RONA is hammering away at its competition with a $300-million expansion plan for Western Canada.

Within the next 30 months, the Canadian hardware, home improvement and gardening retailer will dramatically increase the size and scope of its western distribution centre while opening new stores and renovating existing ones in Alberta and British Columbia.

Fresh off the launching of a $20-million, 140,000-sq.-ft. big-box RONA Home & Garden store in Edmonton’s northern Namao district, the Boucherville, Que.-based company is moving forward with an overall investment of $200 million in Alberta and $50 million in B.C.

The Edmonton outlet marks the first new big-box store to be built by the company in Western Canada. Its next big-box Home & Garden official opening will take place this summer in Regina.

Meanwhile, RONA’s Alberta plans also include the opening of a new big box in Calgary’s northern sector, with construction scheduled to begin later this year. Similar to the just-opened Edmonton store, it will be between 120,000 and 140,000 sq. ft., representing an investment of approximately $20 million. It’s tentatively slated to greet its initial customers in the first quarter of 2005.

RONA also plans to close its current 80,000-sq.-ft. southwestern Calgary distribution centre. It will open a new one, at 320,000 sq. ft., four times the size, in the city’s southeast quadrant.

In Eastern Canada, the company’s distribution system allows its stores to be supplied twice daily, if necessary. “In a few months’ time, thanks to our new distribution centre in Calgary, most of our western stores will benefit from the same high level of service,” said RONA Inc. president and CEO Robert Dutton.

In B.C., a new big box will be added in Richmond, similar in size and cost to the new Alberta outlets, while a number of existing stores, such as the one in Abbotsford, will be remodeled. The company also invested $500,000 in a new Kelowna lumber yard because of increasingly strong sales to contractors.

In 2003, its Vancouver Home & Garden Grandview was named best large big-box retailer over 50,000 sq. ft. by Canada’s Hardware Merchandising Magazine.

In the midst of an aggressive growth program, RONA acquired 51 Revy, Revelstoke and Lansing stores – located in Western Canada and Ontario in 2001 – while purchasing 20 big-box Reno-Depot stores, 14 of which are located in Quebec and six in Ontario, operating under the name The Building Box, in 2003.

Even with those purchases, Dutton said there is still room to grow as 47 per cent of the home improvement market is in the hands of independents. The remaining 53 per cent is shared among the four largest players: RONA, Home Depot, Canadian Tire and Home Hardware.

“It’s a highly fragmented market. We’re going to see a lot of consolidation in this market over the next 10 years,” said Dutton.

More importantly, added Dutton, these next 10 years signal a strong growth period for the renovation sector.
“In Canada, and it’s equal for each part of Canada, 65 per cent of the houses are more than 20 years old. So you have a large number of houses that need major renovations because after 20 years you know, it’s the roof, it’s the doors and windows (that need to be replaced.)”

Robert Dutton

But RONA’s target demographic is not just renovating firms or even new-home builders. Fifty-two per cent of its customers are women, slightly more than the 48-per-cent level for the rest of the home improvement industry.

Those numbers, and the continuing onslaught of
television shows dealing with interior design and home
renovations, are playing a major role in the store’s shift to a ‘softened’ feel by prompting RONA to tinker with its big-box prototype.

The new Namao entry introduces the concept of boutiques into the big-box format, which includes a decor zone, lighting boutique and a flooring section that look more at home in a department store setting rather than a big-box warehouse operation. Tools and other building materials, such as lumber, can be found at the opposite end of the store.

Moreover, because the television home shows do bring in more customers, said Dutton, the company has joined forces with Global to launch RONA Dream Home, a 10-week series premiering March 2.

The reality show places two families in similar homes, asking them to renovate and decorate various rooms with some professional assistance provided. A jury and the public votes on the favourite, and the ultimate winner gets to keep the renovated house and its contents.

Generous consolation prizes, valued at $25,000, should also leave the losing family smiling.

With a network of 535 franchise, affiliate and corporate stores, RONA generates close to $3.7 billion in annual sales. It is proudly Canadian, emphasized Dutton.

“Because 100 per cent of our sales come from Canada, we want Canadians working. Ninety per cent of what you see here in the stores comes from Canada. We work very closely with our Canadian suppliers because they are very creative and they know the market.”