CHHMA - EYE ON OUR INDUSTRY
Volume 16, Issue 8, February 24, 2016

Inside This Issue:

• Make Your Plans to Attend the CHHMA Spring Conference & AGM on April 12th
• Have You Registered Yet for Canada Night in Chicago?
• Sign Up to Sponsor Maple Leaf Night in Las Vegas
• CSSA Holding March 3 Webinar On How to Prepare 2016 Steward Reports
• Points Raised During ÉEQ’s Schedule Consultations Still Under Review
• Lowe’s Tops Estimates on Improving U.S. Housing Market
• Target Swings to Profit, Same-Store Sales Rise in Q4
• Home Depot Reports Better than Expected Quarterly Results
• Sears Canada Hands Off 8 Sears Home Store Leases to Leon’s Furniture
• HBC Sales Get Bump from Currency Fluctuation, Online Sales
• Canadian Tire to ‘Selectively’ Look at Raising Some Prices; Eyes E-Commerce for Growth
• Wal-Mart Outshined by Amazon.com Despite Spending Billions on E-Commerce
• IHA Announces Finalists for Global Innovation Awards (gia) for Product Design
• Westcoast Building and Hardware Show Postponed
• Online Shopping in Canada Grew Substantially Over Holiday Season, BMO Report Says
• Canadian Retail Sales Plunge 2.2% in December
• Inflation Rate Jumps as Impact of Declining Loonie Takes Hold
• OECD Downgrades Canadian, Global Growth, Warns ‘Urgent’ Global Action Needed
• Latest U.S. Economic News


Association News

 
Make Your Plans to Attend the CHHMA Spring Conference & AGM on April 12th

The 47th CHHMA Annual General Meeting & Spring Conference will take place on Tuesday, April 12, 2016.

This year’s theme is “Overcoming Today’s Challenges” and we have an outstanding line-up of speakers and topics to help manufacturers’/brand owners’ better understand today’s marketplace and address some of those challenges.

It is also an opportunity to network with your fellow CHHMA members and get up to date with the latest association news and plans during the AGM portion of the day.

Also taking place during the conference will be the Industry Hall of Fame inductions which will occur during a luncheon prior to the afternoon program. This year’s inductees are Ms. Laurie O’Halloran Founder/Editor/Publisher of Home Style Magazine; Mr. Bill Calisina, retired (former President) of Bissell Canada, and Mr. James Mumby, retired (former President & CEO) of Dynamic Paint Products.

Senior retail customers will once again be invited to attend the Hall of Fame luncheon and afternoon speaker presentation.

Online registration will open later this week but in the meantime, you can click here for a PDF brochure and registration form with all the details.  

We hope to see you there on April 12th!



Have You Registered Yet for Canada Night in Chicago?

The 67th Canada Night reception will be held on Sunday, March 6, 2016, 6:00 to 8:00 p.m. at the InterContinental Hotel, Renaissance Ballroom in Chicago.

Canadian vendors, agents and suppliers to the industry in town for the International Home+Housewares Show are invited to purchase tickets to the event while Canadian retailers are invited as complimentary guests of the sponsoring companies.

The intent of the evening is to give everyone an opportunity to mix and mingle with peers and customers in a convivial environment celebrating the common bond of being Canadian while enjoying wine, beer, caesars and appetizers.

New this year will be live jazz and a whiskey tasting bar!


The registration fee is $175 (Cdn) per person (at the door price $225).

For all the details and to register, click here.  



Sign Up to Sponsor Maple Leaf Night in Las Vegas

Maple Leaf Night is taking place this year on the evening of Wednesday, May 4th at the Mirage Hotel & Casino in Las Vegas.This popular social event is open to CHHMA members and their retail customers in town for the National Hardware Show (May 4-6).

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 $125 CDN.

Regular individual tickets are $185 CDN or $225 CDN at the door.

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

To sign up as a sponsor, click here.  

Regular registration for the event will commence in early March.



Stewardship News

CSSA Holding March 3 Webinar On How to Prepare 2016 Steward Reports


Stewards of packaging and printed paper (PPP) recycling programs including Multi-Material British Columbia (MMBC), Multi-Material Stewardship Western (MMSW), Multi-Material Stewardship Manitoba (MMSM) and Stewardship Ontario, should be aware that the Canadian Stewardship Services Alliance (CSSA) will be conducting a webinar on Thursday, March 3, 2016 (2:00 – 3:30 pm Eastern Standard Time) to help any stewards in preparing their 2016 report and answer any questions about the process or materials to report on.

CSSA will walk you through the reporting process, provide tips on gathering together your data, and answer any specific questions you may have.

Some of the topics to be covered include:

- What's new in the revised Guidebook
- Information about the updated Steward list that identifies resident and voluntary stewards for each program
- Material category and sector-specific reporting tips
- Best practice tips on how to apply the 'component rule' and how to determine the portion of material supplied in multiple program jurisdictions
- Reminder of important dates
- Review of policy updates
- Review of Voluntary Steward Agreement and policies

Please click here to register and confirm your attendance.

If you have any questions, please feel free to contact National Steward Services at 1-888-980-9549.

Source: CSSA



Points Raised During ÉEQ’s Schedule Consultations Still Under Review

Éco Entreprises Québec’s (ÉEQ) recent consultation meetings with stewards on the 2015-2016 Schedule of Contributions drew feedback which led to subsequent meetings being held to discuss topics including increased rates for certain materials, the retroactive effect of the Schedule and the harmonization of material aggregates with other Canadian programs.

On January 22, 2016, ÉEQ’s Board of Directors reviewed scenarios and additional analyses developed following the consultation meetings. Some aspects still need to be reviewed before the 2015-2016 Schedule of Contributions can be adopted and subsequently submitted to RECYC-QUÉBEC for analysis and recommendation to the government.

ÉEQ is working as quickly as they can to provide the Board with all necessary information to take a position on the subject. A webinar will be organized to keep parties abreast of developments.

2012 Schedule of Contributions: $1.86 million in credits to be issued soon

In compliance with Article 7 of the 2012 Schedule of Contributions, ÉEQ will be issuing credits totalling $1.86 million to companies who reported materials for 2012 but are not low-volume producers.  Credit calculations are based on materials categories and prorated to quantities of materials reported, resulting in a $1.8 million credit for printed materials and $60,000 for containers and packaging. The credit will be applied to balances, if any, owed by companies or their upcoming 2015 invoice.  Approximately 670 companies eligible for this adjustment will receive an e-mail in this regard during the week of February 22nd.

Source: ÉEQ



Industry News

Lowe's Tops Estimates on Improving U.S. Housing Market


Lowe’s Companies, Inc. reported a better-than-expected rise in quarterly sales and forecast 2016 sales above estimates as the steady improvement in the U.S. housing market boosts demand.

The company, like other U.S. home improvement retailers, is benefiting from a pent-up demand for houses after the 2008 crisis, while low interest rates and growth in jobs, wages and credit have spurred spending on renovations.

Besides the housing market improvement, unseasonably warm weather in the holiday quarter encouraged customers to continue outdoor activities and home renovations, which led to an increase in sales at Lowe’s and Home Depot.

Sales at Lowe’s established stores in the United States rose 5.5% in the fourth quarter. But that was less than the 8.9% increase Home Depot posted for the same period.

“As good as (Lowe’s) numbers are, comparisons will inevitably be drawn with Home Depot’s much stronger results,” said Hakon Helgesen, analyst as research firm Conlumino.

“This takes the shine off (Lowe’s) figures as it indicates that Home Depot is adding market share at a faster pace than Lowe’s.”

Lowe’s shares were down 2.8% in premarket trading on Wednesday, while Home Depot was off 1%.

Lowe’s said it expects sales for the current fiscal year, which will include an extra week, to rise 6%.

That beat analysts’ expectations of a 4.8% increase, but matched the top end of Home Depot’s forecast of a rise of 5.1-6.0%.

Overall, Lowe’s same-store sales rose 5.2% in the three months ended Jan 29. Analysts on average had expected an increase of 3.6%, according to research firm Consensus Metrix.U.S. same-store sales increased 5.5% for the fourth quarter.

“We capitalized on increased demand for exterior products as a result of warmer weather, while at the same time helped customers tackle interior projects, allowing us to deliver positive comps in all product categories,” Chief Executive Officer Robert Niblock said.

Net sales rose 5.6% to $13.24-billion (U.S.). Analysts on average were expecting revenue of $13.07-billion, according to Thomson Reuters.

Lowe’s net earnings fell to $11-million, or 1 cent per share, from $450-million, or 46 cents per share, hurt by a $530-million impairment charge as it exited a joint venture in Australia.

Excluding items, the company earned 59 cents per share, which was in line with analysts’ estimates.

For the fiscal year, sales were $59.1 billion, a 5.1% increase over the same period a year ago, and same-store sales increased 4.8%. U.S. same-store sales were up 5.1% for the 12 months.

For the full year, net earnings were $2.5 billion and diluted earnings per share were $2.73, including the impairment charge.  Excluding the impact of this charge, adjusted net earnings were $3.1 billion, an increase of 14.0% from the same period a year ago, and adjusted diluted earnings per share increased 21.4% to $3.29.

Earlier this month, Lowe's said it would buy RONA in a deal valued at 3.2 billion Canadian dollars. Lowe's said the deal, which will add to its earnings in the first year after the deal closes, would increase revenue and operating profitability in Canada.

Source: Lowe’s, Reuters, CNBC




Target Swings to Profit, Same-Store Sales Rise in Q4

Target swung back to a profit for the fourth quarter and is reporting its sixth consecutive quarter of rising same-store sales.

The results Wednesday show that Target has made some progress in reinvigorating its business and winning back shoppers.

Target earned $1.43-billion, or $2.32 per share in the quarter ended Jan. 30. That compares with a loss of $2.64-billion, or $4.10 per share in the year-ago period.

Still, adjusted earnings results were $1.52 per share, which was a bit below the $1.54 per share estimate, according to FactSet.

Revenue slipped 0.6% to $21.63-billion on the sale of its pharmacy business to CVS, also a bit shy of Wall Street expectations.

Same-store sales rose 1.9% during the quarter.

For full-year 2015, Target’s same-store sales grew 2.1%, comparable traffic increased 1.3% and adjusted earnings per share increased 11.3% to $4.69.

Target has been regaining traction with customers over the past year as CEO Brian Cornell has helped reinvigorate certain core categories for the brand, including baby goods, home and apparel.

The company has also been putting a greater emphasis on health and wellness, including a design partnership with cult fitness company SoulCycle and testing a revamp of its front-of-store cafes to include options like fast-casual chain Freshii and a local pizza restaurant in some stores.

Its core categories were key to Target's same-store sales growth driven by increased traffic and a surge in online sales. Target said that product sales in the style, baby, kids and wellness areas grew more than three times faster than the company average. Specific upgrades, such as using mannequins to display outfits instead of leaving clothes on a rack and revamping the home decor display at the front of stores, are helping convert sales at a greater rate, said Cathy Smith, Target's chief financial officer, on a call with media.

Same-store sales within home were up 4% and toys were also a top performer due to the proliferation of Star Wars merchandise tied to the movie release in December.

Still, Target has work to do when it comes to upgrading merchandise displays across the store to make products easier to shop and improving its grocery offering so that the company becomes a destination for food, said Neil Saunders, CEO of retail research firm Conlumino, in a note out Wednesday. Though those are both areas the retailer plans to address, and Saunders said that Target is "a retailer than has successfully navigated the very difficult challenges of modern retail."

Source: Target Corp., The Associated Press, USA Today



Home Depot Reports Better than Expected Quarterly Results

Home Depot Inc. reported on Tuesday, better-than-expected quarterly sales, helped by a rise in demand amid an improvement in the U.S. housing market.

Shares of the company, which also raised its quarterly dividend by 17% and announced a $5-billion (U.S.) share buy back plan, rose 2.6% to $126.04 in premarket trading on Tuesday.

The retailer said it had sales of $21.0 billion for the fourth quarter ended Jan. 31, a 9.5% increase from the fourth quarter of fiscal 2014. Same-store sales for the fourth quarter rose 7.1% overall and were up 8.9% in the U.S. Analysts on average had expected U.S. same-store sales to rise 5.3%, according to research firm Consensus Metrix.

Net earnings for the fourth quarter of fiscal 2015 were $1.5 billion, or $1.17 per diluted share, compared with net earnings of $1.4 billion, or $1.05 per diluted share, in the same period of fiscal 2014.  For the fourth quarter of fiscal 2015, diluted earnings per share increased 11.4% from the same period in the prior year.

Analysts on average had expected earnings of $1.10 and sales of $20.39-billion, according to Thomson Reuters.

The company also raised its quarterly dividend to 69 cents per share from 59 cents per share.

For all of fiscal 2015, sales were $88.5 billion, an increase of 6.4% from fiscal 2014. Total same-store sales for fiscal 2015 increased 5.6%, and for U.S. stores, were a positive 7.1% for the year.

Earnings per diluted share in fiscal 2015 were $5.46, compared to $4.71 per diluted share in fiscal 2014, an increase of 15.9%.

Home Depot has benefited from rising home prices, combined with job, wage and credit growth that has prompted consumers to spend more money on improving their homes.

U.S. single-family home sales surged to their highest level in 10 months in December indicating better job and wage growth which in turn support a favourable home spending backdrop.

Home Depot has bucked a broader retail trend of disappointing holiday quarter sales as customers spend more on big-ticket items such as home improvement and automobiles, instead of discretionary items such as apparel.

The company said it expected 2016 sales to grow by 5.1-6.0%, which translates to $93.03-$93.83-billion. Analysts on average were expecting $93.12-billion. Same-store sales are expected to grow 3.7-4.5%, the retailer said.

Source: Home Depot Inc., Reuters



Sears Canada Hands Off 8 Sears Home Store Leases to Leon’s Furniture

Sears Canada Inc. will hand eight of its big-box Sears Home store leases to Leon’s Furniture Inc., a potentially disappointing sign for a historically robust area of its business.

Tuesday’s announcement, which covers four home stores in British Columbia, three in Ontario and one in Moncton, N.B., is the latest in a series of lease exits by Sears in recent years as the retailer shrinks its retail store footprint amid dwindling overall sales, which have fallen for the past nine years to $3.4 billion. The company’s shares have fallen 43% this year.

Unlike the other real estate deals, which have been a boom to the company, bringing in hundreds of millions of dollars to Sears Canada, Tuesday’s deal transfers essentially no money to Sears: It merely allows the faltering retail chain to exit locations at which it has been losing money.

“We are working on rationalizing our store network to ensure our core store physical footprint is highly productive,” Brandon Stranzl, executive chairman, said in a statement. “Our focus is on converting each and every customer at stores with less efficient footprints into customers of our more efficient and best performing stores. These actions will drive more business over less square footage, and will make Sears Canada a stronger company.”

Sears Home stores sell major appliances, mattresses, furniture and some outdoor products at 43 locations, and typically occupy space at outdoor suburban power centres, where rents are lower than enclosed shopping malls.

Stranzl said the company will invite Sears Home customers at the affected locations to shop for similar items at the closest Sears department store.

“Recent experiences show that when we execute this ‘conversion,’ our full-line stores pick up a significant portion of the sales, the market area’s efficiency per square foot improves, and customers continue to be served as they would expect from Sears.”

The following Sears Home stores will be assigned to the Leon's banner: Abbotsford, Langley, Richmond and Victoria, British Columbia and Brampton, Etobicoke and Mississauga, Ontario. The Sears Home store in Moncton, New Brunswick, will be assigned to The Brick banner. The leases will be assigned effective June 1, 2016, with the exception of the Brampton, Ontario location which will be effective July 1, 2016.

Source: Sears Canada Inc., The Financial Post



HBC Sales Get Bump from Currency Fluctuation, Online Sales

The Hudson’s Bay Company has given investors a preliminary look at its financial performance at the end of last year.

On Tuesday, the retailer announced its same-store sales results for the fourth quarter and fiscal year ended Jan. 30.

HBC CEO Jerry Storch commented, "Our growth continued in the fourth quarter, as our team executed our strategies and focused on innovation around the world. Our retail banners are uniquely diversified across both geography and retail concepts. Online sales were especially strong, reflecting our focus on building superior digital capabilities and further integrating our brick and mortar and e-commerce businesses. As we continue to execute our all-channel strategy we are committed to providing our customers with an exceptional experience as they shop our banners whenever, wherever and however they choose."

The company says same-store sales growth was up 11% overall for the quarter, although that was boosted by a higher U.S. dollar compared with the Canadian currency that HBC uses for financial reporting.

On a constant-currency basis, sales at HBC stores that have been open for at least a year were up 1.8% overall for Q4.

Saks Fifth Avenue lagged the other parts of HBC’s retail group, with same-store sales down 1.0% on a constant-currency basis.

HBC’s older banners, including Hudson’s Bay and Lord & Taylor, had same-store sales rise 4.7% and its Saks Off 5th banner had a 6.3% increase in same-store sales.

Sales through HBC’s online and digital channels were up 22.8% on a constant currency basis in the three months ended Jan. 31, which includes the important holiday shopping season.

For the full fiscal year, the company had same-store sales growth of 12.1%. On a constant currency comparable basis, overall same- store sales were up 2.5%.

The Department Store Group (DSG) same-store sales increased 4.7% during the year.

Saks Fifth Avenue OFF 5TH same-store sales were up 6.3%, while Saks Fifth Avenue same-store sales were down 1.0%.

HBC Europe saw a same-store sales increase of 1.7% for the fiscal year.

Digital sales increased 23.2% on a constant currency comparable basis

HBC says it will report the full financial results for the quarter and year ended Jan. 31 on April 5.

Source: Hudson’s Bay Company, The Canadian Press 



Canadian Tire to ‘Selectively’ Look at Raising Some Prices; Eyes E-Commerce for Growth

Despite a weak dollar that has pushed up purchasing costs for Canadian Tire Corp. Ltd., the retailer has generally resisted passing on those added expenses to consumers in the form of higher prices – until now.

Feeling the currency pressures, Canadian Tire will start to “selectively” look at raising some prices, Michael Medline, chief executive officer of the giant retailer, said last Thursday after the company reported its latest quarterly results.

The move to increase some prices is a departure from what Canadian Tire has been doing amid the currency headwinds in its deliberate attempt to grab market share from rivals as many of them raised their prices, he said. Instead, Canadian Tire has absorbed the added currency expense by finding productivity and other savings.

Now, along with its cost-cutting initiatives, “we will selectively look at pricing decisions going forward,” the CEO said during an analyst conference call in a phrase that is retail code for raising prices.

Canadian Tire has been “remarkable” in its ability to keep a lid on price increases and still manage to boost its profit margins by finding other savings, said Mark Petrie, retail analyst at CIBC World Markets.

“But at the end of the day, some inflation in consumer prices is probably inevitable,” Mr. Petrie said.

In 2015, the Canadian dollar fell 13.6% relative to the greenback and, in the fourth quarter alone, the loonie dropped 14.9%, said Kenric Tyghe, retail analyst at Raymond James. “Retailers at some point have to start passing it through” in higher prices, he said. He suggested Canadian Tire, which also owns Sport Chek and other sporting goods chains and clothier Mark’s, may increase prices of sporting goods and apparel.

Despite a rocky economy and unseasonably warm weather, which dampened sales of winter tires and other seasonal merchandise, Canadian Tire enjoyed a 17% fourth-quarter profit gain to $241.5-million or $3.01 a share from a year earlier. But its revenue dipped 7.5% to $3.38-billion, due partly to one less week of selling in the latest quarter as well as warm weather, the difficult Alberta economy and lower gasoline prices. Excluding petroleum sales, Canadian Tire’s overall revenue was $3-billion – down 5.8% from a year earlier.

“These results are even more impressive when you consider the magnitude of the factors that we faced, such as the deteriorating value of the Canadian dollar and the unprecedented unseasonable weather across the country in the fourth quarter,” Mr. Medline said.

The retailer generated savings with productivity measures and by gaining better rates from its suppliers, he said.  It is consolidating some of its purchasing with its top suppliers, helping it get better prices from them.

For example, if the retailer stocks five kettles from four different suppliers, it may decide to switch to selling four kettles from just two suppliers, he said. “You arm the business with the analytics and business kind of drivers in terms of maximizing margin to go and have those discussions with suppliers. And it’s amazing what can happen out of that.”

But he said Canadian Tire will continue to struggle to bolster its sales in Alberta with oil at its lowest level in 12 years and the industry in cyclical decline. Its Mark’s business is expected to feel the most pain in industrial wear and footwear “for the foreseeable future.” However, Canadian Tire has seen strength in British Columbia, Ontario and Quebec that “is more than offsetting the weakness we are seeing in Alberta,” Mr. Medline said.

Since Canadian Tire unveiled its strategic direction and financial aspirations 17 months ago, the economy has shifted dramatically amid the declining loonie and price of oil, he said.

“The retail marketplace has become much more difficult but our strategy and execution, especially our productivity gains, have made us stronger over all,” Mr. Medline said. “And while we do not believe the foreign exchange environment will become easier in 2016, every one of our businesses is focused on the challenge and is executing plans to mitigate the pressure, as we did in 2015.”

Mr. Medline said the retailer was able to strengthen its fourth-quarter margins by resisting deep discounting seasonal goods to clear them out as a result of the warm weather. Canadian Tire is also working at weatherproofing its business by focusing on less weather-dependent categories, such as home goods, analysts were told. About 25% of the retailer’s sales in its fourth quarter were “winter-related” merchandise, chief financial officer Dean McCann said.

Canadian Tire Eyes E-Commerce for Growth

Mr. Medline also told analysts during last Thursday’s conference call that the next acquisition for Canadian Tire Corp. will likely be in e-commerce.

“We set a path for ourselves to be a leader in e-commerce in Canada and that's where we're heading,” Medline said. E-commerce is a “mammoth opportunity” for the general merchandiser to establish a firm footing in the new, emerging digital world.

“We're doing a great job in our Old World assets, which are going to be a huge part of our business for the foreseeable future,” he added. “We're now going to transform ourselves and dominate in e-commerce.”

The company said growing its digital business will help shield it in the future from some of the uncontrollable negative factors that can impact its business, such as a weakened economy, declining oil and currency prices and this year's unseasonably warm winter.

Source: From Articles by The Globe and Mail, The Canadian Press



Wal-Mart Outshined by Amazon.com Despite Spending Billions on E-Commerce

After spending billions on its web operations to take on rival Amazon.com Inc., the last thing Wal-Mart Stores Inc. wanted to tell investors was that online sales momentum was slowing.

Yet the world’s biggest retailer said last Thursday that e-commerce sales rose only 8% in the fourth quarter. That’s down from 10% in the third quarter and 16% in the second.

The retailer attributed the deceleration to increased competition in the U.K. as well as economic downturns in Brazil and China. As for its domestic e-commerce sales, Wal-Mart would only say that its U.S. online operations have grown faster than the company-wide total. But with the retailer set to spend more than US$1.1 billion this year on e-commerce, investors are getting impatient.

“Their eyes were very big, and you can’t necessarily blame them for Brazil or the U.K. or China, but they weren’t careful and conservative in their view of what e-commerce was going to do,” said Meredith Adler, an analyst with Barclays Plc. She said Wal-Mart isn’t currently making a profit online and hasn’t indicated when it will.

Meanwhile, Amazon said last month that its retail sales in the fourth quarter increased 20% to US$33 billion. For all retailers, online sales grew 9% to US$105 billion in the holiday period, according to the National Retail Federation. Wal-Mart doesn’t disclose the dollar amount of its online sales.

Despite Wal-Mart’s spending, the company still is falling short of Amazon on price and selection, said Guru Hariharan, chief executive officer of research firm Boomerang Commerce. During the holidays, Amazon was able to beat Walmart.com in key areas like electronics, toys and housewares, and Target Corp. also sold items for cheaper in some categories, he said. And Amazon had a significantly bigger selection than Walmart.com in every category Boomerang tracked.

“Why would I ever go to Walmart.com and shop there when I have lower prices on Amazon and a much higher assortment on Amazon?” Hariharan said. “Wal-Mart has to do some soul searching and figure out what it stands for. They aren’t going to be able to compete on lowest price and biggest selection anymore with Amazon.”

One area Wal-Mart does have an advantage in is groceries, analysts said. The company has expanded its online grocery shopping to more than 150 locations in at least 20 markets in the U.S., letting customers order online and pick up at the store without leaving their cars.

“If there is one piece Walmart knows in the U.S., it is grocery, so I think that is a logical move forward,” said Robert Drbul, an analyst with Nomura Securities.

But other competitors aren’t far behind.  Amazon is testing its own grocery delivery service, which may use drones, and Google may even enter the market with its self-driving cars, Hariharan said.

“Wal-Mart has a five- to 10-year advantage in grocery,” he said. “They really need to double down on that because competing with Amazon on price is proving to be a bad idea.”

Source: Article by Shannon Pettypiece, Bloomberg News



IHA Announces Finalists for Global Innovation Awards (gia) for Product Design

The 60 finalists in the IHA Global Innovations Awards (gia) for product design were announced last week by the International Housewares Association. Winners in each of 12 categories will be announced during the invitation-only gia dinner on Saturday, March 5th taking place during the 2016 International Home + Housewares Show. The finalists and winners will be on display in the Hall of Global Innovation in the Lakeside Center Lobby. The show opens at 10 a.m. on March 5 and runs through 3 p.m. March 8.

More than 500 entries were received and were judged by a panel of industry experts and news media. The finalists will also be on display in the New Product Showcases located in the Buyers Club in each Show building.

“Congratulations to all of the finalists for an IHA Global Innovation Award for product design,” said Phil Brandl, IHA president & CEO.

“Our world-renowned gia program is the ultimate awards event in the industry, honouring excellence in both housewares retail and product design.”

The finalists are:

Bath & Personal Care
Better Living Products Int'l., Inc.: GLIDE Shower Shelf
BRZ Brands:Towel Warmer
Gleener Marketing Inc.: Gleener On the Go
MadeSmart Housewares: Expanding Bath Tray
simplehuman: spin cabinet

Cleaning
Casabella Holdings LLC: Splot!
DAZZL CORPORATION: 360 Ironing Board
Kuhn Rikon Corp.: Stay Clean Scrubber
SunState Laboratories, LLC: DAZZ Cleaning Tablets
Urine Off by Bio-Pro Research LLC: Urine Off Find It - Treat It Kits

Cook & Bakeware
Alessi USA, Inc.: Pulcina design Michele De Lucchi
Charcoal Box USA: Burnable Charcoal Chimney
Innobaby LLC: Aquaheat
Le Creuset Of America Inc.: Rectangular Dish with Platter
MC Appliance Corporation: Magic Chef Soup Mug

Home Décor & Gifts
Alessi USA, Inc.: Kaleidos design Naoko Shintani
Eva Solo A/S: Window Birdfeeder
Monkey Business Design USA: Nail It
MOVA International: MOVA Cube
New Product Solutions, Touch of Eco: HALOLITE™ Square Solar Outdoor Lights

Home Organization & Storage
Biaggi ZipSak: Hangeroo Satchel
Brabantia USA: Flatback+ Waste Bin
Polder Housewares, Inc.: Wine Glass Drying Rack
Stasher: Stasher
YouCopia: WrapStand™

Household Electrics & Home Environment
Blueair North America: Aware Air Quality Monitor
Bruno SmartCan: Bruno SmartCan
FLI Products, LLC: Agilux LED lighting system
Nugeni: Steva
Sondpex Electronics: Sondpex Electronics SoundLamp™ Dimmable LED Light Bulb with Bluetooth Speaker 1-to-N (sync up to 6)

Kitchen Electrics
Aquarius Brands: AquaBoy® Pro II
Jarden Consumer Solutions: Crock-Pot® Swing & Serve™ Slow Cooker
Keurig Green Mountain, Inc.: Keurig Kold
StoreBound: Dash 2x Toaster Oven
T-Fal / WearEver, Groupe SEB USA: T-fal OptiGrill + XL

Kitchen Hand Tools & Cutlery
Microplane: Ginger Tool
Smith's Consumer Products, Inc.: Compact Digital Scale- Plastic
Talisman Designs: Pastry Wheel Decorator
Trudeau Corporation:Strawberry Huller
Widgeteer, Inc.: Reversible Vegetable Peeler

Kitchenware
DKB Household USA Corp.: Cole & Mason Fresh Herb Keeper
Molecule R: Fermentation Crock 2L by Mortier Pilon
Molecule R: Molecular Styling Kit
Polder Housewares, Inc.: POP-UP Strainer & Stopper
Prepara: Adjustable Oil Pourer

Personal Care Electrics
Home Skinovations Inc.: Silk’n Flash&Go Express Hair Removal Device
Jobar International, Inc.: Color Changing Wrist Blood Pressure Monitor
simplehuman: wide-view sensor mirror
TAO Clean: Aura Clean System - Orbital Facial Brush & Cleaning Station
Zadro Products, Inc.: Lighted Tweezer

Pet Products
Enchanted Home Pet:TheraCool - Pet Mat
Highwave, Inc.: AutoDogMug
Jarden Consumer Solutions: Oster Smart Pet Feeder
Jefferson Rubber Works dba Ruff Dawg: Knuckle Ball
O2COOL: Chilled Pet Bowl

Tabletop
Alessi USA, Inc.: Human Collection Salad Set design Bruno Moretti and Guy Savoy
Eva Solo A/S: My Flavor Carafe
HYDAWAY: Collapsible Water Bottle
Magisso North America: White Line Cooling Ceramics Carafe
Peugeot: Zanzibar Pepper Mill

The International Home + Housewares Show will feature more than 2,200 exhibitors from 49 countries and more than 62,000 total attendees. For more information or to register for a badge, please visit http://www.housewares.org.

Source: International Housewares Association 



Westcoast Building and Hardware Show Postponed

The upcoming Westcoast Building and Hardware Show, which was to be held March 10-13, 2016 at the Cloverdale Fair Grounds in Surrey, B.C., has been postponed.

A press release last week from the Building Supply Industry Association of British Columbia (BSIA), which owns and operates the show, stated that the show was being postponed due to lower than expected response (booth sales and retail pre-registration).

“Due to the dynamic changes in our industry and the over saturation of industry trade shows, the BSIA Show Committee in conjunction with the Board of Directors, have decided to review the focus of the BSIA Westcoast Building and Hardware Show.  Future BSIA shows will take on a new look and content to reflect the emerging demographics in our industry, the release said.

For any further information, please contact BSIA President Thomas Foreman at 604-513-2205 or thomas@bsiabc.ca.

Source: BSIA, Hardlines 



Economic News

Online Shopping in Canada Grew Substantially Over Holiday Season, BMO Report Says

Online shopping was the winner this holiday retail season, according to a report that says many traditional retailers will have to up their game in order to prevent Amazon and eBay from siphoning away sales in the future.

“E-commerce is becoming a more preferred shopping channel among Canadians as these digital platforms offer comfort and convenience for shoppers,” said the report this month from BMO Capital Markets analyst Peter Sklar, who compared share of Canadian Web visits during the holidays between online only retailers and bricks-and-mortar retailers with online divisions, such as Canadian Tire and Walmart.

“E-commerce platforms of the publicly traded Canadian bricks-and-mortar retailers, such as Canadian Tire and RONA, continue to represent an immaterial share of Canadian web visits during this past holiday season relative to Amazon, Walmart, and eBay,” Sklar noted.

Broader data also confirms that the holiday 2015 period was robust for online retail. November and December 2015 were record-breaking months for online sales in Canada, according to MasterCard SpendingPulse, which tracks consumer payments and estimates for credit, debit, cash and cheques. Online sales accounted for 9.7% of total retail sales in the two-month period, the highest watermark yet for Web sales in Canada. In December, online sales accounted for to 9.9% of total retail sales, up from 8.6% in 2014.

In the meantime, overall Canadian retail sales growth, excluding automotive and gasoline, grew 2% year-over-year over the holidays, MasterCard noted.

To gauge the potential future impact on sales of the Canadian bricks-and-mortar retailers, Sklar looked at Amazon’s list of top-selling items on Amazon.ca during the holidays.

Amazon Canada’s top sellers during the holiday season were in the technology category, such as headphones, HDMI cables and television sets, but Sklar said it is inevitable the online giant will begin to encroach on the operations of legacy retailers.

Amazon’s list included items that wade into the same territory as Canadian Tire’s product offering: automotive items such as leather care kits, household goods such as vacuum cleaners, and sports and outdoor equipment such as basketball hoops.

“Although Amazon’s current categories do not substantially overlap with the Canadian publicly traded bricks-and-mortar retailers (except apparel), as the company continues to broaden its categories, we expect that at some point in the future, this will have a noticeable impact on a broader range of incumbents such as Canadian Tire,” Sklar said.

In December 2015, Amazon’s share of aggregate Web visits was about 2.7% compared with 2.45% in December 2014, the BMO report noted. During the same period, aggregate online visits to eBay dipped to 1.2% from 1.6% in Dec. 2014, and Walmart’s aggregate online visits fell to about 0.9% from about 1.2% a year earlier.

To see a full copy of the report, click here.

Source: Article by Hollie Shaw, The Financial Post



Canadian Retail Sales Plunge 2.2% in December

Following a 1.7% rise in November, retail sales fell 2.2% to $43.2 billion in December Statistics Canada reported last Friday, a much larger drop than the 0.9% that economists had been predicting.

Declines were widespread as lower sales were reported in 10 of 11 subsectors, representing 97% of retail trade.

Later snowfalls and unseasonably warm weather in many parts of Canada may have contributed to lower seasonal purchases.

In volume terms, retail sales were down 2.3%.

“Canadians shopped till they dropped in November, but landed with a thud in December,” said Avery Shenfeld, chief economist at CIBC World Markets, adding that economic growth for the fourth quarter would be “barely above zero.”

Weaker retail sales at the end of last year were hurt especially by a decrease in new car sales, which fell 4.1%. Used car sales also declined 2.5%. However, for all of 2015, new car sales increased 8.9% and used car sales were up 19.2%.

Retail sales in Alberta saw the steepest drop (and the third in the past four months), with car sales in the provinces dropping off significantly.

Paul Ashworth, chief North America economist at Capital Economics, said that rising inflation in recent months is beginning to eat into Canadian real incomes.

“Rising prices at the grocery store are already gaining media attention and could begin to eat into consumer confidence,” he said.

Food and beverage stores registered a 1.2% decrease in December and 0.7% over the past 12 months. Lower sales at supermarkets and other grocery stores (-1.7%) offset the gain in November.  Sales at specialty food stores (+0.6%) continued their upward trend in December, while sales at convenience stores edged up 0.2%. Beer, wine and liquor stores sales were unchanged from November.

Sales at gasoline stations (-1.1%) continued their downward trend in December, recording their sixth straight monthly decrease. For 2015, sales were down 7.1%.

Sales from building material and garden equipment and supplies dealers dropped 0.5% in December, but were up 6.3% for the year.

Furniture and home furnishings stores (+0.5%) was the only subsector to increase in December. Higher sales at home furnishings stores (+3.0%) more than offset lower sales at furniture stores (-0.9%). Year-over-year sales were up 8.5%.

Store types typically associated with holiday shopping registered weaker sales in December.

Receipts at general merchandise stores (-2.2%) declined for the second consecutive month but remained up 0.4% from a year ago.

Sales at clothing and clothing accessories stores (-3.6%) decreased for the first time in three months. Within this subsector, lower receipts at clothing stores (-3.6%) accounted for most of the decline. Shoe stores (-5.4%) and jewellery, luggage and leather goods stores (-1.6%) also posted lower sales in December. Year-over sales were up 7.5% for this sector.

Electronics and appliance stores (-3.0%) posted their fourth decrease in six months and were down 4.2% from December 2014.

Sales at sporting goods, hobby, book and music stores declined 2.3% but were 5.8% higher year-over-year. Lower sales at sporting goods stores more than offset gains at hobby, toy and games stores, and book stores and news dealers during the month.

Source: Statistics Canada, The Financial Post     



Inflation Rate Jumps as Impact of Declining Loonie Takes Hold

The Canadian dollar’s sharp drop over the past year is beginning to stoke inflation.

The Consumer Price Index (CPI) rose 2% in January from a year earlier, Statistics Canada said last Friday, the highest since November 2014 as the U.S. dollar’s gain drives up food costs in Canada.

The jump in prices, which exceeded economist expectations, poses a problem for a central bank that is scrambling to shore up growth with historically low borrowing costs as the country struggles with a plunge in commodity prices. Worries about the impact of the currency kept Governor Stephen Poloz from cutting interest rates last month.

“All those anecdotes about higher cauliflower prices certainly came through in this report,” said David Tulk, chief Canada macro strategist at TD Bank. It “speaks to the concern the Bank of Canada had which probably made them more cautious about cutting rates last month.”

Poloz’s decision to keep his benchmark rate at 0.5% at a rate decision on Jan. 20 halted a slide in the currency that saw the Canadian dollar fall to a 13-year low.

The depreciation sparked a wave of on-line discussions and news stories, with the price of cauliflower – which jumped to more than $7 – a lightning rod.

Food costs rose 4% in January from a year earlier, including an 18.2% surge in fresh vegetables and a 12.9% rise in fresh fruit. Most of Canada’s fresh produce is imported through the winter and the cost reflects a decline in Canada’s dollar against U.S. currency.

The central bank has argued much of the “pass-through” effect from the weaker dollar will be temporary. A 5% gain in the Canadian dollar since the rate decision will also help ease worries, Tulk said.

“It’s probably transitory just given what the currency has done since,” Tulk said.

Inflation in January rose from 1.6% in the prior month.

Transportation costs were the other major contributor to faster inflation, rising 2.2% in January compared to a 0.6% pace in December. Gasoline costs increased 2.1%, the first gain since October 2014.

Clothing and footwear was the only major category where prices declined in January with a 0.3% drop.

On a monthly basis, total inflation advanced 0.2% in January and the core rate rose 0.3%.

Economists surveyed by Bloomberg predicted that overall monthly prices would little changed and the core rate would gain 0.2%.

Source: Statistics Canada, Bloomberg News  


 
OECD Downgrades Canadian, Global Growth, Warns ‘Urgent’ Global Action Needed

The Organization for Economic Co-operation and Development (OECD) is taking a markedly dimmer view of Canada’s economy, though its latest forecast is far more upbeat than some other projections.

The OECD now projects economic growth of just 1.4% in Canada this year as the oil shock wreaks havoc on parts of the country, with a ripple effect outward. That’s well shy of its earlier call in November for 2%.

The group also warned of trouble around the world, saying a “stronger collective policy response is urgent.”

The OECD downgraded its 2016 global growth outlook to 3% from 3.3%, matching last year’s underwhelming growth rate.

Global growth is trending at its weakest pace in five years, a disappointing figure for economies now seven years removed from the 2009 recession.

“The downgrade in the global outlook since the previous economic outlook in November 2015 is broadly based, spread across both advanced and major emerging economies, with the largest impacts expected in the United States, the euro area and economies reliant on commodity exports, like Brazil and Canada,” it warned.

The global economy is currently displaying a number of worrying trends that the organization says warrant close watch. World trade, for instance, has been slowing in the past two years, with trade volumes growing by only 2% last year — a level which the OECD says has been “associated with very low outcomes for global GDP growth” in the past.

Where Canada is concerned, its latest forecast is far more upbeat than some other projections.

Indeed, according to the group’s new outlook today, economic growth in Canada could be nearer to the top of the Group of Seven industrialized nations rather than at the bottom of the pack.

While that downgrade is the steepest among the G7, it would still put Canada ahead of Germany, France, Italy and Japan.

However, Canada would still trail the forecast showings of Britain and the United States, at 2.1% and 2%, respectively.

While growth of 1.4% is lame, it’s not as bad as some other economists project. Those other forecasts tend to be in the area of 1% or even worse.

At least one suggests Canada will lag the rest of the G7.

The OECD had several warnings about the world at large, notably where trade and commodities are concerned.

“Sluggish growth is reflected in weak trade and has contributed to recent falls in commodity prices,” the OECD said of world economies.

“While global trade flows have recovered somewhat from the sharp decline in the first half of last year, they nevertheless remain subdued.”

It also urged a “stronger collective policy response” around the world, saying central bank policy isn’t enough on its own.

Many central banks in advanced economies have set their rates to zero in the hopes that low borrowing costs would boost consumer demand, but growth remains persistently weak in countries such as Japan and the eurozone, where some of the most accommodative policy has been used.

“Fiscal policy is now contractionary in many major economies,” the OECD said.

“Structural reform momentum has slowed,” it added.

“All three levers of policy must be deployed more actively to create stronger and sustained growth. The recipe varies by country, especially with regard to needed structural reforms.”

At the moment, many of the world’s advanced economies, such as the United States and those in the eurozone, are not talking about fiscal spending as a tool to kickstart their economies. Some countries faced with large budget deficits, such as Japan, are cutting back on spending entirely.

Canada’s federal government, of course, is poised to unveil a round of infrastructure spending, but has yet to reveal details.

And some economists believe Ottawa could, and will, spend more and run deficits that are much higher than forecast.

For 2017, the OECD forecasts Canadian economic growth of 2.2%, just shy of its November projection of 2.3%.

Canada would still be ahead of Germany, France, Italy and Japan, and still behind Britain and the U.S. Indeed, well behind.

Source: The Financial Post, The Globe and Mail        



Latest U.S. Economic News
       

U.S. Home Prices Up in December, but Miss Forecasts
Annualized U.S. single-family home prices rose less than expected in November, a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas rose 5.7% in December on a year-over-year basis, matching the increase the month before. That was just below the 5.8% estimate from a Reuters poll of economists.

“While home prices continue to rise, the pace is slowing a bit,” said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.

Prices rose 0.8% in December from November on a seasonally adjusted basis, the survey showed, just short of expectations for a rise of 0.9%.

On a non-seasonally adjusted basis, prices were unchanged from November.

Home prices in three U.S. cities, San Francisco, Denver and Portland, Oregon, continue to report the highest year-over-year gains, the survey showed.

Source: Reuters

Firming U.S. Inflation Keeps Fed Rate Hike on the Table
Rising rents and medical costs lifted underlying U.S. inflation in January by the most in nearly 4-1/2 years, signs of a pick-up in price pressures that could allow the Federal Reserve to gradually raise interest rates this year.

The Labor Department said last Friday its Consumer Price Index, excluding the volatile food and energy components, increased 0.3% last month. That was the biggest gain since August 2011 and followed a 0.2% rise in December.

“It is a policy maker’s dream come true, they wanted more inflation and they got it,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.

In the 12 months through January, the core CPI advanced 2.2%, the largest rise since June 2012 and exceeded the 1.9% average annualized increase over the last 10 years.

The core CPI rose 2.1% in December. The Fed has a 2% inflation target and monitors a price measure that is running well below the core CPI.

Economists polled by Reuters had forecast core CPI up 0.2% last month and increasing 2.1% from a year ago.

Inflation is being watched for clues on whether the Fed would continue raising interest rates this year after the U.S. central bank lifted borrowing costs in December for the first time in nearly a decade.

Tighter financial market conditions in the wake of a recent sharp stock market sell-off and slowing domestic and global growth have wiped out bets for a March rate increase. The probabilities of rate hikes for the rest of the year are slim.

Signs of a pick-up in underlying inflation are likely to be welcomed by Fed officials, but significant gains remain a challenge against the backdrop of very low inflation expectations by households.

Still, the firming in the core CPI, together with a strengthening labour market suggest further monetary policy tightening this year remains on the table.

The overall CPI was unchanged last month after slipping 0.1% in December. The CPI increased 1.4% in the 12 months through January, the biggest rise since October 2014, after gaining 0.7% in December.

The year-over-year inflation rate is rising as the oil price-driven weak readings in 2015 wash out of the calculation.

The U.S. government last Wednesday published revisions to the inflation data going back five years. Those revisions showed both the monthly CPI and core CPI readings a bit firmer in the last months of 2015 than previously reported.

Last month, the rental index increased 0.3% after a similar gain in December. Medical care costs rose 0.5%, with prices for prescription drugs also increasing 0.5%. The cost of doctor visits edged up 0.1% after falling 0.2% in December. Hospital costs increased 0.4%.

Apparel prices rose 0.6% after falling for four straight months. The increase in apparel is surprising as retailers have been offering deep discounts to sell unwanted inventory. Prices for new motor vehicles advanced 0.3%.

Gasoline prices fell 4.8%, while food prices were unchanged. There were increases in the prices of tobacco and recreation, but the cost of household furnishings fell slightly.
          
Source:  Reuters  

  

 Upcoming CHHMA Events 

Seminar: Transportation Trends for E-Commerce
Thursday, February 25, 2016
CHSI (Centre for Health & Safety Innovation), Mississauga, Ontario

Canada Night
Held in Conjunction with the International Home+Housewares Show
Sunday, March 6, 2016
InterContinental Hotel, Chicago, Illinois

CHHMA Spring Conference & AGM
Tuesday, April 12, 2016
International Centre (Conference Facility), Mississauga, Ontario

CHHMA Maple Leaf Night
Held in Conjunction with the National Hardware Show
Wednesday, May 4, 2016
The Mirage Hotel & Casino, Las Vegas, Nevada

CHHMA Quebec Golf Classic
Thursday, May 19, 2016
Club de golf Le Fontainebleau, Blainville, Quebec

CHHMA Ontario Golf Tournament
Tuesday, May 31, 2016
Angus Glen Golf Club, Markham, Ontario
       
       

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