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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 has risen to its highest level since 2009.

The Commerce Department said Wednesday that new homes were 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 potential buyers to back away.

The report adds to the evidence that the U.S. housing market has stopped 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-taxed tax cut in the law last year's end. Sales of existing homes have tumbled 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 benchmark 30-year mortgage was 4.81 percent last week, up from 3.92 percent year-on-year.

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

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

The median sales price has tumbled 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 morning, the NBA is partnering with Sportradar and Genius Sports to distribute NBA betting data to sports betting providers in the U.S.

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

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

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

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

Alimentation couche-tard executives say they are "excited" by the growth and popularity of low-risk smoked products, but are keeping an eye on flavoured e-cigarette pods made by Juul Labs.

California-based Juul was an elicited controversy when it yanked mango-, fruit- and cucumber-flavored pods from U.S. shelves in a bid to reduce their appeal to the minor, but decided to keep selling their products in Canada.

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

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

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

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


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

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

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 rent housing grew at a faster pace than supply. It found that the number of occupied units climbed by 2.5 percent in October 2018, compared with a rise of 1.9 percent in the same month a year earlier.

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

The average rent for a two-bedroom apartment jumped by 3.5 percent from October 2017 to October 2018, which was higher than the inflation rate this year. the period

B.C. saw the biggest climb in rent, with Kelowna recording an 9.4 per increase. Saskatchewan, the province with the highest vacancy rates, saw rent down 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 its lunch break to finalize plans for a home refurbishment. Around her, people are drifting 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 lunch.

The store is not one of 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 retailer 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 to just a decade ago, shoppers are more likely to be living in urban areas without having a car, and often want a nearby location to look for items like furniture in person before ordering things online.

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

Warsaw's store is located on two floors covering nearly 5,000 square meters (54,000 square feet), about one-fourth of a traditional big-box store. Similar stores have also 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 the 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 a kiosk 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's 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 the Warsaw store. Now, he explained, the company must adapt to a consumer environment that has dramatically changed over the last 10 years.

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

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

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

Approaching the "baby boomer" retirement 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 47 percent of business owners with a small or medium size enterprise (SME) intending to exit their business within the next five years and 72 percent plan to exit within a decade.

However, in the CFIB report, only eight percent of the surveyed had a formal, written succession plan. About 51 percent had no plan and 41 percent had an informal plan.

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

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

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

In four out of five cases, retirement was cited as the reason for a 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 the sale of their business as a source of retirement income.

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

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

"Currently, there are very few options in Canada to connect those who are 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 will change the tax rules so that the transfer of small businesses to family members is treated in the same way as non-family purchaser.

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 is therefore 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 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. General Motors has announced plans to cut more than 14,000 jobs and end production at five plants, including one in Oshawa, Ont, in the last round of 24 hours.

"The U.S. saved General Motors, and this is the THANKS we get!" Trump tweeted, noting that GM facilities in both China and Mexico appeared to be unscathed. "We are now looking at cutting all GM subsidies, including for electric cars." General Motors made a big China for years ago when they built the plants there (and in Mexico) – do not think that the bet will pay off. I'm 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 U.S. and 8,000 salaried staff – are part of a dramatic course correction aimed at better positioning GM for the dominance of electrified, interconnected and automated cars.

But it was hard to miss the fact that the bulk of the U.S. The cuts came in the Midwest Rust Belt, a region that was instrumental in elevating Trump and his job-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 NAFTA successor, that Larry Kudlow, National Economic Council's director, acknowledged Tuesday that it was designed to foster the auto sector growth.

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

"There's 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 for 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 largest private-sector union represents about 2,500 workers at the factory that the carmaker plans to shut off 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 be devastating to the parts industry and that would cause big trouble for other car companies.

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

Dias says the revamped NAFTA deal should help end up, but the parts that apply to the auto industry will not kick in for years and by then it would 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 in two other regional markets – and its chief executive expects more international divestments in the pipeline.

Scotiabank said Tuesday it signed an agreement to sell its banking operations in nine non-core markets – including Grenada, St. 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 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 the scale in core geographies and businesses, improve earnings quality and reduce risk to the bank," said its executive 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 divestures on the horizon, he told analysts on a conference call.

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

The divestures were announced as a Toronto-based lender reported its earnings for the three months ended Oct. 31, capping off its 2018 financial year with a nearly 10 percent increase in its fourth-quarter profit compared to a year ago, but falling 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 with $ 1.65 a year ago. Analysts have expected adjusted diluted earnings per share of $ 1.79 during the fourth quarter, 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 – weighed heavier on the bottom line than expected, 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 moving forward in the future, including potential improvements in operating leverage, as acquisitions are integrated and improving the feelings of disposal of certain operations in the Caribbean considered 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 employees based on analytics.

The positions will predominantly be located in major cities throughout the country and will join the 5,000 Accenture employees already working 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 address customer challenges.

The new Toronto location that employs 300 employees 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 Canadian telecommunications providers, according to a privately-owned subsidiary, issued Tuesday by the private sector body responsible for resolving 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 increased by 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 31 July 2018.

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

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

"The increase was in the same types of issues that Canadians have complained about historically: sales transactions that go wrong, 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. building a $ 660 million fresh-poultry facility in London, Ont, which will increase its ability to process higher-margin products by closing three aging plants in the province.

The protein company will invest an initial $ 605.5 million into the plant that will serve Eastern Canada and a further $ 5 million in related projects over the next five years, while $ 34.5 million will come from the Ontario government and $ 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-time 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," Maple Leaf CEO Michael McCain said in a conference call after 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 from 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 in mid-to-late 2022.

McCain told analysts, "These plants have served us well, but they are now 50 to 60 years old and severely constrained by growth, because of location, footprint or infrastructure and near the end of their productive capacity."

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, delivering higher margins of 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 percent cost savings from lower labor, overhead and distribution, and one-third increase in capacity, which can expand to meet growing demand.

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

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

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