Bunnings Warehouse

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Bunnings Group Ltd.
Subsidiary
Industry Retail/Trade Hardware
Founded Western Australia (1952); 64 years ago
Headquarters Hawthorn East, Melbourne, VIC
Number of locations
324+ (2015)[1]
Key people
John Gillam
(CEO/Managing Director)
Revenue Increase A$9.5 billion (2015)
Number of employees
31,000+
Parent Wesfarmers
Slogan "Lowest Prices Are Just The Beginning"
Website www.bunnings.com.au
www.bunnings.co.nz

Bunnings Warehouse is Australia's largest household hardware chain,[2] with stores in Australia and New Zealand.[3] Since 1994, The chain is has been owned by Wesfarmers Limited. Founded in Western Australia, its head office is in Melbourne, Australia.

Bunnings has been described as "dominant" in the market.[4] As of January 2016, its main rival, Masters Home Improvement (owned by Woolworths Limited), is suffering major financial issues and has an uncertain future as it struggles to compete.[5][6] Other rivals include smaller Home Timber and Hardware and Mitre 10.

History[edit]

Bunnings Warehouse store in Wagga Wagga, NSW. Being a former Hardwarehouse store, the building retains the trademark device of three columns topped by coloured balls.

Pre 1900s[edit]

In 1886 brothers Arthur and Robert Bunnings left London to settle in Perth, Western Australia, and soon gained a government building contract, which led to them founding a group of building companies which later became 'Bunning Bros Pty Ltd'. They purchased their first sawmill the following year in the south west of Western Australia,[7] and over the next few years they concentrated more on sawmilling and timber distribution and less on building.[8]

20th century[edit]

The company expanded to include several new mills around Western Australia. In 1952, Bunnings Limited became a public company, expanded into retailing and purchased several hardware stores.[8] In 1970, Bunnings bought the merchandising and sawmilling operations of the Hawker Siddeley Group. In 1983, they bought out Millars (WA) Pty Ltd and, in 1990, the Alco Handyman hardware operations. The Victorian and South Australian hardware stores McEwans, owned by James McEwans Ltd, were acquired by Bunnings in 1993, with many branches subsequently closed, leaving only the best performing sites. Bunnings Limited was then bought out by Wesfarmers Limited in 1994.

Store development post-1994[edit]

Bunnings Warehouse interior

After the acquisition of Bunnings by Wesfarmers, the first Bunnings Warehouse was opened in the Melbourne suburb of Sunshine by then Victorian premier Jeff Kennett and Joe Boros, the managing director of Bunnings. This was quickly followed by three other Melbourne stores. Subsequently, new warehouses have been opened, on average, every three months across Australia. Development in Sydney and Brisbane proved more difficult than in other areas, as large blocks of land in the metropolitan area were limited.[citation needed] In 1997, the remaining smaller-format McEwans stores were renamed "Bunnings".

Bunnings Warehouse Ashfield, NSW. A converted industrial building and former Hardwarehouse.

In August 2001, Wesfarmers bought the Howard Smith Group, owner of BBC Hardware and their big-box offshoot, Hardwarehouse. This supplemented the Bunnings national network by several dozen stores, many of them large Hardwarehouse stores in Sydney, Brisbane and New Zealand. Hardwarehouse had been dominant in New South Wales and Queensland, but the purchase complemented Bunnings' prior domination in Victoria, where Hardwarehouse had only seven stores to Bunnings' twenty at the time of the buy-out. The market leader at the time of purchase was Mitre 10 with 12% market share but inclusion of the Hardwarehouse and BBC Hardware stores brought Bunnings market share to 13.5%.[9]

A Bunnings Warehouse store built in 2009.

Hardwarehouse and BBC Hardware stores retained their branding for a year, while television advertisements were tagged with each of Bunnings Warehouse, Hardwarehouse and BBC Hardware during this transition period. Lower-volume stores were closed and, in 2002, remaining Hardwarehouses were renamed Bunnings Warehouse.

From 2004 to 2008, Bunnings purchased and re-branded Mitre 10 stores in Griffith, New South Wales, Kempsey, New South Wales, Randwick, New South Wales and Wodonga, Victoria, Magnet Mart at Griffith, New South Wales and one of Mitre 10's first MEGA stores in Modbury, South Australia. In 2008 the A.C.C.C. looked into its acquisitions of five Mitre 10 stores, as it deemed the purchases would be anti-competitive. In February 2009, the ACCC allowed the purchases, finding that "the acquisition of the Mitre 10 stores did not significantly alter the level of competition in the relevant market."[10]

Since the development of the Bunnings Warehouse stores, two general operational formats exist: Bunnings and Bunnings Warehouse. The smaller "Bunnings" stores stock a more limited range of hardware, whereas the larger "Bunnings Warehouses" contain a more comprehensive hardware range and, often, garden supplies including plants. Over time, some smaller-format Bunnings stores have gradually been closed. However, 2015 saw a half dozen new ones open in Victoria, mainly in smaller regional markets and inner-suburban areas. The "big box" format comprises 167 stores of the network of 280.[11]

In January 2016, Bunnings' parent company Westfarmers Limited bought United Kingdom-based hardware chain Homebase for £340 million. All of the chain's 265 stores will be rebranded with the Bunnings name in three to five years time.[12]

References[edit]

  1. ^ 2014 Annual Report
  2. ^ "Officeworks fits in the Bunnings shed". The Australian. 4 April 2007. Retrieved 6 September 2011. 
  3. ^ "Second Quarter Retail Sales Results". Wesfarmers Limited. 31 January 2011. Retrieved 31 January 2011. 
  4. ^ Mitchell, Sue (14 August 2015). "Former Woolies chair John Dahlsen’s attack on Bunnings is personal: ‘I had to sell 3 stores to them because they were coming anyway’". Business Review Weekly. Fairfax Media. Retrieved 29 January 2016. 
  5. ^ Mitchell, Sue (18 January 2016). "Woolworths to pull plug on Masters after Lowe's exercises put option". Sydney Morning Herald. Fairfax Media. Retrieved 29 January 2016. 
  6. ^ Smith, Michael (19 January 2016). "Masters' pain is Bunnings' gain as Woolworths bows out of hardware war". Financial Review. Fairfax Media. Retrieved 29 January 2016. 
  7. ^ "Arthur and Robert Bunning migrated from London to Perth in 1886 and in 1887 they purchased their first sawmill in the south west of Western Australia, marking the formation of Bunning Brothers Limited. They purchased several more sawmills throughout Western Australia.": Battye Library, MN 2701, Bunnings Limited records, ACC 7471A
  8. ^ a b "Bunnings History". Bunnings. Retrieved 2008-02-21. 
  9. ^ Bunnings BBC marriage could kill off traditional hardware stores
  10. ^ Bunnings Group - acquisition of five Mitre 10 stores
  11. ^ "Costco and Woolies drive big box format". Australian Food News. 28 December 2010. 
  12. ^ http://www.theguardian.com/business/2016/jan/18/homebase-to-disappear-from-uk-as-australian-brand-bunnings-takes-over

External links[edit]