Thread: Woolworths enters the hardware business

Originally Posted by wheelinround

Might be an idea for those worried about who's supplying whom to check out Wesfarmers and what and who they own. Blackwoods who they supply is interesting, Bunnings.

http://www.wesfarmers.com.au/our-bus...-a-safety.html

http://www.wesfarmers.com.au/our-businesses/energy.html

There's not much interaction between the Wesfarmers divisions. Blackwoods definately aren't major suppliers to Bunnings (if much or anything at all), or vice-versa.

Woolworths and Wesfarmers definately do have several markets though (just Wesfarmers is everything from stationery supplies, to groceries, to gas, to fertilizers, to insurance, to coal, to training, to sign writing).

What Woolworths do with this will be interesting to watch, but neither of these companies will worry too much about the little guys. Woolworths approached Mitre-10 recently with a purchase offer, which allowed them to look at Mitre 10's books. This would have given them a great insight into the Australian hardware industry. I wouldn't be surprised if this exercise was just a method of gaining some industry information for cheap.

Whatever they do, they will be big-box stores full of the cheapest stock they can find.

I did have a peek at the Lowes website though - their large tool chest trolley thingy with inbuilt fridge would hit the mark over here!

What will be interesting to see is if Woolies just take a "me too" approach, or actually introduce something better/competitive. Somehow I don't think we are going to see a big difference. The best I can see coming out of this is that Bunnys may have less stock outs - drives me nuts.

Originally Posted by Big Shed

So if you owned a small Thrifty Link store, or indeed a medium size Home Hardware (and we have quite a big one here in Bendigo-Hume&Iser, as well as a medium size one-Kirkpatricks) would you be happy to be tied to a wholesaler that controls one of your major big box competitors?

I know I wouldn't be, unless of course it would enable you to sell at equivalent prices to the Woolworth big box stores.

The new big box stores won't perhaps open for 2 years, but Woolies/Lowes have signalled that they will be a market force long before that by offering to buy Danks and give Bunnies a bit of curry throught the Home Hardware stores.

Yes, you're right. My answer was simplistic and probably a bit off the mark. OK, way off the mark.

Another 150 big box stores need LOTS of customers, and chances are independants will suffer much more than bunnies, who have the money to fight a war.

But the reality is that smaller hardware stores will never be able to compete just on price. So they need to find a model based around service or they will wither and die.

As for offering to buy Danks, it appears to be a done deal. Not surprising given the premium they are willing to pay. Will be interesting to see how Home Hardware goes, both in the short term and the long term.

I don't expect things to change much as to the type of products they will sell .
I don"t think we are going to experience an influx of products that are available in the US through Lowes.

Local Mitre 10 here is a family owned business they sell very little specialised hardware and tools just the home handyman stuff.
They will order stuff out of the ordinary though .I got my Triton thicknesser through them.
The Home hardware outlet is also family owned ,difference is the guy who owns it is a semi retired builder and will order just about anything you want , you just have to pay the price.

Kev.

From a US perspective, no question Lowes is better than Home Depot, but, as has been said, it is still a big box store. And make no mistake, the big box stores (including Bunnies) are in the business of selling to the DIY market, not the WWing market.

So, what is really in it for Lowes?

I suspect:

--A foot in the Oz DIY market
--A leg up on purchasing power for its US stores by leveraging vendors that supply both entities
--A hedge against the vicissitudes of the US market, providing a bit of cushion for the leaner times
--Simply keeping Home Depot from getting in the OZ market
--A good excuse for company executives to fly to OZ for "business meetings"

Hi

About 10 or so years back, Woolies decided to open Foodworks a vehicle to supply the small independants, in effect what this gave them was market knowledge of the best stores they supplied, who were quickly bought up and became Safeways etc. Once they'd picked up the best they then sold off the Foodworks arm. Read owning Danks as being Foodworks MkII and you'll get the picture... the better Home Hardwares will be bought and the others will have to compete.

Interestingly, when our local small hardware closed some time ago the owner blamed the supermarkets, not so much Bunnings as that 3 metres or so of shelf space in the supermarket is where their traditional sales came from.

The way of retailing unfortunately...

Regards


Grahame

woolies have owned Dick Smith stores for years.

A couple of years ago they had many franchise stores, then they sacked all the franchise stores and opened new DS stores nearby to the ex franchisee stores.

How many independent grocery stores do you know of?

It seems to me Bunnies sent GMC/Triton down the gurgler, the big boys are all about money, they don't seem to have moral ethics.

I conclude the little hardware stores are on the slippery slide.

Front page news on the Fin review today, woolies and their wal-mart style corporatism wants a slice of the 28billion dollar home improvement market by opening 150+ "big box" home improvement centers. Cant be good for bunnings, could only imagine this being better for consumers in the market for garbage quality hardware. Wont get a nickel out of me however, woolies dont do anything good for this country, especially for the farmers.

Was an interesting read, mitre10 dont seem too phased.

/discuss.

westfarmers owns coles which owns bunnings and liquor outlets and fuel stations
woolworths owns new hardware store, dan murphy's and fuel stations

what is left for them to monopolise? pharmacies? hair dressers?

this will be the end of the small hardware store that took 5mins to get close to what you want with (mostly) experienced advise, to a hardware supermarket that is central to everything but takes an hour round trip to get helped by (mostly) in-experienced teenagers

as soon as bunnies opened in mackay, the northern beaches hardware closed down not too soon after.

1 hours round trip? My closest is 5min, and I have 4 others within 20 min plus a Mitre10 Mega.
I also tend to shop on week nights (open til 9), not as many teenagers, and easy to find someone who is not busy, especially in the paint shop.

Originally Posted by sundancewfs

Lowes is definately a "go to" store
Way better than Home Depot ( which is similar to Bunnings)

When we lived in the Los Angeles and San Francisco, Lowes will be our 1st choice. Much friendlier staff and easier to find stuff.

Giving Bunnings a run for their money will definitely benefit the consumers.

GUNN

I think that it is really too early to tell. The share market decided but as with shares they react and so it is.

"Monopolistic capitalism is worse than Communism" .
Trying to remember whose quote that was, Lenin,Marx?

Originally Posted by Honorary Bloke

--A hedge against the vicissitudes of the US market, providing a bit of cushion for the leaner times

That makes some sense; while the US (and banks in particular) has been going down the gurgler, we've had just one quarter in retreat. What recession? And, the banks have continued reporting record profits. Bunnings and Woolworths too.

Decades ago, Coles and someone in USA (Krantz?) formed a joint venture, creating our Kmarts. Later, Coles bought the US partner out.