True Value’s price check
During the True Value general session, the audience of dealers responded with applause to the news that local pricing at TrueValue.com was in the pipeline.
Why is that such a big deal? We put that question to True Value Senior VP and COO Abhinav Shukla. He said the positive reaction was to be expected.
“The move resonates because it’s another step in supporting our retailers’ independence,” he said.
“Our retailers understand that there’s a need to meet rising expectations with digitally savvy and informed consumers. So this change helps provide the seamless connection between digital and traditional channels.”
Along with the announcement to allow for local pricing, True Value is bolstering its collection of in-store-only products by 1,200. The moves are part of a new TrueValue.com web site, expected to launch in spring of this year. Local store pricing functionality is expected to kick in this fall.
According to True Value’s research, visibility of local store pricing and inventory is highly valued by the consumer. They want to know this key information both before they leave their driveway, and also while they’re in the stores, Shukla said.
In addition to making prices visible, True Value offers programs to make the prices right – or “optimized” in the industry lingo. The co-op offers participating retailers several tailored price-optimization programs, each with a track record of enhancing retailer margins while driving sales, he said.
Typically, participating stores receive suggestions each month, based on a variety of data points. “Our pricing programs factor in everything from item visibility, category dynamics, local store factors, product cost, brand and those kinds of things. But ultimately it’s our independent store owners who have full discretion in setting the prices. They know their local market and their customers, so they’re the right people to make that judgment.
Attention on pricing – especially at the local level – serves as an example of the integration of customization and individual choice into retail programs. And with more than 4,000 independent True Value stores, there is a lot price fluctuation, for a lot of different reasons.
“A store visit is often the preferred choice, and the fastest fulfillment option, for consumers," he said. "So it's a huge advantage for [retailers] to offer consumers visibility to local-store pricing.“
A beacon of recovery
In 2016, CTL Home Center opened its remodeled doors in a new waterfront location, bringing a 50,000-sq.-ft., state-of-the-art home center shopping experience and drive-through lumberyard to the 25,000 or so people of Tortola, in the British Virgin Islands.
Today, after months of sluggish recovery following the devastating one-two punch of hurricanes Irma and Maria late last year, CTL plays an even more important role — a center for rebuilding.
“It made me feel good just a week ago when a customer walked up to me recently with a basket full of products, and she said, ‘Micheal, thank God you have this store open. I don’t know where we would be with the recovery without this store,” said Micheal Thomas, managing director of CTL Home Center.
While hurricanes and other natural disasters dominated headlines late last year, the island of Tortola was one of the less-publicized disaster areas. But the island’s plight was particularly difficult. Following the direct hit from Irma and its 200-plus-mph winds, communication with the rest of the world was lost. Marinas, buildings and even prisons were blown away.
One of the first people Thomas reached out to once lines of communication were restored was Robert Bass, Orgill’s international territory manager. Thomas let him know everything was fine and to prepare for resupply. Many CTL staff lost their homes in the storms, and Thomas said vendors rushed to their aid with a variety of materials for the relief effort.
Heroics through the storm cycle included an all-night tie-down session, bicycle rides along streets closed to automobiles, numerous nights sleeping in the store and strenuous bracing of the doors during the actual storm surge to prevent breaches.
“It’s been a hell of a ride,” Thomas said. “I can’t fully explain it to you. It’s like a person in Houston talking about the flood. If you have ever been in a building in a hurricane when the building shook like an earthquake, you’ll know. We went through that for hours.”
The tourism industry, crucial to the island’s economy, is still reeling. Hotels and restaurants remain shuttered all over the island. But shipments are arriving with increased frequency to CTL Home Center.
“Trying to get back on our feet is going to take time,” Thomas said. “And everybody knew what this place means to the community.”
Ace reports strong revenue growth
Oak Brook, Ill.-based Ace Hardware Corp. reported fourth quarter 2017 revenues of $1.32 billion, up 6.8% from the fourth quarter of 2016. Net income was $14.2 million for the fourth quarter of 2017, a decrease of $7.3 million from the fourth quarter of 2016. This decrease included a charge of $4.1 million due to the new tax legislation enacted in 2017 as well as increased warehouse costs incurred as part of the warehouse network reconfiguration.
Net income for the full year was $147.4 million, a decrease of $13.8 million, from fiscal 2016. This decrease was the result of a charge of $4.1 million due to the new tax legislation enacted in 2017 as well as $9.5 million of after-tax charges to reposition the warehouse and call center network to support future growth. Excluding these unbudgeted charges, the Company’s net income for fiscal 2017 exceeded its 2017 plan.
“New store growth, a 3.1 percent increase in same-store retail sales, along with revenues from our acquisition of The Grommet at the end of the last quarter, were the predominant drivers behind our strong 6.8 percent overall sales increase and record setting fourth quarter revenue,” said John Venhuizen, President and CEO. “I’m also encouraged to report that 2017 marked the fifth-straight year of increased customer transactions at retail, the sixth-straight year of net new store count growth, the eighth-straight year of increased same-store-sales, and the eleventh-straight year receiving the J.D. Power award for highest customer satisfaction.”
The 3.1% increase in retail same-store-sales during the fourth quarter of 2017 reported by the approximately 3,000 Ace retailers who share daily retail sales data was the result of a 3.4 percent increase in average ticket.
In 2017, Ace added 152 new domestic stores, bringing its domestic stor count to 4,418, a net gain of 55 stores from the end of fiscal 2016.
[For more details on Ace's fourth quarter and full year results, click here.]
Consolidated revenues for the quarter ended Dec. 30 totaled $1.32 billion. Total wholesale revenues were $1.23 billion, an increase of 5.1% as compared to the prior year fourth quarter.
Increases were noted across all departments with power tools and paint showing the largest gains, the co-op said.
Total retail revenues for the quarter were $89.4 million, an increase of $25.0 million, or 38.8 percent, as compared to the prior year fourth quarter. Retail revenues from Ace Retail Holdings — or Westlake Ace Hardware — were $67.8 million in the fourth quarter of 2017. This was an increase of 5.3% from the fourth quarter of 2016. The increase was primarily the result of new retail stores added since the fourth quarter of 2016.
Retail revenues from Ace Ecommerce Holdings, which was formed in the third quarter of 2017 for the acquisition of The Grommet were $21.6 million in the fourth quarter of 2017.
Consolidated revenues for fiscal 2017 totaled $5.4 billion an increase of 5.1%, as compared to the prior year. Total wholesale revenues were $5.1 billion, an increase of 4.7%. Increases were noted across all departments with outdoor living, power tools and lawn and garden showing the largest gains.