Different Song, Similar Beat: Canada's Construction Supply Dealers Hear a Troubling Future
By Craig Webb
The signs are in two languages, but any American could understand the messages being delivered to Canada's construction supply industry at this year's Hardlines conference: These aren't easy times, and it will take extraordinary efforts to achieve anything better than low-digit gains.
A new North American Hardware and Paint Association (NHPA) panel study of 80 companies with 950 stores in the U.S. and Canada found 50.8% predict moderate growth in 2027, while 29.2% predict moderate sales, and 20% some decline. NHPA COO Dan Tratensek also said that 41.4% of the same dealers said sales have grown since 2025, but 21.4% reported flat sales and 37.1% a sales decline.
"We are at an inflection point that is truly unlike anything we’ve seen," Tratensek said Oct. 21 at the event in Ottawa. "... We’re going from convenience to thoughtful curation, from customer service to relationship cultivation, from product knowledge to customer confirmation." In other words, construction supply companies need to up their game if they hope to relevant in a world of generational change, artificial intelligence growth, and economic doldrums.
“Depending on what part of the country you’re in, you might think things are terrible," Peter Norman of Norman Economic Strategies said. "… The construction sector is, at best, steady as she goes.” Canadians can take a bit of comfort that the International Monetary Fund believes the country isn't going into a recession. The IMF predicts Canada will show 1.0% GDP growth this year after a 1.9% increase in 2025.
Add to those issues problems that weren't expected as late as last January: the U.S.-Israel war against Iran, high fuel prices, and new tariff tiffs. That latter issue looks likely to affect U.S. building product manufacturers even more in the future. One year ago, 30% of Canadians surveyed by Environics Analytics said they'd respond to U.S. tariffs by paying more for a Canadian product. Now, 60% say they'd pay extra for Canadian goods.
Canada might seem to many Americans to be just like the U.S., but businesses like Lowe's have learned to their regret that differences abound. Lowe's bought the Canadian dealer RONA for US$2.4 billion and sold it a few years later for US$400 million. Doug Young, who took over two years ago as RONA's Chief Merchandising Officer, said the key to the company's revival now involves taking back control of products to reflect both local and Canada-wide desires.
The number of house brands was reduced from 17 under Lowe's to just six today, including the popular RONA+ label and RONA PRO by Dulux paint. Three separate websites became one. RONA now has its own sourcing operation in Shanghai.
"Lowe’s is a great organization … but there was a lot to be done [after Lowe's sold the company]," Young said. "... Lowe’s gave a lot of direction from the U.S., and its sourcing was [managed] from there. It was never a Canadian-led approach.”
Sophie Marai, VP of Client Strategy at Environics Analytics, spent most of her talk showing the big differences inside Canadian demographic and spending numbers.
For instance, while Canada's population overall is forecast to rise 3.95% between 2026 and 2031, there are 14 small communities that will grow between 7.4% and 20.7%. There also are contrasts in spending per household for home improvement and home goods. The national average is C$10,954 per household, but in Oshawa's it's C$14,898.
Likewise, three groups of households represent 16% of the total but account for 26% of all spending on home goods and home improvement. Those three groups are: Affluent Empty-Nesters and Mature Elites (C$19,453/household), Upscale Large & Multicultural Families (C$17,988/household), and Established Suburban and Rural Families (C$16,901/household).
Tratensek said the NHPA's panel survey found company leaders most interest in improving efficiencies, particularly with new technology. Their second-biggest focus was improving the team, particularly executives, while better marketing was No. 3.
“Traffic and basket size remain important, but scalable growth increasingly depends on productivity, management talent, and targeting customers,” he said.
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