HHIQ_2Q_17_Complete-low

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QUARTERLY BUSINESS CONDITIONS FOURTH QUARTER 2016 I n our latest survey of dealers and suppliers, the outlook for the year ahead has remained consistently positive after a year of increased business across the board. After a winter of wild temperature swings and heavy snowfall in both the West and Atlantic Canada, both retailers and vendors reported that they expect sales to increase over the next 12 months. Part of their plan to help their businesses grow includes offering new products and/or services in 2017. The top issues right now for retailers are staffing, training, and decreasing margins, while vendors are concerned about the exchange rate with the U.S. dollar, higher raw material and shipping costs, and retail consolidation. How did your business compare with the same time last year? Do you expect your sales to increase over the next 12 months? 21.1% SAME 27.3% DOWN RETAILERS 51.6% UP 23.1% DOWN 11.5% SAME VENDORS 65.4% UP 33.9% UNSURE RETAILERS 17.8% NO 48.3% YES 4.0% 4.0% NO UNSURE VENDORS 92.0% YES The percentage of retailers experiencing better sales than last year has dropped down from 63.6 percent to 51.6 percent in Q4 2016. The percentage of vendors experiencing better sales than the same time last year was up more than nine percentage points from Q4 2015, when 56.0 percent of vendors reported increased sales. Retailers’ outlook for the year ahead has remained positive; the percentage of retailers expecting increased sales remained virtually flat, while the number of retailers expecting decreased sales went down more than 13 percentage points from 31.5 percent in Q4 2015. Vendors are extremely optimistic about the coming year. Year over year, the percentage of vendors predicting increased sales has gone up compared to Q4 2015’s 68.0 percent. And the number of those predicting decreased sales is down to four percent from eight percent in Q4 2015. Did your conversion rate increase in Q4 2016? Compared to 2015, are your sales per customer up? Did you receive more orders in Q4 2016 than in Q4 2015? In 2016, how did your business compare with 2015? 40.0% EQUAL RETAILERS 46.7% INCREASED 26.7% NO RETAILERS 15.4% NO 15.4% SAME VENDORS 12.0% NO 8.0% UNSURE VENDORS 13.3% DECREASED 73.3% YES 69.2% YES 80.0% YES The percentage of retailers who experienced an increased conversion rate compared to Q4 2015 remained consistent with that quarter’s 42.3 percent. The number of retailers experiencing more sales per customer has increased more than 10 percentage points from 62.9 percent in 2015. Year over year, the number of vendors that received more orders in Q4 2016 compared to Q4 2015 increased more than 10 percentage points, from 54.2 percent that quarter. Year over year in Q4 2016, the number of vendors who experienced better sales went up 12 percentage points compared to Q4 2015, when 68.0 percent of vendors experienced more sales. 10 SECOND QUARTER / 2017 Hardlines Home Improvement Quarterly www.hardlines.ca
FOURTH QUARTER 2016 BUSINESS CONDITIONS RETAILERS: Top issues in fourth quarter 1. Staffing 2. Training Did you offer new products/services in Q4 to better compete? Did you offer more products in Q4 to better compete? 3. Decreasing margins 4. Increased competition 5. Succession RETAILERS 64.3% NO 35.7% YES 40.0% NO VENDORS 60.0% YES 5. Customer retention 5. E-commerce challenges 8. Adding new services 8. Exchange rate with U.S. dollar 10. Supplier consolidation Year over year, the percentage of retailers offering new products and/or services to better compete was down significantly from 55.6 percent in Q4 2015. Source: HARDLINES Quarterly Business Conditions Survey Looking back at 2016, the percentage of vendors that offered more products to better compete went up from 50.0 percent in Q4 2015, increasing 10 percentage points. 10. Expanding products 10. Increased presence of U.S. retailers 13. Cross-border shopping 14. Mortgage interest rates VENDORS: Top issues in fourth quarter 1. Exchange rate with U.S. dollar 2. Higher raw material/shipping costs 3. Retail consolidation 4. Competition from Asian sourcing 5. Increased retailer demands 6. Housing market 6. E-commerce challenges 8. In-store merchandising and replenishment 9. Increased presence of U.S. retailers Bricks and Clicks November 14-15, 2017 Sheraton on the Falls Niagara Falls, ON www.hardlinesconference.ca 10. Cross-border shopping www.hardlines.ca Hardlines Home Improvement Quarterly SECOND QUARTER / 2017 11
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