The Bunnings of everything: low prices pose threat to rival retailers, but brand loyalists will have to experiment

Hardware chain Bunnings’ move into automotive, cleaning and pet care has been a bonus for consumers, but shoppers can still find bargains elsewhere.

Bunnings has moved aggressively into the pet, cleaning and now auto products markets.

Bunnings’ aggressive push into new and expanded categories has been a bonus for shoppers and the hardware giant, but convincing knowledgeable customers to trade their preferred brands for cheaper products might stall its march on specialist retailers.

The Wesfarmers subsidiary will progressively introduce an expanded auto range in the coming months, hoping to match the success it has enjoyed with pets and cleaning products.

A mystery shopping expedition by The Australian found in many – but not all cases – Bunnings was cheaper than rivals Supercheap Auto and Petbarn. The bigger challenge was finding like-for-like comparisons.

In many cases Bunnings did not offer well-known brands, especially in car care – such as Castrol and Penrite in engine oil – or if it did, it was difficult to compare prices because of size variations.

Expanding the mystery shopping exercise to Woolworths uncovered examples where the nation’s leading supermarket chain had sharper promotional pricing.

Bunnings Mount Gravatt, in Brisbane’s southern suburbs, was selling 325g cans of well-known lubricant WD-40 for $9.60, while at the nearby Big Top Shopping Centre Supercheap Auto a 300g can of low-odour WD-40 was $16.99 and $17.99 for an ordinary 350g can. At nearby Westfield Carindale Woolworths, a 255g can of WD-40 set shoppers back $9.50.

The WB-40 shelf at Supercheap Auto at Mount Gravatt.

Still in the auto aisle, Kincrome ratchet jack stands (1850kg) at Bunnings sell for $104.99, while at Supercheap Auto at the Big Top Shopping Centre, Mount Gravatt, the same product costs $108.99.

At Bunnings, a Trojan 4-way wheel brace will set shoppers back $13.50 while at Supercheap Auto a SCA 4-way wheel brace costs $19.99. In Bunnings, the Exide Endurance battery (30-month warranty) was $222, while at Supercheap Auto a Century High Performance battery (30-month warranty) was $231.99.

Citi analysts, who did their own price comparison exercise, are unsure to what extent Bunnings will hurt the incumbents – ASX-listed Super Retail Group’s Supercheap and Bapcor, owner of the Autobarn, Burson and the Midas chains – in the $1.5bn auto accessories market.

“Firstly, while pricing is well below competitors on certain brands, we found a number of products where the incumbents were cheaper,” the broker said.

“Secondly, while ranging is reasonable in certain categories like car care, there are a number of key brands missing.

“In pets and cleaning, Bunnings has won through offering large pack sizes to reduce unit pricing; however, these opportunities appear far more limited given its auto customer is likely to be a casual user that doesn’t require large quantities of car wash.”

Bunnings managing director Mike Schneider, at an investor day last week, unveiled plans to expand the retailer’s currently limited range of 300 car care products. He told The Australian that the makers of many well-known auto brands had declined to be sold through Bunnings for fear it might jeopardise their existing relationships with Supercheap Auto and Bapcor.

Bunnings managing director Mike Schneider.

According to Morgan Stanley analysts, Bunnings wants to increase store sales density – which is still lower than its global peers – by continued category expansion, better range localisation, and growth in commercial and e-commerce.

The star category has been the pet products range, with 800 products on offer and a strong focus on value.

“Success in the category is resulting in increased customer frequency, as well as attracting new customers, resulting in strong sales growth year-on-year,” Morgan Stanley said.

On The Australian’s shopping field trip, Bunnings offered a 24-can carton of Purina Fancy Feast cat food for $29.98, while at a nearby Petbarn – owned by private equity-backed vet network and retailer Greencross – it was priced at $27.50.

A 1.8kg packet of Trill small parrot mix sells for $6 in Bunnings and $6 in Woolworths.

Bunnings offers a “price guarantee” that a competitor’s lower price on the same item will be beaten by 10 per cent, excluding trade quotes, stock liquidations, and commercial quantities.

Morgan Stanley said that in the cleaning products category, Bunnings matched the lowest price in supermarkets on a per unit/weight cost basis.

“Cleaning now represents six of the top 25 products that are cross-shopped across stores,” the broker said.

Bunnings-owned household cleaning brand Exonic is offered at super-low prices with a litre of dishwashing liquid selling for $1.40, a packet of 100 dishwashing tablets for $12.80 and a 250ml bottle of dishwasher cleaner for $2.99.

Exonic cleaning products at Bunnings.

The competition may have motivated Woolworthss to fight back, with its home-brand Shine dishwashing liquid found at the bottom shelf at Westfield Carindale for $1.40.

Bunnings offered a packet of 60 Finish Powerball Quantum dishwashing tablets for $18.95 (32c a tablet), while a 46-capsule packet of Finish Ultimate Dish Tabs was selling at half price for $24.50 (53c a tablet) at Woolworths.

At Bunnings, a Sabco Microfibre 2 sides sweeper/mop sells for $29.95 while at Woolworths a Sabco Super Swish Xtra 2 pads sweeper/mop sells for $42.

Citi says Bunnings has identified an opportunity to offer solar, battery and EV charging in-store.

Customers will also notice 300 digital screens have been rolled out in-store, part of its retail media experiment to enhance Bunnings’ profits by selling targeted advertising on the shop floor.