HHIQ 2Q 2016
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FOURTH QUARTER 2015<br />
BUSINESS CONDITIONS<br />
Did you offer new products/services in Q4 to better compete?<br />
RETAILERS:<br />
Top issues in fourth quarter<br />
1. Staffing<br />
44.4%<br />
NO<br />
RETAILERS 55.6%<br />
YES<br />
50.0%<br />
NO<br />
VENDORS 50.0%<br />
YES<br />
2. Exchange rate with U.S. dollar<br />
3. Customer retention<br />
4. Training<br />
5. Expanding products<br />
Year over year, the percentage of retailers offering<br />
new products and/or services to better compete<br />
was down slightly from 57.4 percent in Q4 2014.<br />
Year over year, the number of vendors that<br />
offered new products in 2015 was down<br />
18 percentage points from 68.4 in 2014.<br />
5. Decreasing margins<br />
7. Increased competition<br />
8. Succession<br />
Compared to 2014, is your<br />
average basket size up?<br />
Compared to 2014, are your<br />
sales per customer up?<br />
9. Adding new services<br />
9. E-commerce challenges<br />
24.1%<br />
UNSURE<br />
RETAILERS 51.8%<br />
YES<br />
24.1%<br />
NO<br />
Slightly more than half of the retailers polled reported<br />
an increase in the number of items sold per transaction<br />
compared to the year before, which may indicate more<br />
successful merchandising and upselling from floor staff.<br />
Did your conversion rate increase<br />
in Q4 2015 compared to Q4 2014?<br />
11.5%<br />
DECREASED<br />
42.3%<br />
INCREASED<br />
RETAILERS 46.2%<br />
EQUAL<br />
In Q4 2015, 34.3 percent of retailers<br />
reported their conversion rates were up<br />
for the quarter compared to Q4 2014,<br />
but most retailers were flat.<br />
27.8%<br />
NO<br />
9.3%<br />
UNSURE<br />
RETAILERS<br />
62.9%<br />
YES<br />
In addition to an increased basket<br />
size, two-thirds of retailers are reporting<br />
that customers are spending more<br />
per transaction.<br />
Did you receive more orders<br />
in Q4 2015 than in Q4 2014?<br />
41.7%<br />
NO<br />
4.1%<br />
UNSURE<br />
VENDORS 54.2%<br />
YES<br />
Vendors observed a drop in orders in Q4 2015,<br />
compared to the same period the year before,<br />
when only 27.9 percent reported a decrease<br />
in orders from the year before.<br />
11. Supplier consolidation<br />
12.<br />
The increased presence<br />
of U.S. retailers<br />
13. Mortgage interest rates<br />
14. Cross-border shopping<br />
VENDORS:<br />
Top issues in fourth quarter<br />
1. Exchange rate with U.S. dollar<br />
2. Increased retailer demands<br />
3.<br />
Higher raw material/<br />
shipping costs<br />
4. Retail consolidation<br />
5.<br />
Competition from<br />
Asian sourcing<br />
6. Housing market<br />
7.<br />
In-store merchandising<br />
and replenishment<br />
8. E-commerce challenges<br />
9. Cross-border shopping<br />
10.<br />
The increased presence<br />
of U.S. retailers<br />
Source: HARDLINES Quarterly Business Conditions Survey<br />
www.hardlines.ca Hardlines Home Improvement Quarterly SECOND QUARTER / <strong>2016</strong> 9
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