Wednesday, March 01, 2006
Why Cologne matters this year; why same-store sales matter (sometimes)
Mike’s rant – Feb. 27
The hardware world awaits in Cologne
One of the key shows in the industry is the Cologne International Hardware Fair, aka Practical World, March 5-8. The show attracts a truly international range of vendors and buyers, making it a hotbed, not just for new products, but for merchandising and packaging ideas and for identifying product trends.
It’s held every two years, making a visit this year all the more valuable. Hardlines will be there in force. Bev is putting on another amazing Hardlines Canada Night International Reception on Sunday, March 5, and this event alone is worth the trip. Last time, we had the international buyers from Ace Hardware, True Value, Do it Best, and leading German retailers. And of course, many familiar faces from Home Hardware, Canadian Tire, Sears, and even Co-op fédérée, joined us. Whether you’re a buyer, manufacturer or rep looking for new lines, this is a very important show. If you haven’t booked your trip yet, I encourage you to go.
Thanks to DIY in Europe magazine, store tours will be offered, while an editorial office and International DIY Corner in Hall 8 (B 30) will be the site for that German publication to is presenting an overview of the DIY press in eastern Europe, for example, as well as reporting on international product design and the international 50+ market.
Same-store sales: RONA, Home Depot and Lowe’s
All the big guys had their results this week. Any surprises? Certainly not how well Home Depot did. RONA’s same-store sales surprised many, which were virtually flat while Home Depot’s were up 5.5%. However, RONA and Home Depot pose some differences: RONA’s acquisition driven growth means its store base is much more mature than its big box rival’s. Home Depot still relies on fierce new store growth, something that always translates into strong comps in the early years. In fact, newer stores account for about 30% of Home Depot's stores, and only 10% at RONA.
As Home Depot expands its wholesale business and its commercial/industrial business, it will drift further from the traditional retail model. RONA, on the other hand, while expanding its installed sales nationally during the first half of this year, does not expect to boost its pro and commercial sales beyond 10% of overall sales. For both Lowe’s and Home Depot, that number is up around 30%. Over time, it will become more difficult to compare RONA to Home Depot.
Lowe’s did really well in 2005, with profits up more than 27% while sales rose 18.6%. Home Depot's profits, while very healthy, were up 16.7% by comparison. This certainly underscores why Lowe’s arrival into Canada cannot be underestimated, despite any missteps that company may already have taken.
RONA is looking for independents to grow. Home Depot is looking for wholesale suppliers to grow. But wait! Home Depot actually bought up a couple of independents in the U.S. in recent months. Nobody is paying enough attention to this. It means they will be looking for more chains, especially pro yards (just like RONA!) and you can bet they’ll be looking north and south of the border. The news this week that one of America's largest pro dealers, Lanoga, is buying up Wolohan Lumber comes just weeks after Lanoga itself was merged with Strober's. Companies on both sides of the border will be scrambling to stay ahead of Home Depot in their efforts to consolidate the pro dealer market––and, more and more–-the traditional retail home improvement industry, as well.
Agent Orange
Did you catch the piece in BusinessWeek about Home Depot CEO Bob Nardelli’s “passion” for all things military? He wants more vets in his ranks and wants a mindset that mirrors the army to tighten up his own orange army. A thought-provoking, and sometimes disturbing, read.
Finally, from running companies like armies to running them like countries: Wal-Mart has hired a former U.S. ambassador and ex-mayor of Atlanta as a spokesperson and lobbyist. Andrew Young will be chairman of “Working Families for Wal-Mart”, a group organized on behalf of the giant retailer to counter charges that it underpays its staff and skimps on health coverage. This follows only months after news that Wal-Mart had instituted a “war room”, staffed by former political strategists.
Want to comment on this week's rant?
The hardware world awaits in Cologne
One of the key shows in the industry is the Cologne International Hardware Fair, aka Practical World, March 5-8. The show attracts a truly international range of vendors and buyers, making it a hotbed, not just for new products, but for merchandising and packaging ideas and for identifying product trends.
It’s held every two years, making a visit this year all the more valuable. Hardlines will be there in force. Bev is putting on another amazing Hardlines Canada Night International Reception on Sunday, March 5, and this event alone is worth the trip. Last time, we had the international buyers from Ace Hardware, True Value, Do it Best, and leading German retailers. And of course, many familiar faces from Home Hardware, Canadian Tire, Sears, and even Co-op fédérée, joined us. Whether you’re a buyer, manufacturer or rep looking for new lines, this is a very important show. If you haven’t booked your trip yet, I encourage you to go.
Thanks to DIY in Europe magazine, store tours will be offered, while an editorial office and International DIY Corner in Hall 8 (B 30) will be the site for that German publication to is presenting an overview of the DIY press in eastern Europe, for example, as well as reporting on international product design and the international 50+ market.
Same-store sales: RONA, Home Depot and Lowe’s
All the big guys had their results this week. Any surprises? Certainly not how well Home Depot did. RONA’s same-store sales surprised many, which were virtually flat while Home Depot’s were up 5.5%. However, RONA and Home Depot pose some differences: RONA’s acquisition driven growth means its store base is much more mature than its big box rival’s. Home Depot still relies on fierce new store growth, something that always translates into strong comps in the early years. In fact, newer stores account for about 30% of Home Depot's stores, and only 10% at RONA.
As Home Depot expands its wholesale business and its commercial/industrial business, it will drift further from the traditional retail model. RONA, on the other hand, while expanding its installed sales nationally during the first half of this year, does not expect to boost its pro and commercial sales beyond 10% of overall sales. For both Lowe’s and Home Depot, that number is up around 30%. Over time, it will become more difficult to compare RONA to Home Depot.
Lowe’s did really well in 2005, with profits up more than 27% while sales rose 18.6%. Home Depot's profits, while very healthy, were up 16.7% by comparison. This certainly underscores why Lowe’s arrival into Canada cannot be underestimated, despite any missteps that company may already have taken.
RONA is looking for independents to grow. Home Depot is looking for wholesale suppliers to grow. But wait! Home Depot actually bought up a couple of independents in the U.S. in recent months. Nobody is paying enough attention to this. It means they will be looking for more chains, especially pro yards (just like RONA!) and you can bet they’ll be looking north and south of the border. The news this week that one of America's largest pro dealers, Lanoga, is buying up Wolohan Lumber comes just weeks after Lanoga itself was merged with Strober's. Companies on both sides of the border will be scrambling to stay ahead of Home Depot in their efforts to consolidate the pro dealer market––and, more and more–-the traditional retail home improvement industry, as well.
Agent Orange
Did you catch the piece in BusinessWeek about Home Depot CEO Bob Nardelli’s “passion” for all things military? He wants more vets in his ranks and wants a mindset that mirrors the army to tighten up his own orange army. A thought-provoking, and sometimes disturbing, read.
Finally, from running companies like armies to running them like countries: Wal-Mart has hired a former U.S. ambassador and ex-mayor of Atlanta as a spokesperson and lobbyist. Andrew Young will be chairman of “Working Families for Wal-Mart”, a group organized on behalf of the giant retailer to counter charges that it underpays its staff and skimps on health coverage. This follows only months after news that Wal-Mart had instituted a “war room”, staffed by former political strategists.
Want to comment on this week's rant?
