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Housing starts steady in January

12 February 2019
By the Numbers

OTTAWA – Based on its trend measure, the Canada Mortgage & Housing Corporation (CMHC) has reported housing starts held steady in the first month of 2019 coming in at 208,131 units on an annualised basis. However, starts fell on both a seasonally adjusted and actual basis.

January’s trend was just slightly higher than the 207,171 units started in December 2018.

The trend measure is a six-month moving average of the monthly seasonally adjusted annual rate (SAAR) of housing starts. It is used to complement the monthly SAAR of housing starts, which often swings considerably thanks to the multi-unit segment which are can vary significantly from month-to-month.

Chart courtesy of the Canada Mortgage & Housing Corporation.“After recent declines, the national trend in housing starts held steady in January and remained above historical average,” CMHC chief economist Bob Dugan said in a statement. “While single-detached starts continued to trend lower in January, this was offset by an uptick in the trend for multi-unit dwellings in urban centres.”

The stand-alone monthly SAAR of housing starts for all areas in Canada was 207,968 units in January, down from 213,630 units in December. The SAAR of urban starts decreased by 2.1% in January to 190,912 units. Multiple urban starts increased by 0.7% to 146,353 units in January while single-detached urban starts decreased by 10.4% to 44,559 units.

Rural starts were estimated at a seasonally adjusted annual rate of 17,056 units.

CMHC defines urban as towns and cities with populations greater than 10,000.

Actual starts of single-family homes were set at a preliminary 2,470 units in January – down 30% from the 3,534 units started in January 2018. Starts fell in every region of the country, including Ontario and British Columbia where they fell 34%.

Multi-unit segment starts – whether for the condominium or rental market – gains 5% in January coming in at a preliminary 10,099 units, compared to 9,588 units for the first month last year. The uptick was seen in every region of the country except Ontario, where they fell 3%.

Total housing starts were set at a preliminary 12,569 units for January 2019 – off 4% from the 13,122 units started in January 2018. They were down in B.C., the Prairies and Ontario but up 17% in Quebec and flat across Atlantic Canada.

In his research note, Rishi Sondhi of TD Economics said homebuilding seems set to continue bulwarking the overall Canadian economy despite fears to the contrary.

“Despite dipping in January, homebuilding continues to proceed at a strong rate, helping offset the drag from weak resale activity and providing a notable bright spot for the overall economy,” he wrote, adding a recent report on building permits indicates starts will remain healthy in the short term.

“The multi-family sector is buoying homebuilding as condo starts respond to past gains in pre-construction sales. Rental construction is also strong amid low vacancy rates in key markets, boosted by government programs aimed at adding more affordable stock to the market,” Sondhi said.

“We look for housing starts to remain elevated this year. However, starts should ease in 2020, as more recent softness in pre-construction sales and an inventory overhang in the Prairies causes homebuilding to pull back,” he continued.

However, he cautioned the absorption of these new units needs to be monitored over the coming few years. To date, these new units are being absorbed, but that could change in a softer demand environment.

IKEA named best employer

12 February 2019

BURLINGTON, Ontario – IKEA Canada has been named one of Canada’s Best Employers for the fourth consecutive year by Forbes Magazine. This year, the company improved its overall placement on the list to 45, from 70 in 2018, while placing among the Top Five in the survey’s retail and wholesale category.

“At IKEA, our 6,500 co-workers are at the heart of our business and we’re proud to be named one of Forbes’ Best Employers in Canada,” Michael Ward, the newly named president of IKEA Canada said in a statement. “We are a diverse and values-driven company, where down-to-earth, hard-working individuals can thrive and be successful. We are committed to ensuring that IKEA is a great place to work and supports a better everyday life for our co-workers.”

IKEA Canada has been named one of Canada's Best Employers for the fourth consecutive year.In a statement, IKEA listed several reasons why the furniture and home furnishings retailer has been named a ‘great place to work’:

  • A new benefits program that was developed in collaboration with co-workers from across the country. Its strong focus on health and well-being encourages co-workers to use wellness credits towards gym membership, equipment or classes.

  • Work schedules are provided four weeks in advance. The company also offers provide guaranteed minimum hours so co-workers can have predictable working hours.

  • As a global organization, IKEA encourages co-workers to be curious about their career growth and to explore new opportunities to learn across its different companies, countries and roles.

  • An annual performance-driven bonus program.

  • A competitive RRSP program as well as and Tack!, a deferred profit sharing program created by its parent company, the IKEA Group, based in The Netherlands.

  • A global iWitness Ambassador program where co-workers can see first-hand the positive impact the IKEA Foundation has on improving the lives of children.

  • An annual Swedish cultural experience trip for 30 co-workers to the heart of IKEA – Älmhult, Sweden – where they learn about the company’s roots, history and culture.

  • Co-workers also receive subsidized meals, a co-worker discount, paid uniform and safety boots subsidy.

Ward also noted diversity and inclusion remain a focus at IKEA, with a strong emphasis on gender balance – 52% of IKEA co-workers and 51% of managers are women. Additionally, with sustainability at the core of its business, IKEA has been named as one of Canada’s Greenest Employers for ten years in a row by Mediacorp.

In collaboration with analytics firm Statista, Forbes selected Canada’s Best Employers based through an independent survey from a sample of more than 8,000 Canadian employees who work for companies that employ at least 500 people in their Canadian operations.

The surveys were administered in a series of online panels and provide a representative sample of the Canadian workforce.  The resulting list included 300 employers across 25 industries. View the full list at

The only other Canadian retailer with a substantial furniture and mattress business to be included on this year’s list was Costco Canada. Based in Ottawa, the warehouse merchant was number 35 on the overall list, up three spots from 2018.

Bedgear opens warehouses

11 February 2019

FARMINGDALE, New York – Bedgear, the producers of the Performance brand of mattresses, pillows and allied sleep products has opened its first two warehouses in Canada as part of its drive to grow its business north of the U.S. border.

“These two warehouses will enable the company to more efficiently serve one of their most engaged markets with the brand’s full assortment of Performance sleep products, including the all-new M3 Launchpad, the world’s first modular mattress,” the company said in a statement.

Bedgear’s M3 Launchpad, which it describes as the world’s first modular mattress. The company has opened warehouses in Toronto and Vancouver to help grow its Canadian business.Located in the suburbs of Toronto and Vancouver, the facilities also mark Bedgear’s first investment in international operations and expands their distribution footprint to five warehouses across North America.

The company also noted Bedgear has seen steady growth over the past eight years as has the interest shown by young Canadians who are looking for fashionable yet functional products which mirror their active lifestyle.

“Canada has proven to be an amazing market and country for Bedgear and we acknowledge the growth potential here and are taking the necessary steps to provide the sleep solution Canadians deserve,” Bedgear founder and chief executive officer Eugene Alletto said. “As one of the world leaders in recycling and renewable energy, it’s no surprise that the M3 Launchpad – the only mattress which can be upgraded throughout its lifetime with recyclable components – has been welcomed and demanded by Canadian consumers.”

Bedgear first entered the Canadian market in 2011 with The Brick, one of the two banners operated by the publicly-held Leon’s Furniture Limited (LFL), this country’s largest retailer of furniture and mattresses. Currently, the company’s assortment is offered in some 300 or so locations throughout the country.

Lifestyle merchant

4 February 2019

Fort McMurray has known tragedy. The devastating fires that ravaged Northern Alberta over a 15-month period beginning in May 2016 destroyed some 3,200 buildings, forced the evacuation of over 88,000 thousand people and caused some $10 billion in damage knocked this community on its arse – to use the vernacular – but definitely not out. Its people picked themselves up, dusted themselves off and have started the long, difficult process of rebuilding.

For Gary Harris, a second blow came with the unceremonious shuttering of Sears Canada. That process resulted in the loss of the Sears dealer store he had operated for over 20 years. He wasn’t ready to get out of the business and so looked for retail concept that could be successfully adapted to a community in the midst of rebuilding.

This interactive selling station is equipped with iPads the sales team can use to guide the customer through the process and even complete the sale.“With my experience in the market, I recognised the opportunity to open a new format store here in Fort McMurray that would cater to the consumer as a ‘lifestyle merchant’,” he told Home Goods Online, defining such a storeowner “as a retailer who understands the consumer, listens to what they want to achieve in their homes and helps them fulfill their dreams.

The process he and co-owner and general manager Matt Creighton (he’s co-owner and managing director) went through resulted in the opening this past summer of Harris BrandSource, an 18,000 square foot showroom and warehouse located in the heart of Fort McMurray’s main shopping district.

“We set about to make sure we fully understood the market and the vendor and product opportunities, Harris explained, adding he reached out to Don Burnett, banner director of BrandSource Home Furnishing – the primary go-to-market tool for Mega Group. They had known each other as Burnett at one time worked as part of the Sears Canada dealer store network’s management team. “I’ve known Don Burnett for a long time and learned to trust his knowledge,” he added.

This welcome centre is found when the customer first enters Harris BrandSource. The newest member of Mega Group’s national network located in the centre of Fort McMurray, Alberta’s shopping district.The store’s development began with the commission of a PRIZM market study, which was conducted by L’express Marketing, a Montreal-based consulting firm. The study’s purpose is to help retail store owners understand more about the market in which it operates as well as the customer it wants to attract. “The objective is to identify opportunities and guide marketing and communication strategies that will help retain and grow customers,” Burnett said.

One of the first things discovered was Fort McMurray has one of the highest annual household incomes in the country – averaging about $95,000. Furthermore, household spending on furnishings and equipment was also amongst the highest in the country at $4,300 a year.

“It was determined early on the store’s key competitors were not in Fort McMurray,” Burnett said. “The competition is the highway to Edmonton. That’s where the high wage earners go to purchase their home goods. So, the store is addressing that through the in-store experience. One of its features is an interactive selling station as well as iPads for the sales team so the customer can be greeted, informed and the sale closed without leaving the floor.”

The local store competition includes an Ashley Home Store, a Brick franchise as well as an independent store called Furniture Pluss. The local Rona hardware store is also active in major appliances. “All of these retailers trade in the lower quadrant of the price continuum,” Burnett said. “For mid-price points and higher customers would need to travel to Edmonton.”

The study also showed Fort McMurray was a digitally active market, “We noted a particularly high level of participation in social media,” Burnett said.

For example, 34% of area residents are active on Instagram; another 34% can be found on Twitter and almost 47% have a LinkedIn account. Furthermore, 95% are active on the internet and, at any one time, as many of 16% of them were accessing home furnishings or home décor-related content (that’s higher than the national standard which is 11%).

Click here to read more about Harris BrandSource Home Furnishings in the HGO Merchandiser…

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