‘Better together’: Bunnings unveils strategy for coming year

Thirty years after opening its first warehouse store, Bunnings is aiming to repair supplier relationships after a bruising Senate inquiry as well boost productivity.

Bunnings managing Director Mike Schneider has been on a charm offensive since the Senate supermarket inquiry. Picture: Peter Mathew

Bunnings has issued its strategy blueprint for 2025 under the slogan “Better Together”, aiming to repair its relationship with suppliers after a bruising appearance before the Senate supermarkets inquiry in April, while boosting productivity across its supplier network.

Thirty years after opening its first warehouse store, the hardware giant has moved to rejuvenate its supplier relationships in the wake of sensational supplier testimony before the Greens-led supermarkets inquiry, where it was criticised for the alleged mistreatment of some plant and flower suppliers.

Led by Bunnings chief executive Mike Schneider, the nation’s largest hardware chain has been on a charm offensive since the Senate supermarket inquiry this year, which dragged in Bunnings.

The inquiry heard from aggrieved plant, flower and nursery businesses, and Bunnings, Woolworths and Coles were reprimanded in the inquiry’s final report.

The Greens had singled out the supermarkets for much of their fury but also roped in Bunnings. The party pushed for the Food and Grocery Code of conduct to be extended to the “greenlife” sector which would see hardware chains covered.

Some suppliers had complained of unfair treatment at the hands of Bunnings, especially over pricing and supply agreements, and accused it of misusing its market power in the horticulture and greenlife categories.

Bunnings boss Mike Schneider.

Later Mr Schneider said he was saddened to hear of poor treatment of suppliers and that he personally wanted to “put it right”.

Bunnings’ new fiscal 2025 plan – shared with staff and suppliers recently – will now seek to address that perception of alleged mistreatment of some suppliers, deepen current supplier links and focus on the better use of store space, improved stock flow and productivity.

There is also a focus on a more seamless offer for shoppers as they switch between channels, in store and online.

“Later this month we’ll celebrate 30 years since the opening of our first warehouse store in Sunshine, Victoria. A lot’s changed over that time and there is plenty that has stayed the same, but one consistent part has been our relationship and shared success with our suppliers and partners,” wrote Bunnings chief customer officer Rachael McVitty and chief operating officer Ryan Baker in a letter to suppliers last week that has been obtained by The Australian.

“We have also kept a focus on deeper trust and partnerships with our suppliers.

“So many of our suppliers have longstanding relationships that have seen mutual growth over decades, and we don’t ever take that for granted.”

The 2025 strategy is wrapped around the “Better Together” branding which concerns seeking a better connection with suppliers and staff.

“The outcome of this plan will be determined by how we bring ‘Better Together’ to more than just a slogan.

“We met with 1200 team members last month to launch the plan and said to them that all of the focus points will have a key lead and will mean different outputs to different teams,” the letter said.

Bunnings is aiming to create a better experience for the shopper.

While there will be a focus on reducing injuries, which will include looking at how products are packaged and designed to improve safety considerations, innovation will be driven by working closer with hardware suppliers.

“Innovating and expanding our ranges are led by Merch (merchandise team) but can’t be achieved without input and ­offers from suppliers, then ­having those products marketed correctly and making sure team are trained and excited to fill the bays with stock and correctly ­answer customer questions,” the Bunnings letter to suppliers said.

And as Bunnings rejigs its store layouts to take in new categories such as pets and greatly expanded offers in areas like home cleaning, it is seeking to capture better productivity and a better experience for the shopper in 2025.

“Better use of space or seamless customer offers across all channels will only work if Bunnings share that information and decision process with suppliers,” the letter said.

“Improved stock flow, handling and deliveries has the potential to deliver big benefits, but will require collaboration from our stores, logistic companies, distribution and fulfilment centres and of course suppliers.”

It comes as Wesfarmers prepares to report its full-year results on August 29, with its hardware juggernaut Bunnings to once again deliver the bulk of sales and earnings.

The market is looking for Wesfarmers to post annual revenue of around $43.85bn and earnings of $3.75bn.

Bunnings is tipped to contribute $18.86bn of those group sales and $2.246bn of the conglomerate’s earnings.

UBS analyst Shaun Cousins forecasts Bunnings sales to benefit from its push into more categories, and countering the impact of sluggish new housing, with the hardware retailer to report market share gains in existing categories and entry into new ones such as pets and personal cleaning.