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Commerce Department: sales fell for building materials, furnishings

BY HBSDEALER Staff

Retail sales in March rose 0.2 percent month-over-month, buoyed by strong sales at gas stations. But building materials and other related markets saw a drop in sales last month.

According to the Commerce Department report, sales of building materials fell 1.6 percent, and sales of home furnishings fell 0.3 percent. General retail stores, like Wal-Mart and Target, saw a combined 0.6 decline in March.

But year-over-year, overall retail sales increased 2 percent, again buoyed by higher gas prices. Building materials and home furnishings took the biggest hit when compared with last year, falling 6.9 percent and 7.1 percent respectively.

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‘Pinnacle Conference’ held in Boston

BY HBSDEALER Staff

Boston The theme for the Pinnacle Conference was winning — specifically, “Winning city. Winning conference. Winning team.” While technology and efficiency were the major topics at the Activant users group meeting held here, there was also a good amount of old-fashioned money-saving business strategies.

More than 750 attendees from pro dealers, hardware stores and home centers took part in the three-day conference. That number “demonstrates the commitment of this marketplace to the future,” said Steve Bieszczat, senior vp and general manger of Activant’s hardlines and lumber divisions, during the opening session. While he pointed to softness for pro dealers, he described the hardware and home center businesses as holding steady.

“On the LBM side, people are looking to get greater automation and efficiencies and less dependency on adding head count,” Bieszczat said. “In hardware and home center, what you see is an inordinate amount of demand for all things retail — having the same kind of POS as some of the more innovative chains and those taking customer relationships to a new level.”

Some of the educational sessions accentuated some positive news from the housing industry: specifically, the growing population. Household growth from 2005 to 2014, according to Harvard’s Joint Center for Housing Studies, should exceed by 2 million the growth of housing during the boom years 1995 to 2004.

Still, the conference spoke to the difficult market partly through a session titled, “Customer success strategies for succeeding in today’s market.” The session pointed to a number of tactics companies can employ right now to optimize operations during tough times.

In addition to limiting hours and reducing head count, the ideas brought forth included implementing more aggressive measures in accounts receivable, raising deductibles for health insurance plans, using bank issued payment cards that offer rebates and even replacing company e-mail systems with free Google e-mail.

“If it doesn’t add value, quit doing it,” said Johan van Tilburg, president and CEO of Knoxville, Tenn.-based Tindell’s Building Materials.

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NAHB economist breaks out the ‘R’ word

BY HBSDEALER Staff

The National Association of Home Builders (NAHB) chief economist said the economy is in a “mild recession,” the result of the deepening slump in the housing markets that “seriously eroded” consumer sentiment.

“The worse-than-anticipated housing downturn, combined with systematic weakening of the labor market and rapidly rising energy and food prices, has taken a heavy toll on American consumers,” said NAHB’s David Seiders. “It’s now clear that we have entered what we anticipate will be a mild recession, running through the first half of this year, and there are substantial downside risks to this economic scenario.”

The NAHB, which has a track record of generally optimistic forecasts, downwardly revised its official housing forecast to a 30 percent decline in housing starts for 2008, instead of the previously forecast decline of 27 percent down.

The NAHB is lobbying for immediate steps that it says will guard against a longer and deeper downturn. The recommendations target the housing market, such as a temporary home buyer tax credit, modernization of the Federal Housing Administration and oversight reform for the housing-related government sponsored enterprises.

“Stopping the downward trend in housing prices is key to bolstering consumer confidence as well as mortgage credit quality, and a temporary home buyer tax credit is the best way to do that,” he noted.

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