, repair, and operations (MRO) sector.

A major trend among large retailers is the expansion of private labels and house brands, and Home Hardware is no exception. Its signature Benchmark tool brand

got a boost at the end of 2021 when it was relaunched as part of a big promotional and advertising push.

3. LOWE’S CANADA/RONA INC.

HQ: Boucherville, Que.

2022 RETAIL SALES: $8.857 billion

STORES: 445

Lowe’s Canada, once part of an international strategy of expansion by parent Lowe’s Cos. in Mooresville, N.C., was always an outlier. In the U.S., all its stores are traditional big boxes, while in Canada, Lowe’s— since it bought RONA in 2016—had taken on a range of formats, from local hardware stores and building centres on up to big box stores. Not only that, part of that business, to its independent dealers, is wholesale.

Towards the end of Covid, the volume of lumber and building materials sold through the Canadian operations were subject to price deflation. Lowe’s Canadian operations were always more heavily reliant on LBM than was common in Lowe’s product mix south

of the border. This was one of many reasons head office decided to sell off its Canadian operations.

On Feb. 3, 2023, Lowe’s Canada business was acquired by a New York City-based private equity firm, Sycamore Partners. All of Lowe’s Canada’s retail brands, consisting of RONA, Lowe’s, Réno-Dépôt, and Dick’s Lumber, are now owned by Sycamore.

The deal returns RONA to its roots as a private company for the first time since it went public in 2002. Sycamore, which owns other major retail brands such as Loft/Ann Taylor, Nine West, Talbots, Aeropostale, and Staples, has the means to make significant investments in its newest Canadian home improvement brands.

RONA maintains its head office in Boucherville, Que., on the South Shore of Montreal, and will continue to operate and service a network of some 445 corporate and affiliated dealer stores across Canada.

In the RONA network, 61 of its stores were Lowe’s, and they represent an estimated 30 percent of the RONA inc. sales. RONA announced in late June that the former Lowe’s stores will be converted to a new banner, called RONA +, commencing at the end of July. Just prior to that announcement, RONA appointed a new CEO, Andrew Iacobucci, who came over from Illinois-based US Foods. Iacobucci is a former Loblaw Cos. executive.

RONA is investing in its installed sales program, and has been actively onboarding more installers. To attract pros to its already large network, RONA has implemented a new customer relations management system to better qualify homeowners and provide quality leads to pros. The retailer has also invested more than $2.4 million to redesign its stores’ signage to generate demand for installers.

RONA is doing more in its stores to drive the sale, which includes tapping the company’s online assortment. It offers 300,000 SKUs not normally available in stores. Its chief competitor, Home Depot, boasts more than a million products online.

NOTE:Theplacementofthegroupsinthischartdoesnotintendto ranktheminanyway,butmerelytoshowhowtheyarerelated.

Potvin & Bouchard

Agrizone

Watson Building Supplies

BMR Express

Shoemaker Drywall Supplies

BMR Pro Le Groupe Beauchesne

BMR Expert

Slegg Building Materials BC Ceilings Ltd.

Rigney Building Supplies

D.L. Building Materials

SOLLIO COOPERATIVE GROUP

BYCO

GMS INC. (U.S.)

Windsor Plywood

Delroc Industries Sexton Group

UFA Farm and Ranch Supply

ALLROC Tool FBM

FOUNDATION BUILDING MATERIALS (U.S.)

Co-op

WSB Titan

INDEPENDENT LUMBER DEALERS CO-OPERATIVE

SPANCAN FEDERATED CO-OPERATIVES LTD. TIMBER MART

Bytown Lumber

Quincaillerie Ste-Helene

Copp Building Materials Ltd.

Emard Bros. Lumber Company Ltd.

Fries Tallman Lumber (1976) Inc.

Igloo Building Supplies Group

Matério Laurentiens Inc.

J&H Builder’s Warehouse

McMunn & Yates Building Supplies Ltd.

Kent Building Supplies

Simcoe Block Ltd. Soo Mill & Lumber Company Ltd.

Les Entreprises P. Bonhomme Ltée

Star Building Materials

L. Villeneuve & Cie (1973) Ltée

Turkstra Lumber Company Ltd.

Jacques Laferté Ltée

United Building Products Yvon Building Supplies

BMR GROUP

Lefebvre & Benoit

4. CANADIAN TIRE

HQ: Toronto, Ont.

2022 RETAIL SALES: $8.081 billion*

STORES: 505

* hardware and home improvement only

Canadian Tire Corp. is a true Canadian retail success story, which celebrated its 100th anniversary in 2022. The company got its start in 1922, when two brothers, John William Billes and Alfred Jackson Billes, bought a tire reseller in Toronto called Hamilton Tire and Garage Ltd. Overall revenue from all sources in 2022 reached $17.81 billion.

Canadian Tire’s Retail group includes its Canadian Tire-branded stores as well as Marks, Helly Hansen, PartSource, Petroleum, and Party City. It also has a financial services division and a real estate division to manage its properties. (*NOTE: Hardlines estimates here are for Canadian Tire Retail’s allied sales in hardware, housewares, and home improvement, excluding sporting goods, apparel, and automotive services.)

These stores are independently operated and co-owned by Canadian Tire’s franchise, or associate, dealers. The dealers own the fixtures, equipment, and inventory while head office owns the real estate. Retail selling space ranges in size from 3,200 square feet to 134,000 square feet, equalling more than 21 million square feet of retail across 505 Canadian Tire stores.

Canadian Tire says it has benefited from an “improved omnichannel experience” that spans all of its retail banners and is served by a rewards program called Triangle Loyalty that has evolved out of the paper Canadian Tire “money.” The company reported that it has 11.3 million active members in the program and loyalty penetration came close to 60 percent in 2022.

As customers have cut back on discretionary spending, Canadian Tire has seen a rise in its essential mixes. One category that is getting a big push is pet food and supplies through its dedicated PetCo store-withina-store concept.

CTC will invest $3.4 billion over the next four years, “to deliver an improved omnichannel customer experience.” The plan encompasses increased private labels, which it Canadian Tire calls its “owned brands portfolio.” These are regarded as a key differentiator for the retailer’s online presence as well as a margin builder for its associate dealers. The goal is to get the mix of private brands up past 43 percent by scaling up existing owned brands and introducing new products. The retailer anticipates launching over 12,000 new private-label products across all banners by 2025.

The company has also introduced a premium member service called Triangle Select, designed to go up against Amazon Prime. For an annual fee, customers get priority shipping and special discounts.

With more than 500 Canadian Tire Retail stores, the company is not adding additional locations. It will update or relocate existing sites, however. Part of the retail refurbishment involves a concept called “Remarkable Retail,” a store format that exceeds 100,000 square feet. Two such stores were opened in 2022, one in Ottawa (136,000 square feet) and the other in Welland, Ont. (120,000 square feet). The company has a third giant location in the works, in Calgary, which is slated to open in 2025.

5. INDEPENDENT LUMBER DEALERS CO-OPERATIVE

HQ: Ajax, Ont.

2022 RETAIL SALES: $4.644 billion

STORES: 482

Celebrating its 60th anniversary next year, the Independent Lumber Dealers Co-operative conducts purchasing negotiations for building materials on behalf of

some of the largest independently-owned building supply yards in the country, many of them regional chains. There are 21 retail banners in the ILDC, which include such major chains as Kent Building Supplies of Saint John, N.B. (see separate listing at #11), Copp’s Building Materials of London, Ont., and McMunn & Yates of Dauphin, Man.

In addition, ILDC includes in its membership two other massive buying groups: Federated Co-operatives (see separate listing at #15) and BMR (see separate listing at #9). All told, ILDC represents more than 500 stores when it sits down with vendors. It is a member of the hardlines buying group Spancan.

7. SEXTON GROUP

HQ: Winnipeg, Man.

2022 RETAIL SALES: $3.643 billion

STORES: 387

Sexton Group, once a regional buying group that operated mostly in Western Canada, has long since transformed itself into a national player. It continued to sign new members in 2022. But the big news last year for the Sexton Family of Companies was the sale of a majority share of the organization to a group led by PFM Capital Inc., a Regina-based private equity management firm. The move positions the four companies that comprise the Sexton family business for the future.

ordering in a few truckloads of lumber.

Marshall got together with a few southern Ontario LBM entrepreneurs to form BOLD in 1963 and within a year they had 20 dealers. The group would change its name to Castle in 1982. Since that time, Castle has grown impressively. It has continued to add dealers over the past year. They include twounit Hodgins Lumber, based in Wingham, Ont.; Brudenell Building Centre in Montague, P.E.I.; Urban Insulation Supply of Casselman, Ont. (which has joined Castle’s Commercial Building Supply division, in business since 2007); and Maderas, a building centre in Rouyn-Noranda, Que., among others.

6. TIMBER MART

HQ: Calgary, Alta.

2022 RETAIL SALES: $4.362 billion

STORES: 603

Once a buying group concentrated in western Canada, TIMBER MART has come a long way since it set out on its journey to be a truly national presence a quarter century ago. Its secret back then was to end its former Matreco umbrella buying group alliance (with Homecare in Ontario, BMR in Quebec, and AWARD in Atlantic Canada) and form a unified organization with Homecare and AWARD—with BMR going its own way.

Fast forward 25 years and TIMBER

MART is making inroads in Quebec, signing new dealers recently, including Aluminium

B. Bouchard in the Greater Montreal Area and ML Produits de Bâtiment in MontLaurier. TIMBER MART’s distribution centre in St-Nicolas, Que., is clearly paying dividends. TIMBER MART claims to be the largest buying group in terms of gypsum supply purchases in Canada.

In addition to Sexton Group, industry legend Ken Sexton, who died in 2019, started Kenroc Building Materials—a multi-outlet GSD dealer—in 1967, as well as Builders Choice Products and Pan-Brick. At the beginning of this year, Eric Palmer was named president of the buying group. He was formerly the group’s VP and GM.

9. BMR GROUP

HQ: Boucherville, Que.

2022 RETAIL SALES: $1.574 billion

STORES: 275

8. CASTLE BUILDING CENTRES

HQ: Mississauga, Ont.

2022 RETAIL SALES: $1.971-billion

STORES: 293

Castle is marking 60 years in business this year. The “no frills” buying group got its start as BOLD Lumber (“Buying Organization of Lumber Dealers”), spearheaded by Newmarket, Ont., lumber dealer Larry Marshall, who got his start buying a tiny piece of land north of Toronto and

An ILDC member, BMR Group is the retail division of Sollio Cooperative Group, Quebec’s agricultural powerhouse formerly known at La Coop fédérée. BMR describes itself as the largest wholly Quebec-owned home improvement retailer. But it’s also a wholesaler with its own distribution facilities in Quebec. It boasts a 350,000-squarefoot hardware warehouse in Boucherville as well as three LBM DCs comprising 170,000 square feet in Longueuil, Quebec City, and Jonquière.

The standalone BMR brand covers home centres catering to the general DIY customer with a mix of hardware and building materials. Complementing it are the BMR Express proximity stores, contractor-oriented BMR Pro, and large-format BMR Extra. Agrizone stores serve a farm and ranch customer base.

“When the co-op bought BMR in 2013, the main target was to diversify the co-op,”

•

•

Sollio CEO Pascal Houle explained at its annual general meeting this year. BMR fulfilled that function admirably last year, with its best showing in 55 years, mitigating a challenging year for Sollio’s agricultural business.

BMR has made changes to its organizational structure, including the departments of finance, operations, and supply chain. BMR has identified Ontario as a key target for expansion beyond its existing 20 stores there.

was winding its way through the regulatory approval process.

10. CANAC

HQ: Quebec City, Que.

2022 RETAIL SALES: $1.400 billion

STORES: 32

Formerly Canac-Marquis Grenier, this major player in Quebec is owned by the Laberge family. It follows a low-price model. Of Canac’s 32 building supply outlets, 14 are in the Quebec City area, as is one of its distribution centres. The other DC is in Drummondville.

Canac’s everyday low pricing strategy is particularly aggressive when it comes to commodities. But the retailer offers a full home centre assortment running the gamut from hardware, plumbing and electrical, and paint to floor coverings and seasonal products.

Canac began 2023 with the opening of a store in Contrecœur, an hour east of Montreal. The 43,000-square-foot retail outlet is paired with a 31,000-square-foot warehouse. Canac also has stores in the works in Rivière-du-Loup, where construction will begin on access roads and services this year, and Sorel-Tracy, where the retailer’s 34th location is expected to open in 2024. As HHIQ was going to press, a store in Magog, in Quebec’s Eastern Townships,

11. KENT BUILDING MATERIALS

HQ: Saint John, N.B.

2022 RETAIL SALES: $1.188 billion

STORES: 48

Part of the J.D. Irving empire which dominates Atlantic Canada, Kent is famously secretive about its business affairs. It’s the only Canadian retailer other than RONA Inc. to go to market with both multi-format big box and traditional building supply stores. It also has three truss plants and a drywall facility. It last opened a store in March 2022, when it added a Moncton, N.B. big box—its 10th—to its roster. Last fall, Kent signed a letter of intent with the town of Bay Roberts, N.L. to open a store there—if another anchor can be found for a planned new shopping centre.

In November 2022, the Federal Court of Canada gave the Canada Revenue Agency (CRA) the green light to comb through the records of Kent Building Supplies’ pro and commercial customers, looking for tax cheats. Kent was required to forward to the CRA the name and contact information of all Kent Pro customers who had spent more than $20,000 annually in its stores.

Building Supplies in Ontario, Shoemaker Drywall Supplies on the Prairies, and Beauchesne Group in Quebec. The group grew to become one of the giant GSD buying entities in Canada. In 2018, publicly-traded GMS Inc. of Tucker, Ga., acquired WSB Titan, and the Canadian firm became known as GMS Canada. The connection with Watson Building Supplies was firmed up in 2022 when Paul Green, former president of Watson, was named president of GMS Canada, replacing Travis Hendren, who moved back to the U.S. as COO of GMS Inc. This spring, GMS Canada acquired Blair Building Materials in Maple, Ont., and Home Lumber and Building Supplies in Victoria, B.C.

12. GMS CANADA/WSB TITAN

HQ: Surrey, B.C.

2021 SALES: $1.054 billion

STORES: 32

WSB Titan was formed in 2009 by three large gypsum supply dealers: Watson

13. DELROC INDUSTRIES

HQ: Langley, B.C.

2022 RETAIL SALES: $968 million

STORES: 136

With some 33 members operating 136 locations, Delroc is a privately-owned buying group founded by entrepreneur Bruno Mauro of Dryco Building Supplies in Langley, B.C. Delroc will celebrate its 50th anniversary next year. Its members are mostly GSDs, but it also has full-scale building supply dealers—the largest of which is Windsor Plywood (see separate listing, #20).

Delroc is strongest in its home province of British Columbia, where it has 69 locations, followed by Alberta with 27. It has 19 outlets in Ontario and four in Atlantic Canada. It negotiates in a wide range of building material categories. Other than gypsum, its strengths are in engineered wood, lumber, plywood, hardware, flooring, aluminum railings, caulking, concrete products, hardscapes, fasteners, insulation, mouldings, paint, roofing, siding, steel framing, windows, and allied products.

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14. TORBSA/AD CANADA

HQ: Mississauga, Ont.

2022 RETAIL SALES: $786 million

STORES: 45

Affiliated Distributors Canada’s building supplies division represents the dealer group that is number 14 in our Top 20. Before last summer, the group went under the TORBSA name. That buying group had represented a small group of dealers operating mainly in Ontario, with one exception—its largest member, Crown Building Supplies, based in Surrey, B.C. Those members represent a mix of traditional building centres and dealers that focus on commodities.

AD established itself in this country in 2021 as a business unit of its parent company, AD, based in Wayne, Penn. AD is a buying group with almost 900 members that is heavily into all manner of industrial, commercial, and institutional products, which lie outside of Hardlines’ definition of the retail home improvement industry. TORBSA is now called AD Building Supplies - Canada Division.

TORBSA IS NOW PART OF A GIANT NORTH AMERICAN GROUP

Since 1966, TORBSA flourished as a buying group for a small, cohesive collection of building materials dealers and commercial yards. It was a compact but well established group that prided itself on the camaraderie among its members.

TORBSA made a dramatic move in July 2022, merging into another buying group, AD Canada (Affiliated Distributors), a contractor and wholesale buying group. Under the merger, a new division was created within the larger group: AD Canada – Building Supplies. Paul Williams, who had been president of TORBSA, moved over to head the division, reporting to AD Canada president Rob Dewar. The group touts itself as the largest contractor and industrial products wholesale buying group in North America. It provides independent ICI dealers and manufacturers with products and services.

Sales by owner-members in 2022 reached, a 28 percent increase from the previous year. AD’s member community comprises 866 separately owned independents across 14 divisions and three countries, representing US$74.9 billion in sales in 2022.

Today, AD Canada consists of four divisions: plumbing and heating, electrical, industrial and safety, and building supplies. The company says continued growth in both new and existing markets is a cornerstone of its vision. In April, Senso Group Building Supplies in York, Ont., became the newest member to join AD Canada.

15. FEDERATED CO-OPERATIVES

HQ: Saskatoon, Sask.

2022 RETAIL SALES: $560 million

STORES: 91

One of of the country’s largest farm co-ops, and the 60th largest co-op in the world, Federated Co-operatives reported sales by its members of $12.5 billion in

2022—a 38 percent increase on 2021. On the retail side, it supplies member co-ops throughout Western Canada that have ag centres, supermarkets, convenience stores, department stores, and hardware, building supply, and home centre stores. This last category is serviced by FCL’s Home and Building Solutions (HABS) business. The HABS stores have been undergoing a gradual and ongoing revamp, which includes expanding the back end with more drivethrough options, a nod to their growing contractor customer base. To further support growth of its HABS business, FCL has erected a new LBM distribution hub near Regina to service more than 60 HABS stores in Saskatchewan and Manitoba. It has been operational since January 2022.

17. UNITED FARMERS OF ALBERTA CO-OPERATIVE

HQ: Calgary, Alta.

2022 Retail Sales: $445 million

Stores: 34

UFA is a co-operative meeting the needs of more than 120,000 member-owners throughout Alberta, with a handful of locations in British Columbia and, increasingly, Saskatchewan. In Alberta, the co-op has 34 hardware stores under the UFA Farm and Ranch Supply banner. These are often twinned with cardlock locations (fleet fuel depots). UFA is a significant player in the home improvement industry in its region, buying lumber and building supplies through Sexton Group.

of which are corporately owned and which maintain their own banner.

The Quebec-based company is looking to nearly double its store count over the next 10 years and has $25 million earmarked for investment in that growth. Two new stores are already in the works for this year, the first in Brossard this summer and another later in the year in Blainville. Buying other independent dealers also figures in Patrick Morin’s expansion plans.

The Brossard store “will be our first store on the south shore of Montreal,” president and CEO Daniel Lampron told Hardlines in an interview in January. That location will feature a new look for the chain, and a novel size at about 95,000 square feet. The 37,000 square-foot selling space is comparable to other Patrick Morin stores, but the Brossard outlet will also boast 20,000 square feet for a drive-through lumber section, plus additional space for storage.

16. PEAVEY INDUSTRIES

HQ: Red Deer, Alta.

2022 RETAIL SALES: $496 million

STORES: 92

Peavey Industries operates more than 90 farm and ranch stores across Canada under the Peavey Mart brand, having incorporated the TSC stores in Ontario it acquired in 2017. Peavey is also the licensee of the Ace Hardware brand in Canada, which it took over in 2020 from Lowe’s Canada. There are some 100 Ace-branded stores in Canada. Peavey also does business under the MainStreet Hardware banner, a convenience hardware format for the downtown cores of small communities.

Peavey is buying up, on a selective basis, independents who want to cash out, turning the stores into corporate locations. Peavey has a relationship with Sexton to provide that LBM group’s members with the Ace banner and hardware assortments, while Sexton reciprocates with LBM buys for Ace building centre dealers in Canada.

Earlier this year, UFA launched an expanded e-commerce platform—partnering with Mirakl, a technology provider— called MarketPLACE. It offers ship-to-store or ship-to-home options, with vendors controlling their online assortments. UFA sees MarketPLACE as a way to extend its geographic reach with online sales from British Columbia to Manitoba.

19. FOUNDATION BUILDING MATERIALS (WINROC)

HQ: Calgary, Alta.

2022 RETAIL SALES: $411 million

STORES: 27

18. PATRICK MORIN

HQ: Saint-Paul, Que.

2022 RETAIL SALES: $415 million

STORES: 21

Patrick Morin was a member of ILDC until February 2021, when it was bought by seven-store Groupe Turcotte, in partnership with Home Hardware Stores Ltd. At the end of 2022, Patrick Morin had 21 stores, all

Foundation Building Materials (FBM) is a U.S.-based group of GSDs with over 270 locations across the U.S. and Canada. It’s one of the largest wallboard distributors in North America, as well as a leading commercial and industrial insulation materials distributor. FBM currently operates 27 Canadian locations: eight in B.C., seven in Alberta, two in Saskatchewan, one in Manitoba, and nine in Ontario.

FBM Inc. purchased its first Canadian outlets, then branded as Winroc, from Superior Plus LLC., a publicly-traded Toronto-based chemical firm, in 2016.

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Top 20 banner groups 2022 retail sales ($millions)

Market share of Top 20 Retail Groups

20. WINDSOR PLYWOOD

HQ: Langley, B.C.

2022 RETAIL SALES: $343 million

STORES: 52 (in Canada)

One of the distinctively different home improvement retail chains in Canada, Windsor Plywood is as much about plywood as Canadian Tire is about tires. (That is, it’s an important category but there’s so much more.)

Windsor Plywood specializes in hardto-find specialty woods as well as building supplies in general. It’s the only Canadian retailer on this list that has ventured south of the border to open U.S. stores—four in Washington state and one in Montana.

Windsor founder Randle Jones was a student at the University of Victoria when he met one of the owners of Stewart & Hudson

Lumber Co., in 1952. He had gone to the yard to sell them an ad in the student union publication. He went to work for them and later bought the company, opening his first

Windsor Plywood-bannered outlet in 1969 in Surrey, B.C. Windsor Plywood is, with a few exceptions, owned and operated by independent dealers on a franchise basis.

RETAILERS

MEET OUR OF THE YEAR

BY GEOFF M c LARNEY AND STEVE PAYNE

MATHIEU and MARIANNE MOISAN, proud third-generation owners of BMR Paulin Moisan in Saint-Raymond, Quebec, have a winning combination of skills and attitudes

Photography: Danielle Giguère and courtesy of BMR Paulin Moisan

Listening to people is our most important priority.

Last fall, cousins Marianne and Mathieu Moisan—still only 29 and 34 years of age—won our 2022 Outstanding Retailer Award in the category of Young Retailers of the Year. Their BMR store in Saint-Raymond, an hour northwest of Quebec City, is beginning to bear the stamp of their own generation. It also has tradition on its side. Their grandparents, Paulin Moisan and Thérèse Dion, had starting forging relationships in the town when they first opened their 2,000-square-foot store for business in 1961. Today, Marianne and Mathieu are serving the grandchildren of those original customers.

The duo started working in the family’s store as soon as they became teenagers. And they realized, by the time they’d exited their teens, that they wanted to take that giant leap and become proprietors. But the Moisan family had a firm rule in place when it came to succession—new generation family members couldn’t take ownership of the store unless they got some relevant work experience elsewhere. In the interview that follows, the cousins talk about where that took them.

Both already had higher education that prepared them for their current roles.

Top: The original store and yard, built in 1961, was in downtown Saint-Raymond. Bottom: BMR Paulin Moisan today. It was relocated and expanded in 2011.

Mathieu studied sales and construction design. Marianne did her studies in accounting and has her CPA and CMA designations.

The official handover of the shares of the business to Mathieu and Marianne took place in April 2021. Today, BMR Paulin Moisan boasts one of the most sophisticated designs of any home improvement retailer in Canada.

Credit must also go to the second generation of Moisans who took over the leadership of the business in 2003. Denis, François (Marianne’s father), Bernard (Mathieu’s father), Sophie, and Lise drove positive changes that created a strong demand. Eventually, the family realized that both the lumberyard and the hardware store would need to be much bigger. After careful planning, they relocated the business—and expanded to their current 15,000 square feet of retail space—in 2011. The store also has 15,000 square feet of covered space for

building materials and a large yard.

Joining BMR in 2017 was another big change that has paid dividends. Today, the business is thriving. Including management, it counts almost 50 full- and parttime employees.

Marianne and Mathieu credit BMR for its foresight in launching a succession planning program (“Le Relais de BMR”) that has helped them to upgrade their skills. The program is a collaboration of BMR and HEC Montreal—widely considered to be Quebec’s premier business school.

THE MARKET

Saint-Raymond is compact, with just 11,000 residents. However, the number of people swells in the summer, owing to tourism: the region is dotted with lakes and cottages. And in the winter, the area is a sports hotspot, with skiing, snowmobiling, and hockey to attract visitors.

Photo of three generations taken for the store’s 60th anniversary. (From left) Denis, Marianne, Bernard, Sophie, Paulin, François, Lise and Mathieu.

The town’s proximity to Quebec City, just 63 kilometres away, means there’s money coming in from the big city—and competition. Saint-Raymond is also a commercial centre, with two important industrial parks that are rapidly expanding. The town’s history is tied to the wood industry. There are sawmills, wood drying and treating plants, and plywood factories in the area. Maple syrup is both an economic contributor and a tourist draw—the sugar shack is an important landmark in the area.

KEYS TO SUCCESS

The keys to success of this business are, like most thriving enterprises, based around the quality of the staff. It has managed to retain its employees, “for reasons of the management style established by the preceding generations,” the Moisans wrote in their awards entry. “The ambiance at work is very agreeable—both in the retail store and in the lumberyard,” they say. “Listening to people is our most important priority. We have great confidence in our staff—which counts many employees with more than 20 years of service here.”

Another key to success is being on time with deliveries to both the large contractor base and to consumers. Urgent orders are handled outside of official store hours. For

example, if there is a flood at a customer’s home, or some other emergency, the store will deploy pumps and heaters as required no matter what the time of day or night.

PAYING TRIBUTE TO THE FOUNDERS

The founders of this business, Thérèse Dion and Paulin Moisan, have now passed—but their legacy is firmly established in the

town. Thérèse died in 2017 at the age of 84; Paulin last summer at the age of 88. Paulin saw the celebration of the store’s 60th anniversary in 2021. The Moisans marked the occasion with a special brand of beer in his honour, “La Paulin.”

Thérèse and Paulin were 27 and 28 years of age when they opened for business. If there had been a Young Retailer of the Year award in this industry in 1961, they would have been obvious candidates to win it. Now, the business has come full circle.

Read on for our Q&A with Marianne and Mathieu which took place in late April.

BMR Paulin Moisan celebrated its 60th birthday in 2021. It even canned its own brand of beer, “La Paulin,” in honour of the founder, who posed for this photo some 30 years ago.

A CONVERSATION WITH MATHIEU AND MARIANNE MOISAN

Why don’t we start by getting straight on your ages and your exact job titles?

MATHIEU I’m director of sales and materials purchasing and I’m 29. My tasks on the materials side are more making sure I’m following up with my clerks and my vendors, ensuring that pricing is at par with other hardware stores, and all purchasing of materials. It’s up to me to purchase all that. Also special orders, like doors and windows. But not hardware. Hardware inventory, it’s my dad who takes care of that.

MARIANNE And I’m director of operations and comptroller. I’m 34. As comptroller I analyze everything financial, everything connected to accounting, and I supervise the accounting team. I also look after everything operations-related, everything that encompasses the management of a business. I head up that section.

Your grandparents, Paulin Moisan and Thérèse Dion, founded the business in 1961. Can you describe what they were like as people?

MARIANNE Paulin was really someone oriented toward human relations, really someone who prioritized connections with vendors and customers—he was the one in contact with them. Thérèse was really about the numbers, the Cartesian accounting. It’s funny because we’re really two people who are similar to our grandparents: Mathieu is Paulin and I’m Thérèse.

MATHIEU My father, Bernard, is still with the business. He became an employee two years ago when we bought it back. He is

purchasing director for hardware. But Marianne’s father (François) is no longer with the business as of two years ago.

You both knew from a young age that you wanted to join the family business, is that right? How young are we talking?

MATHIEU Yes, we both started working here very young, around 13, 14 years old. But as for being sure of ourselves, that we wanted to take over the business eventually, we would have been closer to 19. But yes, we both first started around 13, 14.

And you were able to do your homework, finish high school, while working in the hardware store?

MATHIEU Yes, we were able to do our homework at home before going to work, but we

only worked evenings or weekends. You know, we were still in school full-time.

And there was a rule in your family, that owners from a new generation would have to spend some time working in outside businesses. Mathieu, I believe you were a construction estimator?

MATHIEU Yes, I did an internship for around, I think, two months. It was with one of our clients, I did that placement and it really clarified for me that my place was in the hardware store.

And Marianne, you were a comptroller at an aeronautics firm?

MARIANNE Yes, I worked for nine, almost 10 years, for an aviation company called Ortie Aviation. It’s based here in the Quebec City

area and basically what we did was rent military planes for training. We had a contract with the American armed forces.

When I finished there, I went on to do my internship for my CPA certification, because you need two years of internship. And of course my parents didn’t want it to be at the hardware store. So I left precisely to look elsewhere to follow the family rule. Initially, I left for two years, with a view to returning to the business. In the end, I was gone for nine, but I always knew I wanted to take over the family business.

So how is it, sharing responsibilities between the two of you?

MATHIEU It almost happens by itself, given that we both have our strengths and weaknesses. So Marianne is really more on the finance side, procedures, employee relations, and all that. Then I’m more on

MATHIEU We still have the same vision, the same mentality. That helps everything to go well.

If you were brother and sister, you would probably have more conflicts ...

BOTH Oh yes!

... but as cousins it’s a bit different. MARIANNE For sure that has an effect, being cousins.

MATHIEU The relationship is a little less close but it’s perfect.

Close enough to work together.

MARIANNE Yes, yes.

You were a winner of our Young Retailer of the Year award. I imagine that weaves a link between the

MARIANNE Because, you know, ours is really a generation that’s at ease with all that, with technology. We want things to be fast and frequent. So we like to be able to control things, which makes anything that’s selfserve suited to the new generation.

MATHIEU The new generation is much more informed too. Often the customer arrives in the store and sometimes they know the product better than we do. So that’s why self-serve orders are going to get more and more popular as customers arrive in store, and they almost won’t even need our advice anymore.

MARIANNE They’ll have looked at it themselves on YouTube or something like that. They’ll get here and know what they need.

You have a high opinion of BMR. Why is it the best group for you and how did your store come to join BMR? Your grandparents didn’t start with them over 60 years ago.

MARIANNE No, it was independent. It was called Matériaux de Construction Enregistré. But it was supplied by SodiscoHowden at that time. Then it became Novico.

the side of purchasing, supplier relations, everything logistics, deliveries, coordinating always having the right stock at the right moment and the right price. That’s more on my side, but not always. Marianne can help me with large purchases.

Do you ever have disagreements, differences of perspective? Do you have someone else who can help you solve them?

MARIANNE Basically, we have a board of directors, which is me and Mathieu, but we also have an external consultant, François, who was the managing director and one of the second generation [of the family in the business], who we kept on as an external consultant.

industry and the younger generation of leadership. In your opinion, how is your generation going to improve retail commerce in Canada, whether it’s at the level of tech or communication?

MATHIEU Well, I think it’s really going to get better. We see it already with all the advertising, social networking, online promotions, online sales …

MARIANNE … self-service [at checkout].

MATHIEU We don’t have it yet but we’ve already talked about it. Eventually, when we’re able to, it will for sure be present in our stores.

MATHIEU Also Unitotal.

MARIANNE Then there was Pro.

MATHIEU We were Pro, Ace …

MARIANNE [In 2016] BMR was ready to welcome us, so we changed to their banner. It’ll be five years this fall that we’ve been with them. We were perfect for their model because it’s smaller stores, independent merchants. With the proximity to the customer and the proximity we had to BMR’s leadership–it’s all of that, the values that are similar to ours. That’s why we made the decision to join BMR. There’s a business model for the independent that really connected with us.

The new generation is much more informed too. Often the customer arrives in the store and sometimes they know the product better than we do.

”

Outdoor Living

The Great Outdoors

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Outdoor Living

THIRD QUARTER 2023

Crystal ball gazing

PRESIDENT Michael McLarney mike@hardlines.ca

VICE-PRESIDENT & PUBLISHER

David Chestnut david@hardlines.ca

EDITOR

Steve Payne steve@hardlines.ca

ASSOCIATE EDITOR

Geoffrey McLarney geoff@hardlines.ca

CONTRIBUTING EDITOR

Rob Blackstien

MARKETING & EVENTS MANAGER

Michelle Porter michelle@hardlines.ca

ADMINISTRATIVE ASSISTANT

Jillian Macleod jillian@hardlines.ca

ART DIRECTOR Shawn Samson TwoCreative.ca

Dr. Decks discusses the latest deck developments for dealers

The best of both worlds

A growing Western dealer has combined an alpine country vibe with modern merchandising techniques

Fabulous at 50

Gagnon: La Grande Quincaillerie celebrates its golden anniversary, yet continues to employ forward-thinking strategies

Old school ODL

Sherk Lumber Company may be Canada’s oldest lumberyard still operated by its original family founders

Category captains

From decking to lighting, here are some hot products to boost your outdoor living sales.

Top 10 trends

What’s hot in the outdoor living segment in 2023? Our experts fill you in

Crystal Ball Gazing

Dr. Decks is back to tout some cutting edge deck technology

Gazing into the proverbial crystal ball of outdoor living, I‘ve noticed one trend that a large amount of respected top-tier deck builders seem to be gravitating to: alternate framing products.

Steel has been around for a while now, with several systems still available, while others have gone away. I think there are benefits to steel, but there’s also a learning curve. Where I live, it’s often wet when we work and rust is an enemy so I opted to wait for alternate systems to arrive and, lucky for me, such systems are here.

I’ve recently used an Australian aluminum system called Outdure, which is designed for low-level decks over rooftops. It’s a structural system that will span longer lengths, with narrower profiles which remain laser straight and flat. After all, I’m a floor guy and a flat floor is always the desired result. It’s a great option for any height deck, with its own fastener system that connects together with erector set simplicity.

Outdure has a unique clip system for grooved deck boards that integrates into the top of the joists and, in

terms of longevity, aluminum is unprecedented in the industry. No rust, easy to cut, lasts a lifetime. It’s a winner (even if shrimps on the barbie are sold separately)!

Owens Corning recently released its new structural composite lumber. I’ve had samples for about a year and am convinced this is a new direction that our industry is heading. Current pressure-treated lumber offerings are being eschewed, given a relatively short life span, warping, flexing, twisting, and other inherent issues that plague these products. This new composite lumber features a fiberglass sheath inside of the cap stock to make it more structurally sound and allow longer spans. It’s workable like traditional timber and fastens together with traditional industry standard connectors. It’s definitely worth a look for those looking for a longer-lasting framing product than traditional wood.

Dr. Decks

Aka Jason Russell TACOMA, WASHINGTON

For even more from Dr. Decks, check out our Top 10 Trends in Outdoor Living (pg. 107).

“I’m a floor guy and a flat floor is always the desired result.”

The Best of Both Worlds

Mountain View Building Materials (MVBM) has come to understand the value of transitioning from a mom-and-pop store into a modernly-run business, complete with professional merchandising and a proper organizational structure.

However, it will never stray from its roots—the customer service-focused, alpine country vibe that intrinsically weaves such a business into the very fabric of smaller communities.

It’s the best of both worlds.

The western-based dealer—new to the Sexton Group—has locations in Kelowna, B.C., and Calgary, both of which are particularly strong on exterior home products.

While owner Joel Seibert wasn’t comfortable discussing the specific increases MVBM has made in its outdoor living segment, he did qualify it as “huge growth.”

A big part of that can be attributed to pandemic-related stresses that found house-bound

Growing western dealer combines alpine country vibe with modern merchandising techniques

By Rob Blackstien

homeowners taking money previously earmarked for social events like vacations and dining out and spending it on backyard improvements to make life at home more comfortable.

The other significant development that fueled the dealer’s dramatic growth was transitioning from a family type operation into something Seibert termed “more legitimate.”

Highlights of this transformation included enlisting Burlington Merchandising & Fixtures to

Mountain View photos by: Anna Milne

The MVBM team has worked together to manage the “huge growth” in the outdoor living segment.

create “more of a professional merchandising platform to work with,” an area Seibert admits the company did not have much experience with.

He also hired a business coach to help usher in more operational efficiencies. The coach encouraged Seibert and his partners (Brad Pettafor and Sheila Carr) to examine their own strengths and weaknesses with an eye towards revisiting their job descriptions and roles within the organization. As a result of this exercise, Seibert now

focuses on business development, something he had precious little time for previously.

“A lot of the growth we can attribute to understanding our strengths,” building their new roles around their respective strengths, “and hiring for what we aren’t strong at,” he explains.

It took some time to get the right mix, but

Seibert is thrilled with the results: “The team we have now is unbelievable. I’d put them up against anybody.”

Seibert says one of the hotter pandemic-driven trends is enclosures, whether by closing in the walls of a pagoda or by using other forms of privacy screening. He explains that when people

Joel Seibert (left) says privacy screens and partitions to modularize the backyard are hot.

were stuck at home because of Covid-related restrictions, they could still get outside, yet retain some privacy “and not feel like they were constantly being peered on.”

These trends are continuing as higher interest rates make buying a new home problematic, prompting people to enhance the house they already own, he says.

As a result, the renovation market for his store remains hot as homeowners engage in projects such as exterior siding, soffit, and trim. “They’re giving their 10-to-15 year old home more of a modern facelift and upgrade.”

They’re also spending more to make their backyards and outdoor living spaces more comfortable. Seibert says customers crave interior creature comforts like backyard kitchens and outdoor living rooms. But no, don’t worry... the outhouse will not be making a comeback any time soon.

Looking forward, Seibert anticipates that these kinds of upgrades may soon be adopted by new home builders as standard fare. “I’m hoping builders are going to look at what people are doing to the footprint” of their yards, draw inspiration from that and offer it as a value-added package.

Such a scenario, of course, “would be massive” for his stores and similar retailers. And it would make sense for homeowners to add a landscaping package like this to their mortgage up front, before they’re cash strapped after completing the home purchase, he adds.

While the pandemic is not something anyone wants to relive, it did have some surprisingly positive effects for MVBM’s seasonal business. Knowing in advance that supply chain issues were going to be a factor, major contractors were buying large amounts of decking, treated lumber, and fence materials much earlier than before, and then repurchasing earlier and earlier.

This was a huge boon for the dealer’s cash flow and inventory turnover, Seibert explains. The LBM industry did quite well for a couple years there, he says. So well, in fact, that when doing longterm forecasting and assessing historical data, “you’ve got to throw those two years out.”

Going forward, MVBM plans to add locations in British Columbia and Alberta, seeking familyrun LBM stores that are the cornerstones of their communities, with owners who are ready to retire or offload their businesses.

But maintaining those ties to the community is paramount to MVBM’s vision, and something it clearly takes very seriously. “It’s our obligation to maintain their family legacy,” Seibert stresses.

In fact, that’s the appeal. Those businesses, their stories and their legacies within their respective communities—“that’s what everyone is emotionally tied to.”

For more of Seibert’s takes on current outdoor living trends, see “Top 10 ODL Trends” on page 107.

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Fabulous at 50

While Gagnon: La Grande Quincaillerie celebrates its golden anniversary this year, it continues to employ forward-thinking strategies

By Rob Blackstien

Gagnon: La Grande Quincaillerie (The Great Hardware Store) may be turning 50 this year, but don’t think for a minute that it’s settling into middle age and resting on its laurels. Au contraire.

In actuality, the Quebec-based, five-store chain has fully embraced constant change as a key strategy to remain relevant and a true leader within its industry. It’s a major reason why the company today is firmly independent, says president Geneviève Gagnon.

“We are a proudly independent company whose goal is to be able to adjust and adapt every single day, every hour, every minute to the customer’s needs.”

The agility that goes with being an independent was key here, she explains, as was sticking to the business’s core values and being true to themselves.

This philosophy has manifested itself in a commitment to never fall behind from a technology perspective. Gagnon recognizes that

the hardware industry isn’t sexy, so recruiting younger staff into the fold isn’t easy. Therefore, the company has made a concentrated effort to increase technological initiatives related to their image, marketing, and employee tools.

She says this was another advantage to being an independent: it allowed the company the agility to expedite this process. As a result, it now boasts an IT team of three at its distribution centre whose full-time job is to develop technological tools.

Gagnon photos by: Annemarie Grudën

Among these advancements are: a mobile-accessible program that provides staff with a knowledge base of product information that’s shareable with customers; a revised payroll/ scheduling system that allows employees to request days off and communicate with their co-workers; management videos to show appreciation for all the employees; and a program in which two employees per location are chosen

monthly to take store photos and videos and post them on social media.

Sustainability is another area in which Gagnon: La Grande Quincaillerie has excelled. Over a decade ago, it opened its first eco-friendly location in Saint-André Avellin, and added a second one a few months later in Saint-Jean-sur-Richelieu. Employing green technologies to improve comfort and energy consumption, the stores feature:

• Low-VOC recyclable materials used in the construction of the stores;

• High-efficiency energy techniques that reduce consumption nearly 40 percent; and

• Natural light that reduces energy by 35 percent.

Gagnon says sustainability is a big part of her stores’ differentiation strategy going forward, but this extends beyond store construction. The retailer is currently developing a section in its locations to resell previously used items that customers have opted to upgrade—products that are perfectly sound, but would likely be ticketed for landfills otherwise.

“We want to give our customers purchase power, so that’s one of the ways we think we can achieve that,” Gagnon explains.

While Covid-related supply chain issues have finally cleared up, the after effects of the pandemic are still being felt in terms of new products, Gagnon explains. With no one allowed to travel to Asia to research and develop products over the last couple of years, she’s anticipating that the market will not exactly be flooded with new merchandise in 2023.

She believes this dynamic, combined with rising interest rates and a looming recession, will result in a competitive year in terms of

Clockwise from top right: President Geneviève Gagnon made her chain more agile to change; the store’s ODL lineup focuses on products that are tough to find anywhere else.

promotions and pricing. Upscale products won’t be as popular as customers focus more on lower to mid-range merchandise.

“I think people will be more aware of what they buy, more conscious. They’ll want to have the right product for the right amount of money,” she predicts.

The pandemic ushered in greater demand for outdoor living products, plus a boom in renovation and new construction, although the latter is slowing down thanks to interest rate hikes, Gagnon says.

barbecues (featuring highly specialized brands that are unavailable elsewhere) and impressive garden centres.

Given how involved Gagnon: La Grande Quincaillerie is within the communities it serves, the company is highly committed “to give back to our customers and our people,” Gagnon says.

Another fallout was that people took advantage of extra time to discover their love for DIY projects, an ongoing trend that she expects will continue in the years to come.

“So that’s a good side of the pandemic for us.”

In terms of ODL offerings, Gagnon says the chain offers a large selection of products across the segment, but the real gems are its line of

Therefore, as part of the 50th anniversary celebration, they decided to take their usual assortment of promotions and contests “and multiply it by 50.”

This included adding 50th anniversary products to their flyers with a vintage 1973 look; special events every weekend of June (the actual anniversary month) at every store with a special

promotion every day of the month; a contest for over $25,000 in prizes for both customers and employees; other special events throughout the year geared for customers and employees; and running a supplement in various newspapers to highlight the retailer’s rich history.

Gagnon, for one, is extremely excited: “It’s going to be a hell of a year.”

For more of Gagnon’s takes on current outdoor living trends, see “Top 10 ODL Trends” on page 107.

Clockwise from top left: Promotions abound during the dealer’s 50th anniversary celebration; highly-specialized barbecues are one of the chain’s differentiators.

“I think people will be more aware of what they buy, more conscious. They’ll want to have the right product for the right amount of money.”

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Old School ODL

Sherk Lumber Company, Port Colborne, Ont., dates back to 1810, two years before this part of Upper Canada became a bloody battleground against invading Americans. This business is 57 years older than Canada.

By Steve Payne

Current owner and president Guy Sherk— representing the seventh generation of his family—is the great-great-great-great grandson of David Sherk (1782-1828), the founder of the first Sherk sawmill. The Sherks, Mennonites who came north from Pennsylvania in 1792, founded

the village of Sherkston, now an eastern part of Port Colborne.

Guy Sherk took over after his father, industry legend Ron Sherk, passed away in October 2021, just a few weeks shy of 90. Ron had worked in the business for over 70 years.

Hardlines went to Port Colborne specifically to do an interview with Guy Sherk about the outdoor living market, but we got so much more. We came away with an appreciation for the history of mills and lumberyards as the most important business

Sherk Lumber Company in Ontario’s Niagara Peninsula might be the oldest yard in Canada still operated by members of its founding family

Sherk Lumber photos by: Steve Payne

Guy Sherk is the seventh generation of his family to run the yard. He got his first paycheque from the business when he was 11.

sector in the development of Canada.

The store, a TIMBER MART dealer, is an essential business in the Port Colborne region. But it is also a museum of artifacts, tools, and general ledgers recording the history of modern building supply retailing.

Founder David Sherk only lived to see his 46th year. He passed the business to his son Christian, who in turn passed it on to Charles Sherk, who pioneered selling coal to the community. When coal become scarce during World War II, the building materials business stepped into the breach under Guy’s grandfather, Arthur Sherk.

The business was heavily based on milled lumber at that time; Sherk’s prefab cottage packages and sheds were sold throughout Ontario. The milling business was supported by two railway spurs and shipped lumber across Canada and into the U.S. The Sherks logged up in Parry Sound, Ont., at one point. The last railcar delivery occurred in the 1990s.

When Ron Sherk took over, he concluded that

LBM manufacturer giants would soon swamp his comparatively small milling operation. So, he switched fully into retail, while keeping the cottage and shed businesses.

A devastating fire occurred in the late 1960s— children playing with matches was the probable cause—but the facility rose from the ashes.

Guy, who had grown up in the business but then went to work elsewhere, rejoined his father around 13 years ago. But Guy had actually received his first Sherk paycheque back in 1974,

Like

when he was only 11 years old.

Along the way, Guy has done almost every kind of job in the industry. He worked for local LBM wholesaler Green Forest Lumber in the ’80s, managing it for eight years. The remanufacturing operation produced 10 to 12 million board feet a year by the time Guy left. Green Forest was shipping up to 10,000 truckloads a year across the Peace Bridge into Buffalo, N.Y. For 10 years, Guy drove a tractor trailer and operated heavy equipment. He’s currently on his fourth stint at Sherk

many yards of its vintage, Sherk Lumber was a big coal provider until shortages occurred during the Second World War.

DEALER PROFILES

Lumber , but this time as president.

When it comes to outdoor living products, Sherk Lumber does it the old-fashioned way as befits an operation that is 213 years old. For example, don’t look for synthetic deck material here.

“All of our artificial decking, we just order job lots from Taiga,” Guy says. “We have samples, but there’s so many flavours of this stuff. If you’re going to compete with the boxes, you’re going to have to have it in-depth. We’re into wood products, including manufacturing.”

Sherk Lumber has been big into sheds (usually eight feet wide and between six and 20 feet in length) for over 40 years, offering a display of them along the Welland Canal, a few minutes’ walk away.

“It keeps us busy in our downtime, in the winter,” Guys says. “When we transition in the winter, the shop is really busy.” But the business stays away from “the big stuff” (houses) “because we’d be stepping on our contractors’ toes.”

Also in the outdoor living category, Sherk Lumber sells reclaimed railway ties and guardrail posts. On the day Hardlines visited the yard, they had about 3,000 railway ties in stock.

“It gets to be more and more of a challenge to get them,” Guy says, because the railways have ripped up so many spur lines, like the ones that used to run into Sherk Lumber. “I have about 20 sources for them. And I keep them pretty close to my vest.” He estimates he’s sold about 30,000 railway ties over the past 15 years.

The other part of Sherk’s outdoor living

offering is concrete slabs and pavers—and a big sand and gravel business to support it. “We deal with Triple H north of Toronto We get a lot of landscapers in here.”

The pandemic lockdowns created a perfect storm for lumber dealers, especially those catering to contractors. Shortages were a problem, with many dealers on allocation. “But I was able to stay ahead of it,” Guy says. “Instead of going to your first two or three suppliers, maybe you have to go to your fourth or fifth supplier.”

Now 60 years old, Guy says he still enjoys the business. “It’s not like we owe a lot of money to anyone. But it’s not a hobby. You’ve got to be present, too, to make money at it. Unless you have someone great to run your operation for you.”

With no natural successors in the family (Guy’s four brothers predeceased his father, Ron), Guy—who doesn’t have children—says he’s “always on the lookout for that person” who wants to run his operation for him, so he can slow down a bit. “But I’m not going anywhere for the next 10 or 15 years,” says the seventh-generation owner.

Sherk TIMBER MART is different. You won’t find synthetic decking on display, but you will find all manner of real lumber, concrete, and reclaimed wood products.

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Category Captains

Accent lighting for the perfect spotlight

From Regal ideas, Yard Lite offers a line of high-performance accent lighting for outdoor projects. Use them to illuminate areas to ensure and improve safety, create an ambiance, or to accent that perfect outdoor masterpiece. Yard Lite LED lights are easy to install and plug directly into Regal ideas and Crystal Rail systems. Available in white, gold, and blue. www.regalideas.com

From decking to lighting, here are some hot products for your outdoor living displays

Easy to operate, easy to clean

Timberline is an advanced and customizable pellet grill with an intuitive touchscreen display and simple controls. Its thoughtful design ensures easy cleaning and maintenance. The Traeger Induction cooktop allows for scorching-hot searing, simmering, frying, and more, while built-in compatibility lets your customer create the ultimate backyard cooking setup.

www.traeger.com/ca/en

Get notified by phone when it’s time to flip

Weber’s 2022 Genesis Smart Gas Grill is designed to bring a complete outdoor kitchen experience to any outside space. With cooking grates specially designed to accommodate the grate insert and grillware pieces (sold separately), it unlocks a wide range of cooking options at the grill. Smart grilling technology creates perfectly grilled food through real-time food temperature alerts, reminders, and flip-and-serve notifications at the grill or on the phone. www.weber.com/ca

Slide planks easily into kit

Hoft’s Kit A4 includes one black powder-coated aluminum end post and all necessary hardware to create privacy screens and fences. The fast and easy slide installation system is a sturdy, no-nail assembly. Customers can choose their preferred wood or composite planks and slide them in. Designed for 5/4 wood boards and 1" composite boards, the kit is available exclusively in black. www.hoftsolutions.com

Design a deck from the comfort of home

With no software installation required, the easy-to-use cloud-based Regal ONE Design Tool produces accurate material and cut lists, layout plans, installation instructions, and fastening details at the click of a button. Just point and click to generate a personalized interface where potential clients can interact with contractors and retailers online.

www.design.regalideas.com

A composite with the look of hand-picked stone

Tando Creek Ledgestone features various sized stones with grout lines in between. The rugged look of hand-picked stone installed with grout shows the natural variation of each stone. Like all TandoStone products, it’s easy to install, moisture-resistant, and free of harmful silica dusts. www.tandobp.com

Keep decking looking fresh

With the professional quality water-repellent wood stain and sealer from Techniseal, rejuvenating the look of decks, pergolas, or any outdoor wood structures becomes easy. Customers can choose from eight trendy colours and quickly refresh and enhance the colour of the wood for long-lasting results. The result is a beautiful outdoor living space. www.techniseal.com/en_ca

Incredible flavour and game-changing customization

Experience the evolution of wood-fired flavour with the all-new Traeger Ironwood. Customers can discover next-level consistency, unrivaled wood-fired flavour, and innovative customization options that let them create the perfect grill for their own cooking style. www.traeger.com/ca/en

Answer the call of the wild

With the Traeger Ranger, cooking an outdoor feast is easy right on a truck bed while camping or fishing, or when taken along for a weekend away. Featuring Traeger’s Digital Arc controller, the Ranger provides precise temperature control with an added keep warm mode to ensure that the food is ready to eat when needed.

www.traeger.com/ca/en

Polymeric sand protects joints

Well suited to both patios and to residential driveways, Techniseal’s EZSand polymeric sand is a high-tech product that goes on dry when applied between pavers, then hardens when activated with water. It stays in the joints permanently, preventing weeds and insects from invading them.

www.techniseal.com/en_ca

Expand outdoor cooking possibilities beyond grilling

The 2022 Smokefire wood-fired pellet grill, Stealth Edition, is designed with a sleek black-on-black aesthetic. High-heat searing and low-andslow smoking contribute to exceptional wood-fired flavour. Roasting, steaming, and even stir-frying are possible, along with traditional grilling. The built-in grill lighting illuminates the cooking grate for the late-night or early-morning cook. Porcelainenamel construction retains heat, even in cooler temperatures, and helps prevent rust and cracking.

www.weber.com/ca

A timeless look for outdoor spaces

Easy to install, with either tempered glass or Regal’s patented locking picket system, Titanium Slate is the trending, hot colour of the year. It has a UV powder coat finish for maximum durability and low maintenance. Complementing many styles and inspired by natural tones, it’s the perfect colour choice for any new deck. www.regalideas.com

A versatile grill for smaller spaces

Weber’s new Lumin electric grill is designed for those with limited outdoor space and for fans of electric grilling who crave barbecue’s authentic flavour. It’s suitable for balconies where charcoal and gas units are not permitted. The Lumin can quickly reach high-heat temperatures of more than 600°F/315°C. A unique smoke mode allows the user to infuse foods with smoky flavour. Clean-up is simplified with a front-access grease tray and dishwasher-friendly, porcelain-enamel cast iron cooking grates. www.weber.com/ca

Eliminate stains without strong solvents

Maintaining clean pavers is a breeze with Techniseal’s complete range of stain-removal products. Use them to effortlessly eliminate tough stains like rust, motor oil, grease, and organic matter. Best of all, they deliver their results without strong solvents.

www.techniseal.com/en_ca

With 3 unique decking lines, TimberTech has the right option to suit your lifestyle. Discover TimberTech Composite and Advanced PVC decking and learn the advantages of each —

Timbertech® Advanced PVC® decking shown in Coastline®

Patio doors come in 14 colours

Jeld-Wen’s DF Vinyl Sliding Patio Door comes in 14 exterior colours from French vanilla and heirloom white to mocha cream and dark buckskin. It features a horizontally sliding slash and is available with or without one of three patterns of dividing grilles between panes. Jeld-Wen uses recycled wood and the door is available with Energy Star-certified options.

www.jeld-wen.ca

Free up deck space with Fascia mounts

Fascia mount post brackets give your deck that extra space. Use them with any Regal railing posts to maximize your space and avoid fastening to the top surface of your deck. Made with durable high strength aluminum alloys, they install to the side of a deck for a clean and modern finished look.

www.regalideas.com

Classic elegance meets fine detail

From Tando Composites, Tando Stacked Stone is a dry stack profile without grout lines between stones. The classic elegance and intricate detail of small stones give this stone the appearance of a precision hand-laid dry-stack set. Tando’s engineering and materials offer the look of natural stone or wood but without the upkeep and maintenance.

www.tandobp.com

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

Russ Perman

Hardlines associate editor and podcast host Geoff McLarney and senior editor Steve Payne interview Russ Permann, president and CEO of Taiga Building Products on how Taiga weathered the pandemic, how the supply chain looks today, and his expectations for technology improvements for the business and the industry.

Frances Sologuk

Frances Sologuk is the owner of Osoyoos Home Hardware in B.C.’s Okanagan Valley. She shares the story of how her family’s hardware store was “un-renovated” to reveal its historic building materials, reclaimed from a nearby mining camp. The store now serves as a museum of the town’s local history, and it’s a big draw for customers!

Joel Seibert

Michael McLarney, Hardlines president and podcast host, interviews Joel Seibert, the owner of Mountain View Building Materials on building team members individually.

Geneviève Gagnon

An interview with the leader of a five-store chain of home centres in Quebec, La Grande Quincaillerie (The Great Hardware Store). Geneviève talks about her experiences growing up in the family business run by her famous father Yves Gagnon, former president of Groupe BMR, and how she’s making her own mark on the business.

Plus many more podcasts to choose from!

Listen today for free at hardlinespodcast.ca

Jim Inglis, recent podcast guest, is a world-renowned retail expert with 60 years of experience in the retail home-improvement industry. Jim has helped shape the industry worldwide as a special advisor to the boards of leading home-improvement retailers around the world: Sodimac in Chile, Hornbach in Germany, Bunnings in Australia and New Zealand; and Komeri in Japan. Jim is speaking at the 2023 Hardlines Conference in Whistler, B.C. on October 17th and 18th. Scan here for more details!

The Hardlines Podcast Series has been made possible through the support of:

Top 10 Trends in Outdoor Living

Curious about what’s going to be hot this summer (besides the weather)? We polled the experts (Joel Seibert, Mountain View Building Materials; Jason Russell, AKA, Dr. Decks; and Geneviève Gagnon, La Grande Quincaillerie) and have boiled down their input into this handy top 10 list

1. Privacy

Seibert recalls the saying; “The best time to plant a tree was 20 years ago, the next best time is now.” So, absent a hot tub time machine, privacy screens are hot, whether incorporated into new deck or landscape feature construction, or retrofitted into existing structures.

2. Colour Schemes

Dr. Decks says adding alternate colour surface borders (or patterns) on top of deck frames is picking up steam, while another big one is segmenting sections of larger decks to maximize board lengths while having fewer surface butt joints for a cleaner look. Gagnon says 2023 colour/material trends include natural rattan, natural wood, natural stone, citrus, and yellow-green.

3. Furniture

Given the trend to extend indoor comforts outdoors, people want to have cozy, comfortable furniture, says Gagnon. “It’s an area where they can either relax, sit by the fire, watch TV, or even work from.” Trends in furniture are towards natural rattan or wood, she adds.

4. Lighting

Homeowners and landscape designers have been adding lighting everywhere, allowing people to enjoy their outdoor

living spaces more hours of the day and more days of the year, Seibert says. Lighting additions are very important, Gagnon adds, given that most of the time spent in this area is at night.

5. Deck Board Bending

No trend list would be complete without Dr. Decks’ signature methodology to customize deck shape. “I exclusively use AZEK decking and Heatcon heat forming kits to make my curves a reality,” he says.

6. Artificial Plants

As the Radiohead song prophesied, artificial plants have become a growing segment, Gagnon says. “People use them to decorate their balconies or their outdoor living area.” In fact, they look so natural nowadays that they can also be used inside. Thom Yorke is smiling somewhere.

7. Modularization

Seibert says that landscape designs are adopting an interior design approach. “We are seeing more designs come across our desk that have specific areas in the landscape design.” Different ‘rooms’ are emerging outdoors: kitchens, entertaining areas, areas for accommodating more guests, and spots with a more private feel. Gagnon echoes the sentiment that intimacy is

important and says people create this by using real or artificial plants, decorative trellises, and wooden fences.

8. Finishing Touches

Dr. Decks says that the ideal way to finish your deck is with Regal ideas’ Crystal Rail, a frameless glass system that lights up as a beautiful blue pane of glass at dusk. He notes this product will have a jaw dropping effect while preserving your view during daylight.

9. Weather Proofing

Gagnon says gazebos, solariums, and pergolas are always consistent sellers, but customers are now going for better built and more fashionable products. Out: fabric gazebos and polycarbonate roofs. In: sturdy steel roofs that withstand weather and the elements.

10. Faux Wood

When it comes to outdoor cladding and siding products, the trend is towards engineered wood, metal, and fibre cement products that are finished to mimic natural wood, Seibert says. More and more, these products are being developed to look “natural” and not so manufactured, plus—and this is the year when the public started to pay attention—wildfire protection is an important consideration.

BY ROB BLACKSTIEN

CLOSE ENCOUNTERS

t probably doesn’t take a rocket scientist—or even a magazine journalist­—to figure out what happens when a building supply yard doesn’t maintain close contact with its contractor customers. (Spoiler alert: bad things.)

But at a time when traditional marketing methods are becoming less effective or have yet to return to their pre-pandemic appeal, and Millennials/Gen Zers are entering the workforce with different interaction demands, smart retailers are exploring new strategies to stay in touch with their lifeblood accounts.

You don’t need to be an extraterrestrial to understand that employing technology to help maintain close relationships with your best customers is the wave of the future I

At the heart of this movement is technology, and thanks to investments in the development of digital tools by innovative distributors like Tennessee-based Orgill,

advantage of the technological tools Orgill provides is Alf Curtis Home Improvements Inc., a Castle member with yards in Peterborough, Lindsay, and Belleville, Ont.

He says Alf Curtis has employed all the usual methods in this regard—newsletters, contractor events, site visits by salespeople, etc. However, in each instance, these methods have become either outdated or difficult to pull off in recent years.

The latter two, of course, were virtually wiped out as possibilities during the pandemic, but Perry says he does plan to revitalize these strategies over time.

Inc., retailers seeking to better service their pro accounts have some great new additions for their arsenals.

Among the dealers that has taken

Brent Perry, president of the firm, is quite intimate with traditional means of maintaining contact with his contractor customers.

The newsletter method, meanwhile, has become a bit of an antiquated endeavour, he explains. In the past, Alf Curtis included a newsletter when they sent out month-end statements, or via email, but Perry says

Chase Curtis and Brent Perry, co-owners of Alf Curtis Home Improvements, a Castle member which has yards in Peterborough, Lindsay, and Belleville, Ont. The pro customer base is huge.

The newsletter method has become a bit of an antiquated endeavour. “ ”

Photography: Galen Dafoe

contractors “don’t look at it.”

So instead of having those marketing materials ticketed for the circular file, Alf Curtis now prints out its newsletters and pamphlets and simply leaves them on the counter so contractors—when they make a physical visit to the store— can catch up on the news from their favourite yard at that time.

“But if you send them out in the mail, forget it,” Perry says.

A NEW BREED OF CONTRACTORS

To his credit, Perry understands that the younger breed of contractors grew up with cell phones in their hands, so employing technology to develop new touchpoints to interact with them is absolutely vital. This is not your father’s builder supply

Once Orgill released the next evolution to its system—fully integrated e-commerce— Alf Curtis immediately hopped on board. No longer run through E-Volution, this new platform is powered by Unilog, and Perry and his staff deal with them directly. Orgill remains a key player in the relationship, providing a support staff that works with dealers to help keep things running smoothly.

DATA ON 1.2 MILLION SKUS

Orgill’s Unilog e-commerce option “is the Cadillac,” Perry says. It’s fully integrated with his point-of-sale system and pulls all the information directly from the distributor.

“I’ve got data on 1.2 million SKUs,” he says, including all his LBM, drywall, shin-

environment anymore. Regardless, Perry’s motivation is rooted in timeless good business sense.

Catering to a younger, more tech savvy customer base, “goes hand in hand with my main focus on what we do and how we offer more services and more ways for our customers to deal with us.”

As a result, about six years ago, Perry’s yards started using Orgill’s e-commerce platform, which at the time was based on a partnership between the distributor and e-commerce provider E-Volution. However, this system was limited given that it only allowed the Alf Curtis yards to showcase whatever Orgill stocked in its London, Ont., distribution centre.

Yes, Perry’s building centres could have added their own lumber and building materials to the system, but “it was a nightmare for maintenance” given that doing so would involve two different databases.

gles, etc. “Everything is on our website.”

The beauty of the full integration is that there’s no need to reinput any order information, eliminating one of the biggest challenges—human error from data entry.

“So a customer places an order online, submits the order, it gets dumped directly into our point-of-sale system. We don’t have to hand-key in an item,” Perry explains.

This system is fully live, and at the time of our interview, Perry and his team were beta testing an app which is also fully integrated. They were ironing out some glitches before fully launching it, but the app was already posted on Google Play and the Apple Store.

It’s a boon for pro customers that have an existing account with Alf Curtis Home Improvements as they don’t have to pay for their orders online; they can simply link their web account to their in-house account to charge it to their account when placing orders through the site or app.

SALES CAPACITY BANDWIDTH

Perry says having the e-commerce site and the app is like adding more sales capacity bandwidth. “I could have 50 customers, 100 customers accessing and purchasing from us at the same time and I don’t have to add any more salespeople.”

He believes that by employing this technology, he’s essentially added another

I’ve got data on 1.2 million SKUs. Everything is on our website. “ ”

Perry and his team were, at the time of our interview, beta testing an app which is fully integrated with the three yards’ inventory. The goal is to add more sales capacity “bandwidth,” Perry says.

salesperson to help deal with his customers—one that works 24/7. Through the e-commerce website and app, his customers “can place their entire orders for next week,” he says. “Orgill has now freed up my salespeople on the counter to look after our contractors.”

Perry says that these new tools offer a win-win scenario for Alf Curtis and its pro customer base.

Picture this scenario: Mr. Contractor is at home on a Saturday night, working on an estimate for a customer. He needs material pricing for a deck to finish the quote, but now he won’t have to wait until Monday morning to call in or get an email reply from one of Alf Curtis’s sales staff.

Thanks to the new Alf Curtis website and app, “they can log in on their account and

get their own customized, unique pricing that’s assigned to them, do their own estimate.” The system is set up in such a way that if the contractor is logged in, they will see their own unique pricing, specific to

what touchpoint a contractor uses to interact with this dealer.

Perry stresses this is not about making more money; instead, he’s simply driven to better serve his customers. “It’s to help

their account; viewing the site without logging in will only show them retail pricing.

“The pricing they see there is what they would get if they walked (up to) the counter and bought it,” Perry says. Finally, a seamless, platform-independent experience that is the same across the board regardless of

offer better services to my contractors. That’s what I want. You’re not going to get rich off e-commerce, no matter what.”

Still, that doesn’t mean that Alf Curtis won’t be heavily marketing these tools.

“We’re going to spend a good amount of money on promoting this.” Perry is not

Orgill has now freed up my salespeople on the counter to look after our contractors.

Perry in his yard in Peterborough, Ont. He stresses that the goal is not to make more money from technology, but to better serve his customers. “That’s what I want,” he says.

ruling out homeowners as potential users of this service, but he says it’s really targeted, for now, at contractors. Ultimately, it’s going to be especially valuable “to the pro contractors who are busy going 100 miles per hour. And who’s open at 9 o’clock at night to answer their questions?”

ORGILL’S TECH ROLE

For its part, Orgill really understands that it has a responsibility to help dealers serve its pro customers by any means. Grant

were already using texting to interact with their contractor customers. Clearly, that presented an opportunity.

“Our dealers need help bringing some productivity and visibility to that interaction, because if we can make it quicker for a salesperson to close a sale, they can be onto helping another contractor or builder,” Morrow says.

“Anything we can do on the tech side to reduce friction in the sales process is money in the bank.”

management (PIM), and mobile and loyalty offerings. Last year, Orgill completed integrating its e-commerce platform with ECI Spruce/RockSolid Max and expects to launch sites this summer that will integrate with Epicor BisTrack.

Further, the company holds semi-annual technology symposiums to keep dealers abreast of all new industry-related technological trends and developments, he says.

Orgill is adamant that dealers must have digital as part of their tool belts. “We believe that it’s vital that pro yards and pro dealers utilize technology to compete,” Morrow stresses.

LEVELLING THE PLAYING FIELD

Morrow, Orgill’s director of e-commerce, says that a few years back the company surveyed its dealers and discovered that many

The distributor is not resting on its laurels, Morrow says, continuing to develop new e-commerce, product information

With big box stores all sporting programs and robust systems to lure pro contractor and builder sales, smaller retailers need to level the playing field, Morrow told Hardlines. After all, he suggests, even in

FLE PRO CORNER

Brent Perry and Chase Curtis are co-owners of a business that is legendary among the contractors in their three markets. Their pro customers are going “100 miles per hour,” Perry says.

Dealers must have digital as part of their tool belts.

”

a relationship-based business, if a retailer makes it difficult for contractors to do business with them seamlessly, the lack of service/relationship with big box stores won’t be enough to dissuade your customers from doing business there.

“Everyone will argue that the pro won’t have the same kind of relationship with a big box, but if a building supply dealer believes it’s a hassle or time consuming to conduct regular transactions with pros, then the pros will go elsewhere,” he predicts.

From the perspective of ever-dreaded paperwork, dealers can enjoy another benefit with these tools in the form of time saved.

Morrow says dealers can set up their system to close sales with a combination of the online site and approval through a mobile site/e-signature to eliminate much of the paperwork back and forth that’s usually inherent in the sales process.

This could open up an even bigger opportunity for dealers to get closer to their contractor customers.

“Use that time to move the relationship to more of a consultative approach to deepen

customers are going to buy more from them, which makes them more successful. They get it.”

So that’s exactly why Orgill is investing money and time into developing these tools, Perry says.

While Orgill is a hardware-only distributor, Perry says his yards deal with all the major distributors on the LBM side. That includes Taiga Building Products Ltd., which offers Taiga Now, a digital quoting/ordering system for dealers that is employed by Alf Curtis’s full-time commodities purchaser.

Morrow says that Orgill’s PIM platform includes product data for “nearly everything a dealer sells, not just items from Orgill.” In fact, he says, its Industry PIM system includes 36,000 non-branded wood products and they can help dealers map those to point-of-sale SKUs to ensure pricing is current on their websites.

For dealers that still think of Nintendo or pocket calculators as cutting-edge technology, let’s close the loop on our previous spoiler alert about bad things happening.

“Pro yards have historically been slow to

Given that when creating an e-commerce site or application, there are many features you’ll want to include (such as job pricing, quoting, the outside sales process, etc.) and factors to consider (business perception), “it’s very expensive to figure out all on your own,” Morrow advises.

That’s where Orgill comes into play, he explains. They can help with all the changes and integrations necessary to make this work for you.

the interaction,” he advises. “That will allow dealers to get into further lines of business with their contractors and builders, rather than just being focused on completing the administrative steps.”

AN APPRECIATIVE DEALER

Perry is appreciative of the distributor’s big-picture thinking. “Orgill does it right,” he says. “They know how to treat their customers and by doing that they understand the two-way relationship where, if they help their customers become successful, their

adopt new technology, sure, but avoiding e-commerce in particular may be risky because we’re talking about customer interaction and expectations, which gives a competing yard or big box a chance to take business away,” warns Morrow.

Thankfully, he adds, the last three years have witnessed a dramatic uptick in dealer interest in e-commerce—one of those serendipitous benefits of that pesky pandemic— however, it’s not an easy thing to tackle. After all, just because you’re great at retailing does not make you an Internet whiz.

As for the Alf Curtis yards, Perry believes his business is unique among the Castle network in going down this path.

“I think we are the only one, the groundbreaker.”

However, given the success Alf Curtis Home Improvements has enjoyed with these initiatives, it’s clear that you can expect this to spread to other dealers in the very near future.

Oh, and that extra “salesperson” the dealer has essentially added? Well, to date, they have yet to try to submit an expense claim for a round of golf with potential customers.

Grant Morrow is director of e-commerce at Orgill, Inc., the giant Tennessee-based distributor. He advocates for technology for independents to “reduce friction” in the sales process.

Pro yards have historically been slow to adopt new technology, sure, but avoiding e-commerce in particular may be risky because we’re talking about customer interaction and expectations.

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BY STEVE PAYNE

GHOST-BUSTING STRATEGIES FOR RETAIL TALENT ACQUISITION

Think you’ve got that “perfect hire” starting on Monday morning? They may not show up. A look at the post-Covid increase in employers getting ‘ghosted’

Ghosting is not only a modern dating term, but employers are similarly getting left in the dust after candidates are going silent on communications, skipping interviews, or simply not showing up for the first day of work.

That was the blurb for a “ghost-busting” seminar at the recent Retail Council of Canada (RCC) Human Resources Conference in Toronto. The conversation touched on employer branding, varied approaches for in-store and hybrid (part work-from-home, part work-from-office) employees, and the expectations of a value-driven workforce.

Kelly Mawhinney, a partner at Toronto HR consultancy Mercer Ltd., was interviewed on

the topic by Michael LeBlanc, senior retail advisor at the RCC.

When it comes to ghosting, there are things that those who are hiring can do. Complacency is the number one enemy, Mawhinney said.

“You can’t be blasé. You can’t just say, this is our stuff: we are a great company.” You have to constantly market yourself as an employer, reach out to prospects, and enlist, enlist, and enlist.

If you’re an HR professional, you have “internal clients,” Mawhinney said. These are the people within your company who candidates will be reporting to. HR professionals need to get them to “narrow down

the three things they need [for a position].”

It’s important for the HR people in a firm to “influence what the employer values process is going to be, what the company is.” Mawhinney said the days of being an “order taker” as an HR specialist are over. “You guys (HR professionals in the audience) are in a leadership role much more than you ever were before… You’ve got to be professional and say, ‘I can do this for you.’ ”

Why is hiring so difficult nowadays? Part of it is that a company’s values and secrets are openly available online for perusal by candidates. Glassdoor—the heavily-visited website where employees talk about what it’s like to be a worker at a firm—is just part of

You may not realize how many applicants are going online to check out your company.

”

HUMAN RESOURCES

the equation, but it’s a crucial one. “Make sure your Glassdoor is clean,” Mawhinney said. Which means checking it frequently and addressing workplace issues that could make your company look bad.

“You have to be proactive there. You may not realize how many people actually go online to see what people think about your brand—or the CEO! There’s a lot going on [online]. People are much more aware about what they’re getting into.” And what you stand for, as an employer. Things have changed a lot from a decade or two decades ago.

When it comes to a “values proposition,” a company has to know what it values in an employee and it needs to communicate that to prospective employees in a way that is compelling, Mawhinney said.

Timing is also really important. “We all know that the hiring cycles are way too long.” Mawhinney said she recently visited a client and had to tell them, “You guys are killing people. There’s no way people are going to this panel, and this test, and this panel, and this test… I said, ‘No!’ It’s got to be compressed. You’ve got to streamline the process.”

You have to follow a game plan when hiring and you have to tell the people hiring what the game plan is going to be.”

“You really have to be proactive, you really have to be streamlined, and you really have to get bums in seats quickly.” Then the retention game plan has to kick into gear, because you don’t want recent hires deciding, “I really don’t like this job.”

Mawhinney concluded her remarks with the “ultimate piece of that value proposition.” Which is compensation. “Nobody works to not get paid.” The pay package has to be flexible, meaningful and competitive.

Found this article useful? Many just like it can be e-mailed to you monthly in Hardlines HR Advisor, the e-newsletter for anyone involved in talent acquisition in the Canadian home improvement industry. Just go to hardlines.ca/publications/hr-advisor to sign up. It’s free!

How many times have you gone through the hiring process, set up a new worker in the schedule, then waited on Monday morning for them not to show up? You are not alone. A study by the Canadian Federation of Independent Business (CFIB) has determined that small businesses across Canada are dealing with this growing trend in the hiring process. More than one-third of small business owners said they’ve hired people over the previous 12 months who never showed up or stopped coming into work shortly after starting. If that isn’t concerning enough, some job candidates stopped responding before they even got the job, said 37 percent of respondents, who found that job seekers failed to reply to requests for interviews or further information that would have secured them a job.

“Employers are already having an incredibly hard time filling certain positions. Ghosting is not only a frustrating waste of their time, but it’s a big drain on their already limited resources,” said Dan Kelly, president of the CFIB. “Job candidates and employees don’t have to take or stay in jobs they don’t like, but they should at least communicate their intentions clearly to their employer instead of leaving them scrambling and wondering.”

Shortages of skilled labour continue to limit business growth for 53 percent of companies, according to the CFIB’s Business Barometer. 38 percent of businesses reported shortages of unskilled or semi-skilled labour. Over half (52 percent) of small businesses have yet to return to normal revenue levels and 58 percent haven’t repaid their pandemic debt.

The CFIB has speculated that many unemployed persons are happy to remain on EI and apply for jobs even though they have no desire to get hired. As the federal government is working on potential reforms to the Employment Insurance system, the association has urged Ottawa to take into consideration the impact of potential EI changes on small businesses.

“We’re hearing from business owners who have experienced ghosting that some candidates prefer to stay on EI for as long as possible and may be applying for or taking jobs just to satisfy the requirements of the program,” said Kelly. “While the vast majority of EI recipients may be looking for work in good faith, any changes the government is considering making to the program should not disincentivize people from accepting or starting jobs, especially with the current labour shortages we’re experiencing.”

—Geoff McLarney

MORE THAN A THIRD OF SMALL BUSINESS OWNERS HAVE BEEN GHOSTED DURING HIRING

Employers are already having an incredibly hard time filling certain positions. Ghosting is not only a frustrating waste of their time, but it’s a big drain on their already limited resources.

BY STEVE PAYNE

MEASURES TO IMPROVE MENTAL HEALTH IN THE WORKPLACE

Ileft that job for health reasons. They were sick of me, and I was sick of them.

That old joke doesn’t seem so funny anymore. Not when mental illness has taken a serious toll on both workers and managers through two exhausting years of Covid lockdowns.

Now that we have work-at-home and

hybrid workplaces, the mental health issues—still unaddressed in most businesses—loom even larger.

Mental health in the workplace was the subject of a seminar at the Retail Council of Canada’s Human Resources Conference, held recently in Toronto.

The presenter was Kristy Cork, a workplace mental health consultant based in

St. Thomas, Ont. Her seminar focused on “steps retailers can take today to improve psychological health and safety in existing safety programs.”

Traditionally, those safety programs were about preventing physical accidents. Physical worker safety has properly been the first training that new shop-floor employees receive. A case in point: Home Depot

There’s actually a CSA standard for “Psychological Health and Safety in the Workplace.” Would your store measure up?

Canada spends about a third of its roughly 20 hours of “Before the Apron” new-hire training focused on physical safety. This includes hazardous materials, working at heights, equipment safety, and customer safety protocols.

CULTURE OF CARELESSNESS

But what about the mental health aspects of today’s workplace? Abusive or difficult customers, the urgency and stress created by digital media, relentless demands from well-meaning (or not) managers looking for ever-increasing productivity… It’s no wonder that Cork is so busy as a specialist focusing on the mental health part of HR.

“I like to talk about a culture of carelessness,” Cork said. “I’m sure you have physical safety provisions. It should be that way with mental health, too. Because workplaces cause harm.”

Cork said that everywhere employees are struggling—and some of yours are, too.

“There are employees parking their cars in the morning and they can’t come into the workplace before they sit there and give themselves a pep talk.”

slide that listed some of them: increased turnover, litigation, absenteeism, short- and long-term disability claims, incidents, and conflicts.

Absenteeism is costly but “presenteeism” is just as expensive. That relatively new HR term, Cork explained, is where the employees show up at work but are unwell. They

that said: RETENTION IS THE NEW COOL.

The alternative, if your employees don’t outright quit, is “Quiet Quitting.” Cork defined this as an attitude in which the worker says, “I’m not going to work for the equivalent of 65 hours a week anymore. I’m only going to do what’s in my job description.”

Obviously, there is a problem here— one which is described by CSA National Standard 21003: Psychological Health and Safety in the Workplace.

It reads, simply: “Psychological safety is a state in which workers are free from exposure to reasonably foreseeable, significant risks to their mental health arising from the acts and omissions of other people in the workplace so that there is a low risk of mental injury.”

The costs of ignoring this little-known standard are real, Cork said. She put up a

can even be in physical pain from their mental unwellness.

STRESS IS ONLY PART OF IT

And it’s not all about “stress,” Cork said. “Work is never going to be stress-free. So, if we focus only on stress, we are missing a big part of the issue.”

One upside of having mental health policies is that employee retention goes up. The previous week, Cork had given a seminar at a restaurant association gathering. There, she saw rubber bracelets being distributed

How to improve your workers’ mental health? “You cannot, in any workplace, prevent mental harm if you don’t know what your hazards are,” Cork said. “You have to do an assessment. You have to talk to people. You don’t start throwing darts at the wall hoping you’ll hit the problem. The best way to begin this process is through an employee survey. Cork has tracked her clients’ results and found out that, on average, only about 30 percent of employees answer “yes” to the question: “Does your employer promote a healthy work environment?”

Cork listed ten major causes of workrelated stress: heavy workload, changes within organizations, job insecurity, lack of autonomy, over-supervision, lack of proper resources, lack of equipment, few opportunities to be promoted, insufficient training, and long hours.

Kristy Cork, a workplace mental health consultant based in St. Thomas, Ont., spoke at the recent Retail Council of Canada Human Resources Conference in Toronto.

There are employees parking their cars in the morning and they can’t come into the workplace before they sit there and give themselves a pep talk.

”

DAVID CHESTNUT, VICE-PRESIDENT & PUBLISHER

WHY WE’RE GOING TO WHISTLER

The Hardlines Conference—as retail conferences go—has always marched to the beat of its own drummer. In the 26-year history of the event, this has been the conference where friends and competitors alike would meet collegially to learn from each other.

Take, for example, the 2009 conference. Annette Verschuren, then-president of the Canadian division of Home Depot, bantered good-naturedly from the podium with Robert Dutton, then-president of RONA inc., who was in the audience. Verschuren was trying to get (so the joke went) Dutton to buy some stores from her.

At earlier Hardlines Conferences, Michael McLarney would invite the presidents of the leading retail groups to a pre-conference dinner, where introductions were made among competitors who would never meet in any other forum.

Michael says his inspiration for the Hardlines Conference was Richard Saul Wurman, an American architect who created the famous TED (Technology, Entertainment, Design) Conferences in 1984.

Thousands of conferences later, TED talks—as they are now called—are legendary for their influence. Their

slogan is “Ideas worth spreading.” We at Hardlines should probably “borrow” that. However, we already have a perfectly good slogan: “Connecting the Home Improvement Industry.” It’s what we do— whether those connections are between company presidents, vice-presidents, buyers, dealers, or vendors.

This fall’s event in Whistler is a longawaited step away from the Toronto area— or, more recently, Niagara-on-the-Lake, Ont. So much of the news in our industry comes from Western Canada that holding the Hardlines Conference in B.C. is long overdue.

We couldn’t have chosen a more spectacular location. The Fairmont Chateau Whistler Hotel, at the foot of Blackcomb Mountain, will host thought leaders from our industry and beyond. See the full roster of speakers on pages 44 and 45. Who knows what connections you can make there?

Thanks to Thomas Foreman and his staff at the Building Supply Industry Association of B.C., who have joined forces with us to make this an important joint venture. We look forward to seeing you there!

On Oct. 17 and 18, the 27th Annual Hardlines Conference will take place in Whistler, B.C. It’s a spectacular venue for one of the industry’s most important national gatherings

Thanks to the Building Supply Industry Association of B.C. for making this an important joint venture.

Exclusive Rhine Cruise for Home Improvement Dealers & Suppliers

INTERNATIONAL

MARCH

Join

March 6-13, 2024

Dealers and suppliers can take the trip of a lifetime following the International Hardware Fair in Cologne. Hardlines, with the Building Supply Industry Association of BC, Expedia Cruises in Surrey, B.C., and the Asia Pacific Wine and Spirit Institute, presents this unique trip from Cologne to Amsterdam.

Don’t miss this once-in-a-lifetime trip along the Rhine aboard the beautiful Avalon Passion, sailing from Cologne (Köln) to Amsterdam.

Join Dr. Clinton Lee, the Executive Director at the Asia Pacific Wine and Spirit Institute. He is an International Wine and Spirit Educator and Judge, keynote speaker and author of “Master the art of Manners”. He is an acknowledged Global Etiquette Master, social media influencer and phenomenon with over 2 million plus followers. Join him on board for his Masterclasses to broaden your passion about cigars, caviar, whisky and wine.

Dean McIntosh is a Canadian Red Seal Chef and Butcher, travelling the world and sharing his extraordinary global experiences with food and cultures. With Dean we will prepare regional cultural dishes right on board!

Cruise Itinerary

2 March 7, 2024 Cochem, Germany

3 March 8, 2024 Rudesheim, Germany

4 March 9, 2024 Engers, Germany

Germany

Expedia Cruises of Surrey offers a full concierge service for the Cologne Hardware Fair: The Rhine cruise, airfare, hotels for the fair, rental cars, transport, additional time in Amsterdam. surrey@expediacruises.com

YOUR EVENT PARTNERS:

Tips and information for home improvement dealers to your inbox every month!

Targeted squarely at store owners and managers, Hardlines Dealer News is a monthly email newsletter with content designed especially for dealers and owners who want to run their businesses at maximum efficiency.

Each issue of Hardlines Dealer News features:

4 News to help store owners and managers stay current on the latest trends in their market

4 Tips for smart retailers who want to identify ways to manage their operations more successfully

4 Insights to help dealers hire smarter, merchandise better and manage more effectively

4 Concrete ideas for managing budgets, merchandising

products and identifying best practices.

Dealers receive a 30% discount to the 2023 Hardlines Conference in Whistler, B.C. on October 17th and 18th . Scan here for more details!

BY GEOFF M c LARNEY

INTO THE LION’S DEN

For Devin Tardif, monster trucking is not just a hobby; it’s also a powerful way to connect with customers

Devin Tardif, dealer-owner of Venture Home Hardware Building Centre in Lac La Biche, Alta., was intrigued the first time he encountered monster trucks. But it was a confluence of circumstances that led to him actually getting behind the wheel of one in a competitive setting.

About 17 years ago, Tardif, a licenced heavy-duty mechanic, was working in his father’s shop in Lac La Biche. The business was celebrating its 10th anniversary, and the monster truck owner was brought in as an attraction for the festivities.

“I did drive the truck in a circle,” Tardif recalls, but otherwise he was just a spectator on that occasion.

Five years later, for the shop’s 15th anniversary, Tardif’s father brought the attraction back. “They ran the first two trucks; they did the first show. [Then] they came up and said, ‘You’re doing the second show.’

“They ended up asking me if I wanted to go and run with them at their next show, which was in Lethbridge. I drove up with them and crewed with them for their main show.”

Tardif and Jed, the truck owner, remained in touch even after Jed lost both his trucks in a shop fire. “He ended up getting a new chassis, got it ready to go,” Tardif recalls “He went down to Australia for a couple of shows and when he came back he had had some kind of reaction: his elbow had grown three times the size. He was on medication. He says, ‘I can’t drive.’”

In short, Tardif says, “He threw me to the lions.”

Tardif made his show debut at Regina’s Brant Centre in 2019. At first, he says, he was “pretty fresh,” but he soon learned the ropes. At his first U.S. show, in Louisiana, “I

did pretty good. I wasn’t first; I wasn’t last.”

The store sponsors the truck, allowing opportunities for cross-promotion. “My Home Hardware logo is all over our t-shirts,” which are worn by the entire crew, Tardif explains. “We supply things like paper towels to clean our hands, hand

cleanser. We did do a donation a while back as an engine sponsor.”

On the retail side, it’s one more way Tardif attracts attention to his brand. “It always starts a great conversation and it’s a great starter point to break the ice with customers.”

When his mentor became ill, Devin Tardif was pulled in at the last minute to drive the monster truck as the entire crowd watched.

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