Housing mire no barrier to Bunnings’ big rollout
The days of wandering aimlessly in search of a single item at Bunnings will soon be over: The hardware titan is trialling a new service at one Melbourne store before rolling it out nationally. Here’s where you can test it out.
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Bunnings says falling house prices and a pullback in renovation activity have not dented its ambition to open up to 14 new stores every year.
Managing director Michael Schneider says ongoing population growth, changing demographics, higher-density living, smart home technology and demand for online shopping all present new growth avenues for the big-box retailer.
The hardware titan is aiming to increase its sales of kitchen, bathroom and flooring products and window coverings, attract more trade customers and provide more installation and in-home assembly services ranging from putting in hot water systems to assembling barbecues.
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It wanted to become more relevant to a younger generation of homeowners and renters by providing more do-it-yourself advice tailored for projects within apartments and townhouses, Mr Scheider said yesterday.
The retail major is also bolstering its online offering, launching its first click-and-collect service at its Craigieburn outlet in Melbourne.
The trial will be extended to Tasmania before the service and a fully transactional website offering delivery on almost the full Bunnings instore range is launched next year.
“It’s all about having a winning offer,” Mr Schneider said at a strategy update.
Bunnings has become the single biggest business unit in Wesfarmers following the move by the Perth-based conglomerate to spin out Coles last year.
The hardware chain has emerged as arguably the nation’s best retailer, doubling sales to almost $13 billion in the past decade and killing off challengers such as Masters.
But a slowing housing market, drop in lending for renovations and rise of online shopping have raised concerns among retail analysts that it faces an uncertain future.
Investment bank Morgan Stanley this week said the broader big-box retailing industry “looks to be slowly dying” and warned “significant” store closures were likely in the sector over the next 18 months.
Mr Schneider said that while a cooling property market was putting the economy under pressure, the fallout had not yet been enough to change Bunnings’ goal of opening 10 to 14 new stores a year. About 70 per cent of the nation’s 10 million homes were more than 20 years old, necessitating maintenance spending, he said.
The retailer’s bricks and mortar network was a key strength given its recent push into online shopping showed about 80 per cent of customers opted to pick up goods in store, he said.
“We see the store network as at the heart of everything we do,” Mr Schneider said.