Latest Data on Canadian Retail and Home Sales

iStock-growth_904781202 (500 x 334)Canadian home re-sales remain at lowest levels in six years

Canadian home resales and prices rebounded in March from a dismal showing a month earlier, but remained below historical averages.

MLS home sales rose 0.9% nationally while the benchmark price rose 0.8%, the Canadian Real Estate Association (CREA) reported last week. While the results are an improvement from February, both sales and prices were down from a year earlier as homebuyers grapple with stricter mortgage rules and rising rates.

Sales activity remains at some of the lowest levels recorded in the last six years, CREA said. It’s the latest in a string of data that show sluggishness in the housing sector after policy makers tightened borrowing regulations, partially in a bid to slow runaway growth in Toronto and Vancouver.

“March results suggest local market trends are largely in a holding pattern,” Gregory Klump, the realtor group’s chief economist, said in a news release.

Nationally, sales were down 4.6% and benchmark prices fell 0.5% from a year earlier.  Sales were also almost 12% below the 10-year average for March. That said, in British Columbia, Alberta and Saskatchewan, sales were more than 20% below their 10-year average for the month. By contrast, activity is running well above-average in Quebec and New Brunswick.

In Toronto, sales rose 1.8% and benchmark prices gained 1.5% from a month earlier. Vancouver sales were down 5.8% while benchmark prices in the Pacific coast city fell 0.5% in March.

Canadian retail sales bounce back after a months-long slump

Canadian retailers emerged from months of slumping sales with a sharp rebound in February that may ease some worries about consumer weakness.

Retailers posted a 0.8% gain in sales on the month, Statistics Canada reported last week, versus economist expectations for a 0.4% gain. February’s increase was the strongest since May 2018, and follows six straight months of negative or flat readings, including a 0.4% decline in January that fuelled concern about slowing household consumption.

A pick-up in retail sales was expected on the back of rising prices for gasoline, but the numbers suggest Canadians were in a spending mood beyond the extra cost of filling up their tanks. New car dealers saw a 3.1% increase in sales, while strong gains were also recorded at general merchandise stores (+3.8%) and supermarkets (+1.6%).

However, after posting gains in December and January, sales at building material and garden equipment and supplies dealers were down 1.6%. Despite this decline, sales remain above the level in November.

Retail sales at electronics and appliance stores (-3.5%) were also down for the third consecutive month.

The overall retail figures will restore confidence the nation’s economy is poised for a better start to this year, after the economic expansion nearly came to a halt at the end 2018.

While first quarter GDP numbers won’t be released until the end of next month, there were a series of negative readings in February for exports and manufacturing that raised questions around growth for that month. February GDP data is due April 30.

In volume terms, retail sales were up 0.2% in February.

Sales were up in only five of 11 subsectors, but those sectors were the largest ones and represent 73% of total sales.

Excluding autos, sales were up 0.6%, topping expectations for a 0.2% gain. That follows a 0.6% decline for this gauge in January.

Canadian Business Confidence Softens

confidence1Canada’s recent economic slowdown and global trade tensions have begun to impact businesses confidence, according to the Bank of Canada’s latest Business Outlook Survey released last week.

The central bank’s first-quarter survey of executives, which took place in February and March, showed softening expectations for sales along with a sharp decline in the number of companies reporting labour shortages. The Bank of Canada’s composite gauge of sentiment turned negative and dropped to its lowest since 2016.

The softening picture reflects how the confluence of headwinds — from global trade wars, to last year’s slump in oil prices and a sluggish housing market — is beginning to ripple through the nation’s economy.

The report will only reinforce expectations the central bank will keep interest rates on hold indefinitely.

“The main headwinds are a more uncertain outlook in the Western Canadian energy sector, continued weakness in housing-related activity in some regions, and tangible impacts from global trade tensions,” the Bank of Canada said in the report in which it described the deterioration in sentiment as a “softening.”

Bank of Canada Governor Stephen Poloz puts significant weight on the survey, which he considers an important supplement to harder economic data. The survey provides insight into everything from investment intentions to the amount of slack in the economy and inflation expectations, and last week’s report was almost universally negative.

More businesses reported their sales growth decelerated over the past 12 months, while expectations for future sales remained depressed.

The share of companies reporting at least some difficulty in meeting increased demand fell to 31%, the lowest since 2015. Readings on labour shortages also weakened to multi-year lows, while inflation expectations showed a marked softening. About two-thirds of all executives surveyed expect inflation won’t surpass 2% over the next two years.

One positive is investment and employment intentions remain robust, even though there was some softening for these questions as well. Among those surveyed, 39% said they expect to increase spending on machinery and equipment, which is about the historical average but down from recent levels.

Almost half the executives surveyed said they expect to raise employment levels over the next 12 months.

The survey also found expectations for growth in the U.S. moderating. The share of businesses anticipating slow growth in the U.S over the next 12 months rose to 70% in the survey, from 42% three months earlier.  In the winter, about half of respondents expected “strong” U.S growth over the next 12 months. That figure now is 17%.  Very few predict a recession, however.

“We see a soft (Business Outlook Survey) indicator causing the Bank of Canada to move to a purely neutral bias at this week’s rate meeting,” Mark Chandler, head of Canadian rates strategy at RBC Dominion Securities Inc., advised his clients on April 15.

The report “could have been better, but it could have been worse,” wrote TD Bank economists Brian DePratto and Ksenia Bushmeneva.

Some companies are pushing through the headwinds better than others. The Bank of Canada survey noted specifically that companies in Quebec continued to report “solid” sales prospects. Bensadoun said he had taken advantage of Canada’s new trade agreement with the European Union to double imports from Europe, and that he would avoid the tangle between the U.S. and China by sourcing Asian production from Vietnam.

Investment intentions outside the Prairies “remain healthy,” the Bank of Canada survey said.

But the Prairies are an important part of the economy, and until those provinces shake off the effects of weaker energy prices, the central bank will have a reason to leave interest rates low.

After oil collapsed in 2014 and 2015, the Bank of Canada predicted that it would take three to five years for the shock to wear off. But according to anecdotal evidence, the drag from weaker crude prices continues. Mullen reduced his exposure to oil, but he can’t do anything about weaker economic growth. His strategy involves acquisitions that will allow Mullen to become more efficient, but he concedes that each time he buys a company, people will lose their jobs.

“What I’ve observed is that companies are finding many ordinary, and many more exotic ways, to reduce their costs,” Poloz said in Washington. “They are adjusting to a lower-prices world, but from what I’m hearing, that isn’t done.”

Source: Bloomberg News, The Financial Post

Well Made Here/Bien fait ici Program Launches across Canada

WellMadeHere_2019-04-17CStarting last week, do-it-yourselfers and contractors across Canada can find reliable information about the quality of hardware items and construction materials manufactured at Canadian facilities, thanks to the Well Made Here/Bien fait ici” program.

The distribution of five million leaflets providing an overview of the new program began last Wednesday, April 17, at cash registers in 2,404 affiliate and corporate points of sale belonging to ten home improvement retail banners: ACE, BMR, Castle, Home Hardware, Lowe’s, Patrick Morin, Réno-Dépôt, RONA, TimberMart and Unimat.

The logo also appears in print and web flyers from each of the participating banners.

“We’re unable to find any similar initiative, anywhere in Canada, where competitors have set aside their habitual rivalries for the common good. In this case, to provide reliable information to consumers, about quality products that are manufactured in one province or another,” affirms Mr. Darveau, Chairperson of the new not-for-profit organization, and President and Chief Executive Officer of AQMAT.

As with supermarkets and drugstores, hardware store customers are becoming more demanding. In particular, they want access to information about the origin of products, manufacturer conduct and, key components for the items they intend to install or place in the space they generally cherish the most; their home.

Product lines that can be accredited and thus bear the « Well Made Here » logo, must be able to demonstrate that 51%, or more, of their manufacturing costs, are incurred in Canada, excluding R&D, design and freight. They must also meet construction code rules and several other prevalent industry standards.

Manufacturers and trademark license holders must commit to transparency with respect to the information they publish on the shared hub. Failing this, manufacturers can be expelled; an anonymous whistleblower line has been put in place to this effect (1-800-434-4373).

Over 70 manufacturers signed up for the program in just a few weeks, many among them brand leaders in all departments; electrical, plumbing, building supplies, hardware, framing and roofing, flooring, windows and doors, paint and decoration, decks and yards, tools and seasonal goods

WellMadeHere_logoThe first manufacturers to participate in the project are presently busy writing the descriptive texts, in both languages and with appropriate images, to present their accredited product lines, thereby building up the online catalogue. On day 1, nearly 400 product lines amounting to 4,000 SKUs are in the system.

« While no one knows exactly how many products are manufactured in Canada, nor how they rank with respect to public standards, management estimates that at maturity, in about two years, some 250 manufacturers will support the program and share information about over 1,500 lines representing nearly 15,000 products across all departments.

To put this in context, a small neighbourhood hardware store has an inventory of about 12,000 items while a very large surface store might carry up to 65,000 SKUs.

Well Made Here / Bien fait ici is a not-for-profit organization under federal charter, belonging jointly to the banners and professional associations that created it on October 31, 2018. Its purpose is to encourage the purchase of quality hardware and construction materials that are made in Canada and intended for the residential market.

The CHHMA is one of three associations currently, along with AQMAT and APCHA, who are supporting the program.

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Move Over, Millennials — Baby Boomers are the Ultimate Untapped Market

babyboomersWhile businesses have been busy marketing their products and services to millennials, a new report from Environics Analytics says that they are missing out on a huge, mostly untapped market: the baby boomers.

In an article by the Financial Post, author Ellen Samek says boomers outnumber any other generation in Canada. The number of Canadians over age 55 increased by 87% between 1996 and 2006, according to the Environics report. In the next ten years, there will be another 16% surge in the number of people aged 55 and over. In comparison, Canadians aged between 16 and 54 only rose 14% between 1996 and 2016.

Canadian households aged 65 and over had an average net worth of $845,600 in 2016. That’s an 86% increase since 1999 after adjusting for inflation.

“They’re active, healthy, they have money to spend, they’re interested, and they’re curious,” said Dr Doug Norris, senior vice-president and chief demographer at Environics Analytics. “I don’t think many businesses have tapped into exactly how different they are.”

Not only do boomers have the physical numbers and have high life expectancy, they also have the spending power.

With all this extra money, good health, and spare time, why aren’t more companies trying to draw the boomers in?

Sylvain Charlebois, a professor of food distribution and policy at Dalhousie University thinks it’s because boomers tend to follow the status quo and millennials are largely challenging it, especially when it comes to food.

“It’s not really about brands anymore, it’s about the product and what it represents,” said the Guelph-based Charlebois. “Boomers really got into the branding and really enjoyed them. They made a lot of multinationals very successful. Millennials consume very differently, they don’t care about the brand, and they care about what the product represents.”

While boomers continue to go to Walmart and Costco, millennials want Whole Foods and the convenience of ready-to-cook meals such as Hello Fresh, said Charlebois.

Norris believes boomers are being underestimated and not properly differentiated from the pre-war generations that were more resistant to innovation and technology.

Other opportunities within the boomers market includes real estate, as many boomers may be selling their homes in exchange for condos or renovating their current homes for accessibility purposes.

There’s also the cannabis industry. Of the 200,000 Canadians with a medical cannabis licence, two-thirds use the substance to treat arthritis. A survey by CAMH Monitor also found there has been a notable rise in cannabis use among those aged 50 and older.

Environics’ Norris also notes that boomers are more educated than generations before them with half of Canadians 55 and over having some form of post-secondary education and are more interested in innovation.

Two industries Norris thinks have been successful in identifying boomers as a viable market are the health and travel industry.

“Certainly industries that have been working hard are the travel industry, you think of what’s happening with cruises today, you just can’t build those ships fast enough,” Norris said.

A study conducted for Expedia Group Media Solutions by Northstar Research Partners found that out of all generations in Canada, baby boomers travel the most on average with approximately 28 days of travelling per year, with a strong preference for international trips.

Cosmetics and beauty are also successfully tapping into the senior market by showcasing older women as spokespeople, Norris said. Some examples include actresses Helen Mirren and Diane Keaton.

The report poses the need for accessibility and making shopping and products more senior-friendly as the boomers and older seniors continue to age.

Charlebois says grocery stores in rural Canada, where the population of seniors is higher, are making more noticeable changes such as seating options within the store for customers to take a rest.

Some brands such as Gillette have already created products serving the rising number of caregivers. Nearly one third of seniors are caregivers to an older relative or friend.

In approximately 20 years, seniors will make up about one quarter of Canada’s entire population, most of them women.

“The stereotype that the older population is set in their ways, not interested in new products, are very price sensitive and unlikely to switch brands must also be rejected, the report concludes. “More advertising needs to be directed at the older population showing them as interested, active and open to change.”

  • Source: The Financial Post

USMCA Deal Looks to be in Trouble

usmcaMore than six months after the United States, Mexico and Canada agreed a new deal to govern more than US$1 trillion in regional trade, the chances of the countries ratifying the pact this year are receding.

The three countries struck the United States-Mexico-Canada agreement (USMCA) on Sept. 30, ending a year of difficult negotiations after U.S. President Donald Trump demanded the preceding trade pact be renegotiated or scrapped.

Although, the agreement was signed by all three countries, it does not take effect until it is ratified, which none has done, and the deal has not ended trade tensions in North America. If ratification is delayed much longer, it could become hostage to electoral politics.

The United States has its next presidential contest in 2020, and Canada holds a federal election in October.

The delay means businesses are still uncertain about the framework that will govern future investments in the region.

“The USMCA is in trouble,” said Andres Rozental, a former Mexican deputy foreign minister for North America.

Though he believed the deal would ultimately be approved, Rozental said opposition from U.S. Democrats and unions to labour provisions in the deal, as well as bickering over tariffs, made its passage in the next few months highly unlikely.

Canada’s Parliament must also ratify the treaty and officials say the timetable is very tight. Current legislators only have a few weeks work left before the start of the summer recess in June, and members of the new Parliament would have little chance to address ratification until 2020.

Trump has shown frustration with the Democratic-led U.S. House of Representatives for failing to sign off on the USMCA. He has threatened to pull out of the old pact, the North American Free Trade Agreement (NAFTA), if Congress does not hurry up.

If Trump did dump NAFTA, the three nations would revert to trade rules in place before it came into effect in 1994.

The biggest impediment is the continuation of tariffs imposed by U.S. President Donald Trump on steel and aluminum imports to the United States.

The President used a controversial clause dealing with national security, commonly called Section 232, to slap tariffs of 25% on steel and 10% on aluminum from Canada and Mexico. Canada and Mexico say these tariffs are illegal and are seeking exemption from them.

The metals tariffs were not included in the USMCA and Mexico and Canada are impatient to resolve the issue. Mexico has repeatedly threatened to target new U.S. products by the end of April in retribution if tariffs are imposed.

Meanwhile, Trump has threatened to slap tariffs on Mexican auto exports unless Mexico does more to stop drug traffickers and illegal immigration.

Mexico’s government is in the final stages of completing a new list of potential U.S. imports to be targeted, said Luz Maria de la Mora, a Mexican deputy economy minister.

“There’s going to be a bit of everything,” she told Reuters, declining to give details of how the list — originally encompassing products such as bourbon, cheese, motor boats, pork legs, steel and apples — could be modified.

De la Mora would not be drawn on whether Mexico could refuse to ratify USMCA if steel tariffs are not withdrawn, saying only: “All options are on the table.”

Tariffs are a drag on the Canadian economy because the United States is Canada’s largest export market for steel, and steel represents nearly 17% of U.S. steel imports. Canada also provides the United States with about half of its annual aluminum needs.

The U.S. economy is roaring, so Canadian exports there continue to be strong. A stumbling block is that the United States has proposed to end tariffs by replacing them with quotas limiting the amount of steel and aluminum Canada can export there.

Prime Minister Justin Trudeau, who faces a tough re-election battle, rejected last week accepting quotas on Canadian steel and aluminum in exchange for U.S. tariffs being dropped.

Meanwhile, Canadian Foreign Minister Chrystia Freeland has said that her government was “constantly” looking at its own retaliation list, noting that Trump’s tariffs left the country over $16 billion worth of space to strike back.

Freeland did not say when that list could change, and a government source, speaking on condition of anonymity, said it might not be necessary. Still, Freeland said Canada was coordinating with Mexico about its options.

U.S. Democrats in the new Democratic-majority House of Representatives have threatened to block the USMCA unless Mexico passes legislation to improve workers’ rights, a demand shared by the Canadian government.

A bill already in Mexico’s Congress to strengthen trade unions should be approved this month, the government says.

Trump blamed NAFTA for millions of job losses in the United States as companies moved south to employ cheaper Mexican labour. Trump is running for re-election in 2020, and his ‘America First’ policy will likely feature prominently in the campaign.

Democrats also want more enforceability on the environmental commitments [in the agreement] and have concerns with biologics.

USMCA shields new biologic drugs from competing cheaper generic drugs for at least 10 years, up from the current protection of eight years in Canada and five in Mexico. But some Democrats in Congress want to lower the threshold to seven years, so cheaper generics can get to market faster.

There is also the general idea in Congress that there’s no need to rush. “I think the Democrats don’t want to just hand Trump a victory,” says Matthew Stewart, director of economics for the Conference Board of Canada.

Forcing Mexico and Canada to rework NAFTA was one of Trump’s signature pledges during his shock win in 2016, and Democrats are pulling out the stops to avoid losing again.

“The closer the election gets, the harder it will be for Democrats to grant Trump a victory” by ratifying the USMCA, said Sergio Alcocer, a former deputy Mexican foreign minister.

This go-slow approach might be exacerbated now that the report by special counsel Robert Mueller has been tabled and appears to remove the allegation that Mr. Trump colluded with the Russians before his 2016 presidential election. The Mueller report’s conclusions and the President’s statement that he has been “completely exonerated” puts the Democrats in a position where it might be even more difficult to hand the Trump administration a win.

“People need to be very careful around opening up what could really be a Pandora’s box,” Freeland said last Thursday.

Canadian officials say they fear that if one part of the treaty were reopened, it could spark clamour for other sections to be renegotiated as well.

  • Source: Reuters, The Globe and Mail

Canadian Housing Market News

calgary-housingPace of Canadian housing starts up in March

The Canada Mortgage and Housing Corporation (CMHC) reported on Monday that the pace of housing starts picked up in March.

The national housing agency says the seasonally adjusted annual rate of housing starts climbed 15.8% to 192,527 units in March, compared with 166,290 units in February.

Economists on average had expected an annual pace of 196,500, according to Thomson Reuters Eikon.

The reading came as starts of urban multiple-unit projects such as condominiums, apartments and townhouses increased 18.6% to 135,894 units in March. The rate of single-detached urban starts rose 12.1% to 42,139 units.

Rural starts were estimated at a seasonally adjusted annual rate of 14,494 units.

The six-month moving average of the monthly seasonally adjusted annual rate of housing starts was steady at 202,279 in March compared with 202,039 in February.

Building permits down in February led by multi-family units

Statistics Canada reported at the start of the week that Canadian municipalities issued $7.8 billion worth of building permits in February, down 5.7% from the previous month. The decline was largely due to lower construction intentions for multi-family dwellings.

The value of permits for residential buildings declined 8.5% in February to $4.9 billion, the lowest level since April 2017. The decrease was largely the result of lower construction intentions for multi-family dwellings in Ontario and British Columbia. Despite the monthly decline, the value of multi-family permits has shown notable strength over the past year.

Municipalities issued $2.9 billion worth of non-residential building permits in February, edging down 0.5% from the previous month. The decline stemmed from lower values of commercial permits (-$114 million), which posted sharp increases in November and December.

The value of institutional permits rose 11.6%, the first increase in five months. A high-value permit issued for the Qikiqtani Correctional Healing Centre in Nunavut contributed to the gain.

British Columbia issued $1.4 billion of permits in February, down $181 million from January. Lower construction intentions for multi-family dwellings more than offset gains in all other components. The value of permits in the census metropolitan area of Vancouver declined 20.5% to $800 million. This followed three consecutive months where permits were above the $1.0-billion mark.

The value of permits in Saskatchewan was down 34.0% to $108 million, as every component except institutional buildings declined. The decrease partly reflected changes to building energy codes that went into effect in the province on January 1, 2019. The largest decrease was in the single-family dwelling component.

The value of permits for single-family homes in Saskatchewan have been on a general downward trend since 2013. In 2018, the province issued $596 million worth of single-family permits, the lowest value since 2006. The Association of Regina Realtors and the Saskatoon Region Association of Realtors both reported a decrease in the number of home sales in 2018.

There’s a full-fledged housing chill in Vancouver, but it hasn’t reached Toronto, data shows

When it comes to housing markets, Vancouver and Toronto are poles apart. The March update on housing sales suggest signs of some stability in Toronto’s market, where almost the same number of units were sold in March 2019 as in March 2018.

Vancouver presents a different and more dismal picture. The number of transactions in greater Vancouver last month was down 31% from the tally recorded in March 2018. Vancouver has not seen such a lacklustre March since 1986.

Housing advocates and some industry observers had suggested that a decline in housing prices would be a boon for those who had previously been priced out of the market. It was argued that declining prices would bring in a rush of buyers who had waited on the sidelines for years for an opportunity to own a home. The evidence for such a narrative is lacking in Vancouver.

Ashley Smith, president of the Real Estate Board of Greater Vancouver, believes that housing “demand today isn’t aligning with our growing economy and low unemployment rates.” She holds regulatory changes responsible for the declining market trends in the greater Vancouver.

Smith is of the view that the host of government interventions that introduced new transfer taxes and stringent lending regulations have effectively sidelined “potential homebuyers in the short term.”

Garry Bhaura, president of the Toronto Real Estate Board, echoes Smith’s concerns. Bhaura also believes the OSFI-mandated stress test, which requires borrowers to qualify for a higher rate than the contracted mortgage rate, and other regulations have impacted “home buyers’ ability to qualify for a mortgage.”

The MLS Home Price Index composite benchmark price for Vancouver, which compares prices of similar homes over time, was down by 7.7% year-over-year (YOY) in March 2019. The benchmark price for detached homes at $1.43 million was down by 10.5% (YOY). Prices of condominiums and attached homes were also down.

While prices have been dropping in Vancouver, buyers also have a richer set of choices. Compared to March 2018, the number of houses listed for sale was 52% higher in March 2019. The sales-to-listing ratio was 13.5% for all property types and 9.4% for detached homes.

More choice and lower prices should have attracted more buyers. But that’s not what usually happens in real estate markets. When prices fall, potential buyers stay on the sidelines in the hope that prices will drop even further. This reduces demand and puts additional downward pressure on prices resulting in even fewer sales. Remember, sales in March were down 31.4% (YOY) in Vancouver.

Buyers in Vancouver could also be looking at the long-term trends in housing prices. Despite the recent declines, the benchmark prices in Vancouver are up by 61% over five years and 102.5% over 10 years. If housing prices in Vancouver had risen rapidly in the past 10 years, buyers might be expecting the prices to regress further towards the long-term average.

Toronto’s housing market is not posting declines in prices, yet the gains are, at best, modest. Composite benchmark prices in Toronto were up by 2.6% in March (YOY). At the same time, new and active listings were down (YOY) in Toronto.

Toronto’s sales in March also reveal the urban-suburban divide. Save for a small number of townhouses, sales in Toronto proper were down for detached, semi-detached, and condominiums. In comparison, the surrounding 905 suburbs showed resilience as sales were up for all housing types. Also, the average housing prices in Toronto’s suburbs were up for all housing types except detached homes, which were down by 1.2% (YOY).

Interestingly, March sales of homes under $400,000 represented a mere 7.5% of the residential transactions in Toronto, which suggests that the regulatory changes that made lending tighter have been followed by a reduction and not an expansion in the sale of low-priced homes.

The housing forecasts for Canada suggest a march towards recovery in 2019. However, local markets may experience different outcomes, as is seen from a comparison of Toronto and Vancouver. The urban-suburban divide in large urban markets suggests that buyers should focus on local and not national-level trends in their decision-making.

  • Source: Special for the Financial Post by Murtaza Haider, associate professor at Ryerson University, & real estate veteran Stephen Moranis.


Top Retailer News

TN2Hudson’s Bay revenue slips as sales fall at all stores except Saks Fifth Avenue

Hudson’s Bay Company reported last week that its fourth-quarter revenue slipped to $2.89 billion, down 5.2% from $3.05 billion a year earlier when the quarter included an extra week.

Excluding the extra week, revenue in the quarter ended Feb. 2 was down $47 million or 1.6% compared with a year ago.

Overall same-store sales for the quarter were down 1.4%, while they increased 3.9% at HBC’s Saks Fifth Avenue stores and fell 5.2% at its Hudson’s Bay, Lord & Taylor and Home Outfitters stores. Saks Off Fifth same-store sales declined 2.1%.

HBC reported a net profit of $286 million or $1.20 per share for the quarter, up from $84 million or 39 cents per share in the same quarter last year.

However, the retailer said it lost $226 million or 95 cents per share from its continuing operations compared with a profit of $180 million or 84 cents per share a year ago.

HBC announced in February it would shutter its Home Outfitters business and was eyeing the closure of up to 20 of its Saks Off Fifth locations in a bid to increase profitability.

A shift to lower-priced merchandise across the Hudson’s Bay retail chain last year was a fixable mistake that resulted in disappointing revenue levels in the fourth quarter, chief executive Helena Foulkes commented.

The strategy was successful in attracting former Sears Canada customers shortly after the rival chain closed, Foulkes said, but “I think we took it too far.”

“The good news about all this is that it’s fixable,” Foulkes she added.

Hudson’s Bay has a new chief merchandise officer who will have a better product mix ready for stores later this year, she said.

Foulkes also said the overall company “is a stronger and more capable company than a year ago.”

“We will continue to improve our cost structure while making strategic investments in technology, marketing, digital and our stores,” Foulkes said.

For the full year, sales totalled $9.4 billion for the year with same-store sales down 0.2% consistent with previous year. Meanwhile, gross profit margin was 38.9%, a slight increase over the prior year.

  • Source: The Canadian Press

Dollarama’s fourth-quarter profit misses estimates

Dollarama Inc. narrowly missed estimates for fourth quarter profit and same-store sales, as the retailer was impacted by severe competition and a softening economy that prevented the company from raising prices.

The company said competition from rivals, including Dollar Tree, had led it to scale back price increases in an attempt to retain customers, reducing gross margins to 40.4% in the fourth quarter from 41.4% a year ago.

As expected by analysts, the results showed that the discount chain was benefiting from consumers opting for more of their shopping with cheaper retailers in the wake of weakening Canadian economy.

But while customers spent more at its stores on average, the number of transactions fell in the quarter and same-store sales rose just 2.6%, compared to analysts’ forecasts of 3% and 5.5% rise, respectively, a year ago.

The company also expected same-store sales growth to be in the range of 2.5% to 3.5% in fiscal 2020.

Dollarama had warned three months ago that it was concerned that fewer customers were shopping at its stores due to price hikes in recent years.

Total quarterly sales rose 13% to $1.06 billion, missing estimates of $1.07 billion and net income rose to $171.98 million ($128.1 million), or 54 cents per share, from $162.83 million, or 48 cents per share.

Analysts, however, had expected the company to report a profit of 55 cents per share, according to IBES data from Refinitiv.

During the fourth quarter, Dollarama opened 33 net new stores, compared to 25 net new stores during the corresponding period of the previous fiscal year.

For the full year (Fiscal 2019), sales increased by 8.6% to $3,548.5 million and same-store sales were up 2.7%. Gross margin was 39.3% of sales, compared to 39.8% of sales the previous year and net earnings per common share increased by 9.9% to $1.67 from $1.52.

During Fiscal 2019, the company opened 65 net new stores, the same number of net new stores opened during Fiscal 2018.

  • Source: Dollarama, Reuters


Sears to set to open first batch of smaller stores

After its journey through bankruptcy, Sears is getting ready to open its first batch of smaller stores in the U.S. that won’t carry clothing but will focus on appliances, mattresses and home services.

The first three stores called Sears Home & Life will open on Memorial Day weekend and are a fraction of the size of the company’s traditional stores.

Peter Boutros, chief brand officer for Sears and Kmart, declined to say how many of the stores are in the works but said locations have been identified. However, he said the new-format stores will not take the place of Sears’ remaining 425 stores.

The company also plans to ramp up TV advertising and is planning to extend its Kenmore brand beyond major appliances into kitchen accessories, plates and knives.

The new smaller stores will be located in Overland Park, Kansas; Lafayette, Louisiana; and Anchorage, Alaska, Boutros said. They range in size from about 10,000 to 15,000 square feet.  The average Sears is about 155,000 square feet.

The moves come nearly two months after Sears Chairman Eddie Lampert bought the Hoffman Estates, Illinois-based company for $5.2 billion in a bankruptcy auction through an affiliate of his hedge fund. With the deal, Sears retained the Kenmore appliances and Diehard battery brands and continues to sell

Craftsman tools through licensing partners. The company sold Craftsman tools to Black & Decker in 2017.

Sears filed for Chapter 11 bankruptcy in October 2018.

“We need to instil confidence that we are open for business,” said Boutros in an interview with The Associated Press, declining to comment on recent sales trends.

Lampert is restructuring the business, but Sears’ long-term survival remains an open question. It has to contend with increasing competition from the likes of Best Buy, Home Depot and Walmart.

Each of the new stores will sell both major and small kitchen appliances. Customers can meet with experts to explore how new appliances will look in their home. They will also have kiosks where shoppers can order items available online and in the regular stores and can have them be delivered to the store or delivered at home.

Boutros declined to comment on sales projections for the new store formats.

  • Source: The Associated Press

Industry Hall of Fame Inductions


The Canadian Hardware & Housewares Industry Hall of Fame was established in 1984 to recognize the achievements of our industry’s leaders and pioneers. Since that time 71 industry icons, inventors, business founders and builders from the retail and manufacturing sectors have received the honour.

In this, the 35th year, the CHHMA is honoured to continue to serve as the custodian of the Canadian Hardware & Housewares Industry Hall of Fame.

On April 2, 2019, during a luncheon held in conjunction with the CHHMA Spring Conference, three more worthy individuals were inducted into the Hall of Fame:

  • Terry Davis, Retired President & CEO, Home Hardware Stores Limited
  • Solly Feldman, Founder & Chairman, Accent-Fairchild Group
  • Dennis Nykoliation, Retired President of Black & Decker Canada, Cambridge Towel Corporation ,CanWel Building Products & GSW Building Products
hof19_terrydavis_6469C hof19_sollyfeldman_6493C hof19_dennisnykoliation_6519C
Terry Davis receiving his
Hall of Fame plaque from
Joel Marks, Vice President-
Merchandise, Home
Hardware Stores Limited
Solly Feldman, is pictured
receiving his Hall of
Fame plaque from his son
EvanFeldman, President of
Accent-Fairchild Group.
Dennis Nykoliation, with
retired President of the
CHHMA, Vaughn Crofford,
receiving his Hall of Fame

TerryDavis_photoCTerry Davis began with Home Hardware in a junior position in the St. Jacobs warehouse and held increasingly responsible managerial and executive positions, most recently as President and CEO of Home Hardware Stores Limited, prior to his retirement in fall 2018.  In an impressive and illustrious career that was captured in Undercover Boss, National Post and the Globe & Mail, he proved to be a great leader who embodied the qualities that have made Home Hardware a trusted and preferred Canadian home improvement retailer.

As noted by his former colleague Joel Marks, Vice President-Merchandise, Home Hardware Stores Limited, who introduced Terry, “This award celebrates his outstanding contributions to both Home Hardware and the home improvement industry through leadership and innovation”.

During the luncheon, Terry was joined by his wife Anne and a number of members from the Home Hardware head office. During his acceptance speech he spoke of the mentoring he received from Home Hardware co-founder Walter Hachborn early in his career and reminder to be customer-focused.

SollyFeldman_photoCIn 1959, Solly Feldman started his career in the industry working at Handy Andy in Montreal as a Junior Buyer. In 1961, he joined Fuller Tool/Windsor Trading as a buyer in the Hardware/Housewares department. In 1967, Solly joined Steinberg Miracle Mart as a Senior Buyer of Hardware, and over the next seven years became Merchandise Manager of Housewares/Giftware/Traffic Appliances/Cleaning, and then Vice President & General Merchandise Manager of Hard Goods. In 1974, he left to start his own company, importing and distributing houseware products which became Accent Home Products and later transformed into what is now known today as Accent-Fairchild Group. Over the last 45+ years, the company has grown to become a significant player in the manufacturing of plastics, operating facilities in Montreal and Charlottetown, PEI where the company manufactures their own brands as well as many OEM brands for major retailers in Canada and the USA.  Today, as Chairman & Founder, Solly continues to work for the company and comes into the office every day.

Solly’s son Evan Feldman, President of Accent-Fairchild Group introduced his father during the ceremony and spoke about the immense passion and work ethic that he has demonstrated over his long career and continues to show to this day.

Solly was also joined at the luncheon by his wife Linda and son Lloyd, who has pursued a successful career as a lawyer as well as a number of employees from Accent-Fairchild and Canadian Tire, who he has had a very successful relationship with over the years.

Solly remarked that he has enjoyed the years of travel to many trade shows and getting to know so many people in the industry.  The induction into the Hall of Fame means a lot knowing that it comes from his peers.

DennisNykoliation_photo_liDennis Nykoliation began his business career with NCR Canada in Winnipeg and held several management posts including Director, Marketing Administration in Toronto. In 1976 he joined GE Canada’s Housewares Division in Barrie, Ontario and served in various senior marketing posts before being named Manager, Marketing and Sales for Canada in 1982. With the acquisition of GE’s worldwide housewares business by Black & Decker in 1984, Dennis was named Vice President, Marketing and Sales for the Housewares, Power Tools, and Outdoor Products businesses and played an instrumental role in transferring the GE brand name on all housewares small appliances to Black & Decker within 2 years. Dennis was appointed President and General Manager of Black & Decker Canada in early 1992 and held that position for 3 years after which he moved on to senior executive positions with Cambridge Towel Corporation, CanWel Building Products and GSW Building Products, retiring in 2007.  During his career, Dennis served on several Industry Association’s Boards including the CHHMA, Portable Appliances Manufacturers Association (PAMA) and the Electrical and Electronic Manufacturers of Canada (EEMAC).

Dennis was joined at the luncheon by his wife Bette of 51 years and a number of his family and friends from the industry.  He noted that he was on the CHHMA board, and at the induction ceremony, when Walter Hachborn was inducted into the Hall of Fame and now, this many years later, he shared the day with another notable Home Hardware inductee.

In addition to thanking his family for their support and remarking on the many friends and special times he has experienced working in the industry, Dennis also spoke about some of the major changes that are taking place in the industry and business world at large.

BrandSpark Survey Reveals Shifting Consumer Preferences


Survey of over 18,000 Canadians shows consumer preferences for health-conscious, environmentally-friendly and natural products

In tandem with it’s Best New Product Awards unveiled earlier this month, market research firm BrandSpark International announced new research on Canadians’ shopping habits for everyday consumer products.

More than 18,000 Canadians voted on the latest new beauty, health, personal care, food, beverage, and household products in 66 different categories. There was a strong presence in the natural and health-conscious realm, with winners including Love Child Organics, Burt’s Bees, Nude by Nature, Tetley Super Tea, and Joyya milk.

BrandSpark noted that, for 2019, the BNPA program has partnered with Canadian Living, which is promoting the winners across its network of print and digital media properties. This year, shoppers can purchase and save on the BNPA award-winning product Shopping Guide on, a new site from BrandSpark that rewards Canadian shoppers with cash back from and other top online retailers.

“With so many new products launched each year, consumers are looking for ways to identify which are truly the best and deserving of their dollars,” asserted Robert Levy, President of BrandSpark International.

“Over the past 16 years, the Best New Product Awards has become the most influential awards program for CPG products, and is recognized as the Canadian Shoppers’ Seal of Approval,” added Kim Diamond, Vice President of the BNPAs. “The award helps products stand out in the saturated CPG marketplace. Year after year we see brands gain an edge in the market by consistently leveraging their win across media channels.”

Embracing Innovation

“Canadian shoppers continue to be interested in innovation, with seven in 10 indicating they like trying new products,” said Levy.  However, the choices can be overwhelming, with half saying there are too many new products for them to determine what’s best on their own, pointing to the importance of credible consumer shopping guides. When it comes to what Canadians are looking for, the survey revealed that:

  • 67 per cent of Canadian shoppers surveyed look for new products that will “make my life easier.”
  • New product benefits that resonate with most Canadians include health, taste, effectiveness, and convenience.
  • 79 per cent appreciate when manufacturers make products more environmentally-friendly, and 37 per cent are willing to pay more for these products, which is an increase from 32 per cent in 2018, pointing to a continued opportunity for brands.

From Woolco to Walmart: Celebrating 25 Years in Canada

Earlier this month, Walmart Canada celebrated its 25th anniversary of operating in Canada, which is a major milestone for the world’s largest retailer. Walmart opened its first Canadian stores after acquiring the 122-store Woolco division of Woolworth Canada in 1994.

Since then, the retailer has built a network of 410 stores, employing more than 85,000 associates, and serving more than 1.2 million customers across the country, every day. In 2011, Walmart Canada launched its flagship online store,, which is visited by more than 750,000 customers

“It’s been 25 outstanding years for Walmart in Canada and we are thankful for the opportunity to serve Canadian families,” noted Lee Tappenden, president and CEO, Walmart Canada. “We have built a strong history in Canada – supporting local children’s hospitals, providing disaster relief support and tackling issues like hunger and waste. We are proud to employ a diverse workforce as one of the country’s largest employers and look forward to a bright future in Canada.”

Giving back to Canadian communities

Walmart Canada’s extensive philanthropy program is focused on supporting Canadian families in need and the company’s mission to help people live better. As a result, the company has formed impactful partnerships with non-profit organizations including the Breakfast Club of Canada, Canadian Red Cross, Children’s Miracle Network, and Food Banks Caada. Through these relationships, Walmart Canada’s community giving program aims to strengthen ties to the communities where Walmart operates, with philanthropic initiatives designed to have a national scope and local impact.

To date, Walmart Canada’s philanthropy includes:

  • Raising and donating $350 million for Canadian non-profit organizations
  • On average, $35,000, has been raised and donated for Canadian charities each day that Walmart has operated in Canada
  • The company has donated 16 million pounds of surplus food – the equivalent of 16 million meals – to food banks and food recovery organizations across the country.

Improving plastic and food waste reduction

Another initiative pursued by Walmart Canada is taking a leadership role on waste reduction — specifically building on business and philanthropic initiatives to eliminate waste and relieve hunger. This initiative has been underway since 2005. Through it, the company is focused on reducing waste across its operations, including ambitious commitments around plastic and food waste reduction. Milestone sustainability commitments include:

  • Send zero waste to landfill by 2025, 87 per cent of waste at Walmart Canada is currently diverted from landfill
  • Achieve 100 per cent recyclable, reusable or compostable packaging for its private brand products by 2025
  • Reduce check-out plastic bags by a further 50 per cent by 2025, taking approximately 1 billion check-out bags out of circulation over that period
  • 100 per cent alternatively powered fleet vehicles by 2028

 Walmart Canada continues to become a part of Canada’s culture

Since 1994, Walmart Canada has become recognized as one of Canada’s top 10 most influential brands claiming that it serves the equivalent of the Canadian population every month in its stores.

  • More than 80 per cent of Canadian households shop at Walmart
  • 60 per cent of Canadians live within a 10-minute drive of a Walmart store
  • It is estimated that 1 in 43 Canadians has worked for Walmart Canada at some point
  • Two babies were born in Walmart Canada stores; a baby girl in the Saint-Hyacinthe store in Quebec and a baby girl in Toronto’s Dufferin Mall store