Good time for regional markets, says Bunnings chief Michael Schneider

Bunnings CEO says the changes brought on by the pandemic have made some exciting opportunities but business forecasts will remain difficult without a vaccine.

Bunnings boss Michael Schneider says the pandemic has created exciting opportunities for regional markets.

Bunnings chief executive Michael Schneider has warned it will be difficult to forecast business conditions until a vaccine is discovered for COVID-19 or international borders are opened. But he welcomed the opening of a travel bubble with New Zealand as a boon to both tourism and commercial activity, saying the pandemic was also opening opportunities for regional markets.

Mr Schneider added that despite the economic uncertainty the business model of the hardware retailer would remain resilient, with its products still popular in the face of any lull in housing sales as homeowners turn to renovation activity.

“I think looking out, if you say more beyond 12 months and I think it will be hard to look much beyond what happens until either there is a vaccine or we can find a way to open international borders,” he said.

Addressing an economic summit held by the Trans-Tasman Business Circle, Mr Schneider also spoke about the impact on the broader economy of the working from home trend, which he viewed as positive for a retailer like Bunnings as people changed their lifestyles. This would have a knock-on effect to the housing market, he added.

“One of the things that is pleasingly emerging is this work from home … period – whether it is longer term or shorter term depending on where you are living – has taught us we can work differently,’’ Mr Schneider told the summit.

“And I think that has seen particularly in regional markets.”

Mr Schneider said there had been “some stimulation of the housing markets, because I think people have realised ‘I can live somewhere that has a great quality of life, by the coast, in the country, and by comparison to living in the city perhaps my dollar goes further.”

“Those sorts of things are exciting’,” he said.

Mr Schneider said the Bunnings business model could weather this storm, and volatility in the housing market.

“We have always said we have a very resilient business model, if the housing churn isn’t there quite often you see work being done on renovation and those activities, so I think that’s a real exciting thing for us.

“But I think we will see interesting changes in the market. People might be more interested in buying a holiday property or a caravan doing those sorts of things.”

Mr Schneider welcomed the work on constructing a travel bubble between Australia and New Zealand, that would bolster tourism as well as business links between the two countries.

“The idea for a bubble for us with New Zealand is exciting …. And it is very practical for commercial reasons beyond tourism and hospitality.”