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Real Estate and Business

Lowe's Closing of 34 Stores in Canada and What They Should Do

It is no surprise to me that Lowe’s is closing 34 stores across Canada. This morning Lowe’s reported Third Quarter sales and earning results in which it announced it will be closing 34 stores. You can get into the financial symptoms of why the decision is being made, but I’m going to jump to the fundamental source of why those stores have done poorly and what could have been done better.

Background

The financial statements are a result of decisions and plans that were created and implemented from years ago when the Lowe’s acquired RONA. Combined, Lowe’s now had 539 stores. That’s almost three times more than Home Depot’s 182 Canadian stores.  In a news release dated May 20, 2016, Lowe’s highlighted previously stated commitments as part of its acquisition of RONA, including:

  • headquartering the Canadian businesses in Boucherville, Quebec;
  • maintaining RONA’s multiple retail store banners;
  • enhancing distribution services to dealer owners;
  • continuing RONA’s employment of the vast majority of its current employees and maintaining key executives from RONA’s strong leadership team;
  • continuing RONA’s local and ethical procurement strategy and potentially expanding relationships both Lowe’s and RONA have developed with Canadian manufacturers and suppliers; and
  • continuing to support Canadian communities through RONA and Lowe’s charitable and environmental initiatives.

Analysis of Lowe’s Operations

From my perspective a a business consultant with expertise in locating operations, commercial realtor, residential property manager and homeowner, I have much more to share about Lowe’s than I’m going to publish in this post. Overall, I’m grateful for Lowe’s and RONA and would shop there more often if the stores were better located or if the online ordering process was better. However, I can share the generalities of what I’ve seen of Lowe’s and examples from others experiences:

  1. Lowe’s Distribution Network – instances where online orders take up to 2 weeks for delivery, distribution centres not knowing what store to ship to, re-routing of shipments,  product sent to stores that aren’t closest to the destination. All these result in greater operating costs and damage to reputation among frequent purchasers of hardware items. Here are some examples of these consequences: Nov. 2, 2019, Nov. 13, 2019Nov. 18, 2019,
  2. Product Offering – products in stores often don’t match the demand for those products in that area. This indicates that whoever is doing the ordering for those stores isn’t in touch with the local market.
  3. Retail Locations – great discrepancy in success of different locations. Some locations are inconvenient to get too. Some pulling areas are concentrated, while others are too distant.
  4. Corporate Decisions – Lowe’s decided to have their headquarters in Montreal rather than the economic headquarters of Canada and where there is the greatest economy for renovations and construction. This also impacted the ability to attract top management talent and operating efficiencies. The preservation of retail banners also impacted the ability to leverage marketing and consumer behaviour.

Of course, significantly impacting the situation is the prolonged devastation to the Albertan economy from the collapse of oil prices. Reflecting this is Lowe’s higher per capita closure of stores in Alberta compared to other provinces. Further impacting the situation is the economic circumstances in other provinces. Had Lowe’s considered the cyclical nature of the Albertan oil-based economy and looked at the situation with the Tar Sands projects and price of oil, they would have acted more quickly. The question in my mind is who was responsible for looking at such significant considerations and why didn’t they hire someone like me to help with the research and analysis?

Here’s What I Would Do If I Were Running Lowe’s

  1. Take a more rational and efficient approach to distribution and logistics. With increasing trend to online purchases, improved online ordering and processing systems. This includes the integration of AI into marketing programs. Rather than push out discount notices to the buyers, use phone apps and client data to recommend purchases and locations in real-time. Many property managers, trades people and realtors, who account for much of hardware store sales. They are frequent and volume buyers who in many cases purchase on a daily basis and must do so in between meetings and tasks. Integration of AI into real-time marketing and co-ordination with supply-chain and logistics will not only provide competitive advantage directly with consumers, but also create powerful operating efficiencies. Improve on product handling and delivery!
  2. Get to know the customers better, especially by buyer types, but also by local community. Having the right product in the right place is the KEY to any retail success. Online buying is one thing, but if I’m dealing with a leaking faucet or flooded basement and I need to get some supplies right away, I just can’t wait for next day (or longer). I’m also willing to pay extra for those products at that time. Some neighbourhoods are more prone to flooding or icing in certain  months. Make sure that the store managers and purchasing managers are aware of these trends. Also, make sure the distribution system can act quickly so that it can have the product in the store when its needed. For example last year there was a major icy snow storm and for two weeks de-icing salt for pavement was completely sold out across the GTA. I, and others, would have gladly paid double the price to have a supply available. There isn’t any reason why supplies or inventory couldn’t have been re-routed to have product in store the next day. Once in store, I would likely pick up other items that I may need, like a new pair of work gloves, windshield wiper fluid, etc. These are items I’m picking up anyway from whatever store I’m in.
  3. Hire an expert to help with locating stores. Locational Analysis is a necessity that U.S. retailers entering the Canadian Market either fail to conduct or don’t have the expertise to properly undertake. This is painful for me, someone trained in urban economics with experience in locating operations, to see. Yet, by  hiring someone like me to conduct this work, it will make the difference between failure or success to foreign retailers in Canada. Retail Locations are the  most important for most end-use consumers. When I’m picking up a new wire for my weed-wacker which ran out in the middle of trimming my lawn or oil for my motorcycle, I’m going to want to go to the nearest retailer. Also, trades people don’t like to go out of their way when picking up supplies, so they tend to go to locations near highway entry points. Many trades will pick up items in the morning on their way to different jobs. So, locate stores where these trades people tend to live. I know neighbourhoods that are heavily populated with trades people who would do just that, but with no hardware store nearby.
  4. Always make corporate decisions based on ability to best identify and service customers, followed by operating competency and competitive advantage, and finally with an eye on operating efficiencies and profitability. Make sure it’s all in that order because each one relies on the previous consideration. Of course to have the right expertise with knowledge of key markets, like the Greater Toronto Area, requires you to hire someone in that market or with extensive experience in that market.

How Can I Help?

When Wal-Mart bought out the Woolco Stores, I worked with Bank of Montreal to analyse the impact it would have on the remaining Canadian retailers from their sales and operations to their financial performance. In a matter of weeks I had dissection and analyzed the impact on every major retailer across Canada and translated that into the impact on their financial performance. How I did this is for another much more detailed post.

In short, I analyzed every single retail outlet of every major retail chain which included: 1) consumer threshold, 2) product-mix overlap, 3) local pricing sensitivity, 4) psychological and geographical traffic boundaries, 5) traffic flows and much more. Then I cross indexed the information and translated it into the financial performance. Finally I conglomerated the data by retail chain to product financial projections for each one. The report went up to the Bank of Montreal Board of Directors and the information was then used to dictate risk appetite and credit exposure among the major retailers.

As part of my analysis, I drew two powerful conclusions, one of which was contrary to what Bank Executives were expecting at the time. If it were not for that analysis, the bank would have made different decisions, created different lending policies, which would have significantly affected Canadian retailers and their employees.

What Should You Do Before You Locate or Acquire a Location in Canada?

Contact me to have someone on your side who can help with every aspect of what needs to be done. But, most importantly, who can get you the right information, with proper analysis and solutions so you can make the best decisions for your business success!

My Starbucks Community

The saying ‘What goes around comes around’ showed itself to be true at Starbucks. Last week, I dropped into my regular Starbucks location for lunch and work on a file. As I’m sitting down, my attention is drawn to a young south Asian man. He seems drunk as he lowers his pants and lifts his shirt while repeating ‘stomach empty, hungry’.

It appeared that the Starbucks customers were getting disturbed and didn’t know how to deal with this man approaching them. I mentioned it to Starbucks staff who seemed to be taken aback and also weren’t sure how to handle the situation. To manage the situation before it escalated, I approached the man and asked, “How you doing?”.

Stomach Empty, Hungry

The young man’s reply was the same line ‘stomach empty, hungry’. I straight out asked him, if he had been drinking, to which his reply was the same as before. I pulled out some money, looked at him in the eye and said ‘take this and buy yourself lunch across the parking lot. Make sure you take care of yourself.’ He was very grateful and kept thanking me. I repeated, ‘Just take care of yourself. Go. Go take care of yourself’. I had to repeat it a couple of times.

As he was leaving, I realized that I had seen that man around the neighbourhood before. In fact, a few years ago, I had given him some money to help me with some handy work on a property.

The Community We Build

I had forgotten about the whole incident. Then, yesterday, I found myself at the same Starbucks. As I’m ordering my sandwich, the supervisor, Bonny comes over. Calling me by my first name she says, “I want to thank you for what you did last week. The manager was here and we saw the whole thing.”. At first I didn’t realize what she was talking about.

Then she reminded me about the incident. I wasn’t expecting her to say, “You handled that situation really well for us. Richard (the manager), didn’t think you should have to buy him lunch, so he wanted me to give you a free lunch and drink”.  I may not be getting every word exact, but it is basically what she said and she went on to explain how it made a big difference to the other customers.

It left me speechless. Not only hadn’t I realized that anyone really noticed, but that it would affect anyone beyond the hungry young man. All I could say was “thank you, but you don’t have to pay for my lunch”. Bonny wouldn’t have it any other way and insisted that the lunch was on Starbucks.

 

We Are A Community

That’s when I realized the extend to which Starbucks is wanting to build a community, an environment of support, in which customers can come and feel that Italian ‘piazza’ atmosphere. A place where you can feel free to talk about anything and build relationships with others that may rely on Starbucks for their morning jolt, snack, temporary office station, meeting point or just to get out of the home or office.

Over the last day, I’ve thought about all the friends and business acquaintances I’ve met at Starbucks. Some I’ve done business with, others I’ve exchanged wisdom. They’ve included aspiring authors, film producers, e-commerce entrepreneurs, students, teachers, crypto-currency traders, business owners, and many more that don’t come to mind right now.

It is up to you and I to build our community or communities and we need to be engaged and pro-active to make it happen.

Starbucks:

It happened at Starbucks
Where the hungry young man stood

A Glass of Water in The Dessert

One of the lessons I’ve learned in life is that you can give a glass of water to two different people and the impact can be totally different between the two. Give a man in a river a glass of water and he wouldn’t appreciate it. However, give a man in the desert a glass of water and he will remember it for life. It may have saved his life.

The glass of water is an analogy for needs that those around us may have. That young man in the Starbucks had a need for lunch because he was hungry. To him it was the most important thing, something he needed to go on. To everyone else, perhaps it would have been unneeded calories.

For the Starbucks staff, my gesture was needed because they may not have been equipped to handle the situation without escalation and potentially bad publicity. For that they were greatly appreciated.

And for me… my glass of water was being recognized by name and acknowledged for making a difference to others. You see, I needed that this week, perhaps as much as that young man  needed his lunch. We all have a tough time when we question the things we do and the value we add to others. Sometimes, getting acknowledge is our glass of water in the desert. Remember that today, look around you, and ask yourself who needs a glass of water!

That is the main reason why I’m sharing this with you. Another reason is that as important as this sort of thing is, the main street media will not likely mention it. At a time when our attention is being diverted to political mud-slinging, scandals, shootings and other discouraging activities, we need to see more of these unspoken acts.

Thank You Starbucks Community

I thank Bonny, Richard and the wonderful staff at the Kennedy Commons Starbucks (in Agincourt) for their service, support and importantly their glass of water in the desert.

 

 

#CBC #GLOBALNEWS #GLOBALNEWSTO #CITYTV #AM640 #CP24 #TORONTOSUN

Ontario Electricity Costs Increase 55% Effective November 1st

New Toronto Hydro Rates effective November 1st, 2019

On November 1st, 2019, Toronto Hydro sent out an email  advising that the Ontario Energy Board announced new rates for electricity costs, effective same day. The astronomical increase is familiar to hyper-inflation symptoms found in third-world countries going to economic crisis.

More disturbing is the lack of coverage by main stream media about this significant increase in electricity costs. This will have a potentially severe impact on some residents, such as the elderly on pensions.

Homeowners and tenants that pay their own utilities, will be surprised when they receive their next bill. No doubt Toronto Hydro will be receiving a lot of phone calls from across the city.

If you find yourself in a situation where you won’t be able to pay the higher electricity costs, there are a number of programs that could help you deal with the situation. Check out other programs as well that you may qualify for to help with your monthly bills.

Ontario Energy Board Offers Two Programs to Assist With Skyrocketing Electricity Bills

Ontario Electricity Support Program

The Ontario Electricity Support Program (OESP) provides monthly on-bill credits for lower-income customers to reduce their electricity costs. Details

Low-Income Energy Assistance Program

“If you’re behind on your electricity or natural gas bill and face having your service disconnected, you may qualify for emergency financial help through the Low-income Energy Assistance Program (LEAP). There are also special customer service rules available for low-income households. You need to meet certain criteria to qualify for these programs, and must go through one of the intake agencies in Ontario listed below.” Details

Other Programs and Resources

Visit the links section for other programs, incentives, subsidies and tools.

Are you aware of other programs?… please enter a link in the comment section below so I can add them to the list.

Big City Versus Small Town Living

The Big City Versus Small Town Living Decision

Once in a while a client comes along who is struggling with making a choice between big city life and country living. Let me start by saying that not every big city is the same and just because one may suit you, it doesn’t mean others will. The same can be said for small towns. In other words, it is a matter of suitability to your personal preferences and lifestyle.

Green Acres is the Life for Me - Big City versus Small Town Living
Courtesy TVGuide.com

If you are faced with deciding between big city life or small town living, I encourage you to consider a couple of things. Firstly, it takes a while to get to know a big city, such as Toronto and to establish a routine. As a student of urban planning and real estate broker, I can tell you that Toronto has more options to offer for all types of lifestyles than any other city I have visited inside or outside Canada. If you want a laid back lifestyle without crowds, Toronto can provide that. There are some very low density neighbourhoods with lots of green space where a large portion of the pockets have lived there for 30 years or more.

In regards, to Ottawa (Canada’s Capital), It is a city that some people can live in comfortably, but it is certainly not a city I would find interesting, to put it politely. The city is full of politicians, bureaucrats, academics and consultants. Though I do really appreciate the Rideau Canal, especially during winter skating season.

Niagara-on-the-lake provides a very good laid back lifestyle while being accessible to several large cities and the best of both worlds.

Why people Live In Big Cities

I myself, was born in a smaller town in Southern Italy, which is as grass-roots and community-centric as you can get. In fact, to this day it is mostly an agrarian community with a tourism component because it is on the mediterranean ocean. In fact, when I go back to vacation and I have for as much as 2 months at a time, I have enjoyed it immensely. However, I could not stay any longer because of what I was not able to have while there. The high-speed internet, access to social networks of world experts in every field, free medical care, cheap and readily accessible public transportation, etc.

Don’t get me wrong, I like the small community feel and that is why I vacation in non-urban communities. Fortunately, I have been able to find the small community lifestyle within Toronto by making specific life-choices, such as which neighbourhood to live in, which activities to pursue and groups to join.

What Your Giving Up In Small Towns

Here is more to add to the list of what you’re giving up when you choose small town living:
– world class doctors able to give you the best treatment and possibly save your life in different medical situations
– the highest paying jobs
– the largest pool of jobs
– the largest selection of restaurants representing every culture of the world
– sizeable ethnic communities representing every group in the world
– public transit
– huge selection of community centres and resource centres
– thousands of street and inside festivals
– world scale concerts, performances, trade and consumer shows
– police force equipped to help you in any situation
– large selection of educational institutions (and courses) Toronto has more of these than any other city in Canada and possibly the U.S. (when you consider all the private schools, which explains the tremendous number of foreign students); University of Toronto, York University (where the world renowned Schulich School of Business is based), Ryerson University, Seneca College, Centennial College, George Brown College, and the list just keeps going.
– large selection of shops and the latest in fashion, gadgets and more
– being able to find something to eat within 5 minutes
– huge competition among grocery chains and independent grocers offering great pricing and quality of product
– quick emergency services response
– being able to find something to do 24 hours a day

Conclusion

These are things that are important to many people, but not to all people. In fact, there are lots of people that move out of the large cities. Many of my clients are corporate executives looking to retire and they’re buying country homes in preparation for a move down the road. There are three communities that they seem to be attracted to post-Toronto. However, these people have already made their money, raised their children and used the ‘big city’ for what they needed. Now they are kicking back, doing their fishing, gardening, travelling. Yet, they seem to come back to the city when it is time for health care.

5 Things You Can Do To Drastically Increase Your Home Security

Those that have experienced home invasions, break-ins or robberies know all too well the tremendous emotional and financial impact it can have on your life. Though you can get insurance for the value of your belongings, you can’t replace their sentimental value. Even more significant is the impact it can have on your sense of personal security and privacy. The thought of a criminal going through your personal belongings, knowing they were going trough your bedroom, diaries, and who knows what else can leave you feeling extremely vulnerable.

In most cases, a homeowner can prevent burglary with some common sense measures. Some of these measures are so simple, yet surprisingly, most people don’t bother. Hence, the increasing degree of home burglaries.

5 Things You Can Do To Increase Your Home Security

1. Visibility – Keeping your doors and windows visible to neighbours

It has always been known that most criminals do not want to be seen breaking and entering into a home. However, in recent years, burglars have become more brazen with daytime break-ins. Often they’ll call a home or knock on the door and if there is no answer, they’ll assume no one is home. That’s when they’ll break-in. Even then, they don’t want to be seen by nosy neighbours.

Homes that have enclosed veranda’s, tall hedges and other ornaments that block view of the doors and windows from neighbours are preferred targets for burglars.  So, trim down or better yet remove shrubbery, trees and other items blocking your windows and doors.

2.  Lighting – Keep it lit brightly

Bright LED lights around the outside of your home are a strong deterrent for burglars. Even better are LED lights with motion sensors, because then it catches your attention and the attention of neighbours when a light comes on unexpectedly. Use several lights in a tiered field approach. For example, near the home the LEDs stay on and then at certain access points or perimeters of the property used LED lights with motion sensors. That way the burglars know everything is well lit and in case they still try to approach they’re surprised by the unexpected extra LEDs turning on.

3. Reinforced Doors Specifically Designed for Home Security

Sometimes burglars will stake out your home for days, recording your patterns and those of neighbours before breaking in. In that situation, the lights and visibility will not work. Then you have to go to the second stage of defense with hardware. Heavy duty metal doors or Doors reinforced with metal are much more difficult to break into than most popular doors. By the time a burglar breaks through one of these doors, the whole neighbourhood would have heard the commotion. They’re more expensive but when you’re facing the possibility of an armed intruder or burglar, you’ll wish you had installed them. Just remember that you also have to get the reinforced door frame, otherwise the door won’t hold.

4. Heavy Duty Locks & Bolts Specifically Designed for Home Security

The quickest and easiest way to increase your security is by upgrading your entry door locks and bolts. In the past lock companies focused on avoiding being picked open, now with burglars simply kicking doors open, they seem to be focused more on the mechanical engineering. Look for things liked thicker and longer bolts that lock into the frame, larger and longer screws that secure the both receptacle into the frame, expanded metal plates for the frame and wrap-around and extended metal braces for the door itself.

Then there are the traditional deadbolts which are well-used in cities like New York and which seemed to have been more used in Toronto’s days past. However, they are effective, especially when used with reinforced frames and doors. These will make it harder to kick in the door without having to replace the whole door.

5. Home Security Cameras

Over the last few years the design of security cameras has significantly improved with increased sharpness, night vision and even internet access. You can get them in wired or wireless format. The price has dropped significantly over the last 3 years and you can now get a complete 4 camera with internet connectivity for as little as $300 Canadian. Some of these cameras allow you to identify zones on your property which if movement is detected it’ll set off the alarm, email, text you or all three. You can then check out the cameras’ live feed through your mobile app or even search past video footage.

These security cameras may not stop every break-in, but it will deter some of them and even help police in catching the burglars and perhaps recovering your property. It also helps with your insurance claim and may even help lower your insurance premiums.

The sooner you start implementing these measures, the sooner you’ll have greater home security and piece of mind. Stay safe in your home sweet home and sleep well at night.

#homesecurity #homesafety #antitheft #theftdeterrent