buckwheat2297 wrote:
This has been in the works for a long time. Hardware stores in Canada have undergone interesting transitions over the years.
ie: beaver lumber owned by Molsons, sold to Home Hardware;
- Aikenheads was also bought by Molsons, but was bought by home depot to gain entry to enter Cdn market;
- Lansing was bought by Rona to spread across Canada from PQ.
- Since Lowes came to Canada in 2007, it has been growing organically, and strategically, and clearly gobbling up marketshare in it's regions of presence. They recently opened up in Waterloo, and opened 3 stores in Calgary,
- who knows whats next.....Maybe Menards will start leasing Sears locations....
The point is, the history is a dynamic one, and invariably, it will continue. And like most people, we are loyal to physical store locations along with things that are shiny and new.
Ultimately, although we are seeing a housing boom in our direct area, there is a population in Cda growing at 1.5% and demand for home materials is relatively flat. The market can only sustain so much square footage of retail. WIth the entry of Lowes, and the re-vamping of home depot stores, the well established niche of home hardware across smaller communities (along with smaller footprints), Rona has been left in the dust, and is going to contract significantly.
Specifically to the Argentia/Winston Churchill location, it is a store that usually has 10 cars out front. It's highly visible from the highway, but the only way to get to it is through the parking lot of Wal-Mart, or 12 other stores. Further, I think they were expecting th enlarge parcel of land in behind to be developed... and it hasn't been.
Their MOVING SALE is also pathetic, and indicative of how they run their business on a regular day. The sales are small in magnitude, regular prices are often not listed beside discount amounts in flyers, sales incentives are often only based on useless air miles, and the promotions are poorly communicated. I went to that store looking for a hex bit set for my impact driver. they didn't have one. didn't carry one. the sales guy didn't know what I was talking about.
I like the milton location for convenience. they often take out small ads in the local Milton paper, and offer crazy door crashers. I give them that. In spite of this, if there is a heavy wind, this sheet metal store will likely blow over and end up on the GO tracks.
The article tells shareholders how their strategy will deliver them value; apparently if you want to see the future Rona format, visit the one in Georgetown.
Rona believes it's doing it right by closing stores
Big outlets to make way for smaller ones
RONA Inc. (TSX:RON) said Thursday it will close 10 big-box stores by the end of this year as the Quebec-based home improvement and gardening retailer tries to stop mounting losses and appeal to more consumers.
"We will redeploy the sales volume of 10 big-box stores to 25 stores," CEO Don Dutton said after Rona posted a fourth-quarter loss of more than $151 million, one of its biggest ever.
"We expect by the end of 2012 that the 10 big-box stores will be fully redeployed into new locations," Dutton told analysts during a conference call.
The announcement by Rona left it unclear how many net jobs might be affected by the closures, since it also plans to start opening 25 smaller stores focusing on more personalized customer service that are a short drive away.
But Rona said few job losses are expected because employees at the big-box stores slated to close will be offered positions at the 25 new stores, with the bulk of jobs providing full-time work.
"We're taking steps to relocate our people as much as possible and then we'll provide assistance to the others who cannot take the opportunity," Rona spokeswoman Michelle Laberge said.
"We think by the end of next year that our head count will be roughly the same at 30,000 employees," Laberge said in an interview.
Two smaller stores will open in a market where there's one big-box store that will close, Laberge said. There are about 190 employees at a Rona big-box store with about 60 per cent of these employees working part-time, she said.
The rollout of the 25 smaller stores includes retrofitting 13 big-box stores and making them smaller, Dutton said during the call.
"On average, this store will be 35,000 square feet. It will provide a more personalized service for customers and a higher return on investment for us," Dutton said.
Dutton said the smaller-store concept has been tested in locations such as Georgetown, Ont., and Granby, Que.
The new stores are expected to add $40 million in EBITDA (earnings before interest, taxes, depreciation and amortization) by 2014.
Rona's big-box stores are often cavernous and suited to contractors buying supplies and to do-it-yourself renovators and may not appeal to those with a more hands-off approach, including women.
Competitor Home Depot has revamped stores to appeal to more to women, often the key deciders in the look of renovation projects.
Meanwhile, Rona will also introduce a new website this spring it believes will be more appealing to consumers.
"Our research indicates that proximity continues to be the most important factor considered by consumers when they're selecting a store to shop at," Dutton said.
"We want consumers to be from one click to 10 minutes away from a Rona store."
Retail analyst Ed Strapagiel said stores are closed when they're not making money and Rona is adjusting its operations to the environment it's facing, noting there's a market for smaller stores.
"As the population gets older there are more people around who would rather hire somebody to do it as opposed to doing it themselves," said Strapagiel, executive vice-president of Kubasprimedia in Toronto.
In its financial results, Rona said its fourth-quarter loss compared with a profit of about $20 million a year earlier.
Rona said its quarterly sales rose 2.6 per cent to $1.17 billion, though same-store sales dropped as the company dealt with poor weather, tough competition from other retailers and a slowing economy.
Sad to see Rona having trouble, but they brought it upon themselves in many ways. You are absolutely right when it comes to nobody having a clue about products or building techniques at Rona. For years I have only been able to find a few competent people at the stores in Mississauga and the GTA. Most of the employees know next to nothing and give really bad advice. As for the whole strategy of more initimate stores, does that mean that the Milton style is now favoured? how hilarious is that! Good luck with that one guys!!
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