Eco fees will make sense when bugs are worked out

The eco fees program launched in Ontario on July 1 got off to a bad start. They were introduced on the same day as the HST, and nobody seemed to know what was going on. Then, the media, faced with a lull between burning cars at the G20 and Lindsay Lohan’s jail time, went looking for blood.

All of which is too bad, because the eco fees are definitely a good idea. Philosophically, we need to take the next step in both diverting waste from our landfills and reducing the amount of waste that gets created.

The retail sector has had some of its best people working on eco fees for the past several years: CHHMA, Retail Council of Canada, Canadian Tire and Sobeys, were among the companies represented on the board of Stewardship Ontario, an industry-funded organization (IFO) formed to respond to the provincial government waste management regulations created under the Provincial Conservative Government in 2002. (Stewardship Ontario, by the way, is not a government body and not a tax collection agency.)

Two key things went wrong. First, a government-imposed deadline to launch the program forced Stewardship Ontario to rush the thing. While sound in principle and in many aspects of its mechanics, it nevertheless needed more time in which to work out the bugs. Second, whoever was supposed to communicate the results of all their hard work, to deliver the message to retailers and consumers alike of how eco fees would work, was asleep at the switch.

So the Ontario Government’s decision to pull eco fees back for 90 days and “revamp” it may be the best solution under the circumstances.

The eco fees program is going to have its growing pains, without question. And it’s going to take time to deliver a cohesive message about the efficacy of the program long-term to consumers. Just look at the blue box program. It had its detractors and its skeptics when first launched. And like eco fees, the infrastructure was not completely sound at the beginning. Now, blue boxes are an accepted part of life in Ontario homes.

Given time, so will eco fees — once the bugs are worked out — as long as they’re not killed or undermined, and as long as 90 days doesn’t drag into the next provincial election and they become some sacrificial lamb for political posturing.

Back at the blog

Watch for more great blogs keeping you up to date on the issues in home improvement retailing.

RONA refinances, TSC strategizes, IRLY showcases, Lowe's expands

RONA raises cash through stock issue
RONA inc. has closed a public offering of common shares to a syndicate of underwriters led by Scotia Capital Inc...
RONA needs cash to keep expanding. I figure it's better than increasing debt. It's a creative way to raise cash when lenders are cautious.

IRLY hosts dealers at buying show and AGM
WHISTLER, B.C. — IRLY Distributors held a buying show for the IRLY members here on May 30. The show was held in conjunction with IRLY’s annual general meeting and played host to IRLY dealers from all over British Columbia...
Four years ago, I thought IRLY was heading for the dustbin of buying group history. When some organizations are going for a bigger is better approach, IRLY has proven that it can offer meaningful services to a small group. I'd have to mention TORBSA in Ontario as another group that has a similar philosophy.

TSC sizes up new Stephenson’s partnership
LONDON, Ont. — A partnership between farm and hardware retailer TSC Stores and rental chain Stephenson’s Rental gives space to Stephenson’s Rental operations, while enabling Stephenson’s to expand and TSC to offer more services...
We're watching TSC with great interest. A couple of years ago, I would have thought the odds were against them. Now, as smaller independent retailers are on the rebound, TSC could be in a sweet spot.

Lowe's to open more stores
TORONTO — Lowe’s will open its next two stores this month, both in Scarborough, Ont. ...
While Home Depot slashes its rate of store openings, and RONA focuses on recruiting affiliate dealers, Lowe's timing may be very good, after all. It just has to weather this recession, which, btw, is nothing like what their stores face south of the border.
Cheers,
Michael McLarney, Editor

What’s up with Home Depot’s latest results?

Home Depot’s second-quarter results are just the latest indication of the weakness of the U.S. home improvement industry. The U.S. housing market — and consumer confidence — continue to slump, and the effects are being reflected in Home Depot’s numbers. (Home Depot isn’t the only one being affected, of course. Lowe’s has just revealed it will lay off more than 200 at its distribution centre in Central Florida.)

At Home Depot, sales for the second quarter reached $22.2 billion, a 1.8% decline from the same quarter a year earlier. Same-store sales were down (by 5.2%), but other factors such as a continued drop in LBM prices further affected Home Depot’s results.

The results were impacted most by the discontinuation of the HD Supply business. Not only will the giant retailer no longer benefit from the tremendous growth afforded it by this burgeoning division, but it had to take a $60 million tax charge in the latest quarter on the pending sale of this wholesale supply division.

One of Frank Blake’s first orders of business after taking over the helm of Home Depot this year (from Bob Nardelli – ‘nuff said there!) was to look for a buyer for HD Supply — despite the profitability of this division. While Home Depot’s fortunes increased by single digits in the first half of the decade, HD Supply was growing by as much as 35%, in both Canada and the U.S. In the company’s first quarter, HD Supply's revenue jumped 46% to $3.11 billion.

Blake wanted to sell it off simply to assuage Wall St. and Bay St., which have enough trouble understanding retail stocks to start with. Complicating things further by adding a wholesale division was never well received by the Street. Nevertheless, Blake must be lauded for staying the course and wants to put all the company’s efforts into rebuilding its core retail business.

In the meantime, though, Home Depot’s already troubled results will have to navigate heavy weather for a while longer. Let’s hope a turnaround occurs in the U.S. before creeping back to Canada and affecting the economy here too adversely.
— Michael McLarney
Publisher, Hardlines

WHY HARDLINES IS REPRESENTING NRHA IN CANADA

Here at Hardlines, we are always looking for new ways to present information and knowledge to this industry. We believe it's the single best way for vendors and retailers alike to keep ahead of their customers and competition — and stay profitable.

But despite the massive output that pours daily from the World Headquarters, we are at heart a small operation. Our best efforts to grow have been through partnerships. Take our expansion of the Hardlines Conference. First, we welcomed the Outstanding Retailer Awards, partnering with Hardware Merchandising magazine, which owns the awards, to make a first-class Gala Awards Dinner.

Then, Reed Exhibitions invited us to co-locate our Conference with their new National Hardware Show Canada. And as we expanded our U.S. edition of Hardlines south of the border, we welcomed a partnership with the fine folks at Presidents Council.

So when the North American Hardware Association sought representation for their organization here in Canada, we were honoured to take on the role. NRHA moved to Canada following the demise of our own Canadian Retail Hardware Association three years ago. NRHA wants to get its product knowledge training programs into the hands of as many retailers as possible. They believe it's the single best way for independents to keep ahead of their customers and competition — and stay profitable.

Now there's a mandate we can get behind.

I'll continue to oversee Hardlines, but leave the news gathering to Vicky Sanderson, our talented new editor. Beverly Allen remains our director of sales and marketing, building sponsorship support for our Hardlines Conference Oct. 15-16, and managing sales of our reports and information products, and our classified and web ads.

I'm proud to be working with the folks at NRHA. I promise you its just the beginning of more cool stuff coming out of Hardlines!

Best regards,

Michael McLarney
Publisher, Hardlines & Managing Director, NRHA Canada