Two big names

In Australia the DIY market is dominated by two names: Bunnings and Mitre 10 – which are due to be joined in autumn 2011 by Masters, a joint venture between Lowe’s and Woolworths (see separate report). It must be said, though, that this happily overlooks the fact that there are also many smaller groups of independent hardware dealers, mainly organised as cooperatives. One example is the HBT buying group (Hardware & Building Traders), which has around 300 affiliated shops. Some 140 outlets are operated by the members of the National Building Cooperative as well. The Home (Home Timber & Hardware) franchise chain has about 200 outlets which notched up sales of approx. € 325 mio in 2009. Moreover, the chain’s parent company, John Danks & Son, manages more than 300 hardware stores under the Thrifty-Link banner, as well as some 60 garden centres called Plants Plus. Bunnings is the undisputed market leader in Australia. Founded as a sawmill in 1886, the company moved into the DIY market in 1989. Five years later came the takeover by Wesfarmers, a quoted conglomerate with interests not only in several retail fields but also in mining, chemicals, energy and the insurance business, which opened the first Bunnings store in a warehouse format. In the meantime (to May 2011) Bunnings operates 241 stores in Australia, 173 of them warehouse-type stores, 35 small-format stores and 33 trade centres. In the 2009/2010 financial year (ended 30 June 2010) the chain recorded sales of AUS $ 6.4 bn, or 9.7 per cent more than the previous year. Mitre 10 comes second in the Australian marketplace. It is a wholesaler and has since March 2010 been part of the Metcash Group, which has held a 50.1 per cent stake in the business since that date. The remaining 49.9 per cent belong to the member companies, who operate more then 430 Mitre 10 and True Value Hardware stores. Around 70 per cent of these stores are located in rural areas. In addition the company supplies goods to a further 400 non-branded independent stores. Mitre 10 declared sales of AUS $ 796.7 mio for 2010. “Ample room in the market” In an interview with DIY International Michael Wedgwood, CFO of Bunnings, spoke about the special features of the Australian DIY market and the prospects for more competition. It seems that the global economic crisis didn’t hit the DIY industry in Australia and New Zealand so strongly as in other regions. What are the reasons? The global economic crisis has created difficulties in…