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  1. #1
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    Default ACCC Concerns about Bunnings’ Adelaide Tools deal

    I might be a little late on this one however I have just found out that Bunnings has proposed an acquisition of Adelaide Tools which is currently being reviewed by the ACCC.

    A few random quotes to give some context:

    "Adelaide Tools is one of only two tool specialists with a physical presence in Adelaide"

    "The other key tool specialist competitor in Adelaide is Total Tools, which has 81 stores nationally, six of which are in Adelaide."

    "Adelaide Tools is a privately owned business that sells tools, tool accessories and outdoor power equipment, primarily to trade customers in five locations in Adelaide."

    "Sydney Tools is the second-largest tool specialist in Australia, with 33 stores across NSW, Victoria and Queensland. Sydney Tools has publicly announced its plans to open new stores across Australia, but does not currently have any stores in Adelaide."


    Whilst I have no connection with Adelaide Tools, I am a customer and prefer to purchase from them than Bunnings when the opportunity presents. They have found that they have a much better range than Bunnings and it just has the feel of a more specialist tool store with better quality products. Staff have always been helpful and don't seem to differentiate between tradies and hobbyists. The store near me is also about 50m from Bunnings.

    I have no idea if anything will change if Bunnings does acquire Adelaide Tools or if it will be business as usual, however it does seem to water down options.

    Further reading:
    Concerns about Bunnings’ Adelaide Tools deal | ACCC
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  3. #2
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    I'm pretty sure that Bunnings [owned by Westfarmers] has done similar across the whole country to capture a higher percentage of the market share.

    The industrial arm of Westfarmer, Blackwoods also did similar to the industrial industry and now pretty well control that market.

    It seems a sad fact of life in Australia that choice and competition is being eroded, thus "online" is becoming more popular with better prices and service in many cases.

  4. #3
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    Supposedly Adelaide is getting a Sydney Tools this year according to an article I read a few weeks ago. If Adelaide had Adelaide Tools, Total Tools and Sydney Tools I think we would be well catered for even if Bunnings does purchase Adelaide Tools.

  5. #4
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    Quote Originally Posted by Sir Stinkalot View Post
    I might be a little late on this one however I have just found out that Bunnings has proposed an acquisition of Adelaide Tools which is currently being reviewed by the ACCC.

    A few random quotes to give some context:

    "Adelaide Tools is one of only two tool specialists with a physical presence in Adelaide"

    "The other key tool specialist competitor in Adelaide is Total Tools, which has 81 stores nationally, six of which are in Adelaide."

    "Adelaide Tools is a privately owned business that sells tools, tool accessories and outdoor power equipment, primarily to trade customers in five locations in Adelaide."

    "Sydney Tools is the second-largest tool specialist in Australia, with 33 stores across NSW, Victoria and Queensland. Sydney Tools has publicly announced its plans to open new stores across Australia, but does not currently have any stores in Adelaide."


    Whilst I have no connection with Adelaide Tools, I am a customer and prefer to purchase from them than Bunnings when the opportunity presents. They have found that they have a much better range than Bunnings and it just has the feel of a more specialist tool store with better quality products. Staff have always been helpful and don't seem to differentiate between tradies and hobbyists. The store near me is also about 50m from Bunnings.

    I have no idea if anything will change if Bunnings does acquire Adelaide Tools or if it will be business as usual, however it does seem to water down options.

    Further reading:
    Concerns about Bunnings’ Adelaide Tools deal | ACCC
    I don't like to acknowledge this but realistically there's only two likely outcomes from the ACCC's investigation.

    1. Bunnings' acquisition of Adelaide Tools (and Oaklands Mower Centre) is permitted to go ahead, or
    2. the privately owned Adelaide Tools goes out of business.

    If it's option 1, then I expect that over the next year or so Bunnings will close Adelaide Tools five stores. Depending on how the stores are configured, especially in regards to parking, Bunnings might rebrand one or two as Bunnings outlets, but without lots of onsite parking rebranding is, IMO, unlikely.
    Given how far and how deeply the ASX has fallen in the past month I can't see the owners of Adelaide Tools doing anything other than "take the money and run". Competition from Bunnings will already be hurting them badly.

    I also think it unlikely that, with a major recession looming, Sydney Tools will open any new stores this year. I think it more likely that Sydney Tools will shutter some of its current 33 stores over the next year or so.


    Given that, Adelaide will be left with just one major tool supplier -- Total Tools.
    regards from Alberta, Canada

    ian

  6. #5
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    I don’t know if they run different pricing structures in Adelaide but I find Sydney Tools and Total Tools pretty much on par for pricing and variety of tools compared to Bunnings. If you only had two of the three you are not missing out on much

  7. #6
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    Up here total tools are hopeless. You'd get more expert service at coles. We are lucky as we have trade tools direct. Used to be queensland trade tools. They are often too dear but occasionally have something cheap on sale. The staff actually have a clue.

    They like sydney and total all seems to have the same prices on branded items. I'm sure it's a coincidence...
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  8. #7
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    Bunnings take over of Adelaide tools would change them to the Bunnings policy of by buy what we have not what you want, Bunnings simply do not have the quality range that Adelaide tools have and their special order section is a joke

  9. #8
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    You are correct Ian that it is a privately owned company and the owner may want out for various reasons which is fine.

    What struck me was the lack of choice, if Adelaide Tools is purchased by Bunnings and either closed or changed, then there would be one specialist tool supplier left in Adelaide. The numbers listed in the ACCC report would indicate that there aren’t many more options Australia wide.
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  10. #9
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    I don't know Adelaide very well, but I'm surprised there's only three tool shops in town. What about Carbatec - I know Adelaide has one of them. Here in Canberra, with 1/3 of Adelaide's population and no major manufacturing (other than being the country's largest producer of hot air), there's no Carbatec, but I can think of at least a dozen tool shops -- you've got the power tool shops like Sydney Tools, Total Tools and Bunnings, but also Blackwoods (not always crazy expensive although often so), also Gasweld; the building suppliers normally run builder's tools, there's one or two independent general tool shops, the auto spares retailers, there's the industrial suppliers full of tools including one excellent machine tool store, the fastener stores and bearing suppliers sell lots of tools, there's a tractor parts place also full of tools, the saw sharpener sell blades and all the Carb-i-Tool bits, you've got one or two concrete blade shops that sell concreter's big stuff, then you've got a couple of specialty auto trade tool shops hidden away like Aladdin's caves, a mobile Snap-On franchise, the auto paint store has full spray paint gear and compressors, plumbers and sparky's suppliers sell their trade tools, there's Ag suppliers on the outskirts of town, and I could probably think of more -- but you're saying that Adelaide only has three places??

  11. #10
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    Quote Originally Posted by damian View Post
    Up here total tools are hopeless. You'd get more expert service at coles. We are lucky as we have trade tools direct. Used to be queensland trade tools. They are often too dear but occasionally have something cheap on sale. The staff actually have a clue.

    They like sydney and total all seems to have the same prices on branded items. I'm sure it's a coincidence...
    Total Tools stores are all franchises so the quality of staffing will vary store to store. The most annoying thing I find with them is their useless website, even if you know the name of the product and that they sell it you still often can’t find it on their website.
    I buy more from Sydney tools as a result.

    Just in general on price, the reason the prices don’t vary much is because they are already selling on crazy low margins and make their money on incentive rebates from suppliers

  12. #11
    rrich Guest

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    Actually, it may be worse than that. The owner wants out to retire and the personal situation along with the financial aspects, the sale is the best option.
    The kid may have said, "I don't want to do what you do." And the owner starts thinking, 'Why am I slaving away to leave something to the kid who wants nothing to do with it?"

  13. #12
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    The underlying issue is that it is very expensive to run a business and the product that many here would like to buy is not sort by others and they may only ever buy one in their lifetime so it is a very tough business model to try and operate
    Bunnings doesn’t care what it sells and will sell anything that the consumer wants. If an item is a slow seller it is wasting valuable shelf space and dropped for something else.

    That is the harsh reality of it all and why they run such a successful business

  14. #13
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    Sydney Tools= no customer service, none.
    Total Tools= some service, but no price flexibility.
    Festool specialist stores= good service but big money, no price flexibility.
    Bunnings= staff have no clue, no price flexibility, rubbish quality gear mostly.

    I’m kinda happy I’m at a stage where I don’t have to go to tool shops anymore, I’m pretty much set up for the next 20 years, but I know that when I do think of buying something, the tool store is the LAST place I look, it’s far easier to buy secondhand from an online source.

  15. #14
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    I've sold hundreds of this exact same item for $87.50 a pair delivered (cheaper for forum members) - https://www.totaltools.com.au/66895-...f-clamp-wfl200

    You tell me why Total Tools want virtually twice the price, picked up? The item is identical, same factory, same quality. There's simply too many parties taking a bite out of it in the supply chain, that's why. This is how Bunnings can undercut on many items, they're dealing direct with the manufacturer or an overseas trading company. They don't want to compete with the little guys who direct import or the local companies that specialise in particular product categories. Steel sections are a classic example, I can't understand why anybody would buy steel from Bunnings.

    I would hate to see Bunnings any more entrenched than they already are. That being said the tool stores that source all their products locally, either because they're a franchise or part of a buying group, are always going to be much more expensive for more specialised items that you can buy online.

  16. #15
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    It sounds to me like a great business opportunity. Set up a competitive business close by Bunnings and wait for an offer,

    mick

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