Thread: ACCC Concerns about Bunnings’ Adelaide Tools deal

There is a Total Tools directly opposite Bunnings here in Sunbury. I have been going there for anything I need as the guys there are most helpful. You are greeted when you walk in and asked if they can help. I prefer to support the smaller stores whenever possible.

I see that the ACCC has now approved this takeover, so will have to see how things change.

Bauldy

Interesting that the ACCC sited that one of their reasons for approval was due to the fact that the deal was unlikely to lessen competition due to the growing number of specialist tools retailers across Australia.

Based off the initial reasonings for reviewing the deal, it was mentioned Adelaide has Adelaide Tools, Total Tools and Bunnings operating in this market. Merging two of the three leaves two. They mention that the other player in the market, Sydney Tools are looking to expand to every state in Australia - but that could be just marketing hype. Yes there is the internet options available - but this is about bricks and mortar.

We don’t know all of the facts. As already mentioned being a privately owned business they may wanted an out and it was either close up and get nothing, or sell up and move on - best of luck to them.

Hopefully despite the change of ownership there will be minimum change. Both stores target a different market, Adelaide Tools was more quality over price - let’s hope quality isn’t replaced by the cheapest items possible - as Bunnings already caters for that market.

As pointed out in a post I wrote above, Canberra with a 1/3 of your Adelaide population has over a dozen tool retailers - and that's without any notable industry. I'd expect Adelaide would have at least twice the tool retailers Canberra has. You didn't, for example, mention Carbatec which is in Adelaide. I suspect when you say there are three - or now only two -- tool retailers in Adelaide you are overlooking a great number of local bricks and mortar tool retailers, all of whom would probably welcome your custom once you discover them. Perhaps none of them have "everything" but what retailer ever does?

Whilst I agree that there are plenty of other specialty stores, they are not operating in the same space as Adelaide Tool, Total Tools or Sydney Tools. These three stores could be compared to the enclosed Bunnings tool area (they all seem to be enclosed with their own register), but offer the next level up of choice and quality.

The likes of Carbatec are certainly welcomed (especially by woodworkers), but with the exception of Festool, you don’t go there for a tool skin to match in with your battery system.

Super cheap auto would fall into a similar category- they used to carry some half decent hand tools, but in my opinion seem to carry a dumbed down selection based off price not suitability.

Many of the other options you listed are further sub category specialists, like the fastener business, or the welding supplies specialist. All welcomed, and have their place - but none that can be described as the up market tool section of Bunnings.

Originally Posted by Gunnaduit

As pointed out in a post I wrote above, Canberra with a 1/3 of your Adelaide population has over a dozen tool retailers - and that's without any notable industry. I'd expect Adelaide would have at least twice the tool retailers Canberra has.

just on this Canberra, and Queanbeyan, are for want of a better description twin cities.

The sorts of tools that Adelaide Tools sold would be just the sort of tools used by Canberra's major industry -- building houses, offices, warehouses, bridges, etc. Tools used by tradies.
Domestic and commercial construction is the vast bulk of Canberra's industry and in terms of Canberra's size is bigger than the similar activities in Adelaide.

Originally Posted by Gunnaduit

I suspect when you say there are three - or now only two -- tool retailers in Adelaide you are overlooking a great number of local bricks and mortar tool retailers, all of whom would probably welcome your custom once you discover them. ?

I was using the ACCC examples of similar businesses or alternative competition that they ranked along side Adelaide Tools.

These were the businesses that they were assessing the market against to see if there would be a reduction in competition should the acquisition go ahead.

Based off the finding by ACCC they seem happy that there will be sufficient completion between Total Tools and Adelaide Tools / Bunnings, with an off chance that Sydney Tools may at some stage open up in the Adelaide market.

The decision either way isn’t going to impact my life greatly, but I did find the process interesting and the reasons for the decision which is why I raised it on the forums.

What I find strange about all this is why would Bunnings have wanted it in the first place? They would have been an insignificant competitor to them, they don’t have the right type of staff to man it nor would they be interested in running small insignificant product lines I assume AT has.
Are these stores located on land that they would be after?

Am I missing something?

Bunnings have been unable to gain access to Milwaukee (owned by the same parent company which owns Ryobi, AEG) Guess what, they now have access. Others that spring to mind, Hitachi/Hikoken, Metabo. Will open up to brands that have previously resisted dealing with Bunnings. All comes down to purchasing power.

Maybe but Bunnings are a massive national outfit, a couple of little shops in Adelaide is not going to change much is it?
Are you suggesting they will use these couple of stores to distribute to their stores? I would have thought if the likes of Milwaukee etc don’t want to deal with Bunnings they won’t allow it anyway

Not sure about all Adelaide Tools stores, but the one near me in Mile End is about 100m from a Bunnings on the other side of the road. The Adelaide Tools store is a decent size - perhaps 4-6x the size of the Bunnings tool department. I can’t see any strategic real estate reason for taking it over.

Bunnings has recently taken over an old purpose built Masters store near the Adelaide Airport. They were one of the few retailers who could have used the space - so perhaps they just waited for the price to be right.