Throughout the COVID-19 pandemic, the Canadian retail home improvement market experienced many of the same challenges encountered in the U.S., while also observing the same surge in spending.
North America proved to be a great market for home improvement spending. According to the Global Home Improvement Report 2020, produced by the combined European and global retail home improvement association EDRA/GHIN, the combined sales power of the North American market totalled almost $550 billion. Canada represented $52.5 billion, making it No. 3 on the world stage after the U.S. and Germany.
The Canadian market enjoyed the buoyancy experienced by the U.S., as independent dealers worked to adjust to contactless selling and curbside pickup. But challenges continue, even as vaccination rates soar in Canada and provinces begin opening up in earnest. These include product shortages, which we expect to continue into the beginning of 2022. Price increases, a natural extension of limited supply, were already easing as of July. Overall, count on this trend to continue for products tied to raw materials, such as plastic and steel, through the end of 2021.
Until the pandemic is truly under control, which may take years, if ever, to happen, the flow of materials and goods will remain challenged well into 2022.
The big change for most independents was adjusting to the explosion of e-commerce. This has become a game-changer for all retail. But independents will need the full support of their banner head offices to maximize this opportunity and minimize the impact of larger chains. Tied to this trend is the importance of managing data. The need to drive loyalty through data from online sales has become the growth department for many major retailers.
After COVID-19, the industry is bracing for a drop-off in sales as life returns to “normal.” People are eager to return to spending on trips, experiences, theater, sports events, etc. This pent-up demand will soften spending patterns related to the home, returning them to more normal rates of growth.