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Market Recap: RISI Crow’s Construction Materials Cost Index

BY HBSDEALER Staff

 

A price index of lumber and panels used in actual construction for June 1, 2012

*Western – regional species perimeter foundation; Southern – regional species slab construction.

Crow’s Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.   

Lumber: Modest trading levels in the SPF lumber market had little influence on dimension lumber prices. Most prices were sticky, able to hold onto previous levels or edge slightly higher where availability was tight. Trading in the Southern Pine lumber market slowed to a snail’s pace, prompting attempts by some producers to get out ahead of the market. Most producers tried to sell #2 at $10 to $15 discounts, which usually garnered orders consisting of mixes and highly specified tallies. Light trading in the Coastal species lumber market and the need for some mills to move volumes created some minor discounts, but prices for both dry and green dimensions were flat overall. Activity in the Inland species lumber market was quieter during the shortened holiday week. Mill order files were out to the week of June 18 on some items. Buyers looking for quicker shipments turned to wholesalers and reloads, with mixed success. Eastern White Pine producers remained selective in taking new business while shipping existing orders. Sales improved for ESLP #2&Btr and #3, while #4 remained a tough sale. Producers of Ponderosa Pine Selects and Commons reported a steady but uninspiring pace to the market. Although buyers purchased selectively, mills did not feel much pressure to lower prices on most items. Moulding and Shop buyers found Ponderosa Pine producers a little more receptive to their needs after the long weekend. Buyers were able to cover their needs for Radiata Pine Mldg&Btr but had to pay a bit more to do so. Sales volumes in the Western Red Cedar market remained relatively strong, but producers did not find it easy to achieve higher prices. Rising log costs and the inability for some producers to achieve higher prices generated some frustration.

Panels: OSB mills carried order files into the week of June 18, which kept producers in the driver’s seat. Prices continued to increase. Distributors reported good sales volumes to dealers. Limited sales activity and eroding order files prompted some Southern Pine plywood producers to negotiate. Distributors and wholesalers participated at the lower prices. Solid and somewhat sporadic demand prompted Western Fir plywood producers to raise prices. Demand out of Canada for CCX volumes was strong. Lean inventories in the distribution chain forced other buyers back into the market. The Canadian plywood market maintained strength and momentum through another week. The market does have a two-tier look about it, but delivery time rather than price is the difference. Particleboard sales were not as robust as in prior weeks. Some of this was blamed on buyers easing back into their offices after the long holiday weekend. MDF order files remained strong.

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UL warns of counterfeit mark

BY Brae Canlen

UL, the independent, not-for-profit product safety certification organization, has issued a warning to consumers and retailers that certain SKUs of Silicone Rescue Tape manufactured and distributed by Harbor Products bear a counterfeit UL Mark for the United States on the product’s clamshell packaging. The Silicone Rescue Tape has not been evaluated by UL and is not authorized to bear the UL Mark. It is unknown if this Silicone Rescue Tape complies with UL’s safety requirements.

The product, which is used for emergency repairs on plumbing, hoses and electrical wires, was sold on Amazon.com and through Ace Hardware. It is packaged in yellow and orange clamshell with various colored tape (blue, red, yellow, black and white). The packaging is provided with the counterfeit UL Mark and carries the following wording:

Silicone Rescue Tape Stretch Wrap and Get Rescued 950 PSI Tensile Strength Resists 500 degrees F (260 degrees C) Insulates 8,000 Volts

UL evaluates more than 19,000 types of products, components, materials and systems annually with 21 billion UL Marks appearing on 71,000 manufacturers’ products each year. UL’s worldwide family of companies and network of service providers includes 66 laboratory, testing and certification facilities serving customers in 104 countries.

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Talking points

BY HBSDEALER Staff

Frank Filmeck, president and CEO of Busy Beaver, talks like a modern-day retailer who has been running a hardware store for several decades. But he joined the regional chain — which is marking its 50th anniversary this year — in 2002. Before that, he worked for ICI/Glidden Paint as a senior VP, handling such companies as Home Depot, Sears, Walmart and Kmart. Filmeck still remembers what it was like to sit in an airport — in this case, Cleveland — and wait for a flight that would take him to a meeting with Menards. But now he presides over a chain of 15 stores in Pennsylvania, Ohio and West Virginia with chairman Chuck Bender, who purchased the company in 1984 with a team of investors, and is active in strategic decisions.

You worked closely with the big boxes, and now you compete against them. Did you take away any lessons that help you now, as a retailer?

When the big boxes moved into the market, a lot of panic set in. [Independents] started putting in some things that didn’t make a lot of sense. They got away from the core DIY [assortment].

Can you give me some examples?

Towels, sheets, other domestics. It confused the customer.

Who is Busy Beaver’s main customer?

People think because our name is Busy Beaver we have this big contractor following. But our business is almost all DIY and has been for a long time.

Tell me about your remodeled store in Canton, Ohio. You’re testing out some new concepts there?

It’s a 35,000-sq.-ft. store with an outdoor lumberyard, but we noticed that we weren’t selling much lumber and building materials. So we said, ‘Let’s really make it into a hardware store.’ So we put in new fixtures and made it easier to shop. We moved lumber inside the store and de-emphasized the longer length [boards].

I noticed that the vast majority of the products in your recent circular are outdoor living.

Lawn and garden has been the fastest growing part of our business. We have a monstrous five-year plan to double it. If you don’t have that kind of plan, it won’t happen.

What kind of changes will that require?

We know it’s going to require some changes to our stores. We’ve always sold annuals and perennials, but now we’re adding shrubs, trees, big planters, soils and mulches. Commerce is our supplier for much of lawn and garden.

You’re not affiliated with any of the co-ops or buying groups.

We use Orgill and Emery-Waterhouse, and do a fair amount of importing ourselves. We have our own distribution center [in Ambridge, Pa.], which greatly enhances our buying power. But it’s not a stocking DC; things come in and get redistributed immediately.

You worked for Glidden Paint for 17 years, yet none of your stores carry the brand. Why is that?

On Glidden, we only needed one national brand in addition to our private label. We put it out for bid, and Sherwin-Williams gave us a better overall program. I still have a fondness in my heart for Glidden. We do carry Liquid Nails, which is part of the Glidden family.

Tell me about your buying staff.

We have four merchandise managers, director of purchasing Mike Slobodnik, and two re-order buyers. I make sure that our buyers understand that although we are a small regional player, we can still negotiate hard and get the best deal that we can.

What else gives you a competitive edge?

We train our people not to avoid customers, or to point to products, or ask yes or no questions. Instead they ask, ‘What are you working on today?’ It’s project selling.

How do you measure the results?

We secret shop our stores twice a month. If we have an individual who cannot or will not do these things, usually they don’t last very long. We measure customer service all the time through surveys.

What do you look for in an employee?

We use a predictive index [test] before hiring employees. It can tell us things like whether they’re shy or introverted, or willing to take risks. For example, we have floor-ready [receiving] stock. We do audits now and then, but if a company has a near 100% [accuracy] rate, they blow right through to the sales floor. All of our replenishment is automated at the point of sale.

That’s pretty sophisticated for a company of your size.

We [also] have our own loyalty card program where customers earn points and [then] rebates on purchases. I’ve signed off on $500 in rebates. Although that’s not typical, of course. 

How about the company’s financial metrics?

Well, our average ticket was up 64 cents in the first quarter, and sales were up 4%.

You spoke about your five-year plan. What about the immediate future?

We’d love to expand, but that’s not in our two-year plan. But if we find the right place at the right cost in a small town where we can put a hardware store, that’s what we’ll do. 

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