Garden centre profile: Bunnings Warehouse, St Albans

A wider range to choose from, knowledgeable staff and more landscape product are just three of the features Bunnings is bringing to its revamped pilot stores, Matthew Appleby reports.

Bunnings: offering customers a broader range of products from which to choose - image: HW
Bunnings: offering customers a broader range of products from which to choose - image: HW

Sausage sizzles are on the menu along with sunflowers, spades and screwdrivers after the first Australian DIY/garden centre in the UK opened on 2 February. Bunnings' parent Wesfarmers bought Homebase for £340m in January 2016. The first UK Bunnings store is in St Albans, Hertfordshire.

The pilot has a design that could roll out to all 260 Homebase stores over the next five years in a £500m rebrand. There will be four rebrands by 30 June and 10 by the end of 2017. The first are close to Bunnings' headquarters in Milton Keynes.

Horticulture Week spoke to Bunnings UK managing director Peter "PJ" Davis:

- What is the measure of success for Bunnings in 2017?

The trial of pilots, and that's not just strong financial outcomes. That's about engaging with local communities and customers and ensuring we're providing a great environment for team members to work. We will listen to feedback from customers and hold exit studies and group customer sessions, and after that we will be clearer on what the rollout could look like over the next three-to-five years.

We've already adjusted a lot of ranges and brought Bunnings' Warehouse format here. But there's been a lot of emphasis on ranging that is different to Australia. In Australia we are about home improvement and outdoor living but in the UK it's home improvement and gardening. We know Brits love their gardens and our research shows they make double the spend on gardening than our Australian customers. We want to capitalise on that, giving them what they want, with more advanced plants and a lot more landscaping than they would traditionally see.

- What will your customers find that is different to Homebase?

They're going to have a far wider range to choose from, pushing into the heavier end of landscape products and also pushing into advanced planting a bit. We want to strongly engage with our customer in terms of members of staff being qualified landscape professionals. They should be able to give our customers the information they need. They key thing is the specialist teams here are very strong.

- Why choose St Albans for the first Bunnings in the UK?

We looked at a tranche of stores we can open that would make logistics and marketing cost-effective. St Albans was well-located for our team. The first new store needs significantly more support down the track and this was in a good position between (Bunnings HQ) Milton Keynes and north London.

There will be a second store in St Albans, then Hemel Hempstead, then we have three others to choose from for the fourth close to the first three and after that we'll go further afield.

- What are your turnover expectations?

We have targets we want to meet and indications are they should be met. (Industry analysts have suggested Bunnings stores need 40% sales growth to deliver a sensible return on investment.)

- How are you going to take share from the competition?

We don't think like that. The market overall is worth £38bn, so it's not small. There's no-one with a significant share, unlike with some other countries in Europe. Because it's so disaggregated we see we have a role in the market. There's lots of ways to market if you look at Screwfix, Wyevale, Dobbies or Wickes and this new format forms our perspective.

- What was wrong with Homebase that you have fixed?

Everyone knows Homebase was underinvested across the board.

We want stores to be easy to shop and to present the merchandise in a warehouse format with a warehouse feel. You won't find anything too fancy, just great stock at great prices.

- How are Australian and British customers different?

British customers are interested in improving their homes and they also love their gardens. It has surprised me the volume of plants that we sell as soon as the weather changes.

Living here for the past 12 months, I can see why. The variety of plants available here is significantly more than in New Zealand and Australia.

That's got a lot to do with access in Australia, importing green life, and a lot to do with closeness to Europe.

- What is your view on Brexit and exchange rates?

Prices are going to come under pressure. There is a lot of inflation caused by currency but in the end the market and the customers will set prices. Customers tell us what they're prepared to pay. But there's no room in the current exposed period for mediocrity.

We obviously want to support local growers where we can but at the end of the day we have got to be competitive and if they are competitive we will more than support them.

- Is there a local sourcing plan?

The majority of stock will come centrally then we'll supplement that with local growers offering products to our local teams to empower our team members to make sure we have the right stock at the right time. That gives us far more flexibility.

- How will you cope with the competition upping its game?

We have always looked at the wider market and to bring new ideas in to make the whole industry grow. That's not something one retailer does, the whole industry does it, and sometimes that's spurred by competition. We've grown the market before, particularly in New Zealand. I'm also seeing the investment B&Q and Wickes are making and that has to be good for customers and the industry.

Expert comment

Neville Stein, managing director, Ovation

"My view is one of optimism. If multiple retailers can get more people into gardening such as first-time buyers that all has to be good news, particularly for the independent garden centre sector and small groups such as Notcutts and Squire's. If they get into gardening through Bunnings they will progress into local garden centres where they offer more advice and choice. Independents have nothing to fear."

TRADING DETAILS -Bunnings Warehouse, St Albans

Finances: Turnover to 31 October 2016: n/a (£1.46bn overall).
Planned redevelopment/repositioning spend: £500m.
Purchase cost: £340m.
Bunnings UK & Ireland made a loss for the last six months of 2016 of £28m (including £13m restructuring and one-off repositioning costs).
Size: 6,500sq m (garden centre 1,800sq m)
Staff numbers: 68
Competitors: B&Q, Wickes, Screwfix, garden centres including locally Ayletts and Burston.
Main suppliers include: Avoncross, Borderstone, Briers, Chessum, Florna, Ivan Ambrose, Mr Fothergill's, OrchiDiva, Scotts, Sipcam, Westland.
Manager: Andy Kenwrick
Buyers: Craig Castelino (general manager merchandising), Martyn Hill (plants)
New features: Children's play area, cafe, charity sausage sizzle.
Garden sections: Decor, garden care, garden plants, garden power, indoor plants, landscape, outdoor living, watering.
Garden product categories: Accessories, aggregates, arches, artificial grass, barbecues, bird care, chainsaws, citronella, compost/composting, cultivars, decking, dog kennels, edging, edible gardening, fencing, fertilisers, footwear, furniture covers, gazebos, gloves, grass seed, greenhouses, growbags, hedge trimmers, herbicides, hoses, houseplants, irrigation, lattice, lawn care, lighting, mowers, mulchers, ornaments, outdoor furniture, pebbles, plant food, play equipment, pots, propagation, sand, screening, seeds, sheds, soil, sprayers, stakes, strimmers, timers, tools, trellis, weed control, wheelbarrows.

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