Bunnings axes famous slogan in the UK as chain continues to struggle

BUNNINGS UK has quietly changed its branding in a desperate move as rumours swirl about its future.

YOU would hardly call the weather on April 4 in the west of England balmy. It barely managed 11C and the skies were leaden.

Just the thing to warm people up in the historic country town of Frome, in Somerset, would be a snag served up at the opening of the town’s new Bunnings Warehouse — one of about 20 stores to have opened in Britain.

It would have been smiles all around, as green aproned staff extolled the virtues of big name brands for all the locals’ DIY needs.

A UK Bunnings store just outside London. The chain now has 24 in the UK. Picture: Mega.

But the Frome store could well be the last to open under the Bunnings brand as the beleaguered British offshoot of the Australian company continues to struggle.

Talk in the industry is that the situation has become so dire that Wesfarmers, Bunnings’ Perth-based owner, is now prepared to pay a buyer $200m to take the British stores off its hands and finally put to an end its, so-far, disastrous overseas adventure.

On Thursday, Rob Scott, Wesfarmers’ relatively new boss, revealed that Bunnings UK & Ireland (BUKI) had seen a 13.5 per cent decline in sales over the last quarter to £211 million. Mr Scott said improved trading results in the New Year had been wiped out by Britain’s miserable March when the so-called “Beast from the East” sent people scurrying indoors from the cold. In contrast, sales at Bunnings Australia were up 8.9 per cent to $3bn.

A review by Wesfarmers could see the company pull the plug on its British arm within weeks.

Rob Scott, Wesfarmers Managing Director, is under pressure to dump Bunnings’ UK chain.

‘LOWEST PRICES HAS JUST ENDED’

In 2016, Wesfarmers paid $700m for Homebase, the UK’s second largest home improvement brand. Around 250 stores remain under the Homebase brand.

Bunnings has converted 24 stores to its own name. But there’s something subtly different about the newest conversions. A change in branding that Brits may not have noticed, but observant Aussie would see in an instant.

Bunnings’ entire British marketing push has revolved around its famous tagline: “Lowest prices are just the beginning.”

It appeared on ads, the website and on huge signs on the side of stores. But on the most recent stores the tagline has vanished, replaced by a list of departments in store.

Before and after: A UK Bunnings store which previously displayed the famous “lowest prices..” tagline (left). Now the store simply lists the products that can be found inside. Picture: Steve Collinge/Insight DIY.

Online, the classic slogan has also disappeared, in its place the rather less snappy: “Your Home Improvement and Garden Centre.”

Industry watchers have said the change is an admission Bunnings’ strategy of simply cutting and pasting the Australian model into the UK simply hasn’t worked.

“The branding change is a sign people don’t know who Bunnings are,” Steve Collinge, the managing director of website Insight DIY told news.com.au from the UK.

“Launching a new brand into a market that has never heard of you is always a huge challenge and is probably the single biggest error made by the original Bunnings team,” he said on Insight DIY.

“Just because your consumers in Australia love you, counts for nothing in a completely different country. It’s a good decision for any retailer to actually explain what they actually sell.”

The Australian website is all about low prices.

The UK website with the rather dull slogan “Your Home Improvement and Garden Centre” — because no one knows what Bunnings is or does.

$200M ‘DOWRY’

A spokeswoman for Bunnings UK and Ireland (BUKI) told news.com.au: “Customer feedback is really important to us and as we continue to establish the Bunnings brand in the UK and Ireland, we are updating our tagline and building signage to showcase our great range of home improvement and garden products.”

She said the price guarantee remained in place.

But the rebranding effort could be little more than shifting the deckchairs on the retail Titanic.

Mr Collinge said that two years after they arrived in Britain, full of hubris, a humiliated Bunnings would likely announce its exit within weeks.

“I’m certain the decision has now been made to leave the UK,” he told news.com.au citing a string of poor financial news and the appointment of investment bank Lazard to advise on a way out of the mess.

In February, Wesfarmers first half profit results revealed BUKI had lost more than $1bn, much of that due to write downs in the value of the business and stock written off because the company couldn’t persuade the Brits to buy it.

Sky News UK has reported that the company has been spruiking a “dowry” of potentially more than £00 million (A$184m) to sweeten any deal to sell off the UK chain.

Wesfarmers took over UK retailer Homebase in 2016. It still has ten times as many Homebase stores as Bunnings branded store in the UK and Ireland. Picture: Chris Ratcliffe/Bloomberg News

Mr Collinge said this was highly unusual but showed just how much Wesfarmers had ballsed up the Homebase business.

“Normally what happens with distressed businesses is that it sells for a pound and the new owner takes on the debt. But in this case, so much damage has been done to Homebase; the real question is whether it’s viable anymore.

“Every way you look at it, it’s painful and costly and (potential bidders) aren’t interested unless Wesfarmers covers some of the costs so (the business) can limp back to breaking even.”

It’s reported that Lazard’s options for BUKI could include selling the chain whole or even entering into a form of voluntary administration that could see stores sold off one-by-one.

Mr Collinge said Bunnings and Homebase had suffered from some bad luck. The cold weather was a nightmare for Homebase as the stores are more focused on garden products than competitors.

But the financial wounds were mostly self-inflicted, he said. “If there is a lesson in this, it’s arrogance. Bunnings announced the Homebase acquisition just at the point they’d seen off the world’s second largest DIY chain Lowes and Woolworths (which had created Masters).

“They were riding high, believed they were invincible and everything permeated from that arrogant belief that they knew exactly what they were doing.”

Brits have yet to be won over but the prospect of a sausage with their sandpaper. Picture: Mega.

TOO LITTLE, TOO LATE

In the rush to open a small number of Bunnings stores, the hundreds of Homebase stores were neglected leading customers to vote with their feet straight into rivals’ outlets.

It was unfortunate, he said, because Brits were responding positively to the Bunnings format and the superior customer service.

Despite the recent warmer weather leading to more people in DIY stores, he said any uptick in sales would be too little too late.

“Bunnings is the better proposition, but you can’t do anything with 24 stores and the cost to convert the remaining Homebase stores is just too much”.

Wesfarmers said a review on the future of the UK business was underway and would report by June.

But why, if the UK chain is about to be sold, is Bunnings even bothering to update signage and slogans? Mr Collinge had a depressing theory.

“It’s likely, it’s a decision to keep the existing management and store teams (in place) believing there’s a future for the business under the ownership of Wesfarmers, even if clearly there isn’t.”

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