Don't under-estimate Bunnings: Garden Centres Association of Australia

Garden Centres Association of Australia manager,Leigh Siebler has given insight into Australian DIY/garden centre chain Bunnings and the thinking behind its plans for Homebase it the UK.

Image: Flickr/David Howard
Image: Flickr/David Howard

Bunnings finalised the £340m deal this week and quickly moved to replace the directors with its own people. Homebase will be rebranded and is set to compete with B&Q on product and price - as well as possibly being a threat to independent garden centres.

Siebler said: "I understand Bunnings originally looked at Home Depot in the United States and basically took their footprint but improved it.

"Bunnings' parent company, Wesfarmers is a wealthy company and started Bunnings when the time was ripe to come into a fragmented hardware industry. They have been smart with acquisitions in the early days with little known brands, McEwans and Hardware House but soon built Bunnings into a strong brand. They built a ‘brand’ with a mass marketing programme, TV, letterboxing, radio and that is still ongoing.

"They are famous for their weekend sausage sizzle with local clubs and charities and their community support.

"They deal with the better quality growers and brands but still have some price points from lower value growers and suppliers too.

"Their Price Match Promise – Lower Prices is just the beginning and seems to have won customers over although most know they are not cheap across the board. However, they are well below garden centre pricing in most cases.

"Australia had the IGCA Congress in 2013 and overseas delegates stated that Bunnings was doing a better job in garden than any of their equivalents in their own countries; that is, they were greater competition.

"Most suppliers tell me that they are good to deal with and pay promptly unlike many garden centres. Yes, they want price, rebates and support but can take huge volumes. When they started with just a few stores it may well be that garden centres under-estimated them. They have now built a huge number of stores and that brand. They had the money to do that but saw the opportunity to gain a big slice of the hardware market first and then saw the fragmented garden market so set out after that too.

"The Woolworths/Masters/Lowes attempt to tackle Bunnings has now failed despite Woolworths having the money to take them on. Yes, they started too late with Bunnings already being strong but made a lot of mistakes in my mind. Their garden offer was bad compared with Bunnings or any decent garden centre.

"The challenge for suppliers to Bunnings is to have a balance of their business with Bunnings and other outlets. Some suppliers have 75 per cent to 90 per cent of their business in Bunnings and that is very dangerous in my mind.

"I believe that the UK garden centres on the whole are better than our Australian centres maybe apart from plant quality at times. Your consumers seem to be more garden focused and clearly you have many more true destination centres than we do so your offer is larger. Our challenge is to get more people through our centres, regrettably without a budget to mass advertise. Our centres need to do more with events. Our garden RELEAF promotion is now into year two but we need to do more."

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