All participants, please stand by. Your conference is ready to begin. Thank you for standing by. My name is Valerie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Canadian Tire Corporation, Limited Third Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star then the number one on your telephone keypad. To withdraw your question, press star then the number two. We ask that you limit your time to one question plus a follow-up question before cycling back into the queue. This morning, Canadian Tire Corporation, Limited released their financial results for the third quarter of 2021. A copy of the earnings disclosure is available on their website.
It includes cautionary language about forward-looking statements, risks, and uncertainties, which also apply to the discussion during today's Conference Call. I will now turn the call over to Greg Hicks, President and CEO. Greg?
Thank you, operator. Good morning and welcome, everyone. I'm joined today by our CFO, Gregory Craig, as well as TJ Flood, who will be participating in the Q&A portion of the call. Before we get into the details of our Q3 results, I'm going to start this morning by recognizing the incredible work of our corporate charity, Jumpstart. As you heard me say before, Canadian Tire has a long history of supporting the communities where we live and work. Throughout the pandemic, we've proven that our purpose of being there for life in Canada is more than just a tagline. After 20 months in, our commitment has not wavered, as proven by the busy quarter had by Canadian Tire Jumpstart Charities. In Q3, Jumpstart continued to help build back sport and play in Canada through its CAD 20 million sport relief fund.
To date, more than CAD 17 million has been dispersed to help over 1,500 community organizations keep their doors open. In addition to addressing the challenges created by the pandemic, Jumpstart remains committed to removing financial, accessibility, and gender barriers to sport and play. In Q3 alone, the team completed four new inclusive playgrounds in Whitehorse, Yellowknife, Montreal, and Vernon, BC, as well as inclusive multi-sport courts in Thompson, Manitoba, and Uxbridge, Ontario. Together, these projects represent an additional 100,000 sq ft of accessible play, space where all kids of all abilities can play together. Constructing these recreation facilities truly takes a village. It wouldn't be possible without the hard work of our teams, our authentic connection to our communities, and the generosity of associate dealers, employees, and customers. In addition to being there for kids today, we remain committed to protecting our communities for tomorrow.
We recently published our 2020 environmental footprint report, which outlines the energy consumption and emissions that result from our business across the entire value chain, from the processing of raw materials to last-mile delivery to customers. In 2017, we set ambitious targets to reduce GHG emissions from buildings and operations by 22% by 2022 and keep emissions from transportation flat, both against a 2011 baseline. As has been the case with many companies, COVID-19 led to growth in volumes, particularly in e-commerce, which impacted our progress on our ambitious transportation targets. We continue to work with our transportation partners to reduce our GHG emissions footprint. More broadly, we continue to work on bringing our environmental work and social initiatives together in an integrated ESG strategy.
We recently established an internal executive leadership council that brings many leaders together, as well as a brand and corporate responsibility committee at the board level to oversee our ESG efforts. We know ESG is a process, not a project, and our work continues. With that, let's dive into our third quarter results. Overall, I am very pleased with our results this quarter. We were excited to welcome customers back for in-store shopping as most COVID-related restrictions were lifted in the quarter. In Q3, we delivered strong comp store sales growth in all banners against exceptional third quarters in both 2020 and 2019. Revenue declined as expected, led by lower shipments to dealers after significant revenue increases in both Q1 and Q2. I'm feeling really good about how our team is working to manage our margins and our OpEx disciplines, which Gregory will speak to in a moment.
From a broader customer health standpoint, we are beginning to see several key metrics starting to grow in our bank, including credit card sales being up over 23% in the quarter, as well as GAR growth for the first time in several quarters. We continue to ramp up our operating capital spend this quarter, primarily in real estate and IT, and continue to drive improvements to our retail ROIC. I intend to spend more time in my prepared remarks this morning discussing two critical areas, customer engagement and our supply chain capabilities. There's no question that increased customer engagement with the Triangle Rewards program has been a key driver of our top-line performance overall and in the quarter. On a rolling 12-month basis, we now have 10.7 million active Triangle members. These members are incredibly valuable, quite simply because they spend more.
Their average basket size is higher, and they shop across multiple banners and channels. In Q3, our loyalty members spent 30% more per visit than non-loyalty members, accounting for 57% of our total retail sales in the quarter. Our member base continues to grow with 680,000 joining in Q3 alone. This brings our year-to-date acquisition to 1.7 million new members, putting us on track to exceed the 1.8 million members who joined in 2020. In looking at our 2020 and 2021 cohorts, it's clear that our Triangle program is attracting younger, more digitally engaged customers. I also want to give a quick update on our Triangle Select subscription program. We are currently conducting a beta test, which was designed to help us understand all aspects of the value proposition for the customer.
We've been in market for about six weeks, and so far we are very pleased with our progress and results. We have just over 5,000 invite-only customers subscribed as part of the beta test. Over 50% of them are skewing younger than our average Triangle member, many have our credit card, and they're spending more across our banners. To date, the program benefits that have been used the most are the 10 times in-store CTM earn, which drives more traffic to our stores, and the own brands bonus, which further demonstrates their differentiation and popularity. It's still early, but we really like what we're seeing so far. Between now and the end of the year, we're exploring new acquisition channels as we look to ramp up enrollment, and we'll keep you posted on our progress.
The Triangle Select beta test and our entire Triangle loyalty program are in service of learning more about our members. We continue to hone and evolve our personalization efforts and drive more meaningful connections with and real value for our customers. Changing gears, I want to spend some time talking about supply chain, as I know that it's been top of mind for the past few months. In contrast to last year's supply chain challenges, which were related to manufacturing supply, the challenges this quarter were primarily related to ocean freight capacity. While we're not immune to the global supply chain issues, I'll spend the next few minutes outlining how our strong supply chain capabilities and experienced management team enable us to navigate challenges, including higher commodity prices, factory shutdowns, port closures, and shipping container shortages.
I'll start with the fact that we're the country's largest retailer of general merchandise and apparel. While we're very focused on inventory turns, the fact that we are neither a grocer nor a fast fashion retailer means that in times like these, we can be very flexible when it comes to holding inventory from quarter to quarter with a significantly lower risk of aging. The non-perishable nature of our products gives us flexibility around lead times and commercial terms, and as the owner of significant distribution and storage capacity through our store network, corporate-owned real estate and the REIT, we can easily hold excess inventory in Canada.
In addition, more than 1/3 of our revenue comes from our own brands, and our direct line to the producers of products such as NOMA Christmas lights, Mastercraft tools, and Denver Hayes apparel means we are in control of when and where goods are produced. We also have line of sight into the shipping from factories and a clear understanding where input shortages may require longer lead times, where cost inflation might lead to higher product costs, or in cases of longer-term shortages or inflation, a product redesign. As one of the largest distributors for national brand products such as Nespresso and Nike, we are quite confident that among Canadian retailers, we are getting our fair share of the products that we expect to be in high demand this holiday season.
Finally, as the largest importer of record in Canada, we have built strong relationships with our vendors and in the shipping and transportation world, particularly on the main routes in and out of Asia and across Canada to our more than 1,700 retail locations and distribution centers. We've proven that our supply chain capabilities can stand up to even the most unprecedented of challenges. As we mentioned last quarter, we chartered ships entirely dedicated to carrying CTR products to move our goods amid a global shortage of shipping containers. This strategic decision to charter four vessels enabled us to bring in key Christmas and winter categories in time for Q4. We have successfully built inventory to meet anticipated customer demand. We ordered more and earlier in key categories and lengthened lead times in anticipation of shortages of inputs such as the microchips used in our NOMA products.
We also continued to make use of third-party logistic providers to increase our inbound storage capacity, ensuring that we could handle our extra inventory. We've been planning for this quarter since before this time last year. The work, which is led by our Chief Supply Chain Officer, Paul Draffin, has been extremely collaborative with the supply chain teams working closely with our merchant teams across all banners. I'm happy to say that as of today, most of our contracted Q4 product has arrived. If all goes to plan, by the end of this year, we will have shipped an estimated 15%-20% more offshore containers than in 2020 to satisfy demand in 2021 and the early part of 2022.
We're already working through our volumes and lead times for summer and fall of 2022, placing orders with vendors, looking at our product pipelines, and while not across the board, anticipating an increase in some input costs. While we're pleased with how we've set ourselves up, managing the current supply chain challenges has resulted in incremental operating spend, which is reflected in our financial results in the quarter and year to date. We expect this trend will continue into 2022. We will continue to build flexibility into our contracting around transportation, logistics, and storage providers to respond to consumer demand. We will also continue to assess where these pressures can be absorbed or offset with our recently announced additional CAD 100 million commitment to operational efficiency savings, giving us further flexibility.
The investments we will continue to make in our supply chain and distribution network will enable us to flex and respond to whatever pressures come our way as we return to a more normal supply chain environment. With respect to the inflationary pressures, I am pleased to say we've been able to offset most of these headwinds in the quarter. We have generated gross margin rate expansion by leveraging data and analytics capabilities related to promo and price management. As stated earlier, I am pleased with our efforts here across all businesses, but I am particularly pleased with what I'm seeing at both Sport Chek and Mark's. The merchant teams in these two businesses are focused on increasing sell-through at regular prices, and we are seeing great progress towards this objective.
Looking ahead, we will continue to pull the multiple levers at our disposal to mitigate gross margin and cost pressures, although we recognize these pressures are not insignificant. Finally, I wanna touch on our capital allocation plans. Investing in our core retail business is our highest priority. Shortly, Gregory will give you a little more color on our anticipated capital allocation plans, and we intend to take you through more detail around future capital spend at our investor day. With that, we are very pleased to be announcing a 10.6% increase in the annual dividend, which marks our twelfth consecutive dividend increase and raises the annual dividend to CAD 5.20 per share. Having paused our share repurchase program during the pandemic, we believe now is the time to reinstate the program.
We have great confidence in our business and the management team, and we're committing to repurchase up to CAD 400 million in share buybacks by the end of 2022. With that, I'll hand it over to Gregory to take you through the financial highlights of the quarter.
Thanks, Greg. Good morning, everyone. As usual, I'll walk you through the financial highlights in the quarter and then take a few moments to speak to our capital allocation and capital expenditure plans. First on the financials. We are very pleased with the results this quarter. Diluted earnings per share were CAD 4.20 on a normalized basis after adjusting for CAD 19 million of costs related to our operational efficiency program. This was down 15% from 2020, but up 21% compared to 2019. The year-over-year decline in EPS was primarily driven by lower shipments at CTR in the quarter, and I'll speak more about this shortly. Our strong retail earnings performance over the last four quarters drove retail ROIC to an impressive 13.2%. Now, let me walk you through the key drivers, starting with sales.
As we commented on our Q2 call, consolidated retail sales in Q3 started out flat to the prior year. In the latter part of the quarter, they picked up momentum as customers were able to return to shopping in-store. We finished the quarter with comparable sales up 3.3% and up 21% compared to 2019. e-commerce penetration of 6.5% was down in the quarter with more visits to our bricks-and-mortar stores, but double what it was in 2019. Comparable sales growth at CTR was 1.4% in the quarter and up 25% compared to Q3 2019. CTR's performance was helped by growth in own brands such as CANVAS, MASTER Chef, Raleigh, and Sherwood. Having better control over the own brand sourcing process amid the ongoing global supply chain challenges continues to be a real advantage to us.
Our seasonal, living, and automotive divisions had the strongest performance in the quarter. Gardening, backyard living, cleaning, and car care were among CTR's top performing categories, and our access to inventory was a key contributor to their performance. Our hockey business was another high point for us, up double digits compared to both 2020 and 2019, more than making up for lost ground a year ago when organized sports were canceled. Overall, we saw 55% of categories grow relative to the prior year, with 26% of them growing double digits. Versus 2019, three-quarters of the categories saw double-digit growth.
The return to hockey and organized sports also benefited our Sport Chek business, where comparable sales in the quarter increased 11% and 7% compared to 2019, and growth was fueled by athletic footwear, athletic clothing, as well as hockey. We also saw a strong comeback in our back-to-school categories, which grew 20% in the quarter. Mark's also delivered impressive results with comparable sales up 8% in the quarter and 13% compared to 2019. Men's casual wear, footwear, and industrial wear were among the key drivers of growth. As was the case in the past few quarters, our focus was on attracting younger customers through premium brands such as Levi's and Timberland PRO, driving a 21% sales increase in national brand sales while own brands were up 2%.
On the own brands front, sell-through over Helly Hansen Workwear was a highlight at Mark's, up 13% in the quarter. Briefly on Helly Hansen results, the business had a good quarter, with external revenue up 1.5% and 3% on a constant currency-based basis, with strong growth from continental Europe and the U.S. From a category perspective, workwear and direct-to-consumer had the largest increases, up 21% and 17% respectively. Now, let's switch gears and dive into the key drivers of our revenue performance. Retail revenue, excluding petroleum, was down 6% compared to the prior year, primarily due to an 11% decrease in CTR's revenue in the quarter.
As you know, given our dealer model, sales and revenue can be out of sync in any given quarter, but it has been our historical experience that over time, the two metrics tend to move together. At the end of Q2, on a year-to-date basis, CTR revenue was up 23%, with sales increasing by 8%. We saw this relationship become more in line in the third quarter, which led to the decline in revenue and CTR in Q3. Inventory at the end of the quarter was up CAD 370 million relative to last year, reflecting our increased investment in product at Canadian Tire to meet potential demand. Retail gross margin rate, excluding petroleum, was up 155 basis points compared to prior year, driven by increases across our retail banners.
The rate improvement at CTR was attributable to a favorable pricing mix despite freight cost headwinds building in the quarter. We are pleased with how the team continues to manage overall margin rates. Margin rates at Mark's and Sport Chek benefited from higher sales contributions from our bricks and mortar channel and lower promotional activity in the quarter. Now, turning to financial services. The business continued to perform well in the third quarter, as demonstrated by historically low aging and net write-off rates. We also saw encouraging trends around credit card sales and receivables growth. Revenue in the quarter was up CAD 6 million as card sales grew 23% and gross average accounts receivable recorded their first quarter of growth since the onset of the pandemic.
Gross margin improved by CAD 32 million, primarily due to lower net impairment losses of CAD 28 million, reflecting the continued stability in the delinquency and net write-off rates. Consistent with this performance, allowance for loans receivable remained at CAD 812 million, flat to the previous quarter, while the allowance rate declined to 13.4% from 13.9% last quarter. The team continues to assess the level of allowance on our books, evaluating uncertainty related to cardholder behavior and potential impact of government relief programs coming to an end, among other indicators of economic health. We also saw a CAD 7 million increase in operating spend in the quarter, mostly as a result of an increase in our customer acquisition efforts. All in all, Financial Services IBT in the quarter increased CAD 27 million or 30%.
While this earnings performance was mainly driven by lower net impairment losses, we are pleased with the growth in customer metrics this quarter. Now, let's get back to some of our key performance indicators at the consolidated level. Our normalized consolidated OpEx ratio as a percentage of revenue came in at 24.6%, unfavorable by 367 basis points compared to 2020. The decrease in revenue in the quarter, as well as an increase in year-over-year OpEx, contributed to the decline in the OpEx ratio. The absolute dollar increase came from a few areas. The drop in share price since the beginning of the quarter resulted in a mark-to-market loss on our equity hedges related to share-based compensation. This compared to a mark-to-market gain in Q3 a year ago.
The remainder of the increase was primarily due to higher marketing and higher supply chain costs as we navigated a more challenging supply chain environment. As Greg said, we anticipate an elevated level of supply chain expenses into 2022 while the supply chain backdrop normalizes. As it relates to marketing, there were some costs related to Tokyo Olympics, combined with the return to a more historic level of promotional and marketing activity. Partially offsetting these increases were savings achieved under our operational efficiency program. Earlier today, we announced the achievement of our previously committed target of CAD 200 million-plus in run rate savings ahead of schedule. As a reminder, the intent of our operational efficiency program has been twofold, to take costs out of the business and to transform and change the way we work to prepare us for the future.
Since launching the program in the fall of 2019, we have completed more than 150 initiatives. Our focus has been on eliminating redundancies, simplifying processes, and capturing enterprise-wide efficiencies. Some of the key achievements include the elimination of non-value-add processes at our store and the development of artificial intelligence to optimize our e-commerce freight costs and reduce delivery time. We also announced today a further CAD 100 million increase in our run rate savings target to be achieved by the end of 2022. We have a significant number of initiatives well underway, among them the implementation of a new transportation management system that will reduce transportation costs across the banners and the introduction of robotic automation for picking product at our distribution centers. Finally, let me turn to capital allocation.
As Greg said earlier, we are pleased to be announcing our 12th consecutive annual dividend increase up 10.6%, along with the reinstatement of our share repurchase program, targeting to buy back up to CAD 400 million in shares by the end of 2022. In the quarter, we also increased our capital spending, primarily at CTR for real estate projects. Operating capital expenditures were CAD 70 million higher than last year, when capital spend was down from pre-pandemic levels. We expect this to continue into Q4, with operating capital expenditure for the full year expected to land in the range of CAD 650 million-CAD 700 million. Looking forward to 2022, we expect to continue with a balanced capital allocation approach.
Investing in our core retail business and our digital and supply chain capabilities continues to be a key priority, building on the momentum of the business and the longer-term strategic priorities we expect to set out in more detail at our Investor Day early in the new year. In summary, we are pleased with our financial performance and our key customer metrics, and we believe we are well positioned as we head into what is typically our busiest season. With that, let me hand the call back to Greg.
Thanks, Gregory. Before I close, I want to give you some insight into what we're seeing so far in Q4. Quarter-to-date, we continue to see healthy demand signals from the customer in both our retail business, which continues to be up against strong comps, and our bank in terms of credit card spend. I am confident with our readiness for the rest of the quarter. We'll continue to prioritize our supply chain and maximize the value of investments made in both Triangle and digital. We look forward to giving you more insight into our strategy, including how we will continue to allocate capital as we invest in the health of our store network and modernize our business model at our Investor Day. With that, I'll pass it over to the operator to open it up for questions.
Thank you. At this time, I would like to remind everyone in order to ask a question, please press star, then the number one on your telephone keypad. We ask that you limit your time to one question plus a follow-up question. We'll pause for just a moment to compile the Q&A roster. Our first question is from Mark Petrie with CIBC. Please go ahead.
Yeah, thanks. Good morning. You delivered another strong quarter on retail gross margin, and obviously there's a lot of moving parts there. I want to ask about your views on the sort of go-forward margin levels, just given the increased prominence of loyalty as well as the continued payoff of all your work on price and promo efficiency. How do you think retail gross margin will compare over time versus pre-pandemic levels?
Thanks for the question, Mark. Maybe we're just kind of looking to see who's going to answer it. Maybe, maybe we'll turn it over to TJ. I think probably CTR is most relevant for you.
Yeah, Mark.
Yeah
Thanks for the question. From a CTR perspective, as I spoke to in the last earnings call, we've built a lot of strong capabilities and analytical models to help us navigate through the inflation that we're seeing. We have analytical modeling and managed discount levels given our high-low pricing model, and we've been honing our elasticity curves to strike the balance between demand creation and managing margin. Our own brands continue to be a key focus for us, providing several differentiated advantage, and one of which being the healthy margin premium over national brands. Then the other piece of work we've been doing over the last couple of years is just managing our assortments and from an architecture and breadth standpoint.
Because we play across a good, better, best price point level in each of our categories, we're able to provide our customers with a lot of flexibility to make decisions that meet their needs. We actually believe we're really well positioned with all the capabilities we have and the data we have at our disposal through Triangle to manage our margins pretty tightly as we go forward here. I think it's important. I wanted to leave you armed with all of these capabilities and the knowledge that we've gained through our Triangle membership. We've never been in a better position to provide value to our customers. We're always going to continue to ensure our customers are exposed to this value through our products, our promotions and end experience.
I think that's what's going to help us run that balance of managing margin and demand creating as we go forward here.
That's very helpful. Thanks. I guess just to follow up, specifically on Triangle, you know, as you lap some of the big growth from last year just in terms of retail sales, what's the loyalty data telling you about how the customers that re-engaged with Canadian Tire during the pandemic are behaving today, as you know, some of those pandemic behaviors fade a little bit?
Yeah, great question, Mark. I mean, as you have heard us talk, we've talked about, you know, tracking and managing the 1.8 million new Triangle members in a hawk-like way, and we continue to be very pleased with the results here today, and we do mine all of their activity. I'd say, you know, as a reminder, the cohort has a much higher percentage of younger members than previous years than our total loyalty base overall. Which certainly makes us pleased that we've introduced a new generation of shoppers to our banners. That's continued in 2021, as I said in my prepared remarks.
These members continue to prove that they are more engaged, more likely to shop cross-banner and spend more per visit to date in comparison to the 2019 cohort. It really showcases the strength of the ecosystem. Let me give you some stats here. Over 74% of the members in the 2020 cohort were acquired through CTR, and about 25% of them crossed over to also shop at Sport Chek and Mark's, which obviously helps their overall spend at the CTC level. It works both ways.
Between 60%-70% of the members acquired at other banners in 2020 have also been active at CTR over the past 12 months, and they've spent a significant amount of money, you know, at the banner. We like what we're seeing here in terms of engagement. You've probably heard me say this before that these outcomes, you know, they just don't happen on their own. We've been very intentional about driving these outcomes, acquiring the analytical visibility to manage customers in this type of way. Having clarity on our objectives and fostering this test-and-learn, fact-based environment is really what's driving value.
I guess I'd finish by saying, I think you may have heard me say this before, that this is all about, you know, scaling more capabilities and businesses and designing them to work together in a mutually reinforcing way with Triangle. We feel confident that we're moving with even more speed and aggressiveness on this front.
That's great. Thanks a lot. All the best in the holiday.
Thank you. Our next question is from Chris Li with Desjardins. Please go ahead.
Hi, good morning, everyone. Maybe just a couple of questions on the outlook for the auto services business. The first question is the supply chain disruption having any significant impact on the business? Following that, are you seeing any sort of favorable factors in terms of, you know, higher miles driven and also increase in used car ownership, and how does that factor into outlook for the next year or so on the auto services business? Thank you.
Hey, Chris, it's TJ. Thanks for the question. It's an interesting one. Our automotive business has been very resilient, despite the headwinds the industry has encountered during the pandemic. In Q3, we grew 2% versus last year, which is 16% above 2019. As you pointed out in our petroleum business, we know that we're still lagging 2019 levels of driving year to date based on our liters pumped. However, we saw that gap close significantly in Q3 relative to the first two quarters of the year. Despite these headwinds, our automotive business has grown for five consecutive quarters, and our growth continues to be fueled through what we call our wants-driven categories. For example, car care, accessories, and outdoor automotive adventure.
We also saw a resurgence in Q3 on several of our, what I would describe as need-based categories, like tires, filters, and auto fluids. Auto service, to your point, we've actually just seen two consecutive quarters of growth in auto service, and we haven't gotten back to 2019 levels, but we certainly have been seeing some momentum in that business. What fueled our growth in Q3 was understanding customer trends early and investing in inventory to meet that demand, and we're gonna continue to take that approach as we go forward. We actually think as you think about inventory, we're actually advantaged relative to the industry.
Because we're a diversified company and have the financial means, we can take positions in categories like tires, despite some of the headwinds in the industries that other non-diversified competitors might be able to take. In combination with the trends that we see and our financial wherewithal and our supply chain capabilities, we feel very good about our inventory levels going into Q4 and the prospects of fulfilling what consumer demand is gonna be there.
Great. That's very helpful. Maybe just a quick follow-up on capital allocation. Where does acquisition fit within your capital allocation priorities? Or are there any attractive areas of opportunities that you might be looking at? Thank you.
Yeah. No changes from the commentary I would have provided last quarter or the quarter before. As you heard both myself and Gregory talk about today, our primary capital priority is the investment in our core retail business. We continue to be on the lookout for brands that could tuck in in any or all of the family of companies. I think you've heard me say that that will. There's no finish line there. We'll continue to look for own brands that we can plug in and product develop and create value for the customer.
I think the only, you know, nuance that may have been net new in my commentary on this last time we talked about it is just, you know, thinking about where we could potentially partner for capability. Our investment, equity investment in the Ashcroft terminal that we announced would be a classic example. When you think about, you know, core capabilities that allow us to have a more competitive posture going forward, I think you'll continue to, you know, hear more or we'll be active, on that front to understand where we can improve our capabilities and partner for strength and scale.
Great. Thank you, and all the best.
Thank you.
Thank you. Our next question is from Irene Nattel with RBC Capital Markets. Please go ahead.
Thanks and good morning, everyone. I would like to spend, if you don't mind, a couple of minutes just talking about CTR. Because I think, you know, if we go back two years, if we had said, yeah, over a two-year basis, revenues are gonna be up 25.3%, I don't think anyone would have believed that. So can you talk about where that strength is coming from, the role of Triangle, the categories, and how you can sustain that level of revenue and, you know, as things normalize, as it were?
Well, thanks, Irene. I'll start, and you know, TJ's obviously got a really good handle on the business, you know, with his team and how he's thinking about the business going forward. I mean, I start always here from the conversation we just had about the customer. We just have such an unbelievable net new capability to look at the prospects for the future around how each customer engages with us in that banner. You know, yes, you hear us talk about moving customers around, banner to banner.
To TJ's point around being multi-category and answering his question around the tire and auto service business, there's lots of opportunity to do that, and we are doing that just within our family of businesses under the same roof of CTR. There's all sorts of headroom in terms of how we either you know bring a customer over that we've acquired at Sport Chek and get them to believe it or not be introduced to Canadian Tire as some of the stats that I provided to Mark's question. Also in a business like auto service that we just talked about, where a very small percentage of our active and even high-value customers in CTR are using you know that service.
I tend to look at the business now, you know, very focused at the customer level and the engagement and the frequency and spend per customer. The more and more we grow our total percentage of sales on loyalty in CTR or at the aggregate consolidated level, the more first-party data we have, the more the flywheel, you know, personalizes. I think I just wanted, before we got into, you know, categories and market opportunities and market share and what have you, which I'm quite certain TJ will go. I just think grounding ourselves in spend per member, given that is our focus strategically, is just a good place to start. Why don't I hand it over to TJ here?
Yeah, Irene, just to build on that a little bit at the category level. I think the strength of our business model has really come to the fore since the beginning of the pandemic, and the diversity of the categories in which we compete are so relevant to Canadians. In Q3 with no exception there. Some of the trends we saw, we continue to be impressed by how much consumer demand there is in things like backyard living. As the summer months went by, Canadians just wanted to explode outside, and they continued the consumption on spring/summer businesses, and that growth extended into September as well. They're also investing, continuing to invest in their homes. We saw strong growth in categories like kitchen and cleaning and home organization as well.
Then there was a big bounce back in return to sports as the country reopened, and Gregory mentioned in his opening remarks, hockey has bounced back. I can attest to that. My 10-year-old needed brand-new skates and new sticks and almost everything head to toe because he'd been off for so long. I think just the relevance of our assortment, coupled with our capabilities from a supply chain standpoint, Greg talked a lot about it in his upfront. Having inventory has been given us such a leg up and has really allowed us to capitalize on the relevance of our assortment and allowed us to gain market share relative to 2019. We think that there's still momentum in this business, and we're gonna continue to leverage that relevant assortment as we go forward here.
That's really helpful. Thank you. If I could just have a follow-up, because obviously one of the debates among investors is the degree to which the increase in revenues at CTR is, let's call it one-time versus sustainable. It sounds like from what you're saying, by having this focus on the customer and using the Triangle data, you can take what may have been a one-time purchase, like let's call it patio furniture, and drive forward sustainable sales of other related categories. Is that sort of the way to think about it?
Yes, just using that relevance to just increase kind of spend in the categories in which they're shopping, you know, already. When we started the pandemic, I think the posture and the mindset potentially in the organization. Irene would have started around this. Okay, there's significant tailwind. There's lots of reasons for incremental consumer demand around, you know, the home, the garage, the yard, et cetera. We're gonna try and capitalize on that as much as we possibly can. Now we're coming through 2021. That mindset, I'm here to tell you, is changing. We don't intend to give any of this back, Irene. We're going on offense. We're legging up from here.
Again, the capabilities and the relevance that we have talked about here gives us a lot of confidence in this business going forward. If that helps, that's the mindset of the organization and our associate dealers at CTR.
That's really helpful. Thank you.
Thank you. Our next question is from Vishal Shreedhar with National Bank. Please go ahead.
Hi. Thanks for taking my questions. Given the scale and the frequency in use of Triangle, wondering what management's comments are on monetizing the data via advertising on your digital platforms. Is that an avenue that Tire has explored or will explore, and could that be a meaningful driver in the future?
I think it's reasonable. It's a reasonable question to think about for the future, Vishal. Whether it's meaningful to us or not, I wouldn't be able to answer that question as of yet. We're just very focused on our family of companies right now. You would have seen us just adding Pro Hockey Life as an example into the ecosystem, either late last quarter or early this quarter. Party City has been plugged right in. Just really building kind of the data capabilities, the automation, the machines, getting opt-in for, you know, one-on-one communications in our own audience, et cetera.
Going back to Irene's question, we just believe we've got a plethora of things to do to drive our own business and keep us focused on the core. Make no mistake, we are building very strong capabilities here. As we look forward, you know, that could potentially, you know, be a part of our go-forward strategic plans. As of right now, it's not a material component of our drawing board, and nor do we expect it to be a material component of our financial results in the short term.
Thank you. Given pervasive concern about supply chain pressure, and I know Canadian Tire's addressed their own inventory and your own capabilities. Wondering how the dealers are starting to think about that, and do they? Are you seeing them perhaps think about holding excess inventory should these pressures persist longer than some may perceive?
Hey, Vishal, it's TJ. Yeah, you raise a really interesting question here. What I would say is the strategy we've been deploying since the beginning of the pandemic, and this is true of the corporation as well as dealers, is we've been investing in inventory. When you look at what happened in 2020, and we grew five years' worth of growth in one year, we on both sides of that equation, we both had to right size in an upward direction our inventory levels. The dealers continue to invest in inventory. To your point, they do have to start to look for ways of how to store that and throughput that inventory. But this group of entrepreneurs, it is our secret sauce and our strategic advantage.
They know that inventory is something that they have to invest in. It's what's been fueling our growth, and they're gonna continue to do that, as we go forward here. It's something that they'll be working on within their P&Ls, but they work it at the local level and do what's right for their business to deploy and get the right amount of inventory to buoy their business.
Okay. With respect to promotional activity, are you finding your peers are passing on inflation in general in the industry, or are they holding the line at a time when you know the comps get tougher year over year?
Yeah, it's a great question, and there's been a lot of media attention around kind of the global supply chain issues, and there's been numerous prognostications with respect to promotional intensity and what we're seeing in inflation. What I can tell you is that we at Canadian Tire always strive to provide value to our customers, and we'll continue to do that. We're always running the balance of managing supply availability and demand creation and looking at our pricing and promotional activity. Given the customer data that we have, as I said earlier, we've never been in a better position to create value that customers crave and to expose them to that value, whether it be through our traditional flyer or discounting strategy or through mobilization of our Triangle Rewards.
We're gonna be very competitive in the marketplace. We're watching that closely in terms of how our competitive set are looking at pricing and inflation. But I can tell you we're really well positioned as we head into our busiest selling season.
Thank you.
Thank you. Our next question is from Peter Sklar with BMO Capital Markets. Please go ahead.
Good morning. I wanted to ask you about these strong categories that you've mentioned today. I mean, some of them that have come up are, you know, outdoor garden, cleaning supplies, home organization. Like, the strong sales you're seeing, are they? Is it because those categories just generally are strong, consumers are buying those categories? Or do you have good measures of what your market share is in Canada by category among, you know, your competitive set? Can you just talk a little bit about the strength of the category versus your market share gains or losses in those categories?
Yeah, Peter, it's TJ again here. At the category level, I think you've hit on both elements, right? We definitely have seen industry growth since in categories like backyard living and kitchen and cleaning and even in our fixing categories as well. There has been industry growth. If you look at how the landscape has laid out from a market share standpoint, we have various data points that we draw on for market share. It's certainly not an exact science by any stretch, but all indications are from the data points that we have that not only are we benefiting from industry growth, we are gaining market share relative to 2019.
Little bit of noise in that from 2021 relative to 2020 because you're really kind of going through an environment where not everybody was open to full capacity in 2020 in Q3 relative to 2021. Over time, from 2019 onward, we certainly believe we've been gaining market share in those categories.
I would just add, Peter, that you know, big category in the country, casual wear, obviously hit pretty hard, structurally, during the pandemic, maybe even leading up to the pandemic. You know, there's a category as an example where Mark's participates that we are absolutely taking share. We believe that there is a meaningful opportunity to continue that trend well past the pandemic. That'd be inclusive of both men's and women's jeans as well, where we're seeing lots of gains. I just point that out because it is a big category where we have relatively low share, where there has been some structural challenges in the marketplace.
You can expect us to continue to be aggressive to grow our share in that category in the Canadian market.
Okay. The other topic I wanted to ask you about is, you know, the significant operational improvement projects that you have, which is you're saying you've realized CAD 200 million and you expect to achieve a CAD 100 million run rate by the end of 2022. I mean, how should we think about where those dollars go? Do they drop to the bottom line? Like, does that mean your 2023 earnings are gonna be CAD 100 million higher than they would otherwise be? Or do they find their way into other parts of the business where you reinvest those savings? If you could just talk a little bit about that.
Sure. I mean, it's the same as the way we would have positioned it, when we announced the CAD 200 million plus—we keep saying plus—commitment. It you know, as evidenced by what we're experiencing now, post the introduction of the program in 2019, we can't foresee the type of you know, transitory inflation that may come our way. But if we were you know, to shut down the business tonight and reopen it at the end of 2022, and nothing else happened, you'd see the CAD 100 million to the bottom line.
One of the things that I'm you know really focused on is really you know how do I you know get a sense that the cost really is coming out of out of the business, Peter. I'm really happy with the fact that we are you know seeing you know very strong operating leverage in our retail segment and that's net of the inflation that we're seeing. When you look at pre-pandemic you know relative to today it is very clear in the retail segment empirically that we're getting leverage in the business. We're doing that like I say net of some pretty significant inflationary pressures that the industry is dealing with with the supply chain.
I think that's the way that you should be thinking about it in terms of CAD 100 million, and it is the way that we'll be looking at it internally to make sure that we're getting the progress that we're committing to here.
Okay. Thank you for your comments.
Thanks, Peter.
Thank you. Our next question is from Patricia Baker with Scotiabank. Please go ahead.
Thank you, and good morning, everyone. Greg, I wanted to turn back to Triangle and thank you for providing us with the metrics that you did on the subscription program. I know it's just a beta test and you're only six weeks in, but can you share with us a little bit about the thinking behind this program, the mechanics and the strategic rationale for this?
Sure. Thanks, Patricia. Yeah, I mean, it's really a program to pull kind of an enterprise value proposition together, to drive, you know, incremental spend at the customer level. You know, I guess a reminder. I mean, this is new for us. It's a paid, you know, loyalty subscription program. We've designed the value proposition and the benefits right now to focus on where we differentiate. So Elements, it's not a me-too new me-too program. This is a program designed specifically to accentuate the differentiators of Canadian Tire, you know, elements like own brand, shopping in store, and eCTM primarily.
Yes, it involves added value with free shipping and a 1-year Crave subscription, bonus multipliers across all the banners. It is about providing, you know, value at the customer level. Our efforts right now are making sure that we have the right benefit proposition. Give you a little bit more granularity than I provided in my prepared remarks. I mean, we did just launch the program on August 9. Having said that, it is yielding some significant learnings. Although when you're doing kind of pre- and post-spend activity, keep in mind, you know, you're talking six, eight weeks. We haven't really been in a rush to use mass channels to acquire new subscribers.
As I said, 5,000 registered Triangle Select members, right now over-indexing with our target customer segment, 35 years-49 years old. A lot of active families. We're over-indexing on high-value customers and credit card customers compared to our base loyalty customers. The feedback on the registration process has been, you know, very strong empirically with CSI NPS scores. Our monthly dashboards, whereby we provide a Select member a view, at their level, a dashboard as to the value they're getting relative to the subscription price, is getting, you know, rave reviews. Our intent is to continue to remain connected to customers throughout the test, gathering, you know, feedback and fine-tuning the value prop.
It is really about, you know, to go to your overall strategic question. It's about, you know, providing, you know, value for the member their way. You know, providing the best value for them at any time they wanna shop, as opposed to presupposing that, you know, putting a product on sale this Friday to next Friday is the ideal timing for them to come to our store or our website, you know, et cetera. This everyday value
Mm-hmm.
really connecting with them with a personalized understanding and using our entire family of companies to engage with them to spend more across the family. I don't think it's, you know, it's anymore. I don't think I can wax poetic any more than that. It's we really do believe it has the opportunity to change the way we provide value to customers, but it's early. like I said, we're quite happy with the spend trends pre and post and the type of customer that we're acquiring here.
Well, thank you for that. Particularly, I appreciated your point about letting the customer shop the way, when, and how they want to shop, and that would be truly differentiated. I have a follow-up question on capital allocation. You know, thanks for providing us with that detail again. Now, you did note, Gregory, that investing in the retail network, you know, is the most important and the largest piece of the capital allocation. You gave us the CapEx for the current year, but not for next year.
Is it going to be in that similar range of CAD 650 million-CAD 700 million, or is that something, we're gonna have to wait for the Investor Day to get the amount and the specific projects?
Yes. Thanks, Patricia. It's Gregory here. We had a long discussion on this, frankly, getting ready for the quarter. Our thought was, you know, the more appropriate process was to kind of share where we were strategically. We know what we needed to do to get through this year, and we thought, you know, it was more appropriate, frankly, to handle that as part of our Investor Day. That was kind of how we're thinking about things. We're looking forward to having this discussion. It's unfortunate, you know, the timing happened the way that it did on the federal election. Having said that, I know the team's excited and looking forward to sharing all the strategies.
Part of that, of course, will be where we're seeing our capital spend the next few years. Again, I'll just reinforce, I think Greg said it, and I think I've said it as well, that you know, core retail continues to be our focus around where we're gonna continue to invest capital as we're moving forward. We're not stopping waiting for Investor Day. Let me assure you that is not the case.
Okay. You did indicate that the Investor Day would be early in 2022. When do you anticipate you're going to release the Investor Day date?
I think probably, you know, I think we've got a date we're working to internally.
Mm-hmm.
Look, I think we wanna make sure we've got the location and the logistics nailed before I give a date, and then I don't wanna have to back up.
Right.
Sure.
Mm-hmm.
Suffice to say it'd be shortly after our Q4 release, excuse me. It's just, I'd wanna make sure that we have all the logistics. We are hoping that we're gonna be able to do this in person, and see everybody again is one of the things we're hoping to be able to do. We have some logistics we're still working out, but we'll be able to share that, I think, fairly soon.
Okay. Look forward to it. Thank you.
Thank you. Our last question is from Graeme Kreindler with Eight Capital. Please go ahead.
Hi, good morning, and thank you for taking my question. I wanted to follow up with respect to the Financial Services business. Some strong and positive trends in the quarter here with GAR as well as credit card spend. I'm wondering if you could touch on for a moment what sort of metrics or continued metrics you would need to see in order for that business to reclaim its pre-pandemic levels here, particularly as in-store shopping becomes more prevalent here. Thank you very much.
Thanks, Graham. It's Gregory. You know, it's interesting. What I would say is twofold. First and foremost, the good news is the narrative we've been giving for the last six quarters, five quarters on financial services hasn't changed. What I mean by that is the risk metrics, customer payments, our loss experience all are incredibly strong relative to, you know, historic levels. It is. That's continuing. What Greg said in his remarks, and what I've said in my remarks stands true. There's now an emerging narrative in my mind that you're seeing that business, you know, turning the corner. We're seeing growth in customer metrics. We're seeing growth in usage. And as we've talked about previously, this is not a light switch.
Like, this isn't a situation where the business is gonna return back to, you know, the CAD 6.5 billion in receivables that we were at kind of at the end of 2019. You know, it's gonna come through acquisition. It's gonna come through building relationships with customers, with Triangle as Greg talked about. You know, but what I would say the positive sign is, you know, I know acquisition of new accounts is up fairly significantly versus last year, still probably behind where we were in 2019. But I think what's more important is, again, the type of customer, the behavior we're seeing is different as we acquire digitally. It's a different type of customer profile. So I think we're all very excited about what the team's doing and how they're investing in and acquiring accounts.
It's gonna take a little time before we get back up to where we would have been kind of in that end of 2019 timeframe, Graham. What do we look at? Acquisition, attrition rates, engagement. As you know, all the metrics I think you've heard us talk about before are just more important now. Early indicators like Triangle, how are they engaging with all of the banners would be another one that I would point out. Lots of things that we're keeping a close eye on, but I think I'll speak for Greg. I think we're both pretty pleased with what we're seeing in that at Financial Services.
Thank you. That is all the time we have for questions today. I will now turn the meeting over to Mr. Hicks.
Thank you, operator. Before we sign off, in honor of Remembrance Day, we at Canadian Tire would like to recognize those who've served and continue to serve Canada during times of war, conflict and peace. Thank you again for joining us today. Enjoy the upcoming season and continue to stay safe.