CHHMA - EYE ON OUR INDUSTRY
Volume 14, Issue 36, September 24, 2014

Inside This Issue:

• Last Call for Next Week’s Industry Memorial Golf Classic
• CHHMA to Hold Information Session on Canadian Data Synchronization
• ÉEQ News: 2014 Company Reports Due by September 30th
• La Coop fédérée Confirms Closure Date for Trois-Rivières DC
• Study Finds Basket of Goods Cheaper at Target Canada than Walmart
• Data Breach Spurs Lawsuit on Behalf of Home Depot’s Canadian Customers
• ‘This is the End’ for Sears, Says Credit Suisse
• Family Dollar Rejects Dollar General’s $9.1-Billion Tender Offer
• Costco Canada Switches to MasterCard from AmEx
• Canadian Retail Sales Fall for the First Time in Six Months
• Wholesale Sales Unexpectedly Drop by 0.3% 
• Inflation in Canada Holds Steady at 2.1%, But Core Rate Rises 
• Rising Home Prices Cause Rude Awakening for Potential Buyers 
• Toronto and Vancouver’s Red-Hot Housing Markets Aren’t as ‘Insane’ as They Look, Says CIBC’s Top Economist 
• Canada’s Aging Population Expected to Head West
• Latest U.S. Economic News


Association News
Last Call for Next Week's Industry Memorial Golf Classic    
 
Looks like we are starting off fall with some nice weather and an opportunity to get in a few more golf games before the clubs get stored away for the winter. With that in mind, there is still an opportunity to register to attend next Wednesday’s (Oct. 1) Industry Memorial Golf Classic at the Blue Springs Golf Club in Acton, Ontario. The Industry Memorial Golf Classic is held on behalf of the hardware and housewares industry and honours stalwarts from the industry who have passed away. CHHMA members and non-members are welcome to attend. The day allows family, friends and colleagues to honour these industry stalwarts while enjoying a fun day out on the golf course followed by a dinner and silent auction. Money raised from hole sponsorships and the silent auction will go towards the CHHMA Scholarship Program which provides support for children of CHHMA member company employees to attend university or college.  Read More >>  


CHHMA to Hold Information Session on Canadian Data Synchronization 
 
Data synchronization is rapidly becoming the product content solution of choice for retailers and distributors in Canada and globally. In Canada there are two current data synchronization options: GDSN (Global Data Synchronization Network) and  ECCnet (owned and operated by GS1 Canada).
    
Data synchronization enables a supplier to populate their product catalogue items into a standard data structure and as they add new items and update existing items the changes are automatically transmitted into the data recipient’s environment within 24 hours – this keeps them and their trading partners on the same page.

ECCnet is an older, Canada-only solution used primarily in the grocery, drug store and general merchandise channels. GDSN is broader in scope and is used globally.

Many vendors have been getting pressure from customers to comply with data synchronization. The CHHMA has been lobbying retailers to keep an open and competitive environment and not limit the marketplace to one exclusive service provider for data synchronization in Canada.

There has been a lot of confusion and misinformation about data synchronization and the inter-operability of various options, so the CHHMA will be conducting an information session on Thursday, October 30, 2014, Toronto Airport Area TBA to help clarify the situation.   Read More >>

Stewardship News
 
ÉEQ News: 2014 Company Reports Due by September 30th
 
This is a reminder for stewards from Éco Entreprises Québec (ÉEQ) that your company reports for the 2014 Schedule of Contributions are due by September 30, 2014. That is also the deadline for providing documentation to support your request for a credit for recycled content. In addition, your last instalment payment for the 2013 Schedule of Contributions is due this Friday, September 26. Interest charges will be applied after that date. 

ÉEQ has begun its review of the financing formula by meeting with government authorities, packaging manufacturers and European eco-organizations. ÉEQ held its first meeting with the Steering Committee made up of company representatives, and another will be held with the Association Committee in September. All contributing companies will be invited to a webinar to be announced this fall. Read More >> 


Industry News
 
La Coop fédérée Confirms Closure Date for Trois-Rivières DC   
  
La Coop fédérée confirmed on Tuesday that January 16, 2015, will be the closure date for its hardware and material distribution centre in Trois-Rivières. The plan to close the DC was first announced back in February of this year when the company said the time required to complete the closure was estimated at 12 to 15 months.

In a press release, the company said 60 employees have voluntarily left with severance pay and 130 employees still remain working at the facility. The release added that the involvement of La Coop fédérée in the hardware and construction material sectors is still a priority for its members and it intends to remain as a full player in its own right. The decision to close was guided by the strong competition in the retail trade sector, and by the fact that the hardware and renovation industry has been slowing down in recent years.

Last November, La Coop fédérée announced that it was acquiring a minority interest (20%) in Groupe BMR and it is expected that BMR’s warehouse operations will take over for the Coop DC that is closing.

Source: La Coop fédérée


Study Finds Basket of Goods Cheaper at Target Canada than Walmart
 
Target Canada has moved aggressively to lower prices in an attempt to gain some ground against Walmart in this country, a new study finds.  An identical basket of consumer goods cost 3.9% less at Target than at Walmart in August, according to the latest pricing study conducted last month by consultancy Kantar Retail of Boston.  The cuts suggest Target is willing to drop prices further than it did when it first entered Canada, when Kantar’s first survey in the spring of 2013 indicated basket prices between the two retailers were virtually identical in this market.  Read More >>


Data Breach Spurs Lawsuit on Behalf of Home Depot’s Canadian Customers     
A class action lawsuit has been launched last week on behalf of Canadian customers of Home Depot Inc. who may have had their credit and debit cards hacked. Saskatchewan lawyer Tony Merchant, a long-time class action activist, said he filed the claim against Home Depot on behalf of as many as four million Canadians who have been affected. Home Depot customers could get hit with financial losses and inconvenience, he said, and many will also suffer mental distress because of the worry over whether their personal data has been compromised.

The suit, first filed in the Court of Queen’s Bench for Saskatchewan, will also be filed in other jurisdictions and will cover all Canadian customers, Mr. Merchant said. The representative plaintiff is Martin Knuth, a Regina resident who regularly shops at Home Depot. His credit card was compromised “as a result of the Home Depot security breach,” the claim alleges.  Read More >>

'This is the End' for Sears, Says Credit Suisse 

Credit Suisse analyst Gary Balter last week became the latest retail expert to call for struggling department store Sears to liquidate.

In a note to investors, Balter, who has a $20 price target on the company, said recent events at Sears have him singing "This is the end," a nod to The Doors' song, "The End."  By Balter's calculations, keeping up Sears' operations is taking more than $10 a share of value from shareholders each year.

"Let's face facts. Sears is generating negative operating cash flow of between $1 billion and $2 billion [closer to upper end, it looks like] in 2014," Balter wrote. "Unless it sells off real assets while somehow maintaining the cash flow from those assets, this story is not likely to have a happy ending, and that ending continues to depend on suppliers."  Read More >>
 
Family Dollar Rejects Dollar General's $9.1-Billion Tender Offer
  
Family Dollar Stores again rejected last Wednesday a $9.1-billion takeover approach from Dollar General and urged shareholders not to tender their shares to the discount retailer’s bigger rival. The step, largely formal, prolongs a heated battle over the fate of one of the U.S.’s most prominent dollar stores. Dollar General is looking to derail an agreement that Family Dollar struck to sell itself to a small competitor, Dollar Tree, for $8.5-billion. 

In a news release, Family Dollar noted that Dollar General’s offer to buy shares directly from shareholders is a largely symbolic gesture, because it won’t actually purchase the shares unless the two companies reach an agreement. But Family Dollar reiterated that the offer remains problematic. Combining the two companies, it has consistently argued, would run afoul of antitrust regulators who would be displeased that two of the country’s biggest dollar stores would be combining.  Read More >>

Costco Canada Switches to MasterCard from AmEx
 
Costco Wholesale Corp. will switch to accepting MasterCard Inc. rather than American Express Co. credit cards in Canada next year after talks broke down between the U.S. retail giant and AmEx.  Capital One Financial Corp. will soon offer a new co-branded MasterCard for Costco members in this country, serving as both a credit card and a Costco membership card, the companies confirmed last Thursday.  Read More >>
 



Economic News
 
Canadian Retail Sales Fall for the First Time in Six Months
 
Following six consecutive monthly gains, retail sales paused in July, edging down 0.1% to $42.5 billion Statistics Canada reported on Tuesday. Sales declined in 5 of 11 subsectors, representing 55% of retail trade. Economists had expected a gain of 0.5%. In volume terms, retail sales were flat in July.  Compared to a year ago, retail sales are 5% higher.  Read More >>



Wholesale Sales Unexpectedly Drop by 0.3%
 
The value of Canadian wholesale sales in July unexpectedly dropped by 0.3% from June to $52.9 billion, pulled down in part by lower sales of agricultural supplies, Statistics Canada data indicated last Friday. Analysts expected a 0.6%rise in July after three consecutive month-on-month advances. In volume terms, sales fell by 0.6%. Declines in five sub sectors, which together represent 81% of wholesale sales, more than offset an increase in the motor vehicle and parts sub sector.    Read More >>

Inflation in Canada Holds Steady at 2.1%, But Core Rate Rises
 
Canadia's annual inflation rate was steady at 2.1% in August, but the closely-watched core rate unexpectedly jumped above the 2% threshold, Statistics Canada data showed last Friday. The overall rate was in line with analysts' expectations and marked the fourth straight month it has been above the Bank of Canada's 2% target. Statscan said the major driver for the year-on-year increase in the Consumer Price Index was higher shelter costs, which rose by 2.8% in August from a year earlier, compared to a 3% 12-month gain in July. The increase was led by a 17.9% surge in natural gas prices.   Read More >>

Rising Home Prices Cause Rude Awakening for Potential Buyers     
 (Article by Tara Perkins, The Globe and Mail)

Many Canadians shopping for a home are facing a sobering reality check; roughly 40% discover they’re going to have to fork over tens of thousands more than they originally planned. The phenomenon is most apparent in Toronto, where more than half (57%) of house-hunters say that they’ve realized they’re going to be spending more on a home than they planned once they started looking, according to a new survey conducted for Bank of Montreal. And not just a little more - something in the neighbourhood of $100,000.

But the trend also extends far beyond Canada’s most populous city, with a large proportion of buyers across the country experiencing a rude awakening. It speaks to the degree that prices have risen in recent years. Four-in-ten buyers nationally now expect they’ll spend more than they first wanted to.  Read More >>

Toronto and Vancouver’s Red-Hot Housing Markets Aren’t as ‘Insane’ as They Look, Says
CIBC’s Top Economist  (Article by Jonathan Ratner, The Financial Post)

In Toronto, calls for house prices to significantly fall are much like predictions for the Maple Leafs to win the Stanley Cup: They surface every year, but when the results don’t materialize, people are quick to say “wait until next year.” This analogy from CIBC World Markets chief economist Avery Shenfeld comes as research continues to suggest that some elements of the Canadian housing market are vulnerable to a correction.

New condo supply, fatigue among borrowers and the inevitability of higher mortgage rates are obvious catalysts for such a fall, but Mr. Shenfeld highlighted an important point that investors and homeowners seem to be overlooking: The vast majority of gains have come at the upper end of the price spectrum.  Read More >>

Canada’s Aging Population Expected to Head West       
 (Article by Tavia Grant, The Globe and Mail)

Canada’s population will shift dramatically in the next half century, becoming greyer, more diverse and more concentrated in the four Western provinces. A portrait of Canada in the next 50 years shows the country’s population could reach up to 63.5 million people by 2063 compared with 35.2 million last year, Statistics Canada projections show.   Read More >>
 
Latest U.S. Economic News
 
Sales of new U.S. single-family homes surged in August and hit their highest level in more than six years, offering confirmation that the housing recovery remains on course. The Commerce Department said on Wednesday sales jumped 18.0% to a seasonally adjusted annual rate of 504,000 units. That was the highest level since May, 2008, and marked the second straight month of gains.

U.S. home resales unexpectedly fell in August as investors stepped away from the market, but the decline probably does not signal renewed weakness in the housing sector. The National Association of Realtors (NAR) said on Monday that existing home sales dropped 1.8% to an annual rate of 5.05 million units. The decline followed four straight months of gains and the sales pace was still the second highest for the year.

A gauge designed to predict the U.S. economy’s future health rose in August but at a much slower pace than in July. The Conference Board said last Friday that its index of leading indicators rose 0.2% in August, the seventh successive increase. But that was much slower than the revised 1.1% gain in July.  Read More >>
 

 

 Upcoming CHHMA Events 


Industry Memorial Golf Classic
Wednesday, October 1, 2014
Blue Springs Golf Club, Acton, Ontario

Industry Cocktail
Thursday, December 11, 2014
Casino de Montreal, Montreal, Quebec

Canada Night
Held in Conjunction with the International Home+Housewares Show
Sunday, March 8, 2015
InterContinental Hotel, Chicago, Illinois

CHHMA Spring Conference & AGM
Wednesday, April 8, 2015
International Centre (Conference Facility), Mississauga, Ontario

CHHMA Maple Leaf Night
Held in Conjunction with the National Hardware Show
Tuesday, May 5, 2015
The Mirage Hotel & Casino, Las Vegas, Nevada

CHHMA Ontario Golf Tournament
Tuesday, May 26, 2015
Angus Glen Golf Club, Markham, Ontario

CHHMA Industry Calendar

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

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"Eye On Our Industry" is published by the CHHMA as an information resource for our members. Member input regarding content and format is welcomed. Please contact Michael Jorgenson by email: mjorgenson@chhma.ca, or call at (416) 282-0022, ext. 34. CHHMA is located at 1335 Morningside Ave., Suite 101, Scarborough, ON, M1B 5M4 www.chhma.ca

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