Rona focuses on three store sizes to take on Home Depot

Rona Inc. wants to be the market leader in every community in which it operates as it takes on U.S.-based home-improvement titan Home Depot Inc., Rona chief executive officer Robert Dutton says.

To achieve this, Rona, with 530 stores, plans to focus on its strategy of running three sizes of stores, ranging from massive superstores to medium-sized big-box outlets and smaller specialty outlets, Mr. Dutton said in an interview.

Home Depot runs about 100 jumbo-sized stores, although it is starting to build smaller versions of its outlets in some communities.

Mr. Dutton compared the Rona model to that of supermarket leader Loblaw Cos. Ltd., which also operates diverse sizes of stores including the Real Canadian Superstore and No Frills outlets.

"We have the same business plan as Loblaw," Mr. Dutton said. "Their model inspired me."

Part of Rona's strategy is to rebrand some of its recently acquired big-box stores under the Rona Home & Garden banner. Yesterday, the company said it was renaming six Building Box outlets in Ontario, starting on Monday. They were inherited by Rona when it bought Reno-Depot Inc. last year.

Also yesterday, Rona said it will build three new stores in Ontario -- superstores in Barrie and Kitchener and a smaller outlet in Peterborough targeted more at tradespeople and do-it-yourselfers -- over the next year or so.

Rona of Boucherville, Que., which has about $2.7-billion of sales or an estimated 14 per cent of the home-improvement market, aims to increase its share to between 22 and 25 per cent -- reaching $7-billion in sales -- by 2007, Mr. Dutton said.

It wants to run as many as 725 stores by then, he said.

Rona competes with Home Depot by catering more to women, who are a burgeoning part of the sector's clientele, with more emphasis on home decor, greenhouse and lawn furniture products, he said.

They are grouped in boutiques within the large stores that make it easier to shop and supported by more attention to customer service, he said.

"We offer something different for the consumer," he said.

He cited a wood-flame barbecue that sells for about $250 to $300 at Rona stores. It is more environmentally friendly than other models on the market and easier to start up, a spokesman said.

"We don't want to have the same things as others have," Mr. Dutton said.