Bunnings boss sees strong pipeline of demand from DIY handymen, tradies and homeowners ahead

The Bunnings boss expects sales to rise this year as people stuck at home or working remotely look to put their new found DIY skills to use around their home.

Bunnings boss Michael Schneider sees a strong pipeline of demand ahead, especially as people stuck at home and working from home have picked up new DIY skills for the home. Picture: NCA NewsWire / Andrew Henshaw

Australians stuck at home or working from home have spent time looking over their dwellings to find new projects and repair jobs to take a crack at, and have also used the spare time to teach themselves DIY handyman skills which should help boost Bunnings sales this year.

Bunnings boss Michael Schneider told The Weekend Australian there was a healthy pipeline of home repairs, commercial building and other projects stretching into Christmas, giving further confidence to him that a rebound in earnings Bunnings notched up in the June half should continue into fiscal 2023.

“In the second half we can see that increased level of certainty in trading conditions and being able to be open through Easter and all those sorts of periods.

“Obviously, commercial growth is strong because we can see the commercial pipeline, that’s been really pleasing and I think throughout the first half – and this is continuing – with the second half is people still spending a lot more time at home, working from home a little bit more and probably isolating and things like that.

“More people are at home and at home for longer periods of time, we see that ‘wear and tear’ on the home and that sort of carry through of people doing DIY things around the house, I think over the last couple of years people have learnt a whole new range of DIY skills, really putting those to use.”

For fiscal 2022 Bunnings revenue increased 5.2 per cent to $17.754bn as earnings increased 0.9 per cent to $2.204bn, including a favourable contribution from property disposals. The performance was a tale of two halves, as the first half was dominated by store closures and Covid-19 lockdowns, suppressing earnings. But as the economy and Australia opened up in the June half it helped Bunnings – the traditional profit engine for Wesfarmers – to forge a resurgence as home projects, repairs and major commercial activities could resume.

In the June half Bunnings earnings rose 3.7 per cent against a 1.2 per cent earnings fall in the first half.

Total store sales increased 4.2 per cent for the year, with store-on-store sales increasing 4.8 per cent and online sales growth of 37 per cent. Despite cycling an elevated level of demand, sales growth was achieved across all major trading regions, supported by continued DIY activity in consumer and strong demand in commercial. In the second half, total store sales increased 7.8 per cent.

“We remain well positioned for a range of market conditions in the year ahead. There’s a solid pipeline of building and renovation activity and lots of opportunities as customers continue to maintain, build and improve their homes,” said Mr Schneider.

He added for the first time in a number of years Bunnings would be able to full trade through Father’s Day and Spring, especially across Victoria.

“So ultimately the customer has got to decide where they want to go and how they want to spend their money. Our job is to have a really compelling offer that they‘re going to choose us first.”