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CHHMA NEWS

 
   
 

     Volume 11, Issue 09, March 03, 2011

                         
                               
                                     Association News

2011 Spring Conference & AGM: "Boom, Bust & Bounce Back"

Registration is now available for this year's CHHMA Spring Conference & AGM taking place on Tuesday, April 5th at the International Centre Conference Facility, 6900 Airport Road, Mississauga, Ontario.

The value-packed one day conference for CHHMA members offers a great line-up of speakers and topics that address current issues and will provide you with helpful information to succeed in the new economy.

Corporate packages are available for $1,000 + HST and include tickets for four attendees plus any additional tickets for a reduced price of $250 + HST.

Individual conference tickets are available for $350 + HST. 


One of the keynote presentations, by Professor Robert Kozinets, will address Social Media Marketing for the Hardware and Housewares Industry.

Marketers, managers, and consultants are all talking about social media marketing. However, many of their overly enthusiastic presentations are cloaked in confusing terminology and thinly veiled sales pitches. In this presentation, Professor Kozinets, a pioneer in this field, seeks to clear the air. He will explain what social media marketing can – and can not – do for hardware and housewares marketing in the current age. Using plain language and with relevant timely examples, he will explain what you need to know to understand, use, and measure social media marketing campaigns today in this industry. The presentation will also include actual case studies from CHHMA member companies who have been working with York MBA students to incorporate social media into their marketing plans.

Robert Kozinets is a globally recognized expert on social media, innovation, marketing research, and brand strategy. He is a noted scholar with over 80 publications, including many in the world’s top marketing journals, and two books. He is also an accomplished consultant and a keynote caliber speaker who has worked for global corporations such as Amex, Merck, eBay, HSBC, Campbell Soup, Nissan and Sony. An anthropologist by training, he is Professor of Marketing at York University’s Schulich School of Business, where he is also Chair of the Marketing department. His feed is available as kozinets on Twitter, he is on LinkedIn, FourSquare, and Quora, and Brandthroposophy, his popular blog on marketing and social media is available at http://www.kozinets.net.

For further information or to register for the Spring Conference & AGM, click here.


                             
Maple Leaf Night Sponsorship 
Maple Leaf Night is taking place this year on the evening of Tuesday, May 10th at the Mirage Hotel & Casino in Las Vegas. This popular social event is open to CHHMA members and Canadian customers in town for the National Hardware Show (May 10-12).

Member companies who would like to be a sponsor of Maple Leaf Night can click here for the sponsorship request form.

The sponsorship fee is $700 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 $95 CDN. Regular individual tickets are $160 CDN or $200 CDN at the door. Customers can attend complimentary. Registration for the event will be open later this month.


CHHMA Scholarship Program
The CHHMA is once again pleased to be able to offer the opportunity for children of employees of our member companies to apply for a scholarship to help offset the cost of post-secondary education. The Association recognizes the importance of education and therefore encourages children of our member companies to attend University or College. Five to seven scholarships are awarded each year. Successful candidates receive $1,000 CDN per year for the first two years of study leading to a diploma or degree from an accredited community college or university.

The scholarship program is available to the dependents of any current full-time employees of the CHHMA or member companies. The program is only offered to Canadian companies or divisions of companies based in Canada which are members of the CHHMA. The member company must remain a member in good standing in order for the student to qualify for the second year of the scholarship. The student's parent or guardian must be an active full-time employee with at least one year seniority with the CHHMA or member company as of July 15th in the year of application. Applicants must be high school seniors preparing to enter an accredited community college or university in the fall term, and attain a minimum average of 75% in the last year of high school. The decision of the Selection Committee and the CHHMA is final and not open to appeals. The CHHMA reserves the right to withdraw a scholarship should the student's parent(s) or guardian(s) voluntarily leave the employment of the CHHMA or member company, or if employment is terminated for just cause prior to the start of the school year, or if the company terminates its membership in the Association.

Complete details and application forms can be found at https://www.chhma.ca/Public/Scholarship-Program.

The CHHMA must receive applications from potential candidates no later than July 15th.

Since 2001, the CHHMA has awarded $108,000 towards scholarships and some 54 young people have benefited from the scholarship program.   
  
                                  Industry News

RONA Fourth Quarter and Full Year Results
RONA inc. reported last Thursday that net earnings fell 28.1% to $22.2 million or 17 cents per share for the fourth quarter ended December 26, 2010, a decrease from $30.8 million, or 24 cents a share, a year ago. Consolidated sales for the quarter were down 0.4% at $1.14 billion, a drop of $4.4 million from the same quarter last year. Same-store sales were down 6.4% for the quarter.

For all of 2010, total sales were $4.8 billion, an increase of 2.6% from the previous year. Same-store sales remained flat. Double-digit growth was generated in the commercial and professional market division. Net earnings were up 3.6% or $5.0 million to $143.2 million, and earnings per share were down 2 cents to $1.09.

“Again in 2010, RONA demonstrated its agility and ability to emerge stronger from the face of challenges. Although the economy has been slow to rebound, we were able to capitalize on growth opportunities. Through acquisitions, we moved much closer to realizing our objective of a national platform for the commercial and professional market, we gave our distribution business an important boost and we increased our retail presence in strategic Eastern Canada locations,” stated Robert Dutton, President and CEO of RONA. “We are now at 19% market share, up from 17.5% at the beginning of the year, and on target to reach our 20% objective by the end of 2011. During this challenging year we continued to improve our overall efficiency as well as customer loyalty and we got the first tangible benefits of our unique $100 million succession planning fund launched last year with five projects completed by young entrepreneurs
from our independent dealer network. As 2011 unfolds, our new, integrated and regional approach is expected to bring significant benefits. We are also poised to grow our distribution and commercial and professional segments and reduce the cyclical nature of our
business by continuing to consolidate the Canadian market,” said Mr. Dutton. 


                     
Sears Canada Fourth Quarter and Full Year Results
Sears Canada Inc. reported last Wednesday a 28% drop in earnings for the fourth quarter ended January 29, 2011. Net earnings were $92.2 million or 87 cents per share versus $128.2 million or $1.19 per share for the same quarter a year ago. Revenues for the quarter were $1.477 billion compared to $1.525 billion last year, a decrease of 3.2%. Same-store sales decreased 3.3%.

For the year, revenues were $4.958 billion versus $5.201 billion, a decrease of 4.7% from the previous year. Same-store sales were down 4.0%. Annual net earnings were $149.8 million or $1.40 per share compared with $234.7 million or $2.18 per share a year ago.

Commenting on the quarter and full year performance, Dean Rogers, President and CEO, Sears Canada Inc. said, “The 2010 results were disappointing due to several external factors including increasing household debt, at an all time high, which affects sales in major expense items such as appliances, the effect of a warm fall that impacted apparel and categories such as snow blowers, and continued deep discounting by the industry in general. Nevertheless, we take responsibility for our results and are committed to improving our performance in 2011.”
 
 

                                       
Economic News

Bank of Canada Holds Benchmark Rate
As expected, the Bank of Canada kept its benchmark rate unchanged at 1% Tuesday. The central bank said the economy is growing at a slightly faster pace than expected as signs emerge of a recovery in exports, but gave no hint it was ready to resume hiking interest rates. Economists speculate that the bank is waiting for evidence that U.S. economic performance is strong and steady enough to ensure that Canadian exports will contribute to economic growth regardless of the level of the loonie.

The bank said domestic demand continues to expand although household spending is moving in line with growth in disposable income; business investment continues to expand rapidly as companies take advantage of low interest rates and the need to boost competitiveness; and an anticipated comeback by the trade-oriented sector appears to be unfolding.

“There is early evidence of a recovery in net exports, supported by stronger U.S. activity and global demand for commodities,” the Bank of Canada said, although warning: “The export sector continues to face considerable challenges from the cumulative effects of persistent strength in the Canadian dollar and Canada’s poor relative productivity performance.”

Global inflation pressures are rising due to higher energy and food costs. But in Canada, the central bank said inflation is in line with its expectations – the core rate, which strips out volatile-priced items, stood at 1.4% in January – and pricing pressures remain subdued, reflecting “considerable slack” in the economy.

Most central bank watchers feel the bank will put a hold on any rate increases until its July 19 decision or later, instead of tightening on April 12 or May 31.   
   
Canada’s Fourth Quarter Growth Tops Forecasts
On Monday, Statistics Canada reported that Canada’s real GDP grew at an annualized 3.3% rate in the fourth quarter of 2010, after a revised 1.8% expansion (up from 1%) in the third quarter.

The report showed broad strength in the economy – crude oil export volumes jumped 30% to a record high while the mining, construction and retail sectors all boosted activity. Higher demand for exports (+4.0%) contributed the most to fourth quarter growth. Export sales rose 17.1% on an annualized basis in the fourth quarter, the best performance in eight years. Imports, meanwhile, advanced just 0.5%, the slowest gain in six quarters. The surprise surge in exports could be short-lived however, as it was driven by energy-related exports following colder than usual temperatures in the U.S.

Canada’s GDP rose 0.5% in December from November, also topping expectations. Economists had expected quarterly growth of 3% and December expansion of 0.3%. For all of 2010, the Canadian economy grew 3.1% after a 2.5% contraction in 2009. This trailed only Germany’s 3.6% advance among Group of Seven countries and outpaced the U.S.’s 2.8% growth.

All major industrial sectors, with the exception of manufacturing, increased their output in the fourth quarter. Service-producing industries increased 0.9% while goods production rose 0.5%. The public sector expanded and so did wholesale and retail trade, real estate and construction. Manufacturing fell after five straight quarterly increases. Businesses cut inventories by $5 billion in the quarter, after strong build-ups in the two previous quarters. Business investment in plant and equipment expanded for the fourth straight quarter. Consumer spending rose 1.2% in the quarter, up from 0.7% in the third quarter. Spending on furniture, furnishings and household equipment and maintenance increased 0.9%, after two quarters of decline. Investment in housing edged down 0.2% in the fourth quarter, the second decline in a row. The value of new housing construction fell 5.7%, the first drop since the third quarter of 2009. Renovation activity also fell, down 0.9%. Renovation activity has been weakening since the second quarter of 2010 after a string of quarterly increases of 3% or more that began in the second quarter of 2009. 
 

2011 Retail Sales Outlook for Canada
Retail sales will rise 5.1% in 2011, the same as in 2010, according to a study by retail consultancy Kubas Primedia released on Monday.

Last year, total retail sales were $436.5 billion, which is up over pre-recession levels whereas in the U.S., retail sales have failed to regain what was lost during the recession. The report says a growing number of U.S. retailers are planning to open stores in Canada as they are looking for better retail growth opportunities that are not currently available in the U.S. market.

Kubas Primedia expects food and drug retail store sales to increase 3.1% this year, compared with 2.5% in 2010 when food deflation hit grocers. Sales at general merchandise stores will rise 4% in 2011, compared with 4.4% a year earlier. Automotive & related sales will rise 8.1% this year, slower than the 9.9% in 2010. Furniture and home furnishing store sales will rise 4.4% versus a 3.2% increase in 2010. Electronic and appliance stores sales will be up 2.6% this year as compared to 1.8% in 2010. Building material and garden equipment & supplies store sales will increase 4.2% in 2011, up from 1.8% in 2010. 
  
U.S. Fourth Quarter Growth Revised Down
The Commerce Department reported last Friday that the U.S. economy grew at an annual rate of 2.8% in the final quarter of 2010, revised down from an initial estimate of 3.2%

State and local governments, wrestling with budget shortfalls, cut spending by 2.4%, much deeper than the 0.9% annualized cut first estimated. In addition, consumer spending rose only 4.1% instead of 4.4% as first thought. Still, it was the best showing since 2006.

For all of 2010, the U.S. economy grew 2.8%, the most in five years.

Looking ahead, the U.S. economy is expected to grow by 3.2% in 2011, according to an AP economic survey. 
 
U.S. Construction Spending, New Home Sales Fall in January 
On Tuesday, the Commerce Department reported that U.S. construction spending fell 0.7% in January to an annual rate of $791.82 billion, which was more than expected and the lowest since August.

Private construction spending contracted 1.2% as investment in non-residential projects tumbled 6.9%, the lowest since August 2004. However, private residential construction rose 5.3%, reflecting a pick up in the construction of multifamily homes as demand for rentals rises. Spending on public construction edged up 0.1% in January, with federal projects surging 9.1% while state and local government construction dropped 0.9%.

The Commerce Department also reported last Thursday that new home sales dropped significantly to a seasonally adjusted rate of 284,000 homes in January, down from 325,000 in December and less than half the 600,000 a year pace that economists view as healthy.

Bad weather likely hampered some sales, although the industry continues to struggle since the housing bubble burst in 2006.

2010 was the fifth consecutive year that new home sales have declined. Buyers purchased 322,000 new homes last year, the fewest annual total on record. Economists say it could take years before sales return to a healthy pace.

Builders of new homes are struggling to compete in markets saturated with foreclosures. High unemployment and uncertainty over home prices have also kept many potential buyers from making purchases.

Sales of previously occupied homes have not fared much better. While sales rose slightly in January, the seasonally adjusted annual pace of 5.36 million is still far below the 6 million homes a year needed to maintain a healthy market.

Upcoming CHHMA Events For 2011

Canada Night
Sunday, March 6
InterContinental Hotel, Chicago, Illinois

Spring Conference & Annual General Meeting
Tuesday, April 5
International Centre, Mississauga, Ontario

Maple Leaf Night
Tuesday, May 10
The Mirage Hotel & Casino, Las Vegas, Nevada

Quebec Golf Tournament
Tuesday, May 17
Le Fontainebleau Golf Club, Blainville, Quebec

Ontario Golf Tournament
Wednesday, May 25
Angus Glen Golf Club, Markham, Ontario

Night at the Races
Wednesday, June 15
Woodbine Racetrack, Toronto, Ontario

Industry Memorial Golf Classic
Tuesday, September 27
Blue Springs Golf Club, Acton, Ontario

To register for all events visit our website at www.chhma.ca or call Pam Winter at (416) 282-0022 Ext. 21

CHHMA Cost Savings Links
(Click on logos to see how your company can save money)

 


"Eye On Our Industry" is published by the CHHMA as an information resource for our members. Member input regarding content and format is welcomed. Please contact Michael Jorgenson by email: mjorgenson@chhma.ca or call (416) 282-0022, ext. 34.

 

 

Canadian Hardware & Housewares Manufacturers Association | 1335 Morningside Ave., Suite 101, Scarborough, ON M1B 5M4
Telephone: (416) 282-0022   Email: pwinter@chhma.ca