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Volume 18, Issue 7, April 9, 2018

Inside This Issue:

• Latest Honourees Inducted into the Industry Hall of Fame
• Register Now for the CHHMA/COPA Golf Tournament at Angus Glen on May 16th
• Sign-Up for the CHHMA Quebec Golf Classic - June 12 at Club de golf Le Fontainebleau
• Last Call for HR Info Session on April 10: Update on Bill 148 – Fair Workplaces, Better Jobs Act – Three Months In, Where Are We At?
• Learn How You Could Reduce Your Cost of Distribution at Seminar on April 19th – Free for CHHMA Members!
• If Heading to Las Vegas for the National Hardware Show Be Sure to Attend Maple Leaf Night at the Mirage and Network with Key Canadian Retailers
• CHHMA Welcomes New Member Companies
• Canadian Dollar Notches Five-Week High on Domestic Jobs Gain
• Toronto Home Prices See Biggest Drop in Almost 30 Years
• New Hudson's Bay CEO Helena Foulkes Says 'No Sacred Cows' as Retailer Seeks Elusive Turnaround
• Dollarama Plans DC Expansion, Stock Split as Profit Climbs
• Retail Revolution in Reverse: Online Shopping Goes In-Store
• Canada’s Economy Shrinks in January Amid Tougher Real Estate Regulations, Oil Sands Shutdowns
• U.S. GDP Growth Revised Up to 2.9%; Consumer Spending Surges
• Canadian Retail Sales Growth Slows Going Into 2018

Latest Honourees Inducted into the Industry Hall of Fame

Last Tuesday during the CHHMA Spring Conference Luncheon, three more worthy industry veterans were inducted into the Canadian Hardware & Housewares Industry Hall of Fame.

In this, the 34th year, the CHHMA is honoured to continue to serve as the custodian of the Hall of Fame. The Hall was established in 1984 to recognize the achievements of our industry’s leaders and pioneers. Since that time 68 industry icons, inventors, business founders and builders from the retail and manufacturing sectors have received the honour.

Here is some career history on each of the honourees:

Yves Gagnon
After graduating in Sciences at the Université de Montréal and working a few years as a chemistry teacher, in 1973 M. Gagnon took over his family’s general store. This store later became one of the first RONA Renovateur stores in Quebec and M. Gagnon also served time on RONA Board of Directors. After growing his business, into what today consists of 7 stores and a rental center with over 350 employees, he joined Groupe BMR in 1983.In 1995, he became President & CEO of Groupe BMR at which time the group consisted of 42 bannered stores with just over $200 million in sales. At the time of his retirement twenty years later, the group had 185 stores with sales reaching $1.5 billion. Under his leadership, BMR expanded to include its own hardware distribution center and trucking division, along with a credit and loyalty card program and a training center. They also developed an award-winning EcoAttitude store concept. Outside of work M. Gagnon served on numerous community boards and committees and donates generously to several local and national charities.

Yves was joined at the ceremony by his wife Diane, daughter Geneviève and her husband Stéphane together with his son Francis and fiancé Karla.  Martin Menard and Charles Gregoire-Beliveau from BMR were also on hand.

Gerry Byle
Mr. Byle began his career with the Remington Shaver Company in 1969 as Ontario Sales Manager after graduating from Ryerson University. Two years later, he moved over to Philips and became Western Regional Manager in 1978. Later, he was offered a position at Sunbeam and during his time there he met the owner of a start-up company out of Montreal called Bionaire. Over the next 15 years, Gerry went from National Sales Manager to VP Global Marketing, to President of the Canadian and US business units. During that period, sales went from virtually zero to over $80 million. The company went from a private enterprise to publicly traded and was acquired by the Rival Company in 1996.  Gerry stayed on as VP International Sales. In 1998, he was hired by Honeywell Consumer Products as the General Manager of its Canadian Division.  When Honeywell was acquired by Kaz Inc. in 2002, he remained as General Manager of Kaz Canada until his  retirement in December 2010.

Gerry was joined at the luncheon by his wide Louise and sons Eric and Glen and good friend Wally McTaggart. 

Vaughn Crofford
Vaughn began his career working part-time for the Co-op in Salmon Arm, BC during his high school years and full time in 1968 as a hardware clerk in Calgary.After a highly successful 16-year career in various management  positions throughout BC and Alberta, he was moved to the home office of  Federated Co-operatives as part of a management team charged with turning around the hardware department. Within two years the department was profitable and later the building materials were merged with hardware.  In 1994, Vaughn was approached by a couple of vendors to consider the job as President of the then struggling CHHMA. The Association thrived under his leadership over the past 23+ years as he became a voice for the manufacturers’ side of the industry. Vaughn was an integral part of the formation of the Electrical Stewardship Association which manages recycling programs in BC. He is also the creator of the calculator for determining packaging material responsibilities accepted by all blue box programs across Canada. Vaughn was the longest serving President of the CHHMA and retired at the end of last year.

Vaughn was joined at the luncheon by his daughter Sandra and her husband Jamie and of course many friends and colleagues from the association.

Congratulations once again to these three worthy recipients of our industry’s highest honour!

Maureen Hizaka
In addition, during the luncheon, the CHHMA acknowledged and thanked Maureen Hizaka, the longest serving employee of the association for her amazing workand dedication over the past 30 plus years, as she nears her retirement at the end of May. Maureen’s daughter Alexandra and son Scott were also able to join us on the day.

CHHMA Chairman Peter Laing presented Maureen with a gift on behalf of the association board of directors and membership.

We will have some further photos from the Hall of Fame Luncheon plus a full recap of the Spring Conference & AGM in the next issue.

Register Now for the CHHMA/COPA Golf Tournament at Angus Glen on May 16th

This year’s CHHMA and COPA joint golf tournament is set for Wednesday, May 16th, at the Angus Glen Golf Club in Markham, Ontario.

So, start shining up your clubs, working on your swing and fine-tuning your putting stroke! Golf fee of  $299.99 + HST per person includes breakfast, golf, and dinner.  Registration & Breakfast 9:00 a.m., tee-off 10:00 a.m. If you can’t make it in the morning, you can join us for an early dinner at 3:00 p.m. ($129.99).

Don’t miss out on the prizes and fun! Passports will be available at the registration table for $20 (no tax). All proceeds will go toward the CHHMA and COPA scholarship programs.

Not a golfer? At this tournament, no one has to be left out! Non-golfers and their guests can take advantage of this day to connect and unwind at the spa — and you don’t have to feel guilty doing it: research has shown that a massage and some spa time can boost your creativity, productivity, and immune function, as well as reduce pain, stress and help you sleep better. In fact, a massage is becoming an essential part of most busy professionals’ wellness routine! Three spa treatment options at the Amicai Spa at 8971 Woodbine Ave. in Markham, are available on a first come, first service basis. Spa participants can then meet up with the rest of their peers and guests back at Angus Glen for the dinner. Cost for the spa day and dinner is also $299.99 per person.

For all the details for golf and the spa options and to register online, click here.

For a PDF registration form, click here.  

So come join your industry friends on May 16th and enjoy this fun day!

Sign-Up for the CHHMA Quebec Golf Classic - June 12 at Club de golf Le Fontainebleau

The 2018 CHHMA Classique de golf / Golf Classic is being held on Tuesday, June 12th, at the Club de golf Le Fontainebleau in Blainville, Quebec.An excellent course which has hosted Champions Tour events in the past.

Registration and brunch will start at 9:00 a.m., with an 11:00 a.m. shotgun start.After golf, there will be dinner with wine followed by prize presentations.

The cost to attend for CHHMA members is $325 including tax or $110 for dinner only.

In order to maintain the most reasonable cost possible, the event depends on sponsorship. When registering, please consider sign-up as a sponsor for $325 which includes: your company’s name on signage at registration and dinner as well as your own sign at a tee box on one hole. The emcee will also mention your company’s name during the evening as well as be printed on a tent card on each table.

Click here to register online now or click here for a PDF registration form.

Last Call for HR Info Session on April 10: Update on Bill 148 – Fair Workplaces, Better Jobs Act – Three Months In, Where Are We At?

At the end of 2017, the CHHMA and COPA hosted an HR information session which discussed several Employment Acts in Ontario that had new regulations taking effect in 2018. We’ll be hosting another follow-up event on April 10thto discuss updates to Bills 148 and 177.

Bill 148 – the Fair Workplaces, Better Jobs Act – changes to the Employee Standards Act (ESA) and Ontario Labour Relations Act (OLRA) including Minimum Wage – effective January 1, 2018

When Bill 148, the Fair Workplaces, Better Jobs Act, came into effect in the New Year, it ushered in sweeping changes to Ontario’s labour and employment laws. Accordingly, it is absolutely crucial for employers to become familiar with the amended provisions and their potential impact on doing business in Ontario. Amendments will impact areas including minimum wage, vacation entitlement, holiday pay, overtime and personal emergency leave. In this session, we will be reviewing where we are at with this Bill, three months in.

We will also be reviewing other Employment Law changes that were announced after our December 2017 HR presentation.


1.Bill 148 – Meeting Compliance under the ESA – Viki Scott
2.Bill 148 – Minimizing Risk of Unionization – Bill Anderson
3.Bill 177 – Changes to OH&S noncompliance fines


Viki Scott RC (c); BSc OccHealth; RRP; CHRM; MBA; ADR(c)
Scott & Associates Inc. – President and Principal

William D. Anderson LL B
Blaney McMurtry LLP’s – Partner, Labour and Employment

Event Details:

When: Tuesday, April 10, 2018, 8:30 a.m. – 10:30 a.m. (Registration @ 8:00 a.m.)
Where: Centre for Health & Safety Innovation (CHSI), Conference West Room, 5110 Creekbank Rd, Mississauga, ON L4W 0A1
Price: $129.99 + HST (CHHMA Members), No Charge for Members of the CHHMA-COPA HR Peer Group

If you would like to attend this session, please contact Pam Winter at 416-282-0022 ext.121 or

Learn How You Could Reduce Your Cost of Distribution at Seminar on April 19th - Free for CHHMA Members

CHHMA and COPA will be holding a seminar on the morning of April 19 (8:00 a.m. registration & continental breakfast, presentation 8:30 a.m. – 10:00 a.m.) at the Centre for Health & Safety Innovation (CHSI) in Mississauga on What You Need to Know About Today’s Distribution Industry.

The seminar will be complimentary for CHHMA members.

Come out and hear how the supply chain and distribution has changed the way companies get their products to market.

The session will look at the impact of 6 key components that will reduce your cost of distribution and improve your bottom line.

Learn to address the following issues when selecting your carriers/couriers:
  • What impact does your overall volume and velocity have on your costs.
  • Choosing between different modes of transportation and why.
  • What impact does density have on overall distribution costs?
  • Fuel surcharges explained and how they impact you.
  • B2B vs B2C business models and costs associated with each.
  • How do your freight rates match up to your competitors and/or other similar industries?
 About the Speaker
 Paul Publow, President , Logistics Solutions & Services Inc.

With over 45 years experience in the distribution and supply chain industry, Paul has worked with almost every supply chain model and mode of transportation. Starting his career in his teens loading trucks he worked his way up to the CEO position of a major Canadian Freight Forwarding and Transportation Group with 24 offices throughout North America.

For the past 24 years he has been President of Logistics Solutions which has provided ongoing supply chain consulting services to members of the CHHMA, The Canadian Office Products Association and the Promotional Products Professionals of Canada. In addition, he has completed logistics and distribution projects for some of Canada’s largest retailers and manufacturers.

His unique approach to the supply chain has saved his many clients millions of dollars. His experience and insight will challenge management to take a deep dive into the mechanics and efficiencies of their current supply chain programs and ultimately improve their organization’s bottom-line.

Click here to register online.  Click here for a PDF registration form

If Heading to Las Vegas for the National Hardware Show Be Sure to Attend Maple Leaf Night at the Mirage and Network with Key Canadian Retailers

Maple Leaf Night is taking place on the evening of Tuesday, May 8th, 5:30 p.m. – 8:00 p.m., once again  at the Mirage Hotel & Casino in Las Vegas, however, this year it is being held within the PORTOFINO Restaurant just off the main casino floor.  

This special social event is open to CHHMA members and their retail customers in town for the National Hardware Show which runs from May 8 to 10 at the Las Vegas Convention Center.

Sponsorship is $775 CDN and entitles companies to corporate identification on all tickets, letterheads and event signage. It also entitles your company to one complimentary ticket for the host who will participate in the receiving line and two additional complimentary sponsor tickets.

Additional sponsor tickets can also be purchased for a reduced price of $129 CDN versus regular individual tickets which are $189 CDN or $225 CDN at the door.

Retailers/customers are invited to attend complimentary on behalf of the sponsors.

Click here to sign-up as a sponsor online or click here for a PDF sponsorship form.

For regular online registration, click here  or for a PDF registration form, click here.  

CHHMA Welcomes New Member Companies

The CHHMA is pleased to officially welcome four new member companies to the Association:

Arrow Fastener Co. LLC [Manufacturer] was founded in 1929, and has been a leading manufacturer in manual, electric, cordless fastening & hand stapling tools for both pros and DIYers. Products include staple guns, hammer tackers, plier staplers, nail guns, glue guns, hole punches and rivet tools. Product is manufactured in the U.S.A. and offshore. Arrow Fastener was acquired by Masco Corporation in 1999, and then sold to Hangzhou GreatStar Industrial Co., Ltd. in May, 2017. Their Canadian sales office is in Stouffville, Ontario.

Established in 1993, GreatStar is the leading manufacturer of hand tools in Asia serving DIY, professional, and industrial markets worldwide.GreatStar also manufactures a full range of specialty tools for drywall, masonry, painting, tiling, plumbing, and automotive applications as well as power tools, tool sets, and flashlights.

Tufx-Fort Manufacturing Inc. ( [Manufacturer] is a leading Canadian manufacturer and supplier of landscaper and contractor grade wheelbarrows and tools (hand trucks, cement mixers and pot movers) in North America. They operate out of a newly-renovated manufacturing facility & warehouse in Waterloo, Ontario, which is also their head office.

Tufx-Fort Manufacturing Inc., whose original roots are in Holland, has been designing and manufacturing professional grade TUFX and FORT brand wheelbarrows in Canada for over 30 years. They also have product manufactured in China.

KS Solutions Sales and Service Inc. ( [Sales Agency] Barrie, Ontario is a Canadian sales agency catering to the hardware, housewares & home improvement industry. The company represents two CHHMA manufacturer members: Envirogard/Rainfresh and Oatey SCS Canada.Other companies they also represent include Belanger UPT, MAAX Bath Inc., Dura Housewares Inc., Franke Kindred Canada & Superior Pump.

Commport Communications International, Inc. ( [Affiliate] is a B2B provider of electronic commerce services including EDI, VAN (value added network) and data synchronization – Commport is a GDSN (Global Data Synchronization Network) certified data pool. They provide services to a number of vendors and retailers in the hardware/housewares industry.

The company was established in 1985 and have an office located in Aurora, Ontario.

Canadian Dollar Notches Five-Week High on Domestic Jobs Gain

The Canadian dollar rose to a five-week high against its U.S. counterpart last Friday as data showing a stronger-than-expected increase in domestic jobs offset a renewed trade spat between the U.S. and China.

Canada created 32,300 jobs in March, Statistics Canada said, topping economists’ forecasts for an increase of 20,000. Full-time jobs rose by 68,300, more than recovering from February’s decline.

“We did see an initial jump in the Canadian dollar, partly because of a bit of disappointment in the U.S. (jobs) report initially and a nice headline on the Canadian number,” said Doug Porter, chief economist at BMO Capital Markets. “I don’t think it meaningfully changed the outlook for the Bank of Canada.”

The central bank has raised interest rates three times since July. But money markets continued to see chances of another hike by May at less than 50% after the data.

China warned it would fight back “at any cost” with fresh trade measures if the United States continues on its path of protectionism, hours after President Donald Trump threatened to slap tariffs on an additional $100 billion in Chinese goods.

Stocks fell on fears that the tit-for-tat tariffs could spiral into a trade war. Canada’s commodity-linked economy could be hurt if global trade slows.

At 9:52 a.m. EDT last Friday, the Canadian dollar was trading 0.1% higher at $1.2737 to the greenback, or 78.51 U.S. cents. The currency touched its strongest since Feb. 27 at $1.2732.

The loonie is set to advance over the coming year, helped by improved prospects for a revamped NAFTA trade deal, a Reuters poll of currency strategists showed.

The U.S. dollar fell on Friday after a report showed the U.S. economy in March created the fewest jobs in six months, although losses were limited by a pickup in wage gains.

The price of oil, one of Canada’s major exports, slipped on trade tensions. U.S. crude prices were down 0.4% to $63.30 a barrel.

Canadian government bond prices were mixed across a flatter yield curve, with the two-year down 1 cent to yield 1.816% and the 10-year rising 2 cents to yield 2.179%.

The gap between Canada’s 2-year yield and its U.S. equivalent narrowed by 2.8 basis points to a spread of -47 basis points.

Source: Reuters

Toronto Home Prices See Biggest Drop in Almost 30 Years

The high-end of Toronto’s housing market is bearing the brunt of declines from last year’s dizzying growth, with prices falling and unit sales slumping by almost half.

Sales of detached homes in and around the city fell 46% in March from the same month a year ago, while the average price fell 17% to $1.01 million, according to data released last Wednesday by the Toronto Real Estate Board (TREB). That dragged down the average selling prices for all housing types by 14% from a year earlier to $784,558, the biggest drop since 1991.

“Detached home sales, which generally represent the highest price points in a given area, declined much more than other home types,” the board said in its monthly report. “In addition, the share of high-end detached homes selling for over $2 million in March 2018 was half of what was reported in March 2017, further impacting the average selling price.”

Still, prices continued their stabilization of the past few months as home owners get ready for the traditionally hectic spring season. Benchmark prices, which are weighed to account for differences in home type, rose 1.2% in March from February, including 1.1% gain for detached homes and a 1.8% increase in condos. Benchmark prices are down 1.5% year-over-year. Average prices rose month on month.

Sales for the market as a whole, including condos, townhouses, and semi-detached homes, fell 40% to 7,228 units in March from a year ago but were up from February. That’s the lowest sales figure for March since 2009.

Canada’s biggest housing market has been adjusting to new rules that make it harder for buyers to qualify for a mortgage, curbs on foreign purchases and rising interest rates. Federal and provincial governments have been gradually tightening market conditions to tame prices that skyrocketed last year.

“Right now, when we are comparing home prices, we are comparing two starkly different periods of time: last year, when we had less than a month of inventory versus this year with inventory levels ranging between two and three months,” Jason Mercer, director of market analysis, said in the report. “It makes sense that we haven’t seen prices climb back to last year’s peak.”

The second half of the year should see the annual rate of price growth improve as sales increase relative to the below-average level of listings, Mercer said.

New listings fell 12% to 14,866 from March 2017 and were down 3% compared to the average for the previous 10 years.

Source: Bloomberg News 

New Hudson's Bay CEO Helena Foulkes Says 'No Sacred Cows' as Retailer Seeks Elusive Turnaround

Hudson’s Bay Co.’s new chief executive, Helena Foulkes has the unenviable task of refashioning a retailer being dragged down by its biggest division.

At a dire time for U.S. department stores, the owner of Saks, Hudson’s Bay and Kaufhof in Europe saw its overall retail sales fall in 2017, and missed industry estimates despite posting the first profit in eight quarters.

“We have many opportunities to improve from where we are today,” Foulkes told investors two weeks ago on her first analyst call since taking on the top role in February.

“We are not happy with how we executed the transformation plan, and we see a real opportunity to turn that around and improve performance.”

“There are no sacred cows,” Foulkes added. “We’re looking at every part of the business to improve performance and everything is on the table.”

HBC has suffered from a painful industry-wide shift to a more digital business but also from its own missteps, both in its e-commerce and physical stores. It stumbled in trying to improve its critical online operations as well as its discount - or “off-price” - segment, which includes Saks OFF 5th, despite the fact that off-price is one of the few growing sectors in retailing.

Now its massive cost cutting and staff reduction efforts (in June, HBC laid off 2,000 employees as part of a vast overhaul) -- aimed at generating $350 million of annual savings – have gone awry, forcing the already-challenged retailer to “take a step backwards,” Ms. Foulkes said.

“The strategy was the right one,” said Foulkes, one that began under the watch of former CEO Jerry Storch, who resigned in November.

“I think that the execution of it was not good. It started with issues of alignment at the top, then essentially poor change management, so we had a lot of moving parts in the second half of last year with a good percentage of our folks in new positions and not enough clarity around their roles.”

Turnover at the top also weighed on the retailer, which has seen five executives including Storch depart in the last year. Don Watros, president of HBC’s international business, CFO Paul Beesley, Brian Pall, president of HBC’s real estate and Jonathan Greller, president of HBC’s off price business.

At the same time, an activist investor has been pressing HBC to monetize more of its real estate. In October, the company sold its flagship Lord & Taylor building in New York to WeWork Cos. as part of a joint venture deal that raised $1.6 billion in cash to pay down debt, and transform floors of key HBC department stores in New York, Toronto, Vancouver and Germany converted into WeWork’s shared office workspaces.

The retailer is still looking for a buyer for its HBC store in Vancouver.

Known as a leader who doesn’t shy away from taking bold steps, Ms. Foulkes is the first female CEO of Canada’s oldest retailer. She was previously president of CVS Pharmacy, the drugstore division of U.S.-based CVS Health Corp.

At CVS she played a key role in repositioning the stores to focus more on health and beauty – adding “health” to the company name – and developing its loyalty program by using that of Canada’s Shoppers Drug Mart as a model. This year she vowed to stop significantly retouching images used in the retailer’s beauty product advertising.

“I have been concerned by the level of executive turnover in the company,” said Randy Harris, president of the apparel market research firm Trendex North America. I think Canada isn’t their problem. They could be doing acceptably and they will benefit somewhat from the demise of Sears.”

Ed Strapagiel, a Toronto-based retail analyst, said retailers who sell off real estate and continue to lease back their stores may benefit in the short term from the cash infusion, but ultimately HBC needs to drive up performance in its core store assets, even as web sales have grown to 17% of overall revenue.

“The trouble with the real estate play is that you can only sell that land once,” Strapagiel said. “You need to be a really good store operator, regardless.”

Foulkes, on the job for six weeks, was not ready to discuss further strategies to boost business.

“It is clear that things do need to change,” she said, adding there would be no “sacred cows” when it comes to assessing the retailer. “Everything is on the table.”

HBC’s retail sales fell to $14.3 billion in 2017 from $14.5 billion, a drop largely attributable to its lagging performance in the United States, its largest division.

Sales at U.S. stores fell to $6.68 billion from $6.9 billion; in Canada, where the retailer operates under its eponymous banner, Home Outfitters, Saks and off-price division Saks Off Fifth, sales rose to $3.35 billion from $3.28 billion.

The Toronto retailer saw sales climb 2.1% in the three-month period ending Feb. 3 to $4.7 billion, an increase of $95 million from the prior year.

Net earnings were $84 million, or 39 cents per share, compared with a net loss of $152 million (83 cents) in the prior year. Adjusted income was $20 million, missing analyst expectations of $120.18 million, according to Thomson Reuters.

Same-store sales at Saks Fifth Avenue grew for the third consecutive quarter, increasing by 2.1%. But overall same-store sales fell 2.6% at the retailer’s department store group, which also includes Lord & Taylor.

Similarly, same-store sales tumbled 3.4% at HBC’s European department stores and sank 7.6% at HBC’s struggling off-price division, which includes Saks Off Fifth and the online retailer While problems with Gilt were largely responsible for weakness in the off-price category, HBC also cited lower traffic at Lord & Taylor, HBC’s off price stores, and Galeria Kaufhof.

Source: The Financial Post, The Globe and Mail 

Dollarama Plans DC Expansion, Stock Split as Profit Climbs

Dollarama Inc. beat Bay Street profit forecasts yet again in its latest quarter as the value retailer said it will expand plans for its Montreal distribution centre and propose a three-for-one share split.

Company founder Larry Rossy is stepping down from the board, to be replaced as chairman by lead director Stephen Gunn. He will be given the title chairman emeritus and provide advice to management as needed, the company said in a statement last Thursday. Mr. Rossy has led the family business since 1973. It became Dollarama in 1992.

“After a lifetime in the retail industry, it is time for me to step down from active duty,” Mr. Rossy, 75, said in a statement. “I am proud of all that we have accomplished and of the strong and dynamic team leading the company’s growth.”

That growth shows no sign of slowing under the leadership of Mr. Rossy’s son, Neil. While major swaths of the retail sector are getting clobbered by online competition and changing consumer behaviour, Dollarama has been on a remarkable run. It opened 65 new stores in its fiscal year just ended and plans to open another 60 to 70 this year.

The Montreal-based dollar-store chain reported a 17% increase in diluted profit for its latest quarter ended Jan. 28, 2018, to $1.45 a share. Revenue rose 10% to $938.1-million and same-store sales climbed 5.5%. Analysts had forecast profit of $1.40 per share.

Profit for the full year came in at $519-million or $4.55 a share on sales of $3.27-billion. Products priced above $1.25 now make up 67% of sales, the company said.

Dollarama shares have risen 57% in the last year.

Dollarama said it has decided to increase the size of its new distribution centre planned for Montreal by about 50%, to 500,000 square feet, and purchase its existing distribution centre, which was being leased. The decision will increase capital expenditure spending for fiscal 2019 to between $150-million and $160-million, the company said.

A larger facility will provide the infrastructure to support the company’s planned retail expansion to a maximum of 1,700 stores by 2027, Dollarama said. It currently has 1,160 locations across Canada.

Directors of the company have approved a proposed split of Dollarama shares on a three-for-one basis, the company said. Investors will vote on the proposal at the annual meeting in June.

Dollarama to offer online bulk shopping this year, taking on Costco and Amazon

Dollarama also plans to take on Costco and Amazon in online bulk buying which it will be up and running by the end of the year.

The retailer revealed more details about its pending e-commerce rollout last Thursday.

Chief executive Neil Rossy said the platform is working in beta testing, though details such as delivery costs and the final selection of goods haven’t been finalized.

“We are taking our time and doing lots of beta testing,” Rossy told industry analysts on a conference call, adding the company might debut the concept in one or two provinces later this year to get customer feedback before rolling it out nationally by the end of 2018. “We are somewhat introducing a new concept, you know, built for Costco, in the concept of selling things by the case and not by the unit.”

Costco, which requires an annual paid membership in order to shop at its warehouses, began offering bulk restaurant and office supplies at its first business centre in Canada a year ago and offers a selection of its bulk supplies online from its business centre and standard warehouses.

Dollarama is a known haven for crafters who have been known to scour multiple locations to pick up bags of river rocks and mason jars. When announcing the bulk order strategy last year, the retailer’s executives noted a segment of customers come to stores to fill large party supply orders.

“It is really meant as a tool to address a customer base that isn’t being satisfied in an intelligent useful way that need a higher quantity of our product without having to go store to store, whether that’s a person with a party, or a dog groomer who has got a small business,” Rossy said, noting items will be offered online based on practicality and cost.

“There are certain items you simply can’t ship in an e-commerce platform without it being cost prohibitive,” he said. “If you are buying wine glasses at our store and you are hoping to buy 400 wine glasses on our e-com site, it’s highly doubtful that will happen. Because the wine glasses, the way we bring them in for our retail operation, aren’t built to handle drop tests for courier companies.”

“The website will open up a nice additional revenue stream for them,” said Bruce Winder, partner in Toronto-based Retail Advisors Network, adding the move puts Dollarama in line to compete with bigger businesses like Costco and Walmart.

“Retailers know that there is a fairly large business-to-business market out there. When Costco opened originally, it catered mostly to a business customer before evolving into more of home consumer warehouse — that’s why they are now opening up the business centres. Dollarama would have further revenue growth opportunities if they carry items that they don’t offer in their stores.”

Source: The Globe and Mail, The Financial Post

Retail Revolution in Reverse: Online Shopping Goes In-Store

At the base of Canadian Tire Corp. headquarters on Yonge St. near Eglinton Ave., a small, chic experiment is taking place.

Humble products, including baseball caps and cotton T-shirts, toques and hoodies, branded North Point, hang like designer wear off elegant racks in a small concept store being tested. The atmosphere is spare and white and bright.

It’s not just a different look for the retailer, which also runs more workmanlike Mark’s stores. Beside the wall of sneakers and shoes at the concept store is a tablet, where customers can swipe to find the shoe they want, to see whether it is in stock in their size, and have a sales associate bring it out of the storeroom to try.

In the store’s change room, another tablet. A shopper with an armful of products to try on can order a different size or colour, or a different product altogether — perhaps a pair of shoes suggested by the interactive tablet — without having to poke their head out of the room, flag down an associate and wait while the associate searches the floor and returns.

The setup allows staff to respond more efficiently and customers get speedier service — having the tablet in the change room reduces the amount of time it takes to retrieve new items from six minutes or more to just 45 seconds, according to David Dougherty, president, Kinetic Commerce, the Toronto company behind the system at the North Point store.

Retailers have spent the last decade getting their wares online. Now they are bringing their online game into stores, in the hope of selling more, and using smaller, less expensive chunks of real estate.

It’s sometimes called “endless aisle,” and while Canadian Tire is testing the concept, the Kinetic platform is already at shoe retailer Aldo, which has installed interactive screens in 600 stores worldwide, according to Dougherty.

Bringing the online experience into stores is also the cornerstone of Tulip Retail, based in Toronto and headed by Ali Asaria, who founded, a health and beauty retailer.

“A lot of the biggest retailers we work with are opening up smaller footprint stores with less inventory in them,” said Asaria.

“They want those stores to be able to sell every product that they have, even if they are not available in the store.”

That’s where hand-held devices come in.

Tulip Retail arms sales associates with a tablet or iPhone or iPod Touch, allowing them to offer more and better advice to customers, including a wider range of products or specific advice based on their past experiences, and added a financial incentive to encourage associates to use them.

“There was never an incentive for a store associate to sell an online product, because they weren’t getting credit or commission for those sales,” said Asaria.

“We bring all that inventory to every store associate and customer, so they can access all of the inventory online and in store. Also, we find a way to credit that store or the store associate with the commission on that.”

He said some retailers have boosted sales by as much as 10% using the system.

“A lot of Tulip is about reinventing stores but also reinventing store associates in a post e-commerce, post-mobile world,” says Asaria, whose clients include Indigo, Lululemon Athletica, Coach and Saks Fifth Avenue.

Both Canadian Tire and Aldo declined to talk about their initiatives.

90% of retail sales are still made in stores, according to a 2018 global retail report by Deloitte consultants. The same report also points to a 2016 report that found that digital interactions influenced 56 cents of every dollar spent in bricks-and-mortar stores. So it seems to make sense to join the two.

“What retailers are trying to do today is bring elements of that digital experience and make it come to life in a physical store,” said Thomas F. Quinn, national retail and wholesale distribution leader, Deloitte consultants.

The first attempts to bring online shopping into stores — plopping computers on the sales floor and having consumers look products up themselves — proved too cumbersome to catch on, said Quinn. Putting the computing power in the hands of store associates is a way to make it work more seamlessly.

Source: Article by Francine Kopun, The Toronto Star

Canada’s Economy Shrinks in January Amid Tougher Real Estate Regulations, Oil Sands Shutdowns

Canada’s economic output unexpectedly contracted in January, as the impact of tougher real estate regulations and oil sands shutdowns further applied to the brakes to an already sluggish economy.

Statistics Canada reported that real GDP declined by 0.1% in January from December on a seasonally adjusted basis, the first negative reading in five months. That partially undoes the 0.2% rise in December, which Statscan revised upward from its originally reported 0.1%.

While economist had anticipated a relatively weak GDP report in light of a string of tepid earlier indicators for the month, they had expected the economy to have kept its head slightly above water. Their average estimate called for growth of 0.1%.

Statscan said the downturn was led by a 7% drop in oil extraction, the result of unscheduled maintenance downtime taken by oil sands producers. The real estate segment also slumped 0.5%, slowed by tougher rules on mortgage lending that came into effect Jan. 1 – after having swelled in December in a rush of activity ahead of the new regulations.

While economists largely dismissed January’s small dip as driven by those two temporary factors, January nevertheless showed a continuation of the slower-growth path the economy has been on for the past several months, in the wake of a growth surge in the first half of 2017. Fourth-quarter real GDP growth was at a 1.7% annualized rate, and economists don’t expect much better for the first quarter – a far cry from the 4%-plus rate in the first half of last year.

“The underlying story is that growth remains on a sluggish underlying path of less than 2%, as it has been since the fever broke around the middle of last year,” said Bank of Montreal chief economist Douglas Porter in a research report.

After leading the Group of Seven in growth last year, the report is consistent with what is widely expected to be a sharp drop off in Canadian economic growth this year as highly indebted households pare spending. That should keep some pressure off the Bank of Canada as it contemplates when to raise interest rates again.

While GDP should bounce back, “we’re going to revise down our Q1 GDP forecast to sub-2%, adding weight to our view that the Bank of Canada is on hold until July,” Avery Shenfeld, chief economist at CIBC World Markets, said in a note to investors.

Investors are anticipating at least two more rate hikes this year, after the Bank of Canada raised borrowing costs three times since July.

And it’s unclear whether the two sectors that weighed down GDP in January are poised for a quick turnaround. Some major oil sands producers have announced further production curtailments, as they grapple with heavy price discounts and transportation bottlenecks for Western Canadian oil sands crude. And while the January real estate activity suffered from a drop-off from a particularly brisk December, the new mortgage regulations are expected to continue to weigh on mortgage lending and home sales.

But on the upside, the manufacturing sector grew a strong 0.7% gain in January, despite weak motor vehicle output. And wholesale and retail trade and construction all posted solid gains.

Overall, the country’s 20 major industry sectors were evenly split between gains and declines in the month. Goods-producing industries, collectively, declined 0.4%, while services-producing industries were flat month over month.

The economy’s January slump strengthens the case for the Bank of Canada to hold off on further interest-rate increases for a while, after raising its key rate by one-quarter percentage point in January, its third such increase in six months. In January, the central bank projected first-quarter GDP growth at 2.5% annualized, a forecast that now looks far too optimistic.

The central bank is still widely expected to raise rates further this year. But economists increasingly believe the next hike might not happen until the second half of the year, as policy makers assess the slowing economic pace and await clarity on the North American free trade talks, a key risk to the economic outlook.

“Given the apparent slowdown, the Bank of Canada will have to decide how much further monetary tightening is warranted,” said CIBC economist Royce Mendes in a research note. “We continue to see central bankers raising rates only once more in 2018.”

Source: The Globe and Mail, Bloomberg News

U.S. GDP Growth Revised Up to 2.9%; Consumer Spending Surges

U.S. economic growth slowed less than previously estimated in the fourth quarter as the biggest gain in consumer spending in three years partially offset the drag from a jump in imports.

U.S. GDP expanded at a 2.9% annual rate in the final three months of 2017, instead of the previously reported 2.5%, the Commerce Department said in its third GDP estimate for the period. That was a slight moderation from the third quarter’s brisk 3.2% pace.

The upward revision to the fourth-quarter growth estimate also reflected less inventory reduction than previously reported. Economists polled by Reuters had expected that fourth-quarter GDP growth would be revised up to a 2.7% rate.

There are signs that U.S. economic activity slowed further in the first quarter, with retail sales falling in February for a third straight month. Housing data have been generally weak and the trade deficit hit a more than nine-year high in January.

Estimates of the first-quarter GDP growth rate are currently just below 2.0%. Still, analysts believe the U.S. economy will hit the Trump administration’s 3% annual growth target this year, driven by a $1.5 trillion income tax cut package and a planned increase in government spending.

That could keep the door open to slightly more aggressive interest rate increases from the Federal Reserve this year. The U.S. central bank raised rates last week and forecast at least two more hikes for 2018. The Fed also lifted its economic growth projections for this year and 2019.

The U.S. economy grew 2.3% in 2017, an acceleration from the 1.5% logged in 2016.

The government also reported that after-tax corporate profits increased at a 1.7% rate in the fourth quarter after rising at a 5.7% pace in the third quarter.

The government said while provisions of the income tax overhaul that came into effect in January had no effect on corporate profits for current production, they had an impact on net cash flow in the fourth quarter.

An alternate measure of growth, gross domestic income, rose at a 0.9% rate in the October-December period. GDI expanded at a 2.4% rate in the third quarter.

The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at a 1.9% rate in the fourth quarter. That followed a 2.8% rate of growth in the prior period.

Prices of U.S. Treasuries pared gains after the data. U.S. stock index futures were mixed while the dollar was stronger against a basket of currencies.

Robust Consumer Spending

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, was revised up to a 4.0% rate in the fourth quarter from the 3.8% pace reported last month. That was the quickest pace since the fourth quarter of 2014 and followed a 2.2% rate of growth in the July-September period.

Imports grew at an upwardly revised 14.1% pace instead of the previously reported 14.0% rate. That was the fastest pace since the third quarter of 2010 and overshadowed a rise in exports driven by weakness in the dollar.

The resulting trade deficit sliced off 1.16 percentage points from GDP growth last quarter, the most in a year, after adding 0.36 percentage point in the third quarter. Trade will likely remain a drag on GDP growth in the first quarter.

The trade deficit widened sharply in January. A separate report from the Commerce Department last week showed the goods trade deficit rising slightly in February.

While robust consumer spending curbed the accumulation of inventories, the slowdown in inventory investment was not as steep as previously reported.

Inventory investment rose at a rate of $15.6 billion in the fourth quarter instead of the previously reported $8.0 billion pace.

Inventories subtracted 0.53 percentage point from GDP growth after adding 0.79 percentage point in the prior period.

Inventories could contribute to growth in the first quarter. The Commerce Department reported that both wholesale and retail inventories increased solidly in February.

Growth in business spending on equipment was revised slightly down to an 11.6% rate from the 11.8% pace published last month. That was still the best performance since the third quarter of 2014.

Investment in homebuilding increased at a 12.8% rate, rather than the previously reported 13.0% pace, after contracting for two straight quarters. Momentum likely slowed in the third quarter amid weak home sales.

Government spending grew at a 3.0% rate, revised up from a 2.9% pace. That was the strongest pace since the second quarter of 2015.

Source: Reuters  

Canadian Retail Sales Growth Slows Going Into 2018

After hitting a 20 year high last year, overall Canadian retail sales growth has eased off in recent months. For the 3 months ending January 2018, total sales were up 5.3% year-over-year. While still quite respectable, this is down from the 6.7% increase recorded for 2017.

The underlying 12 month growth trend has now gone flat and is likely to weaken further. The 3 month growth trend has been declining since mid 2017. This pattern is occurring to one extent or another in all the major retail sectors.

Food & Drug
The underlying 12 month trend for Food & Drug retail sales slid steadily in 2017. The 3 month trend is tracking below this, implying further weakness ahead.

Sales at supermarkets & other grocery stores have been particularly slow, increasing a mere 0.4% year-over-year for the 3 months ending January 2018. This is less than inflation, and even less than population growth. It appears that combination stores (like Costco and Walmart, whose sales fall under the other general merchandise stores) are continuing to take share away from conventional grocers. On the other hand, specialty food stores are enjoying increased sales, gaining 9.9% in the last 3 months.

Health & personal care stores' retail sales are also slipping. Sales were up 3.1% for the 3 months ending January 2018, markedly lower than the 5.7% annual gain recorded for 2017.

Store Merchandise
After hitting some record highs last year, retail sales growth in the Store Merchandise sector appears to be coming back down to earth. The 3 month sales growth trend has now dipped under the underlying 12 month trend, which is now poised to go south.

But there still are some shining stars in this sector. Electronics & appliance stores gained a whopping 18.0% year-over-year for the 3 months ending January 2018, while building material & garden equipment/supplies dealers gained 9.4%.

Furniture store sales however were down 0.8% on a last 3 months basis, and home furnishings stores eked out only a 0.1% gain.

Automotive & Related
Retail sales in the Automotive & Related sector also appear to be softening. For the 3 months ending January 2018, sales increased 7.4%, which would normally be a very good result. On the other hand, it was lower than any such comparable gain in 2017.

New car dealers' sales were up "only" 4.9% for the 3 months ending January 2018. This however is about half of the 9.4% sales gain achieved in 2017.

On the other hand, gas stations are continuing to enjoy high retail sales increases, up 12.3% on a last 3 months basis. Of course, this is due to increases in pump prices for gasoline.

Canadian E-Commerce Stats
StatsCan started providing ecommerce retail sales data in January 2016. While the amount of data is limited, some trends appear to be emerging. Here are some results:

Overall, e-commerce represented about 2.6% of Canadian retail sales for the 12 months ending January 2018, including both pure play operators as well as the online operations of brick & mortar stores. Canadian consumers however also buy online from foreign websites, spending which is not captured in these numbers.

Canadian e-commerce sales were up 15.1% year-over-year for the 3 months ending January 2018. This however is only half of the 30.8% annual increase recorded for 2017 over 2016, indicating that e-commerce sales growth may be slowing down.

Note that location based retail is the same as what's normally reported as Canadian retail sales. Except that it isn't. Location based retail excludes another section called Non-Store Retailers (NAICS code 454), which covers electronic shopping and mail-order houses, which in turn is where (mostly) pure play e-commerce businesses are. For the 12 months ending January 2018, electronic shopping and mail-order houses had an estimated $8.98 billion in e-commerce sales.

But that's not the only source of e-commerce, as (mostly) bricks & mortar location-based retailers also sell online. For the 12 months ending January 2018, this group had an estimated $6.86 billion in e-commerce sales. With electronic shopping and mail-order houses, there's a grand total of $15.67 billion in e-commerce sales by Canadian operators over the year. Note that this does not include foreign e-commerce purchases made by Canadian consumers, but it does include purchases made by foreigners at Canadian e-commerce businesses.

For electronic shopping and mail-order houses, an estimated 82.9% of their sales are allocated to e-commerce. For the (mostly) bricks & mortar crowd, it can be estimated that just 1.2% of their total sales come from e-commerce.

Finally, (mostly) pure play operators (namely, under electronic shopping and mail-order houses) generated an estimated 56.7% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers' share of e-commerce is 43.3%.

To see the full article, click here.  

Source: Article by Ed Strapagiel, Consultant                      

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