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Ikea adapts to consumers – Business News

Nov 28, 2018 / 7:25 am | Story:

Sales of new U.S. homes plummeted 8.9 percent in October, as the number of newly built, unsold homes sitting on the market climbed to its highest level since 2009.

The Commerce Department said Wednesday that new homes sold at a seasonally adjusted annual rate of 544,000 last month. New-home sales have declined in four of the past five months. Over the past year, sales of new homes have dropped 12 percent, as higher mortgage rates have caused the buyers to back away.

The report adds to the evidence that the U.S. housing market has stalled after years of prices climbing faster than incomes. The affordability pressures were offset by historically low mortgage rates, but the borrowing costs for homeowners shot up after President Donald Trump signed a deficit-financed tax cut into law at the end of last year. Sales of existing homes have dropped 5.1 percent this year, the largest annual drop recorded by the National Association of Realtors since July 2014.

Mortgage buyer Freddie Mac said that the average rate on the benchmark 30-year mortgage was 4.81 percent last week, up from 3.92 percent a year ago.

The decline has left homebuilders with 336,000 homes listed for sale. This is the highest level since January 2009, when the real estate market was still sorting through the wreckage of the last decade's housing bubble.

New-home sales fell in the Northeast, Midwest, South and West last month.

The median sales price has dropped 3.1 percent from a year ago to $ 309,700.


Nov 28, 2018 / 7:02 am | Story:

The National Basketball Association has reached a deal to provide official league data to licensed sports betting providers.

In a pact announced Wednesday, the NBA is partnering with Sportradar and Genius Sports to distribute NBA betting data to sports betting providers in the United States.

Sports leagues that once vehemently fought against the prospect of sports betting are increasingly seeking to get in on it now that it is legal.

On Tuesday, Major League Baseball partnered with MGM Resorts to become an official gambling partner in the U.S. and Japan. MGM Resorts previously reached similar deals with the NBA, WNBA and NHL.

FanDuel joined the NHL and its New Jersey Devils franchise this month for sports betting and fantasy sports play.

Nov 28, 2018 / 6:58 am | Story:

Alimentation Couche-Tard executives say they are "excited" by the growth and popularity of low-risk smoking products, but are keeping an eye on the flavored e-cigarette pods made by Juul Labs.

California-based Juul elicited controversy when it yanked mango-, fruit- and cucumber-flavored pods from U.S. shelves in order to reduce their appeal to minors, but decided to keep selling its products in Canada.

Brian Hannasch, the Quebec-based convenience store chain's president and chief executive, says Couche-Tard is focused on making sure that it is not part of the problems associated with such products.

He says Couche-Tard has revised its processes and practices to ensure it does not sell such items to underage consumers, but wants to work with partners to understand how products can be sold on a safe way.

Hannasch also says the market has seen enough of a short-term bump from such products that he feels "optimistic" about the future of alternative tobacco products.

Couche-Tard made comments during a conference call with financial analysts to discuss its latest quarterly results. The company beat expectations as its net earnings rose 9 percent in its most recent quarter thanks in part to acquisitions and lower taxes.


Nov 28, 2018 / 6:37 am | Story:

Canada's total vacancy rate dropped for a second year in a row, as demand for rental housing grew at a faster pace than supply, according to Canada Mortgage Housing Corp.

In its annual rental market survey, the housing agency says in 2018, the vacancy rate across the country was 2.4 percent, down from 3 percent in 2017.

CMHC says demand for rental housing has grown at a faster pace than supply. It found that the number of occupied units climbed by 2.5 percent in October 2018, compared with an increase of 1.9 percent in the same month a year earlier.

Ontario, B.C. and Manitoba all saw an increase in vacancy rates, while Quebec, Alberta, Saskatchewan and the Atlantic provinces all saw declines.

The report, which looked at purpose-built rental units and condo apartments available for rent, found the average rent for a two-bedroom apartment jumped by 3.5 percent from October 2017 to October 2018. This increase was higher than the inflation rate during this period.

B.C. saw the biggest climb in rent, with Kelowna recording a 9.4 per increase. Saskatchewan, the province with the highest vacancy rates, saw rents go down slightly, by 0.5 percent in Regina.

In October, Vancouver had the highest average monthly rent for a two-bedroom apartment at $ 1,649, followed by Toronto at $ 1,467 and Calgary at $ 1,272.

Trois-Rivieres, Que., Had the lowest average monthly rent in October at $ 601, followed by Saguenay, Que., At $ 608 and Sherbrooke, Que., At $ 639.

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An airport worker drops by Warsaw's newest Ikea store during her lunch break to finish up plans for a home refurbishment. Around her, people drift in and out of the shop, putting small houseware items in big yellow bags as cafe tables fill up with people just stopping in for the lunch.

The store is not one of the Ikea's out-of-the-way, maze-like warehouses that require a car to visit, but a shop like any other in the city center shopping mall. The Swedish retailing giant plans to open 30 such smaller stores in major cities around the world as part of a broader transformation to adapt to changing consumer habits. Compared with just a decade ago, shoppers are more likely to live in urban areas and not have a car, and often want a nearby location to look at goods like furniture in person before ordering things online.

"I like the idea because you can come any time," said 29-year-old Angelika Singh, the airport worker, as she finalized an order for a new kitchen. "Mostly when you go to Ikea you need to have a full day free, or at least half a day free, because it's far."

Warsaw's store is located on two floors covering about 5,000 square meters (about 54,000 square feet), about one-fourth of a traditional big-box store. Similar stores have also been opened in major cities like London and Madrid and more are expected, with one due next year in Paris, among other locations.

Shoppers can buy cushions, curtains and other home items. They can design the layout of bedrooms and kitchens at computer stations. But those hoping to buy a bookcase or bed will not find them stocked in a large warehouse, although they can order them at kiosks and have them delivered to their homes.

As such, it offers a very different shopping experience from the usual visit to one of the large warehouse stores.

"Ikea has been doing pretty much the same for 70 years. It's been a cash-and-carry company, and it's still for most of its sales," said Andreas Flygare, project manager for Warsaw store. Now, he explained, the company must adapt to a consumer environment that has changed dramatically in the last 10 years.

"You have companies such as Amazon and Uber that raise the bar for what is expected. Because if you can have the same-day delivery, or Uber is two minutes away, it influences other companies like Ikea," he said in a recent interview in the store's cafe. "It can be a very tough environment. Everything is changing so fast."

While Ikea is still profitable, its earnings have recently been growing more slowly than expected.

Nov 28, 2018 / 5:31 am | Story:

Approaching "baby boomer" retirements will result in a huge transfer of business ownership over the next five to 10 years, but only a small percentage of owners have a formal written succession plan, the Canadian Federation of Independent Business says.

In a report released Wednesday, the CFIB suggests that 47 percent of business owners with a small or mid-size enterprise (SME) intend to exit their business within the next five years, and 72 percent plan to exit within a decade.

However, the CFIB report said only eight percent of surveyed owners had a formal, written succession plan. About 51 percent did not have any plans and 41 percent had an informal plan.

"While it is encouraging that a good proportion of business owners intend to pass their business on to a new generation, the lack of formal planning leads to significant risks for Canada's competitiveness and prosperity," the CFIB says in a report by research analyst Marvin Cruz.

"With more than $ 1.5 trillion in assets changing hands over the next 10 years, Canada can not afford to have so many SME owners unprepared to make that transition."

The CFIB's conclusions are based on an online survey of 2,507 small business owners conducted last May.

In four out of five cases, the retirement was cited as the reason for the planned departure from a business. Other reasons included a move to another business venture or lack of profit in their current enterprise.

About 62 percent of survey respondents said they would rely on selling their business as a source of retirement income.

The CFIB said formal succession plans have the advantage of being developed with input of professional advisers who can help develop a timetable and a process for resolving disputes.

It also identifies a number of barriers to the creation of a succession plan – such as family members who do not want to take over the business and entrepreneurs who would prefer to start a new business rather than buying existing business.

"Currently, there are very few options in Canada to connect those looking to exit their business with those who may be interested in buying a business and may be a field for governments to explore," the report says.

It also suggests that the government changes the tax rules so that transfers of small businesses to members of the family are treated in a similar way to a non-family buyer.

Under current rules, a gain in the business's value over the owner's tenure is treated as a dividend if sold to a family member and as a capital gain if sold to a non-family buyer.

"In effect, these rules can discourage the transfer of a business to a family member, because the transaction does not include the right to a lifetime capital gain exemption and, therefore, is more heavily taxed."

Nov 27, 2018 / 4:41 pm | Story:

Donald Trump tweeted a warning shot across GM's front bumper Tuesday, threatening to pull all U.S. subsidies for America's largest automaker if its plans to slash jobs and production at North American plants prove to be a precursor to building interconnected electric cars in China.

The U.S. President's senior economic adviser was in the middle of a White House briefing when Trump delivered his latest broadside, and full 24 hours after General Motors announced plans to cut more than 14,000 jobs and end production at five plants, including one in Oshawa, Ont.

"The US saved General Motors, and this is the THANKS we get!" Trump tweeted, noting that GM facilities in both China and Mexico appeared to escape unscathed. "We are now looking at cutting all GM subsidies, including for electric cars." General Motors made a big China bet a few years ago when they built plants there (and in Mexico) – I do not think that bet will pay off. here to protect America's Workers! "

The company said the cuts – 2,500 jobs in Oshawa, GM's Canadian heartland, as well as 3,300 production workers in the United States. and 8,000 salaried staff – are part of a dramatic course correction aimed at better GM positioning for the dominance of electrified, interconnected and automated cars.

But it was hard to miss the fact that the bulk of the U.S. cuts came in the Midwest Rust Belt, a region that was instrumental in elevating Trump and his jobs-promising, "America First" agenda to the White House in 2016.

They also cast a pall over this week's signing of the U.S.-Mexico-Canada Agreement, the hard-won successor to NAFTA that Larry Kudlow, director of the National Economic Council, acknowledged Tuesday was designed to foster the growth of the auto sector.

"(Trump) believes – as, frankly the prime minister of Canada, (Justin) Trudeau, believes – that the USMCA deal was a great help to the automobile industry and to auto workers," Kudlow told a White House briefing.

"There is a disappointment that it seems that GM would rather build its electric cars in China than the United States, and we will look at certain subsidies regarding electric cars and others, whether they should apply or not."

Nov 27, 2018 / 12:25 pm | Story:

Unifor president Jerry Dias says General Motors' plan to close its car plant in Oshawa, Ontario puts it on the brink of leaving Canada completely.

The head of Canada's biggest private-sector union represents about 2,500 workers at the factory, which carmaker plans to close at the end of 2019.

After meeting Prime Minister Justin Trudeau in Ottawa on Tuesday, Dias said GM has moved production of five models of vehicles to Mexico and the United States in the past few years, and if the Oshawa plant closes, the company will have only one left here.

Dias argues that if General Motors stops making cars in Canada, it would devastate the parts industry and that would cause great trouble for other car companies.

He says labor standards in Mexico are low and Trudeau has to work with President Donald Trump to keep production jobs from shifting south.

Dias says the revamped NAFTA deal should help eventually, but the parts that apply to the auto sector will not kick in for years and by then it could be too late.

Nov 27, 2018 / 10:17 am | Story:

The Bank of Nova Scotia plans to sell its banking operations in nine Caribbean countries and its insurance operations on two other regional markets – and its chief executive expects more international divestments in the pipeline.

Scotiabank said Tuesday it has signed a deal to sell its banking operations on nine "non-core" markets – including Grenada, Maarten and St. Lucia – to Republic Financial Holdings Ltd. for an undisclosed amount.

The bank also said its subsidiaries in Jamaica and Trinidad and Tobago will sell their insurance operations to and partner with Sagicor Financial Corp. Ltd. to provide products and services in the two countries, for an undisclosed amount.

These exits are part of Scotiabank's broader strategy to "sharpen our focus, increase scale in core geographies and businesses, improve earnings quality and reduce risk to the bank," said its chief executive Brian Porter.

The bank intends to remain in its core Caribbean markets as well as the Pacific Alliance countries of Peru, Chile, Colombia and Mexico, but there are more divestitures on the horizon, he told analysts at a conference call.

"We've got a couple more to go and you'll hear more from us in 2019, but they do not relate to Latin America or the Pacific Alliance," Porter said.

The divestitures were announced as the Toronto-based lender reported its earnings for the three months ended Oct. 31, capping off its 2018 financial year with a nearly 10 per cent increase in its fourth-quarter profit compared to a year ago, but falling just short of market expectations.

Scotiabank earned $ 2.27 billion or $ 1.71 per diluted share for the three months ended Oct. 31, up from $ 2.07 billion or $ 1.64 per diluted share in net income during the same time last year.

On an adjusted basis, the bank reported earnings per share of $ 1.77 compared to $ 1.65 a year ago. Analysts on average had expected adjusted diluted earnings per share of $ 1.79 during the fourth quarter of the bank, according to Thomson Reuters Eikon.

Scotiabank is the first of its peers to report its quarterly and full 2018 financial year earnings. Royal Bank of Canada, Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce report later this week.

For its full 2018 financial year, Scotiabank says it earned $ 8.72 billion or $ 6.82 per diluted share, compared with a profit of $ 8.24 billion or $ 6.49 per diluted share in 2017.

The bank's recent acquisitions – including a majority stake in a Chilean bank – have weighted heavier on the bottom line than anticipated, said John Aiken, an analyst with Barclays in Toronto.

"Further, Scotia could not escape the capital markets' weakness in the quarter, despite a lower relative exposure," he said in a note to clients. "Despite the miss, we believe that there are significant reasons for optimism going forward, including likely operating leverage improvements as the acquisitions are integrated and improving sentiment with the disposal of certain operations in the Caribbean considered as non-core."

Nov 27, 2018 / 10:16 am | Story:

Accenture will add 800 new technology jobs in Canada by the end of 2020.

The consulting firm says the jobs will be focused on digital economy and will include designers, data scientists, engineers and workers based on analytics.

The positions will be predominantly located in major cities across the country and will join the 5,000 Accenture employees who already work in Canada.

Accenture is also investing in expanding its apprenticeship program to increase digital-based job opportunities for under-represented communities.

The company announced its forthcoming efforts as it unveiled a new innovation hub in Toronto's financial district that aims to use technology including artificial intelligence and blockchain to solve customer's challenges.

The new Toronto location that employs 300 workers joins a network of 10 hubs that Accenture operates across North America.

Nov 27, 2018 / 5:14 am | Story:

There has been a dramatic increase in the number of complaints raised against Canada's telecommunications providers, according to an annual release released by the private-sector body assigned to resolve disputes brought by customers who have not been able to get satisfaction directly from their provider .

The 14,272 complaints raised by Canadian telecom and TV customers over the 2017-18 period were up 57 percent from the previous year, while the total number of issues they raised rose 67 percent to 30,734, the Commission for Complaints for Telecom-Television Services says in its report for the 12 months from Aug. 1, 2017 to July 31, 2018.

"With the addition of TV complaints to our mandate in September 2017, we did anticipate an increase – but not the 57 percent that we received," CCTS commissioner Howard Maker said in a report.

But, Maker added, fewer than five percent of complaints related to TV alone.

"The increase was in the same types of issues that Canadians have been complaining about historically: sales transactions that go wrong, a service that does not work as expected, and billing problems."

The CCTS is a decade-old independent industry-funded body that works under a mandate from the Canadian federal regulator.

Nov 26, 2018/7: 04 pm | Story:

Maple Leaf Foods Inc. is building a 660-million-dollar fresh-poultry facility in London, Ont., which will enhance its ability to process higher-margin products by closing three aging plants in the province.

The protein company will invest initial $ 605.5 million into the plant that will serve Eastern Canada and additional $ 5 million into related projects over the next five years, while $ 34.5 million will come from the government of Ontario and another $ 28 million from the Canadian government.

It will lead to a net reduction of about 300 jobs.

The new facility will span nearly 60,000 square meters and employ 1,450 full- and part-time workers once operations begin, which is expected in the second quarter of 2021. Construction will begin this spring.

"It will solidify and strengthen the poultry industry in Canada for the next many, many decades," said Maple Leaf CEO Michael McCain in a conference call after the markets closed Monday.

Chicken is the most consumed and fastest growing meat protein in Canada.

McCain said the plant is the largest single-site investment ever made in the Canadian food sector. Production of three of Maple Leaf's other plants will eventually be consolidated into the new facility, the company said.

Its St. Marys plant is expected to close by late 2021 and its Toronto and Brampton facilities will close by mid to late 2022.

"These plants have served us well, but they're now 50 to 60 years old and severe growth is constrained because of location, footprint or infrastructure and nearing the end of their productive capacity," McCain told analysts.

McCain said he "deeply" regrets the impact on existing employees, but the plant will allow it to earn and extra $ 105 million in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) annually by delivering higher margin value-added air-chilled , tray-packed boneless and ground poultry. It will also help to expand its retail brand and supply fresh chicken to two other facilities that make cooked and sliced ​​meat.

The new plant, located near Highway 401, will deliver more than 30 per cent cost savings from lower labor, overhead and distribution and a one-third increase in capacity that can expand to meet growing demand.

"This will be the best of our knowledge, the single most technologically advanced facility of its kind in the world."

The company plans to provide affected employees with job opportunities at the new facility or other plants it operates, he said, as well as services to help them eventually find new employment.

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