BOUCHERVILLE, Quebec -- Canadian home-improvement retailer Rona Inc. is considering adding convenience stores and gas bars to some of its big-box outlets, reported The Globe & Mail.
The move follows Home Depot's recent foray into the c-store channel in the United States, although Rona CEO Robert Dutton said the company would not operate the c-stores and stations itself, but would team up with specialists in those areas, such as Petro-Canada.
Partnering with c-store and gasoline operators would be a quick way to attract more [image-nocss] customers, Dutton told the newspaper. The concept could be implemented as early as next year. We're looking at that, he said. It's a good service for the customer. If they take some gas and they want to come to shop at our stores, it's going to be a good thing.
Home-improvement retailers have enjoyed red-hot growth over the past few years, said the report, but the market is showing signs of a slowdown as the housing market starts to cool. Rona and industry leader Home Depot Inc. are both looking for ways to supplement their core business. In Canada, the two chains will face added challenges next year when U.S. retailer Lowe's Cos. Inc. begins to open stores there.
Rona's possible move into c-stores and gas bars would see the retailer entering yet another heated retail sector, retail analyst Benoit Caron at Canaccord Capital Inc. told the paper.
The new concept probably wouldn't take up a lot of space in Rona's parking lots, and could boost the retailer's overall traffic, Caron added. It's a good way to increase return on capital. The new venture would be timely because Rona's same-store sales at outlets open a year or more have started to slow down, he said.
Boucherville, Quebec-based Rona is considering setting up the new stores at about one-third of its 70 outletsthe ones with large parking lots, he said. The retailer expects to have more information by the third quarter.
While Rona is studying U.S. opportunities, its priority is to take over smaller home-improvement retailers in Canada, the company said. In the United States, Rona will look to launch by buying smaller independents rather than rolling out big-box outlets.
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