On the heels of IRLY's announcement to join TIM-BR Marts, Centre Magazine had the opportunity to speak with the buying group's President, Tim Urquhart, and ask him a few questions about TIM-BR-Marts in particular, and the future of independents in general. Here's what he told us.
Centre: As of January 1, IRLY Distributors joined the TIMBR Marts banner. Why did IRLY decide to join your group? What did TIM-BR Marts bring to the table that other groups didn't?
Urquhart: It would be best to hear from IRLY why they decided to join us, but I believe they saw the strength of TIMBR Marts Ltd. as Canada's number one buying group for independents and our buying power. From our perspective, IRLY's distribution center will help us bring value to our B. C. dealers and to our entire dealer network since it will play a part in the landing and distribution of imported products. I can confidently say that all parties agreed this would be a mutually beneficial relationship.
Centre: Will TIM-BR Marts try to woo other groups to come under its banner?
Urquhart: Our focus is always on bringing the most value to our dealers and any time a new relationship has this potential, we'll give it due consideration. While growth has been part of our success, no doubt, we don't pursue it as an end in itself. Groups that join TIM-BR Marts Ltd. need to be credit worthy, in fact, we've walked away from opportunities that didn't meet our criteria and they've since joined other groups. The union must add value, plain and simple.
Centre: Rona is on a real roll in terms of swallowing up independents. What can TIM-BR Marts do to counter this offensive?
Urquhart: Being part of Canada's number one buying group for independents is something our dealers are proud of and hold in high regard. It's a relationship that's compelling, as is our competitive growth: from $600 million in purchases in 2003 to over $2 billion today. In-house, we have a program that connects dealers looking to move on from their LBM business with those seeking to buy, so we help facilitate that transition and keep the business within our group. Plus, we make it easy for dealers to be a part TIM-BR Marts by not requiring them to sign a long-term commitment. This is something that works well for independents since it requires us to provide value to them month in and month out. We are continuously focusing on building the power of our volume to enhance profit and deliver exceptional value for our dealers.
Centre: Who would you say is your biggest competitor? The big box companies or co-ops like Home Hardware?
Urquhart: Everyone and no one is our competition. There are things that make us unique as a retailer and a buying group -- like our true dealer independence and buying strength -- these distinguish us from our competitors. At the same time, retailers in the industry, whether corporate big boxes or other formats, are competing within similar product categories in the same communities as our dealers.
Moreover, we are always looking out for new competitors who may not even be part of our current landscape. We're in contact with North American, and even global players, to ensure we are positioning ourselves to continue our leadership position in the future.
Centre: Are your stores franchises or independently owned and to whom [how] are the profits distributed?
Urquhart: Every TIM-BR Marts location is independently owned and our dealers reap the benefits of rebates on volume purchasing each year.
Centre: How can you assure the smaller independent dealers in Canada will continue to have a contributing role in the Canadian market, especially when the bigger box stores are positioning themselves with smaller proto-type box stores, in more rural locations?
Urquhart: The beauty of many of our TIM-BR Marts locations is the history they have in their market places -- some celebrating 125, even 150 years in business -- how they've contributed to the well-being of their communities and the consistent level of service they deliver each day. These are the things that will help the smaller independent dealers retain their foothold in changing times. They are what customers remember, value and I believe, encourage them to return.
Growth through consolidation of the independent dealer will assist as well. The independents in Canada still represent over 50% of the total market. We have proven that consolidation can occur and believe that future growth will only assure the success of the independent network across the country.
Centre: What kind of a landscape do you see in the hardlines industry in the next five years? In other words, how many major players will we have left standing?
Urquhart: Certainly we'll continue to see more consolidation. And with the corporate team we have in place and our buying power, combined with the fact we never lose sight of the independent dealer as our customer, or forget who their customer is, TIM-BR Marts will remain a strong player in the industry.
Centre: In your opinion, what is the biggest challenge for the hardlines industry today?
Urquhart: As it has been for some time now, is the shortage of skilled labour and people who enjoy and find satisfaction working in a retail environment on a long-term basis. But it is possible to cultivate a business environment that overcomes this. Woodland TIM-BR Marts in Grande Prairie, Alberta was just recognized as Canada's Best Building Supply Store in part for their efforts to attract and retain superior talent --whether it's through benefits and RSP contributions, community involvement, or a comprehensive and ongoing training program. What they're doing works. And that is in the midst of Alberta's oil boom economy where the lure of a higher salary is a definite reality.