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DEPARTMENTS Newsmakers Features 6 Viewpoint 8 Retail Focus 12 Behind the Counter 14 US News 16 NZ News 18 Timber Update 39 News 44 What’s New 46 Diary Dates 20 Safety & Security As home styling continues to drive millennials’ purchasing decisions online and in-store, connecting to house proud consumers is more important than ever. 29 Adhesive, Sealants & Fillers Silicone shortages turned the adhesives, sealants and fillers market on its head last year and saw prices rise to unprecedented levels. Now that prices have steadied and suppliers have had a chance to catch their breath, many have since implemented clever strategies to combat supply. 36 Fasteners John Power investigates the highs and lows of the fasteners market. 39 T emple & Webster’s new online hardware offer 40 N ew Adelaide store sees building costs cut 41 H aymes Paint launches flagship store About the Cover With a focus on increasing onsite productivity with high safety standards, Ramset™ has designed the FrameBoss™ XP and XPM powder actuated tools to specifically address a need for high-powered and efficient fixing to concrete, masonry and steel. The new FrameBoss™ XP and XPM delivers more power, efficiency and speed so trades can finish the job quicker with reduced strain and fatigue. PRL791 RAMSET_AHJ_FRONTCOVER_280x420mm_2pp_FINALV3.indd 1 26/4/21 10:08 am Print Post Approved PP100007331 SINCE 1886 Vol.137 No.5 May 2022 43 8 20 29 4 HARDWAREJOURNAL.COM.AU | MAY '22

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CAB Audited Glenvale Publications and Australian Hardware Journal are pleased to provide the articles contained in this publication to keep its subscribers up to date on issues which may be relevant to their businesses. This publication is supplied strictly on the condition that Glenvale Publications and Australian Hardware Journal, its employees, agents, authors, editors and consultants are not responsible for any deficiency, error, omission or mistake contained in this publication, and Glenvale Publications and Australian Hardware Journal, its employees, agents, authors, editors and consultants hereby expressly disclaim all liability of whatsoever nature to any person who may rely on the contents of this publication in whole or part. Published by GLENVALE PUBLICATIONS A.B.N. 31 218 591 688 11 Rushdale Street, Knoxfield Victoria 3180 Phone: (03) 9544 2233 Editor: Christine Bannister Phone: (03) 9544 2233 Email: Journalists: John Power Hartley Henderson Online Communications & Production: Justin Carroll Email: ADVERTISING Harry Rabiee Email: Phone: (03) 9544 2233 Mobile: 0403 000 444 ACCOUNTS Melissa Graydon Email: SUBSCRIPTIONS Melissa Graydon $93.00 – 12 issues ART AND PRODUCTION Justin Carroll PRINTING Southern Impact Pty Ltd 181 Forster Rd, Mount Waverley VIC 3149 Phone: (03) 8796 7000 After three years of cancellations and delays, HBT's National Conference recommenced on the Gold Coast earlier this month. Once again, the AHJ teamwas in attendance and were all so excited to catch up with so many old friends – and some new - throughout the three-day event. One thing I have always admired about the HBT group is that the friendships within the group are always genuine and long lasting. I truly believe it is a stand-out feature of the group. The 2022 conference was no different. If anything, the chance to finally catch up with one another after such a long time ensured an air of excitement at every event, whether it be the awards lunch or a simple business workshop. HBT was innovative and creative with this year’s conference program which I believe added to the excitement as delegates gathered on the first day. What I loved most about this conference was its focus on connection, with the extensive business lunch and awards held on the first day of the event - instead of the final night, followed by an evening Sea World experience which allowed members to easily seek out their old friends, while also enjoying the delights of Sea World’s well-known dolphin show. The conference was also different in that business sessions, held on day two, investigated specific topics and categories giving members the opportunity to pick and choose which sessions were most appropriate to their business. Just some of the sessions included insight into the timber category, buying opportunities, new category opportunities and an inspirational keynote speaker finishing off the day. A conference highlight for me was finally visiting HBT’s trade show which never ceases to disappoint. Boasting its highest number of HBT members in attendance, the trade show also saw a strong supplier attendance of over 150 stands. Thank you to everyone who took the time to catch up with the AHJ team during the show as we investigated all that is new and exciting in the industry. The team included myself, industry reporter Jason McLeod, our resident professional photographer John Della – who often has trouble focusing on the photography because he is always so enticed by the new products that are on hand, as well as AHJ’s National Advertising and Marketing Manager, Harry Rabiee. AHJ’s June edition is dedicated to entirely covering all aspects of the national event, while several live interviews - featuring Jason and myself, may also be accessed on AHJ’s YouTube channel, AHJ TV, in the lead up to the June edition. Make sure you look out for your smiling faces throughout the June edition, which will feature an abundance of photos from all events as well as this year’s Store Award and Supplier Award winners who were presented with awards throughout the extensive business lunch on day one. The awards certainly put everyone in a fantastic mood for the days ahead. Coming up … AHJ’s June edition will not only present its Hand, Power & Trade Tools feature, but also the Insurance & Financial Services feature, alongside the Abrasive, Grinding and Cutting feature. Please get in touch with either myself, or AHJ’s Advertising & Marketing Manager, Harry Rabiee, to be involved in any of the upcoming features. Christine Bannister - Editor

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Business: PJ’s H Hardware Maryborough and PJ’s H Hardware Flagstaff Manager/Owner: James Prime Location: Maryborough & Flagstaff, Victoria Building Group: Hardware & Building Traders (HBT) PJ’s H Hardware achieves store hat trick after 35 years Timing is everything when it comes to business, and it was perfect timing that led the Prime family to jump at the chance of opening their third store in country Victoria after a rival store came up for sale. H Hardware Maryborough Store Manager, James Prime, says the additional store not only gave the family ample room to stockpile much-needed stock during ongoing shortages, but also cater to trade customers more than ever before. The Prime family has run several businesses in the country town of Maryborough for many years, beginning with the establishment of the family’s original store, Prime’s Discount Store in 1970 by James’ parents, Geoff and Chloris, with this original store still operating in the town of Maryborough today. Being a small family business James says he has worked with his parents from a young age. “I can never remember not coming to work. Mum would just always bring me to the store when I was little. As I got old enough to wheel and carry stuff out for customers this became my first job and my career just grew from there. I helped run a second-hand goods store for mum and dad when I was just 13 years old so I have been in retail for a very long time. Dad is also a chippy by trade so this is where our building offer was born from. Dad could see a need for certain building supplies in Maryborough in the 1970’s and our trade area has grown from there.” It was in 1988 that the Prime family first ventured into hardware when they bought an existing hardware store and re-branded it to PJ’s Timber & Hardware. It has been a local icon for over 32 years. Although the family was content with how the business was running, storage problems were often a substantial issue until the incredible opportunity to purchase the former Skinner’s Building Supplies store in the nearby town of Flagstaff came up in 2020. “Skinner’s Building Supplies was also part of the HBT Group for many years and we got along with the owners really well. Although we were competitors there was never any animosity between the two stores. When they decided to move on from the business they offered it to us first and we were happy to take up the opportunity and open our third store located just outside of town in Flagstaff,” James said. “When we first bought the original hardware store in Maryborough we loved how much room it had, but 30 years on we could do with three times the amount of room that we have on-site. We really needed to do something to alleviate the congestion so when the boys down the road offered us to buy their store, which is on a really large site, we jumped at the chance.” “Not only does it give us room to store excess stock and push our trade to this store a little bit more but also allows us to focus on our retail PJ’s H Hardware Flagstaff was recently re-branded in HBT’s outstanding black and gold.

offer in Maryborough alongside a smaller trade offer,” James said. After joining HBT’s specialty hardware division - H Hardware - a couple of years ago, James said he and his family had always planned to banner both stores under the H hardware branding which was finally achieved last year. “Both hardware stores are now completely rebannered under the substantial yellow and black branding and also re-named as PJ’s H Hardware Maryborough and PJ’s H Hardware Flagstaff. When our customers drive past both stores now you can easily see that they both look the same as both stores are professionally bannered and the branding really stands out.” “The new branding identifies us and establishes us as a hardware store. Before we re-branded you could easily drive past PJ’s Hardware a thousand times and you still might not know what our offer is. But this has now all changed and we are easily identifiable,” he said. When asked if there was enough demand in the area to warrant two hardware stores operating under the same banner James said this was definitely the case, particularly because the purchase of the third store has also now resolved on-going storage issues. Local competition Local competition consists of a well-known, extensive Mitre 10 store in town, however James believes that Mitre 10 has its own demographic of customers and there are certain people that are drawn to this type of store and will always go there. “Then there is a whole other demographic who want to walk into our shop because they believe they might get a better insight into the product they are purchasing or a better delivery service because they know we base our business around an old school style of retailing. While there are trades that f loat between the two of us, we have our own customer demographic and they appreciate what we do so they just keep coming back,” he said. “Our stores are set apart from our competitors because of how well we look after our people. While I agree that price is an issue for some of our customers, it certainly is not the only issue when it comes to hardware because the exceptional service will always keep our customers coming in the door. Having stock is also so important which is why we stock quite heavy to make sure we have got everything our customers need. Maintaining good staff is also really important. Maintaining price, stock and good staff has not been easy throughout the pandemic but it is not impossible and you just have to learn to go with it.” “We are also totally independent so we have the ability to choose products that suit our local area and our customers. It does not matter which brand it is or what the deal is, if this is what our customers want, that is what they will get. This is the great thing RETAIL FOCUS PJ’s H Hardware sets itself apart from its competitors by being totally independent and choosing only products that suit the local area and its customers. Prime's Discount Store was first opened by Geoff and Chloris Prime in 1970. MAY '22 | HARDWAREJOURNAL.COM.AU 9

about HBT. You still run the store the way you want to run it, you just use the deals and the group to your advantage,” James said. Like most Australian hardware independents, uplift in housing developments and DIY projects within the local area since the pandemic has also considerably boosted activity in-store according to James. “In saying this our business was also going really well pre-COVID. In March 2020 we were still very busy within the business but obviously, as soon as the pandemic hit everyone went crazy with their DIY projects. We have also had a few good years within the rural sector so all of the local farmers are reasonably flush at the moment which is great for our business as well.” Although James says there were not a lot of changes required within the business throughout the pandemic, he did say the biggest challenge was coping with the unexpected demand from customers. “We only had about three or four COVID cases in the area throughout the lockdowns so we were very lucky to not have a lot of restrictions placed on us, apart from masks and customers being required to sign into in the store. Being a country store means that a lot of our customer base prefers shopping in-store rather than online, but that is just one of the beauties of living in the bush.” While the family has deliberately tried to push more trade out to the H Hardware Flagstaff store, H Hardware Maryborough is transferring to a more retail offer combined with a modest trade offer so builders can go to either store for their building products. “The Maryborough store was once 60 per cent DIY and 40 per cent trade but over time this site has transformed to 70 per cent DIY and 30 per cent trade. H Hardware Flagstaff is much more trade-orientated with an 80 trade and 20 per cent DIY split so we have definitely swayed more of our trade out there.” “We are deliberately trying to sway the number this way because the Flagstaff store is perfectly geared to cater to the trade. There is so much room out there to store things, collate orders, hold the stock levels that you need. This is quite different at the Maryborough store because customers often just want two bags of cement and a stick of timber to be dropped at their house so they can tackle their latest project,” James said. HBT Group Re-branding both stores to the H Hardware bannering is just one of the many benefits that come with being part of the HBT group, James says. “Another huge advantage of being part of the group is gaining access to companies and products that we might have never known about or seen until it is advertised in a Bunnings or a Mitre 10 James and Leanne Prime have managed the family business for many years.

catalogue. HBT accesses new and upcoming suppliers quickly and sends us an email to ensure we are aware of a new supplier and their products,” he said. “An example of this was the recent implementation of our stock food, dog and cat food which have all done exceptionally well in recent months. We never would have thought of implementing these products instore if HBT had not suggested it. It seems like everyone bought a pet throughout the pandemic so implementing these products in-store ensures a different following of customers which is great for business.” “When you run isolated country stores, being part of HBT and having access to this type of information is priceless. HBT pushes hard to make sure we have access to these suppliers and we get in touch to source a decent price. HBT’s buying power is also exceptional along with the rebates that come with this,” he said. Future plans For now James says he has a number of plans in place including on-going upgrades to Maryborough H Hardware, and new racking to be implemented to make the store safer and products more accessible. “We will make slow changes as we keep trading including fixing up the external view that matches the new paint and upgrading fences. We will eventually tackle an internal re-fit of the Flagstaff store to get the hardware offering where it needs to be while also increasing our range of good quality trade products so tradies can easily source all the tools that they need.” “We are just a country store and we upgrade bit by bit. When the money comes in, we bang them through and just keep working at it. We are pretty old school and this is probably some of the charm that keeps our customers coming now and for many years to come,” James said. Sadly, at the time of writing, James’ father Geoff passed away after a prolonged illness. Geoff ’s career in hardware retailing spanned an incredible 50 years and he was well-regarded throughout the industry. Geoff and wife Chloris would have celebrated their 55th wedding anniversary next month. Geoff was 78 at the time of his passing. RETAIL FOCUS PJ’s H Hardware founder Geoff Prime – pictured with wife Chloris - passed away last month. PJ’s H Hardware is well known for its extensive range of timber and building supplies. MAY '22 | HARDWAREJOURNAL.COM.AU 11

In this edition of Behind the Counter, conference keynote speaker, business strategist and consumer behaviour analyst, Barry Urquhart, investigates how automated customer service can not only damage your reputation but also hinder potential repeat sales, permanently. Hold on. That’s not service! Tradies and DIYs are demanding customers. Their expectations of retail and wholesale hardware outlets are high – on numerous counts and aspects. For example, when installed and operated, automated artificial intelligence-driven telephone and online answering services impact the team-members who are the first personal interactive contact with existing or prospective clients who are unsatisfied, annoyed, frustrated and underwhelmed with their customer service experience. That is brand damage writ large, and morale issues underscored. No-one, it seems wins when technology intercedes, interrupts, and overwhelms. When customers are asked to wait, a majority do so. That gives them time to think. Often those thoughts are negative and attention can, and does turn to competitors and substitutes. In many instances, where relationships matter, value is subjective and buying criteria favour emotionalism, human engagement is fundamental. Technology, when introduced, can enhance operational efficiency and lower costs. However, when the human quotient is removed or marginalise, it is typically a false economy. The expenses are magnified and multiplied in terms of lost customers and forsaken revenues, profits, loyalty and repeat business. Retail hardware is similar in nature to banking and pharmacy. Relationships and preferences are founded on personal relationships. Often the business, brand and service names are secondary, supportive elements. Designers of automated systems which do not have immediate and ready access to local, human contact, have little or no understanding, respect for, or sensitivity to the concept of customer obsession and service excellence. Service, and its many mutual benefits, is about outcomes, not processes. It does cost, but poor or a lack of service costs more. That is, sales, customers, repeat business, referrals, and loyalty. And the damage to your business could last much longer than you think. The triple zero emergency ambulance telephone service in Victoria is a case in point. Recent publicity revealed that urgent calls to that number are consistently answered within the nominated five-second benchmark. That is impressive. Regrettably, the receptionist is often an employee of a telecommunication company. Actual access to the ambulance service can and has taken up to 15 minutes. That is the connection to the specific service, not the dispatching or the arrival of the vehicle.

In life-threatening circumstances that can mean the difference between life and death – or contribution to the latter. True measure of service For tradies, any time spent away from the tools and on-site can incur financial penalties for them. Opportunitycosts are usually measured in modules of time. Therefore, value seldom equates, or is equal to costs. Hence, it is advisable to regularly engage all service providers in reviewing, refining and improving policies, processes and procedures with a single focus of enhancing response and performance times. Marginal increments can result in exponential returns. The same principles apply to the many time-poor domestic handy-persons. Calls to roadside vehicle service assistance can, and do, experience similar circumstances. Likewise, the victims of natural disasters like floods and fires are kept waiting for services which address remediating, repatriating, and paying insurance for reparation. Managers of banks, engineering, heavy equipment, retail, and supply organisations stand exposed, accountable, and answerable to and for identical and like instances. Rapid change Yes, now is the time to accelerate timeliness within the context of “customer focus”. Most things in life, business and the broader hardware sector are being tainted with the expectations of, and the dreams for time-saving processes and experiences. Since the declaration of the COVID pandemic in March 2020, hardware retailers have introduced and upgraded the inactivity, efficiency, and productivity of websites, dedicated on-site collect facilities, on-site delivery provisions and payment systems. Ideally, these systems should be integrated, seamless, accurate, and require only a ‘one-touch’ experience for customers. In a recent national survey conducted by a retail trade magazine, Bunnings was rated number one in online customer experiences. It out-ranked Woolworths, K-Mart, JB Hi-Fi, Myer, and David Jones. Word gets around. Therefore, maintaining, and continually improving standards will be important to maintain a competitive advantage and consumer interest. The investment in time and money far outweighs damage caused to a business when inferior services are utilised. However, it is essential that publicity and public relations initiatives are complemented and reinforced with consistent, disciplined and structured advertising, marketing and sales missives. Incomparable Skills shortages and supply-chain disruptions have continued to contaminate consumer, media and industry perceptions and expectations. The impacts are noticeable in response times, contract periods and service costs for new-home constructions, extensions, maintenance, and damage repair in and around residences and commercial properties. Expectations are low. So too is tolerance. Therefore, the need exists to re-educate existing, prospective and past customers and clients. Being elevated on the shopping list is advantageous, and typically involves little or no financial increases in direct outgoings. Sourcing local products and services via independent hardware groups, short supply-chains, accessible fulfilment centres (warehouses) and ‘will-do’ attitudes attract premiums and are accepted by a significant majority of consumers and clients as representing substantial value. Time is money Single-minded philosophies are limiting. However, at present, an emphasis on time and timing does strike a chord with consumers and clients from a broad cross-section of society. Declaring a statement attracts attention. Delivering the promise wins business, enhances reputation, establishes competitive advantage, and represents genuine value. “Hold on,” some may say, “that is difficult to achieve and sustain”. True, but not impossible. The wheels of commerce are turning. There is a better way. Find it. A good starting point will be discussions with, and the collaboration of your suppliers, distributors, and supply-chain service providers. When everyone lifts and contributes, everyone wins. No buts Rationalisations are shallow when addressing the needs for, expectations of and mutual benefits from service excellence. Business owners and managers – retail hardware operators included - tend to be more price-sensitive and resistant than their customers and clients. The latter seek value and expect to pay for it (not necessarily, happily). When driven by customer obsession, costs and processes are typically set aside. A single-minded focus on the outcomes and customer/client satisfaction inevitably leads to revised and upgraded standards, philosophies, and policies. The orientation then correctly turns to HOW. However, be quick. Avoid the temptation to hold on, and be sure to revisit, reaffirm and possibly refine your business PURPOSE. Inevitably, the sub-text will centre on time and timeliness. Barry Urquhart Conference Keynote Speaker Marketing Focus M: 041 983 5555 E: W: BEHIND THE COUNTER MAY '22 | HARDWAREJOURNAL.COM.AU 13

US NEWS US building industry experts have revealed that many hardware and construction retailers are now left without building materials after Amazon bought unprecedented amounts from wellrenowned suppliers. Dallas-based McRight-Smith Construction President Andrew Smith was recently told there is now a six-month wait for supply after Amazon bought all the stock. Being well aware of the supply chain challenges, Mr Smith placed his order 20 weeks in advance but the supplier quoted a lead time of at least 40 weeks, a report has revealed. This then forced Mr Smith to seek out smaller companies to handcraft the materials with the use of alternative suppliers pushing the cost from $65,000 to $99,500 but reducing delivery time by 24 weeks. “That is the choice people have to make. Are you willing to spend more money to take another route or do you extend the duration of the construction project?” he said in the report. Amazon’s bulk buy move is just another nail in the coffin for many construction and building companies after its real estate footprint grew from 97.3 million square feet of ground-f loor real estate in the US in 2016, according to data provided by MWPVL, to a 370 per cent increase, with the company expected to reach 457.3 million square feet by the end of this year. A 2021 report from Colliers revealed the company’s rapid acceleration of warehouse construction activity has placed significant pressure on the construction materials supply chain. An unnamed US steelmaker reported that orders for Amazon-related construction projects were about 33 per cent of its domestic capacity, pushing lead times to a 20-year high, according to the report. The report also referenced advice from national industrial contractor ARCO Design/Build Industrial who advised customers to expect price increases for joists, beams and deck materials that could lead to an overall increase in construction costs of $1.30 per square foot. While many companies did plan ahead and order materials months in advance, only some institutional giants like Amazon have enough capital to stock materials giving them a serious advantage in a desperate market, according to the report. The US Census Bureau also reported that construction costs hit a 50-year high in 2021 with prices rising 17.5 per cent year-over-year between 2020 and 2021 and last year’s costs 23 per cent higher than in 2019 according to the report, with the cost of wood increasing 85 per cent in just three months. Despite the issues most developers have worked to source materials directly from overseas manufacturers or operating on a narrower scope until materials become available, with these solutions proving to be successful so far. The good news for the construction industry is that Amazon is expected to slow the growth of its fulfillment centres after 2022, with a Newmark report indicating that Amazon withdrew plans for some of its new industrial plans. This could be due to a change in budget management that came with the changing of the guard from Jeff Bezos to Andy Jassy in July last year. Amazon dries up building materials supply chain Image: Tony Webster from Minneapolis, Minnesota, United States, CC BY-SA 2.0 via Wikimedia Commons

Grocery company, Food City, recently announced that it will launch its own line of Curt’s Ace Hardware stores mid this year, a recent report has revealed. Seeking locations in Abingdon, Bristol, Piney Flats, Erwin and Elizabethton, the new line-up of stores will have a firm focus on servicing local communities. Food City President and Chief Executive Officer Steven Smith said in the report that the Food City team looks forward to bringing Curt’s Ace Hardware store locations to the communities who need this service. “Given our vast merchandising and marketing experience, I am confident that our team will do an excellent job managing and operating these locations. We greatly appreciate the support that our loyal customers have shown us and we want to leverage our Curt’s Ace Hardware brand to better save the communities where we already do business,” Mr Smith said in the report. The name Curt’s Ace Hardware comes from Mr Smith’s grandfather who had a long and distinguished career as a retailer operator. “He was a general mercantile store operator, he sold everything from hardware and horseshoes at the time. He had the Post Office in his store, and we have done this to honor his memory and his legend of being in the hardware business,” Mr Smith said in the report. ACE Store Manager, Kyle Geffers, said he was excited about the potential of the partnership. “You ain’t gotta go through a big box retailer, you ain’t gotta go 100 yards to get a bolt. You can walk in, you’re in an 8,000 square foot building, you just get the bolt that you need and you can leave,” Mr Geffers said in the report. Food City’s parent company, K-VA-T Food Stores, reported that up to 200 jobs will be created through the partnership. The US Bureau of Labor Statistics’ Producer Price Index (PPI) report has revealed that the price of materials used in residential construction, minus energy, jumped 1.4 per cent in March this year. The jump in material costs comes after the cost of construction materials also rose 2.2 per cent in February and 4.1 per cent in January, totalling an eight per cent increase since January 1, a recent Hardware Retailing report has revealed. The cost of building materials has now risen 20.4 per cent and is up 33 per cent – year-over-year - since the pandemic began. Even larger jumps were revealed in services inputs to residential construction up 3.2 per cent in March, 5.1 per cent in February and 6.2 per cent in January, for a total increase of 15.2 per cent in 2022, according to the report, while the price index for services inputs to residential construction is up 18.5 per cent year-over-year and 39 per cent since the start of the pandemic. The Houzz US. Renovation Barometer, which monitors residential renovation market expectations amongst construction and design professionals, found that construction professionals are also concerned about the rising prices of gas and the impact it is having on businesses. Rising gas prices are expected to be a factor for professionals deciding whether to take on a new project, according to the report, with backlogs now sitting at around three months for construction professionals and two months for architecture and design professionals. Houzz Staff Economist, Marine Sargsyan, says while business activity and the confidence in demand for construction and design services has been the strongest the industry has seen in the last four quarters, industry professionals are cautious about expected performance in the second quarter. “Pros anticipate some impact on project inquiries due to inflation, supply chain delays and rising costs for materials, such as lumber, aluminium and even gasoline. Lengthy backlogs persist into Q2 however, signalling continued home renovation and design activity,” Ms Sargsyan said in the report. Food City plans Ace Hardware launch Construction material prices continue to soar Image: MAY '22 | HARDWAREJOURNAL.COM.AU 15

NZ NEWS Homebuilding expenses recently hit record highs due to on-going timber and construction product price hikes, according to CoreLogic New Zealand, after construction costs rose 2.4 per cent in the three months through to March. The hikes outperformed the quickest gain of 2.2 per cent in the second quarter of 2021, CoreLogic reported, after costs surged 7.3 per cent from 12 months earlier. This is the quickest gain recorded since 2013. The surging construction costs are seeing a rise in New Zealand’s inflation with Reserve Bank Governor, Adrian Orr, saying he expects interest rates to keep rising as the central bank seeks to contain inflation expectations. Wages also continue to climb, according to CoreLogic, as firms work to full capacity in an effort to meet the unprecedented demand. CoreLogic’s Chief Property Economist, Kelvin Davidson, recently revealed in a BollyInside report, that while higher costs and rising interest rates may prompt some to forgo new builds there will not be much respite for the construction industry. “Simply based on the pipeline of dwelling consents already approved builders will be busy for some time to come yet. I would not rule out a period of double-digit cost inf lation into next year,” Mr Davidson said in the report. The construction of Trade Depot’s expansive warehouse and showroom at Titanium Business Park near Hamilton Airport is just one of many new businesses filling one of Waipa's premium business park ventures. Trade Depot Founder and Director John Christie recently explained to the New Zealand Herald, that he has moved his family to Waikato so he could specifically work from his new flagship store. “(A few years ago) I saw a product overseas that I thought my customers would like, so I bought a bulk shipment. This shipment sat in my store and I sold none, so I listed them online and sold the lot. That is when I realised there was a nationwide market, not just local, and I could bulk buy products from overseas and sell them throughout New Zealand with a different model,” Mr Christie said in the report. It was then that Trade Depot in Auckland was born and just a few years on Mr Christie began looking for new locations to expand into and the Titanium Business Park location was the perfect fit. Mr Christie said that there was enough room for an expansive warehouse and showroom, that was also conveniently located to the airport so customers could easily fly in and shop. It is also located close to the soonto-be-completed Waikato Expressway and the Port of Tauranga where a lot of the stock comes in. With plenty of new home construction and renovations being conducted in the Waikato and Bay of Plenty region currently, Mr Christie said it was the perfect market to tap into. The scale of the business is massive, according to the report, boasting a 30,000 square metre warehouse (which could easily fit five rugby fields inside) and parking for 150 cars and trailers, as well as enough stock on-site to fill 500 shipping containers. Well over two kilometres of well-laid out displays have also been implemented in-store to assist customers in choosing what they need and with over 60 staff on site, customers can be assured their every need is catered for, according to the report. Trade Depot’s point of difference amongst hardware suppliers is that it concentrates on everything required for kitchens, bathrooms and appliances, and this offer starts from the smaller budget right up to high end. Trade Depot is already selling around 150,000 large appliances, 5000 heat pumps and bathroom fixtures purchased to renovate over 35,000 bathrooms per year, the report says, making it one of the top three appliance distributors in New Zealand. The globally sourced stock comes from Italy, France and China in an effort to deliver a modern styling and good performance, with the high volume of appliances sold from Trade Depot seeing the savings passed through to the customer delivering extensive savings. According to the report, Trade Depot also plans to open a new café in June so customers have the opportunity to recharge during their shop. Construction costs reach record highs Trade Depot boss moves closer to flagship store

Following the successful introduction of Pot Recycle in November 2021, Mitre 10 New Zealand has launched a second national product stewardship scheme, Lightbulb Recycle, in partnership with specialist waste and recycling business Interwaste. Mitre 10 Lightbulb Recycle offers customers a solution for the responsible disposal of used household lightbulbs of any kind. The scheme is expected to also raise awareness around the safe disposal of lightbulbs which should not be disposed of in household waste as they often contain components made of hazardous materials, such as mercury, which contaminates landfill and potentially pollute waterways. The service is now available through all 84 of the co-operative’s stores nationwide and customers can simply drop their old bulbs into the Lightbulb Recycle boxes at their local store. Mitre 10 NZ then sends the recycled bulbs to Interwaste where they are dismantled and the materials recovered to then be repurposed into raw materials for other uses. Glass, for example, can be repurposed into glass wool insulation batts, mercury is extracted and repurposed for use in the dental industry, while metals such as aluminum are separated and recycled for industrial use. Product stewardship occurs when a company or manufacturer takes responsibility for the full lifecycle of a product by recovering product and/ or packaging and repurposing the material’s new products. As with Pot Recycle, which closes the loop on plastic ID5 plant and seedling posts, Lightbulb Recycle supports the transition from a throwaway linear economy where disposal is mainly to landfill, towards a circular economy where waste is repurposed into new manufacturing pathways. Grant Fraser, Chief Legal and Property Officer and Executive Sponsor for Sustainability, acknowledges that the co-operative's sustainability journey still has a long way to go but says Mitre 10 NZ is committed to making a real and sustainable impact on the environment and its local communities. “We have much still to do but every change we make and every solution we develop for our customers contributes to the country’s drive to become more sustainable. Pot Recycle has diverted almost 10 tonnes of plastic from landfill to date,” he said. Mr Fraser said that Mitre 10 NZ also recently introduced a Sustainable Packaging Policy that requires all supply partners to reduce unnecessary packaging and to use only materials that are home compostable or fully recyclable by 2025. Mitre 10's lightbulb recycling program MAY '22 | HARDWAREJOURNAL.COM.AU 17

TIMBER UPDATE Pulp log trial expected to ease timber crisis Forest and Wood Products Australia, in partnership with the Green Triangle Forest Industries Hub, has received an Agricultural Trade and Market Access Cooperation Program Grant that will investigate the use of low-value wood fibre in engineered products in an effort to ease structural timber costs. According to an ABC report, the Green Triangle received the $1.3 million Federal Government Grant to create new wood products using softwood and hardwood pulp in an effort to assist current timber shortages. If successful the new products could be a welcome relief after a report by Forest and Wood Products Australia found demand for new housing will climb from 183,000 new dwellings per year to 259,000 by 2050, leading to a 50 per cent increase in demand for sawn softwood. Construction Forestry Maritime Mining and Energy Union National Secretary Michael O'Connor said in the report that more action was definitely needed. “Australia is not going to be able to build the new homes that it needs in the future if we do not take urgent action now to ensure we have the softwood supply we need. The timber shortage crisis is a global problem, and Australia cannot look to other markets for solutions. We need our own plan,” Mr O’Connor said in the report. Green Triangle Forest Industries Hub Executive General Manager Liz McKinnon said in the report that the project was potentially exciting for the regional industry as it underpinned thousands of local jobs. “Recent export log bans to China highlighted the lack of domestic processing opportunities for both softwood pulp log and hardwood chip, while at the same time there has been a shortage of structural timber. This project will determine whether it is feasible to manufacture an engineered wood product for use in building construction using this fibre,” Ms McKinnon said. Australian Forest Products Association Chief Executive Ross Hampton said the forestry sector's innovation could alleviate the domestic timber shortage. “We think this project is going to free up a lot more timber in the future if it successfully works. Ultimately we hope to deliver more timber to our markets, to our domestic processes; and to those consumers, builders, homeowners and renovators who are so desperately after more timber,” he said in the report. While he welcomed new wood products to assist the construction crisis, Mr Hampton pointed out that it would take more than innovation to alleviate timber supply pressure. “Ultimately, of course, we really have to get more trees in the ground. That is the big solution and this is what we are pushing really hard for in this election,” Mr Hampton said. In its April 2022 Interim report, Forest and Wood Products Australia predicted that Australia needs an additional 468,000 hectares of softwood plantations before 2050 to cope with demand. Until the required trees are in the ground, Member for Barker, Tony Pasin, said the government contribution will allow the industry to develop the concrete and steel of the next generation, adding value to traditionally low-value fibres. “From my perspective that means an Aussie log is being converted into a high-value offering via a whole series of Aussie jobs along that value chain. Now if some of those engineered wood products end up in boats leaving this port for destinations international, fantastic. But equally these products will service our local market which will increasingly clamour for these hybridengineered wood products,” Mr Pasin said in the report. The use of low-value wood fibre in engineered products could see structural timber costs decrease.

Bunnings plans to double the number of processing plants it uses to manufacture wooden frames and trusses over the next 18 months in an effort to not only combat ongoing timber shortages but also growmarket share in the high-growth category. Bunnings currently operates three frame and truss sites based in Hallam Victoria, Warnervale New SouthWales and Unanderra, also in New South Wales. The three sites supply high-quality materials in the pre-fabrication of roof trusses, floor trusses and wall frames, servicing a mix of volume, project and SME builders. Bunnings Chief Operating Officer – Commercial, BenMcIntosh says Bunnings has operated Frame and Truss plants in Australia for over 20 years and sees a lot of opportunity in this area. “We are excited to be expanding our participation in this market, improving our offer and working with even more customers to provide solutions for their projects, end to end.” “The expansion plans form part of our wider commercial strategy as we continue to be a trusted partner to builders from the moment they are planning a build, right through to the fit out,” Mr McIntosh said. The investment is expected to create a number of newmanufacturing jobs while also expanding on the current frame and truss team that service customers with quoting, estimating and detailing for both small and large-scale projects. The new frame and truss sites are rumoured to be located in Melbourne, Brisbane and New SouthWales with Bunnings expected to use the new offer to entice builders into purchasing a variety of building materials required on-site alongside the frames and trusses. Target customers are expected to be residential builders who work within the medium-density residential market. The announcement comes as local builders become concerned that a fresh wave of building material shortages is on its way, according to the report, particularly as Russia’s invasion of the Ukraine continues to disrupt 15 per cent of global timber supply. The Tasmanian Forest Products Association (TFPA) has raised concerns that timber shortages could damage the housing construction sector after a Forest andWood Products Australia (FWPA) interim report found Australia’s reliance on imported timber will double by 2050. The unprecedented increase in demand is even more likely if the nation falls short of the plan to plant one billion plantation trees, a recent Examiner report has found. The report revealed that heightened construction activity has resulted in a 50 per cent increase in demand for timber, with TFPA Chief Executive Officer Nick Steel saying there was a substantial dependence on imported timber. “The critical timber shortages of the past two years have exposed Australia's over-reliance on timber imports which have become more expensive and difficult to source. This has also driven up building costs and significantly delayed construction.” “The finding that our reliance on timber imports could blow out to double over the next 30 years should be ringing alarm bells among policymakers. Furthermore, the global push for more fibre to transform building systems, the pivot away from plastics and move to sustainable biofuels, along with the need to halt deforestation internationally will only make gaining imports even more difficult,” Mr Steel said in the report. “There is time to avert this crisis if all levels of government work with industry to ensure Australia reaches its one billion new production trees goal and fill more of the supply gap with Aussie grown, renewable timber, and in the process support the hundreds of thousands of jobs forest industries underpin.” “The Coalition's recently announced $305 million forest industries package to support new plantations and drive forestry and timber innovation is an excellent start. TFPA looks forward to seeing Labor's response to Our Plan for Growth, including measures to achieve the One Billion Trees Goal,” Mr Steel said. Labor Agricultural Spokeswoman and Member for Franklin, Julie Collins, said that the opposition remained loyal to the native timber industry and growing the plantation industry. “Forestry is part of Labor's $15 billion National Reconstruction Fund, which will value add to the sector, make more here in Australia and unlock new jobs and investment. Labor will work closely with the industry and all levels of government to help grow our forestry industry,” Minister Collins said in the report. Bunnings set to double frame and truss plants TFPA raises concerns around timber shortage MAY '22 | HARDWAREJOURNAL.COM.AU 19

As home styling continues to drive millennials’ purchasing decisions online and in-store, connecting to house proud consumers is more important than ever. Millennials demand style and usability within security sector It is for this reason that the 2022 consumer continues to look at ways to express their style through hardware channels, which is why Allegion believes it is so important to connect with consumers on a deeper level this year. Allegion Marketing Director – Australian and New Zealand, Craig Patterson says this deeper connection is not only accessed via social media, but in-store where the brand needs to show it is changing with the times as well. “We have taken some inspiration from other industry leaders and looked at how brands are connecting not only with builders, but the homeowner and the end-user as well and really making the brand accessible in this way. When it comes to products that are on-trend, we are seeing a lot of brass finishes and the rustic look remaining popular, while sustainability is continuing to be a very relevant topic amongst most industries as well,” he said. This year consumers continue to show they are supportive of businesses that invest in sustainability. “While it is not always the most cost-effective or easy option navigating the sustainability route, it is certainly the right thing to do. We are committed to this as a company and the entire team is supportive of being more sustainable whether this is through our packaging, the shrink-wrap we use, or consolidating freight to use less fuel. We are looking across the business to do what we can to be a better global citizen.” “Allegion is focused on packaging sustainability with all of its new products currently, and while it is more expensive – as we look at alternate technologies with packaging, we are really excited by what will happen over the next few years as this project progresses. We will also use this as an opportunity to understand the customer experience and provide an improved Omnichannel experience where our customers can connect with the product online and offline as well,” Mr Patterson said. Reflecting on the past two years, Allegion cleverly used this tumultuous time to look inside the company to investigate areas for improvement and milestones to be celebrated. SAFETY & SECURITY 20 HARDWAREJOURNAL.COM.AU | MAY '22