Ruminating on the casual living business in Canada, Patio Palace President Steve Gilboe summed up what many of his peers had probably thought at one point or another this year.
“I think if you asked anyone whether they’d rather have good weather in a bad economy or bad weather in a good economy, they’d pick the former,” he said.
It was wishful thinking for sure, because the Canadian weather has not been kind to casual furnishings dealers. Not that it usually is. The overall sentiment is that consumers up north would have been more than happy to spend more on their decks, patios and vacation homes this year had Mother Nature only cooperated.
As for the Canadian economy, it was more or less just fine.
“I know that for us, retail sales in Manitoba are up 2% to 3%,” said Phil Squarie, president of Wicker World Home & Patio in Winnipeg. “Everything is plugging along pretty good. We don’t have the big ebbs and flows the U.S. has.”
The 2014 economy has been strong in the greater Vancouver area, where Alnasir Shivji is still reaping the benefits of his aggressive moves when things weren’t so hot the previous couple of years. The owner of The BBQ Shop in Port Coquitlam, B.C., said he took advantage of the soft economy to grab market share from other retailers who took a more conservative approach.
“I think our attitude at that time was let’s service the customer really well and advertise and have product rather than shy away from inventory,” Shivji said. “I think competition is increasing their inventory and staff, too. We’re feeling that more than anything now.”
But Shivji said his business is still growing, as it has every year since he opened The BBQ Shop in 2007. The store itself is proof of its growth. It started out at 6,000 square feet of combined showroom and warehouse space. Now, all 6,000 square feet is for display, and Shivji has a separate 12,000-sq.-ft. warehouse in the same shopping complex.
Gilboe said Ontario is on a little bit of a delay, feeling the pinch western Canada felt in 2012 and 2013. But he wouldn’t go so far to say the economy there is terrible. He said 2013 was marred by poor weather, making him think this would be a bounce-back year. As of late July, it wasn’t. Bad weather struck again.
Meanwhile, Squarie said Wicker World, which has a 14,000-sq.-ft. outdoor furniture showroom to go along with the 10,000 square feet of space it devotes to indoor furniture, has enjoyed steady sales growth for the last decade. Through this summer, business was already up 7% over 2013.
In neighboring Saskatchewan, Tim Kramer said the economy is holding steady.
“People are certainly capable of investing in better quality,” said Kramer, manager of Sunshine & Ski Ltd. in Regina. “It’s not only because they can afford it but also because they realize it’s better than tossing money away on cheaper furniture.”
Further west in Alberta, where consumer spending is relatively strong thanks to Canada’s burgeoning oil industry, Sheila Edmonson said the local economy is “trying to find its footing.” Nevertheless, she and her husband, Gerry Bell, who bought Sun N’ Fun in Red Deer in 2007, have seen a huge increase in patio furniture sales this year thanks to a couple of orders in excess of $40,000.
Canadian dealers are more than happy with any kind of sales increase given what the weather has been like. As in the northern United States, much of Canada suffered through a rugged spring that really wasn’t spring-like at all. Much of Manitoba was still getting frost as late as mid-May, Squarie said. The climate in Alberta wasn’t much better.
“We had a winter that would never end,” Edmondson said. “We live in the valley of the Rockies, so we get very big storms that drop a lot of snow. It melts and goes away and then does it again. That usually goes on for six or so months. This year, winter came in October and didn’t leave until April.”
The same thing happened in Ontario, Gilboe said, but as soon as the frost melted people came out in droves.
“We went from being underwhelmed to having all hands on deck,” he said. “We asked our staff if they had boyfriends or girlfriends or relatives who could pitch in on a Saturday to help build stuff or go out on deliveries. We were scrambling.”
But it was a good kind of scrambling, because Gilboe admitted that until that point he wondered whether he was doing something wrong.
“Even though you know weather is a factor, the doubts creep into your mind,” he said. “You think the problem can’t be that simple. You don’t want to use that as a crutch. But then when the weather breaks, you realize that’s all it was.”
The Canadian climate didn’t cooperate for long, however. The central part of the country endured near biblical flooding in June, which caused a whole host of problems for dealers in the region.
“We had the highest water levels in 80 years,” Squarie said. “Because the water levels came up, they say it hatched five years’ worth of mosquitoes. People just didn’t want to go outside.”
In Saskatoon, Kramer said the flooding led to an E. coli scare that kept everyone inside. By the time residents came out, they had to worry about flood damage. New patio furniture was the last thing on their minds.
Meanwhile, temperatures dipped to fall-like lows all across central Canada. Gilboe said that even in late July the weather was cool, cloudy and rainy.
“It would go all the way down to 47 degrees at about 7 p.m.,” he said. “You still had sunlight, but going in the pool was out of the question.”
Kramer said that sapped his customers of any enthusiasm they may have had for buying patio furniture. The weather improved a little in July, but he said it was just a hangover period from the horrible June.
The end result for Canadian outdoor living dealers was a compacted selling season. With a mid-May start, Gilboe said he thought the season would simply shift later, extending beyond its usual drop-off date of Father’s Day. But sales fell off right on schedule.
“There’s something about catching good weather early in the buying season” he said. “The anticipation of consumers is really important. If you hold off, people start to rationalize their summer away.”
In that brief window when they were buying, Canadian consumers gravitated to fire pits in particular.
“We’ve been selling them before people were reading about them, but they continue to be very popular,” Gilboe said. “We show about 70 grills and 35 fire pits on our floor. I can see a point where you’ll see as many fire pits as grills.”
He said he’s already thinking twice about including coffee tables in his chat set buys. Enough of his customers are swapping out those tables for fire pits that he has to worry about being stuck with a bunch of those tables by the end of the season.
Edmondson said the weather in Canada is perfect for fire pits, which is why she’s had success with the category for the last seven years. The market has matured to the point where her customers have already gone the cheaper route via big box stores and now are back buying fire pits from her.
“We’re getting people calling up wanting a price and an estimate on how long they’ll have to wait before we get them in,” she said.
Several Canadian dealers also reported a declining demand for dining sets.
“I’ve noticed over the last few years that people are more interested in using their outdoor spaces to just kick back and relax,” Kramer said. “It’s like if you don’t have a cottage and you’re not inclined to spend a bundle on a summer holiday, you’ll do the staycation and create a beautiful environment on your patio or deck.”
Gilboe said the dining decline even extends to tabletop accessories.
“It’s still great to merchandise your store with and it makes the showroom look better, but we’re not doing the volume in tabletop we used to do because people have that stuff now,” he said. “The decluttering theme is affecting that business. A lot of people are just using their indoor stuff and hoping they don’t drop it.”
With their 2014 selling season now over, many Canadian dealers, still smarting from two straight selling seasons dampened by the weather, are looking for ways to streamline their operations for growth in 2015. Even though he expects growth this year, Squarie said 2013 left him with excess inventory he had to sell this year. To prevent that from happening again, he said he intends to show fewer collections on his floor in 2015.
Gilboe said Patio Palace just signed on with the Casual Classics Buying Group to leverage the group’s buying power and learn from what other members are doing. And Edmondson plans to approach customers about special orders as early as January to help safeguard her business no matter what Mother Nature has in store.
Shivji, meanwhile, is dealing with a more hardened consumer base in western Canada, at least in the grill category. He said he’s seeing more consumers give big box stores a try.
“But when it’s time to connect their grills and use them properly, they find us,” he said. “We seemed to be doing a lot of free service, which isn’t free to me. It costs to have knowledgeable employees and phone lines and advertising.”
His initial reaction was simply refusing to help these customers. That earned him negative reviews on Yelp and other websites. So now, he and his staff field those calls, ask them to bring in their grills so a technician can do the work for a fee. So far, that’s taken care of any hard feelings and created a new revenue stream.
It’s the kind of think-on-your-feet strategizing Canadian dealers are known for. With a climate as crazy as theirs has been, being nimble isn’t just an asset. It’s a necessity. 