The Australian Bureau of Statistics (ABS) has released stats for hardware retail revenue through to February 2024.

In assessing this data, we will rely on periods of 12 months from March to February. Thus p2022 will refer to a period from March 2021 to February 2022.

Overview

Contrasting p2024 with p2023, revenue in Australia overall fell by 0.7% to $25.5 billion, a decrease of $168 million.

In percentage terms, the steepest fall came from the Northern Territory (NT), which was down 5.7% to $263 million, a dip of $16.0 million. In dollar terms, New South Wales (NSW) was the biggest loser, down $239.9 million to $7548.3 million, a drop of 3.1%.

The largest growth in percentage terms came from South Australia (SA), which rose by 2.7% to $1771.1 million, a gain of $46.0 million. Western Australia (WA) was the largest gainer in dollar terms, lifting by $68.3 million to $2803.3 million for p2024.

Victoria (VIC) also performed well, gaining an extra $63.9 million to hit $6618.4 million, an increase of just under 1.0%. Australian Capital Territory (ACT) also grew, gaining $11.0 million, an increase of 2.1% to reach $540.0 million. Queensland (QLD) experienced a loss of 1.8%, or $99.2 million, leaving it with$5298.4 million.

New South Wales

As the chart indicates, revenue for February 2024 was only slightly elevated over previous years. In the usual peak period from August through to December 2023, revenue flattened out as compared to the two prior years.

Victoria

For VIC, p2024 has proven to be surprisingly good period. While the results in both January and February 2024 were in line with recent results, the state managed to set new revenue records during August, September and October 2023.

Queensland

For most of p2024 QLD has mostly "split the difference" between a weaker p2022 and a stronger p2023, though it equalled the prior years for December 2023 and January 2024, and bettered them both for February 2024.

South Australia

SA saw p2024 win out over p2023 for all but two months - December 2023 and January 2024.

Western Australia

Most of p2024 for WA was a close - but slightly improved - copy of p2023. The highlight was a new peak for October 2023, and strong finish in February 2024.

Tasmania

Similar to WA, the TAS numbers for p2024 were close to those for p2023, falling below them for December 2023, and getting above them for February 2024.

Northern Territory

After a very good p2023, p2024 came in somewhat lower for the NT. March to June 2023 were strong, but after that revenue slowly declined through to February 2024.

Analysis

The chart below shows the extent of growth in NSW, VIC and QLD as compared to the rest of Australia.

One influence of the pandemic has been to shift some growth out of the east coast states and towards the rest of the nation - in particular to WA and SA.

Just as a reminder of how much things have changed, here's a chart for hardware revenues by state in p2019 versus those for p2024.

As HNN has commented in the past, tracking renovations (alterations and additions) is always a little tricky. For example, the Australian Bureau of Statistics (ABS) limits all Building Approval data to projects costing more than $10,000, which excludes a large number of actual renovations.

In general, there is always going to be some doubt about absolute numbers, but what we can track relatively accurately are trends. If there are errors in data collection, they tend to be consistent errors, so if the numbers go up or down, they likely reflect the same movements in the underlying markets.

Unfortunately, this group of statistics is not really suited for managing the smaller regions in Australia, notably Tasmania, the Northern Territory and the Australian Capital Territory. To adequately manage those we need access to chain volume statistics, which will be out for the March quarter 2024 in the near future. When we have access to those, we'll do a deeper analysis of those regions.

So what we're attempting to achieve here is not to be definitive, but rather indicative. The statistics we've chosen to use are as follows:

Combining all those stats, we should be able to see some trends in each state.

It's worth delving into these data somewhat comprehensively, because the alts & adds market has become very complex going into calendar 2024. We've seen a slight cooling in the housing market (though not in all areas and all sectors). This is combined with ongoing high interest rates (which, as HNN has suggested in the past, are unlikely to fall through 2024). These contribute to overall increases in the cost of living, driven both by inflation, and opportunistic price increases in Australia's semi-monopoly markets.

Thus there is retardation in the overall market, as Australia's economy staggers under both inflation and the cure for inflation. Yet there is also stimulus in the alts & adds market, as increased house prices and concerns about market stability reduce the willingness of home owners to sell, and increase the attractiveness of "fixing up" a current abode.

HNN also commented earlier that it seemed unlikely to us that the "standard" market analysis would work in 2024. This suggests that when the housing market falls, spending shifts to alts & adds. The scenario that gets omitted in that analysis is what happens when strong exterior influences affect the total market. In that case, you could see falls in both renovations and housing, or increases in both. It's not clear that this is entirely the case for 2024, but it is certainly a year for external influences to play a part in all markets, it would seem.

The monthly data is presented in 12-month periods, which run from March to February. So p2022 refers to a period running from March 2021 through to February 2022, for example. Quarterly data is presented in calendar years for this data series.

New South Wales

Building Approvals

It's interesting to contrast the two sets of stats we have for building approvals: the number of approvals and the total costs of approvals.

The chart clearly shows that p2024 trails p2023.

The value chart shows a different picture, grouping together p2022, p2023 and p2024 apart from the previous four years. That is further born out when we consolidate the monthly data into 12-month periods.

This indicates that while the value spent on alts & adds has remained relatively steady, the number declined sharply for p2024.

Lending

The lending stats from the ABS follow a different pattern.

We can start to unravel this by looking at the numbers for p2023 (the red line), which begins with very high numbers from March 2022 through to August 2022, then drops from September 2022 through to February 2023 to a level that either matches p2022 or is below it. Following that, p2024 underperforms on p2023, but broadly matches p2022.

Both p2022 and p2023 show a high degree of volatility, especially for p2023. It is difficult, on a monthly basis, to really discern any patterns - there is very little seasonality, for example. The only real pattern is the four-month decline from November 2022 through to February 2023 (shown in the red line for p2023).

Some patterns can be seen in the 12-month consolidation for these data. The transitions from p2021 through to p2023 follow an expected pattern - an increase in the number of loans corresponding to an increase in the total value of those loans. That pattern is altered for p2024, where the number of loans decreases significantly, but the value decreases less proportionate to that.

National Accounts

As quarterly results, the survey for household spending on alts & adds does not reflect any data for 2024, but gives a "grounded" indication of what is going on in the market. It clarifies, for instance, just how extreme the growth has been in alts & adds since the beginning of the COVID-19 pandemic.

This also presents a simple illustration of what many have intuitively supposed was happening in the alts & adds market: increased demand in the first quarter of 2023 as compared to 2022, parallel demand to 2022 in the middle quarters, and decreased demand in the final quarter.

Analysis

Numbers of building approvals decreasing while overall spending remains static indicates that a split has developed in the NSW renovation market. We can combine that with the lending numbers, which show a decline, but a much less significant one. For example, a similar number of loans for p2022 show a much lower value than for p2024. This would indicate that the decline in largely in self-financed renovations. The two possible scenarios is that those renovations were of relatively low value, as did not affect the overall number as much, or that as some renovators dropped out of the market, those that did remain have increased their spending.

Victoria

Building Approvals

One aspect of building approvals for Victoria that must be mentioned is the overall decline in alts & adds as reported by the ABS. The chart below illustrates the number of alts & adds reported by the ABS for financial years.

As this shows, in terms of what the ABS considers alts & adds, there has been an ongoing decline since 2018.

Moving on to the monthly numbers as reported by the ABS, what is most notable in comparison with the NSW data is the lack of volatility.

What volatility there is, such as the spike for February 2023 (the red line) is caused by the addition of data for conversions along with pure alts & adds (which is necessary as the value data for approvals is only provided with the two combined). The most recent volatility is for p2021 (the green line), which, running from March 2020 to February 2021, would have been at the start of the pandemic period. While p2022 shows some increased activity, both p2023 and p2024 are more subdued.

The values for alts & adds shows something quite different.

What is interesting here is just how similar the most recent three periods are. There is some additional volatility to p 2022, but there is a strong seasonal pattern running from November through to February in all three periods.

What is happening is more clearly outlined in the chart that totals these 12-month periods.

This shows an immediate shift, starting with p2022, where the value reaches a local high, and maintains that through three periods. This seems to exist almost independent of the actual numbers, which is especially noticeable for p2024, with numbers reaching a new local low.

Lending

It is evident that the number of loans has fallen substantially for p2024.

The most substantial declines are for April 2023 and December 2023.

The story for the value of loans, however, is quite different.

As we saw with NSW, even as numbers fall, values increase. The exception to this would be for April 2023, where a strong fall coincides with the fall in number of loans. But that is contradicted by the February 2024 loan values, which climb steeply, while loan numbers increase more modestly.

Looking at the 12-month totals for the lending stats, we can see a trend somewhat similar to that for NSW.

Again for p2024 there is a reduction in the number of loans, but an increase in the total value for those loans.

National Accounts

As with NSW, the alts & adds reflected in National Accounts show a somewhat more stable pattern.

This shows alts & adds for 2023 tracking slightly above those for 2022 at the start of the year, following below, then tracking considerably higher for the September quarter. The end of 2023 shows a near match on 2022.

Analysis

Similar to NSW, we're likely seeing a split in the market. Fewer loans for a larger amount, a trend that is echoed for building approvals.

Queensland

Building Approvals

The numbers of approvals for alts & adds, leaving aside the spike for December 2022 from conversions, have remained remarkably stable.

The only real spike has been for June 2023.

Surprisingly, the values have also remained stable.

The dominant driver remains seasonality.

The 12-month overview shows some differences to those for NSW and VIC.

While the part of this pattern that is familiar is the value of approvals remaining nearly constant for p2022 through to p2024, what is different is that the number of approvals goes both up and down.

Lending

In contrast to approvals, lending remains quite volatile.

Overall, however, there is an evident reduction in numbers for p2024 as contrasted with p2023.

Not surprisingly, there has been more stability in the value of loans.

The most interesting feature of this chart is the increase between February 2022 and March 2023, which is something like a pandemic "before and after", with values subsequent to March 2023 entering a new region of consistent highs.

The 12-month summary for lending also seems familiar.

The pattern of a reduced number of loans but a constant overall value is repeated.

National Accounts

The estimation of household spending on alts & adds from the National Accounts does show a difference from NSW and VIC.

Spending for 2023 does rise above that for 2022 in the June quarter, but there is a sharp drop for the December quarter.

Analysis

While there are some broad similarities with NSW and VIC, QLD Is also unique. The pattern for spending reflecting in approvals is for a high spend per approval in p2022, followed by a reduced spend in p2023, and a return to a moderately high spend in p2024. The lending data reflects that, though in a diminished way.

South Australia

Building Approvals

After the east coast states, stats for SA seem quite unique.

There is a degree of volatility for p2022, followed by a less volatile p2023, then a somewhat volatile p2024.

In terms of value of approvals, these show a more constrained range of movement, with a strong peak in November 2023.

While some of this chart looks familiar, it is telling a very different story to the east coast states. There is a steady increase in 12-month total values of approvals from p2020 onwards, while the numbers fluctuate. For p2023 there is a reduction in number of approvals, while value continues to grow. However this is followed by a strong increase in numbers for p2024 without a commensurate increase in value.

Lending

The lending numbers are volatile for p2022 and p2024, but more stable for p2023.

There is a similar volatility for the value of loans.

The strongest pattern is an increase for p2024 from the low in September 2023 through to the high in January 2024 - though this is followed by a steep fall in February 2024.

The 12-month view on lending reflects the results from approvals.

In something of a reversal from the east coast states, we see in p2023 an increase in the number of loans, with only a small lift in their total value. This reverses in p2024, with the number of loans decreasing while the value rises.

National Accounts

The pattern here is to see 2023 outperforming 2022, which is itself far above 2021.

Analysis

It would seem that p2023 would have been something of a consolidating period in market, with activity centred on slightly lower-value expenditure on more alt & adds activity.

Western Australia

Building Approvals

Unfortunately, with the low level of approvals reported by the ABS, the chart of stats becomes less clear. What can be discerned is that the level of activity for p2024 is above that for both p2022 and p2023.

In terms of values, we can see that p2024 is clearly boosted above the two preceding years. While seasonality continues to play something of a role, October and November 2023 have been boosted considerably, as has February 2024.

WA shows something of an individual pattern. In p2022 there is a sharp shift in the value of approvals, with numbers reducing while value increases. However, something of that new ratio hold true for the two subsequent periods, with the numbers corresponding more or less with the value.

Lending

Perhaps the most interesting feature of this chart is that while there is some seasonality in p2021, p2023 and p2024, p2022 seems to break away from this, starting in April 2021.

The value of loans seems to follow a similar pattern, with p2023 something of a break-away. So p2024 follows much of p2022, with the exception of a kick upwards for December 2023, January 2024 and February 2024 at the end.

The 12-month values show a real "normality" in lending. The value of loans steadily increases from p2022 onwards, and so does the number of loans issued.

National Accounts

The results for household spending on alts & adds in the National Accounts show a more optimistic picture. 2023 shows considerable gains over both 2021 and 2022.

Analysis

WA escaped much of the early consequences of the COVID-19 pandemic (due largely to sane and smart management, as well as some isolation). But was influenced post COVID-19 by economic changes. It seems likely the state is also going to escape some of the more dire forces at work in the other states, especially as regards poor planning for housing demand.

Overall analysis

It should be clear from considering these stats that we're really not looking at a "regular" period for alts & adds. Universally, there has been an increase on expenditure in this area since the pandemic, and nothing in these numbers suggests that is going to end abruptly.

What we are seeing, however, are different growth patterns. One possibility is that the market is beginning to split in the east coast states somewhat into "have" and "have not" strata. That is, we could see already expensive housing migrating through renovation and extension to be even more expensive, while the stratum below that seeks to remain in the realm of "achievable" purchase.

Bunnings managing director Mike Schneider has rejected claims made by the chief executive of plant industry lobby group Greenlife Industry Australia (GIA), Joanna Cave that the hardware/home improvement retailer has 70 per cent market share of greenlife products.

He recently told The Australian Financial Review (AFR) the retail horticulture sections of the 310 Bunnings outlets in Australia selling seedlings, native grasses, flowers and shrubs had an overall market share of about 25 per cent.

In GIA's submission to the Senate Select Committee's Inquiry into Supermarket Prices, Ms Cave said its figures came from extensive surveys with growers, carried out over the past five years.

We think the growers are best placed to know. We're very confident that we're right.

However, Mr Schneider said there were between 1000 and 1100 growers of seedlings and plants around Australia with diverse avenues to market, and Bunnings only dealt with about 250 of those.

GIA

The commercial gardening and nursery sector has publicly expressed - for the first time through GIA - its concerns about Bunnings' market power and how it treats growers.

The nursery industry has been valued at over $2 billion at the retail level and GIA represents businesses that grow seedlings, plants and trees that are sold to gardeners. It employs more than 25,000 people. GIA said by volume of units sold in Bunnings' stores, plants were second only to tins of paint.

In its submission, GIA said Bunnings' massive market share allowed it to dictate prices and supply of plants. The submission said:

Whilst growers of nursery products do supply plants to many supermarkets, our bigger concern is with the supply of plants to what are commonly described as big box stores.

Bunnings is by far the biggest of these, maintaining a national market share of 70 per cent, rising to over 80 per cent in some regions and towns.

Ms Cave said:

We've got lots of examples where we feel Bunnings is abusing their dominance of the marketplace. Growers have shared their stories with us in complete confidence because they are genuinely scared of retribution.

Ms Cave said she had spoken to at least 200 growers in the lead up to the inquiry, and some were being encouraged to plant up to 10,000 seedlings but given a contract for only a single plant.

And they might ask several of the growers in the region to also plant 10,000. But they're under no obligation to take any from anybody. Of course, that's a perfect example of asymmetry of information, because the big-box retailer has all the information on who is growing, the numbers they've been encouraged to grow and the prices that they're requesting. They can pick and choose. They can take 8000 or 5000 or none. It's up to them.

Ms Cave said grower appeals for price increases were routinely rejected after lengthy reviews while retailers would raise costs of nursery products overnight. She also said fear of retribution or being punished for raising complaints against Bunnings was "the biggest issue" growers expressed to her.

It's been the No. 1 preoccupation for growers.

Growers

Tasmania-based Brocklands Nursery owner Karen Brock supplied native trees, grafted and standard roses, herbs and perennial plants to Bunnings from 2003 to 2016.

Appearing before the senate inquiry, she said the relationship worked "incredibly well", until increased demand to supply plants for merchandise stands in store "with no contract or even an indication of what numbers they were looking at" placed her business under pressure. In The Weekly Times, she said:

When you've got merchandise space, you've got this Holy Grail of space, it gives you confidence to put stock on the ground, but not off an order. We were growing (plants) two years out, this is a long-term investment you're spending now to get a sale out of in two years. You get the confidence, and you get sucked in, you start investing and borrowing money because you have to put all this stock down.

She said there was no supply contact, and was subjected to intimidation when complaints were raised with Bunnings, citing one example where an entire range of plants were cancelled.

They would not give decent orders, they would not confirm orders, they would not give us any forward planning.

When Ms Brock raised concerns with Bunnings, she said the barcode for her product was cancelled. She said Bunnings' practices resulted in low prices for her business and order sizes in some years collapsing without any warning, as the retailer switched between its various suppliers in an apparent "divide and conquer" strategy.

Ms Brock said troubles with the giant retailer escalated in 2014-2015, when Bunnings opened new stores in Burnie, Launceston and Glenorchy. She told the senate committee:

Because we're growing stock two or three years in advance, we needed to know what were their plans so that we could grow stock.

Bunnings refused to sign trading terms or contracts detailing the number of plants they would buy from her over time. It also refused to adhere to minimum plant order sizes, forcing her to incur losses delivering small orders to Bunnings stores state wide. Ms Brock said:

We were travelling to Hobart and back ... for a $78 order, or a $48 order. We tried to bring in a $300 minimum order but that was rejected.

Ms Brock said the unfair lack of transparency on its ordering schedule was rife in Bunnings.

We had these huge pressures put on suppliers, they promised the world, and then those promises weren't delivered.

Her business was left with mountains of unsold stock as a result. She said:

I don't think there's anything worse than seeing your work of two to three years sitting on the tip. I felt that we were slaves, we were slaves to Bunnings.

We were a mouse running around the hamster wheel and no matter how fast you spun that wheel, you could not ever achieve the goal of making somebody happy in that environment.

Nick Powell is a nursery grower near Stanmore in Queensland. He is aged in his 70s and faced health issues, including a battle with leukaemia. He has vented his frustrations at dealing with Bunnings Warehouse in the past.

Growing a mixture of indoor foliage plants and landscaping plants, Mr Powell said he felt he was a very good supplier to Bunnings, but grew increasingly frustrated with a lack of certainty around orders. Bunnings was its largest customer, with other minor customers. In the Weekly Times, he said:

The issue was we'd try and get allocations for stock we knew would be ready at a certain time, that was the hard part.

He said there were no supply contracts at all between his nursery and Bunnings. In order to work with the uncertainty, Mr Powell would invest in bigger pots to replant stock in "to keep growing it, and hope to sell it as larger stock items".

That was one of the only ways we could cope with not being able to get our stock into store.

Tim Drewitt is a nursery plant grower, selling to Bunnings through his Silvan-based farm, Drewitt's Bulbs, in Victoria. He said he has supplied product to Bunnings since late 2018, and has had a positive relationship with the company, contrary to some stories being told by other suppliers. In The Weekly Times he said:

We're purely a Mum and Dad business, I have a young family. I'm a little frustrated with GIA. I have reached out to them a couple of times asking for support in various avenues, and they tend not to respond.

I'm sure there are suppliers who have had issues, but I have not experienced that. We employ up to 30 employees, and especially during COVID, the support and patience shown by Bunnings was very accommodating.

Bunnings' response

Mr Schneider said he was "concerned" to hear the accounts from some of his former suppliers. In the Examiner, he said:

Some of the claims made were new to us, some quite historical, and others are not aligned to the information we have to hand. They're absolutely at odds with the way we believe we do business and we look forward to responding to these more formally in due course.

Assertions that we do not have contracts or that our team refused to make commitments or agree to price increases are simply not true. We're confident the two accounts don't reflect the views of the vast majority of our around 220 greenlife suppliers. However, we know we don't always get it right and if we let a supplier down, we act as quickly as we can to remedy it.

He said he invited suppliers who were unhappy with their dealings with Bunnings to reach out and meet him, with GIA as an intermediary if they wished. In the Sydney Morning Herald, Mr Schneider said:

I'm always going to be sad to hear about situations where people say we haven't done the right thing. Me personally, I want to put it right.

If someone's done the wrong thing in my team, we've got very strong internal processes in our own code of conduct that we hold our team accountable to. I'm not saying we're perfect, I'm not saying 'nothing to see here, move on'. There could be truth in what [they] said.

An independent whistleblower resource managed through Deloitte is also available to suppliers, Mr Schneider said.

We have previously asked the GIA for their assistance in connecting growers with us if there are concerns so we can assist and support them.

We have reached out to all current greenlife suppliers and encourage anyone that has feedback or an issue they'd like to discuss to contact us directly so we can investigate.

Mr Schneider said the business worked hard "to build longstanding, win-win partnerships" with plant suppliers. He told the ABC:

We have robust processes in place, including as part of our trading agreements, to ensure those relationships are fair and transparent.

Many of our supplier relationships span a number of decades and generations, and over the years they have engaged our team on ways to partner, grow and collaborate to support their businesses.

Most recently, Bunnings category manager Belinda Raskers told the parliamentary inquiry it was in the best interest of the company to maintain its relationships with producers and she was shocked at previous evidence from plant suppliers. She said:

We rely purely on our suppliers over supply, and having not really strong relationships with our suppliers is of no commercial benefit for us. We have to have really long-term, viable supplier relations here.

Supermarket code

Coles and Woolworths have signed on to plans to make the supermarket code of conduct mandatory, following a review led by economist and former Labor trade minister Dr Craig Emerson. The interim report - which is being released for feedback - recommends the code "be made mandatory and apply to all supermarkets with annual revenues exceeding $5 billion, which at present are Coles, Woolworths and Aldi and [the] wholesaler Metcash".

The report calls for the code to be strengthened to better protect suppliers, including by outlining new protections against retribution for complaints.

Woolworths and GIA have both called for Bunnings to come under the code, with the supermarket arguing that the hardware retailer is now a competitor in certain grocery categories and the association accusing Bunnings of abusing its market power in the plant retail sector.

However, Mr Schneider said broadening out the code would mean it becomes a "catch-all" that is "not going to service everyone".

It's a supermarket code ... Bunnings is just not a supermarket. We are simply not a grocery retailer or a food retailer.

Mr Schneider said that the code should be assessed through an "industry lens" rather than by product, pointing out that supermarkets might, from time to time, sell power tools.

Businesses will dabble in adjacent categories, either periodically or build those out, but that doesn't make us a supermarket, and that's a fundamental difference.

The Food and Grocery Code of Conduct regulates how supermarkets and their suppliers do business. While it includes plants and flowers in its definition of groceries, the voluntary code is only signed by the major supermarkets.

Ms Cave said growers who supplied Bunnings and other stores like Mitre 10 and IKEA need to be protected from unfair trading practices. She said that could be achieved if the government included them in the Food and Grocery Code of Conduct and made the code mandatory.

Growers really feel that Bunnings has all the power in the relationship. [Bunnings] sets the price, control supply, there is an absence of proper legally enforceable contracts - all kinds of practices that would be in breach of the code, were Bunnings covered by it.

If everything they are doing is above board they have nothing to fear - but it will certainly be a reassuring gesture to their suppliers, who are on their knees.

Ms Cave argued that the big box retailer had more in common with major supermarkets than local garden centres.

It seems ludicrous that Bunnings would sit outside the code and not be subject to any of the rules.

In the AFR, Mr Schneider referred to the vast products purchased by shoppers from Bunnings as "discretionary spend" meaning they wanted to buy them, not because they were a staple of life like in food sold by supermarkets.

As a result, it would seem unfair to try to apply a "universal" code of conduct on retail businesses which had vastly different characteristics. He said:

There's more differences than there are commonalities.

The Senate Select Committee on Supermarket Prices will hand down its report in May, and the Australian Competition and Consumer Commission is conducting a separate inquiry into supermarket pricing, due to report in February 2025.

Long-established hardware business EW Bulte located in Ararat, in south-west Victoria, has changed hands after 112 years. Owner Peter Walker has been a familiar face at the hardware store EW Bulte for 38 years. But in March, he handed over the keys to new owner Niles Patel. Mr Walker told the Wimmera Mail - Times:

Deciding to sell wasn't easy but it was time. I want to do other things, and it seems right.

After making his decision, Mr Walker's first thought was to thank the customers loyal to the company ever since his great-grandfather Ernest William Bulte founded it as a building company in 1912. He said:

The locals have been good to us over the years.

EW Bulte employs four staff members, and he credits them as a significant part of the company's success.

Without good staff, you can't do it.

Initially, Mr Walker had a building career in his sights when he was at school, and owning the hardware store was a side of the building industry that fitted with that. A four-year stint in the bank in Melbourne before joining the company was a bonus managing the finances, and he loved that side of the business. He said:

I always wanted to join the company, but when I left school, there were no vacancies! Dad thought I should work for someone else before joining the family business, and he was right. I learned what an employer expects from you.

My wife Karen and I took over in 2000 after I'd worked with Dad for 15 years.

EW Bulte has survived and thrived despite two world wars, a depression, the black plague, and COVID-19. Some noticeable changes over the generations have been in how business is built. Mr Walker said:

I go to the bank when I want to expand, but the generations before me would save up to develop or increase stock. The use of cash has also diminished, although quite a few of our customers still prefer cash.

He doesn't think the introduction of mega-stores has impacted EW Bulte's business.

Some of my customers came here as children with their parents, and that's what customer service can do for your business. I suppose you could say some of our customers are generational.

In his opinion, customer service is essential to any business.

You could spend the same amount of time with a person who needed a washer for a tap as you could with a much bigger order, but they were all equally important.

New owner, Mr Patel, wanted to purchase a family business, and EW Bulte fit that description. He intends to maintain the same customer service, and the EW Bulte name will stay, too.

Mr Patel and his wife, Puri, own and operate a service station near Ballarat. He'll initially divide his time between the two businesses but hopes to eventually work full-time at the hardware store.

Sunshine Mitre 10

A Sunshine Coast Mitre 10 store in Maleny (QLD) that was accused of violating human rights and discriminating against a man who refused to wear a face mask during the Covid-19 pandemic has had a win in court. According to the Sunshine Coast Daily:

Andrew Kos claimed the Mitre 10 store ... which is operated by Deltapath Pty Ltd, indirectly discriminated against him when they refused him entry for not wearing a face mask on July 14, 2021, despite his impairment.

The public health order for the Sunshine Coast region at the time was that everyone aged more than 12 years old was to wear a face mask in indoor spaces and the Mitre 10 Maleny store chose to enforce a blanket ban in order to properly comply and protect their staff.

The court documents stated Mr Kos was "challenged very quickly" when he entered the store and denied entry, with the staff offered to bring Mr Kos products he was interested in outside.

Mr Kos initially took his complaint to the Queensland Human Rights Commission before it ended up at the Queensland Civil and Administrative Tribunal, where the decision was delivered on March 13.

The court documents from the decision stated it was accepted Mr Kos did suffer from an impairment when he refused to wear the mask.

Some people will suffer from chronic anxiety and agoraphobia to such an extent that it impairs their thought processes, emotions or judgment or that results in disturbed behaviour, but some will not.

Mr Kos explained when giving evidence the difficulties that the conditions caused him, and I am satisfied that they amounted to an impairment on 14 July 2021 as defined in the ADA (anti-discrimination act).

Member Jeremy Gordon said Mr Kos had not proved he had difficulty wearing a mask at the time of the incident due to his impairment and he was most likely incorrect when he said his doctor told him he would suffer mental and physical harm if he had. Mr Gordon said:

I think what the doctor said was what Mr Kos explained when giving evidence in the hearing, that he had been advised that it was not sensible to wear a mask if he was having a panic attack. This can be readily accepted.

Mr Gordon said Mr Kos was not having a panic attack at Mitre 10. He also said the store's blanket ban on people coming inside without masks on was not unreasonable for the safety of staff, especially given it was a criminal offence at the time for a business not to comply with the public health order.

He was aware that a number of his staff had underlying medical conditions such as coronary heart disease, hypertension, asthma, Asperger's syndrome, and post traumatic stress syndrome and he was sure that many customers would also have health issues.

Ultimately, Mr Gordon ordered the complaint be dismissed.

Khouri's Trading Co.

In the Sutherland Shire in NSW, Khouri's Trading Co store that also trades as Home Hardware Miranda, is closing after more than 60 years.

The Khouri family ran it for many years before business partners Pat Albanese and Marty Vukovic bought the business 26 years ago and retained the name Khouri's Trading Co, according to a report in the St. George and Sutherland Shire Leader.

Khouri's was the shire's only remaining small hardware shop after the closure of Glen's Mitre 10 at Sutherland in 2010 after 57 years, and Hocking & Rose at Kirrawee, Mitre 10 Engadine and Illawong Hardware in 2012. Mr Vukovic announced the closure of Khouri's in a social media post.

It is with a heavy hear that we share some bittersweet news with you all. After 26 years of trading, Khouris Trading Co will be closing its doors for good. This decision was not made lightly, however we believe it is the decision for us.

Our final days of operation will be towards the end of April ... We want to express our deepest gratitude to each and everyone of you who has supported us over the years. To show our appreciation we will be offering discounts across our entire range as we clear out our remaining stock.

Your support has meant everything to us, and we hope to see you in the coming weeks as we bid farewell.

With gratitude, Marty, Pat and Gabriella.

The intended location for the Bunnings store in Lithgow (NSW) is still in the process of mining the old Lithgow Valley Colliery coal seam, leaving a substantial hole in the terrain that will need to be filled in before construction starts. So there is no official timeline for when the store is likely to open.

Regional manager for Bunnings, Simon O'Grady, told the Lithgow Mercury the new store will be a $13 million investment in Lithgow spread over 6000sqm, and 25 per cent bigger than the existing western Main Street complex.

The improved layout will incorporate the trade requirements, timber yard, nursery and a wider range of home and lifestyle products.

Mr O'Grady said Bunnings is looking forward to bringing the new store to Lithgow and is eager for construction to get under way.

Related

Contractor

Bunnings recently made a payout to a contractor worker who was seriously injured on the job.

Back in 2018, Sarah Jane was working as a merchandiser for Neutrog at the Seven Hills Bunnings store in Western Sydney. At the time, she severely injured her back when she knelt down to lift and drag forward a bucket of fertiliser to the front of a pallet. Each bucket weighed between 10.8 and 11.2 kilograms.

Ms Jane's case has gone before the NSW Supreme Court, with Bunnings agreeing to a settlement of $750,000 plus legal costs, which are reportedly about $500,000 but are yet to be determined. Neutrog, who Ms Jane was employed through, has been ordered to contribute to the costs.

Bunnings said they "knew or ought to have known" the foreseeable risk when they failed to train Ms Jane to use a pallet jack, which could have prevented her injury. Ms Jane received training through a Bunnings module but was not told pallet jacks were available to help her move stock forward.

These jacks are regularly used by Bunnings' own workers, however, court documents note Bunnings "did not apply the same rigour or adopt the same precautions for the merchandisers, who were nonetheless subject to Bunnings control and oversight".

Ms Jane said she continues to suffer from the back injury and it has affected her ability to parent her kids. She told news.com.au:

It's a win but it doesn't really feel like a win. Not just everything that they've put me through, but just the injury itself, and how much it's changed my life and how much I've missed out on with my kids when they were young.

Staff retention

In its survey of best places to work around the country, The Australian found that "many organisations show enormous innovation, drive, resourcefulness and talent to push forward even as the economic landscape within the nation and in the rest of the world is changing at a fast pace".

According to Bunnings, it has a high retention rate of more than 80 per cent permanent staff, and has more than 2800 team members who have been with the company for 20-plus years. Damian Zahra, Bunnings' chief people officer, told The Australian:

A phrase you'll often hear around Bunnings is 'we live here too', which is in reference to the fact that many of our team live, work and raise families in the roughly 400 communities where we operate.

Many of our team members feel a real sense of pride and connection by working in their own local communities, which we find naturally helps them stay engaged, productive and happy. We're really fortunate to be in this position and we certainly don't take it for granted.

We're also proud of the collective attitude of our support centre team who work hard each day to help set our stores up for success. They all really embrace the diverse and fast-paced nature of the retail industry and enjoy the cross-collaboration between the many different functions that support the business.

Culture and attitude mean everything at Bunnings. For our store teams in particular, we always look for people who love working in a team and providing customers with great service, as we know these attributes help us deliver strong results and make Bunnings a great place to work.

One of our core HR philosophies is ensuring we maintain a multi-generational workforce. Age is not a barrier at Bunnings and we have really strong team cohorts across all age demographics - from young people still in school to mature-aged team members, some even into their 90s.

Caleb Whitaker, a supervisor at Bunnings Maitland said he has worked at more than 10 Bunnings stores across Australia.

Each one of them has a friendly, welcoming and supportive team. The culture that Bunnings has built really stands out and is something customers often appreciate.

I've really valued the flexibility that's come from working at Bunnings. This is my 10th year at the business and during this time I've been able to work after school, during uni and even while I travelled. The business allows you to work around your life schedule, which has been great.

As part of Bunnings' Travelling Team Member program I was able to continue working while touring around Australia with my wife for 14 months - which was honestly one of the best experience of our lives.

We travelled over 40,000km in total, and during that time I worked shifts at eight Bunnings stores across six different states. I don't think many other workplaces could've facilitated something like that - it was amazing.

Top brand

Bunnings has been crowned the most trusted brand in the 12 months to December 2023, based on results from the 2023 Roy Morgan Risk Monitor survey. It has returned to the top spot after three-and-a-half years, dethroning Woolworths.

Bunnings lost its title as Australia's most trusted brand to Woolworths in May 2020. However, since October 2022, Bunnings has shown a strong recovery, achieving the largest improvement in trust among all trusted brands. Roy Morgan chief executive Michele Levine said:

Bunnings is a brand with a vast reservoir of goodwill and reputational strength fed by dramatically more trust than distrust... its trust has been climbing steadily over the past year while its minimal distrust remains fairly stable.

In its research, Roy Morgan found that Australians' distrust in companies has grown in the last year, with reasons including corporate greed, poor customer service, unaffordable prices, dishonesty, unethical practices, and poor privacy practices. Bunnings has managed to buck the trend against an economic environment where trust has eroded. Ms Levine explains:

Bunnings has harnessed many of the foundational pillars of a trusted brand including great customer service, communicating what it stands for and delivering, being an active part of the community, solving customer's problems and expertise and product knowledge.

The Roy Morgan Risk Monitor canvasses about 2000 Australians every month on 1000 brands across 26 industries.

In another profile in The Australian, Bowens said it has a commercial agreement with Uber's Australian arm for timber and hardware product. It guarantees 90-minute deliveries via the rideshare and delivery app of up to eight boxes weighing up to 20kg to building sites within a 15km radius from a store.

So far, average delivery times for the service, which charges a $10 flat fee, are less than 60 minutes. Bownes chief investment officer Andy Bowen told The Australian:

The reason we invested in digital in the first place was to focus on the next generation of builder coming through. We were concerned that we were not engaging enough with that generation.

It has been a difficult period for builders. So we are trying to do everything we can to make life easier for them.

We hear time and time again that they are starved of time. It is disruptive for them to leave the building site. For us to be able to offer Uber is a huge advantage.

It is to the point now where some of the builders are actually mandating with their teams to use the Uber service, rather than getting in the car and losing an hour off site.

John Bowen has been CEO of Bowens since 2005. He said:

Tradies and builders are growing up in a world where they are getting their deodorant and shaving cream in two hours from Amazon. This is the world that we are in. We can't continue to suggest that timber and building supplies sits outside of that.

In the past 12 months, Andy Bowen has established an in-house e-commerce and marketing team focused on same-day delivery of the large and often fragile products needed by builders on work sites from Bowens' 20 stores across Victoria.

We effectively are a logistics company in many ways. We have our own vehicles, some contract vehicles, and are able to get product to site very quickly.

When you are selling a commodity that you can buy across the road, you have to be really good at finding new products and being innovative. By making sure we deliver on time in full and deliver really quickly, we will differentiate ourselves even further from the competition.

Seventeen per cent of deliveries from the Bowens store network are currently same day, and it wants to double that number by the end of the calendar year.

Since early 2022, the firm has added about 15,000 products to its online offering, which now totals about 55,000. Its ultimate aim is to have every product that it sells online.

In the 2024 financial year Bowens said it will sell more than $600 million of timber, building materials, hardware and prefabrication products, which is up from $460 million in 2022. Four stores have been opened since March 2022, at Warragul, Melton, Cheltenham and Belmont, while two stores, at Hastings and Epping, are being extended. John Bowen said:

We've never opened up that many stores so quickly. It would be unlikely for us to do that again.

He said the company is "definitely" open to the idea of expanding the Bowens brand outside of its home state, but also said "we are not going to fall over ourselves trying".

It is also a tough economic environment for the timber and building product supplies market. In 2024, for the first time in several years, annual turnover at some of Bowens' stores will be in line with, or below, the previous year. Prices for pine framing and engineered wood products have been under pressure. John Bowen said:

It is a bit slower in the back half of the year than it was at the start. Except for our truss plant in Brisbane. It's all about Victoria. Victorian builders in the volume space are not selling enough homes. So we are feeling that.

We look at a crucial number every month, which is those builders who are no longer in business that we were trading with a year ago. It is still a pretty significant number, even if the number of those in trouble has slowed.

Bowens has always been self-funded and has never taken on a dollar of external capital. Andy Bowen said:

I worry when I look at the rest of the market and the industry, that the fabric of the business would be lost to capital investment that is external. We continue to reinvest as a family and that is the best thing for our business network.

We are growing at our own pace. To double in size in the next five years is not in our best interests. We are meeting the needs of our customers and our builders, and we are listening to them. That is the right pace for us and that does not require external investment.

Related

DoorDash and Lowe's

DoorDash recently announced new partnership with Lowe's Home Improvement in the US to offer on-demand delivery from over 1,700 stores nationwide. Neelima Sharma, senior vice president, digital commerce and technology at Lowe's, said:

As Lowe's continues its omnichannel journey, expanding same-day delivery options helps us meet our customers where they are. Our collaboration with DoorDash unlocks an opportunity for us to reach new DIY customers who are shopping directly on the DoorDash app...

Lowe's products can now be purchased directly on the DoorDash app, helping consumers easily shop for everyday items they need delivered same-day. All participating Lowe's stores will also be available on DashPass, DoorDash's membership program that offers members a $0 delivery fee and reduced service fee on eligible orders from thousands of restaurants, grocery, and convenience stores across the US.

(DashPass benefits apply only to eligible orders that meet the minimum subtotal requirement listed on DoorDash for each participating merchant. Other fees including service fee, taxes, and gratuity still apply. After signing up for DashPass, users will be charged the then-current renewal price plus applicable taxes automatically on a recurring basis until it is cancelled.)

Fuad Hannon, vice president of new verticals, at DoorDash, said:

...Our partnership enables consumers with quick access to must-have tools and last-minute materials to complete projects of all sizes.

Throughout his career, Jason Milani has worked in marketing roles for a number of different companies that supply the tile industry. In that time, his exposure to product development processes has given him a sense of how products are created from start to finish. Now he is using his experience and expertise to bring uLock to market. As he told HNN:

While speaking to my mate in the trades, we spoke of a common issue we had when it came to mixing products.

The issue we both had was the bucket constantly moving due to the pressure of the mixing tool. There were a number of close calls with the bucket slipping from the grip between our knees. I wanted to think of a safer way to mix products and that's how I developed the idea of uLock.

In my mind, uLock is going to provide users with a safer option to mix products and reduce the risk of absorbing airborne crystalised silica [RCS]. It's going to save professional tradespeople time and physical effort when it comes to mixing and reduced the chance of injuries.

With my contacts and my design mindset, I was able to leverage some suppliers and get things moving with uLock.

The product

Ulock is designed to tackle a number of worksite issues, related to safety, ergonomics and efficiency. It's not uncommon to see workers from various trades struggling with the (apparently) "simple" task of mixing a powder product with water in a bucket. It's a little funny when a bloke finds instead of mixing, he has the bucket spinning at a high rate of rotation between his work boots - but it's not really funny, because it could result in poorly mixed product, an expensive spill, or worst case, a leg injury.

In short, power mixers have solved a lot of problems, and added in extra efficiency, but they've also created a few problems of their own. Ulock is the accessory that can help tradies really unlock the full potential of those powerful mixers, making the job both safer, faster and with a great result.

A really important addition to that is protection from accidentally inhaling respirable crystalline silica (RCS) particles. While there have been real advances in reducing the amount of RCS in adhesives and other tiling products, it still remains a major concern. Much of that exposure comes in the early stages of mixing, when the dry powder is added to the small amount of water in the bucker, creating a "bloom" of fine powder dust - most often inhaled by the tradie. Ulock is a really well thought-out solution to radically reducing that risk.

The basics of the product are this: There is a platform made from moulded plastic, 520mm deep by 660mm wide. The 23-litre uLock bucket locks directly into that platform; it simply cannot rotate at all. The user stands on the platform, so he/she is perfectly positioned over the bucket.

The lid of the bucket folds back so that water and mixture can be added in a controlled way. The mixer can be inserted and the lid locked down, so that the mixing takes place under the lid of the bucket. A vacuum hose can also be attached to further reduce the risk of dust escaping.

It's a sensible, safe solution.

Feedback

When Jason originally came up with the design of uLock, it didn't make it past the initial phase because of engineering complications. He learnt from that experience to work more closely with the engineers to understand why his design was not suitable. After a few more drafts, he was able to translate the requirements of uLock into a manufactured design.

There has also been some real-world testing of the product. So far, Jason has organised a demonstration day at Kerakoll in Melbourne and apprentices from Holmesglen TAFE have also used it under teacher Frank Vanzella's supervision.

A number of comments from end-users came out of the demonstration days. One comment related to the size of the bucket and whether it could be made bigger so that two bags of adhesives (or another product) can be boxed in together. Jason said:

The answer is 'no' purely because then it becomes a 55kg bucket. It's not about the volume, it's about the weight of lifting up 55kg.

The market states that bags should be between 16 to 20kg. If you remember that years ago cement bags were 25kg. So they've gotten lighter. Anything more than 20kg, they would prefer a two-man lift. Two men can't be lifting a bag of cement! At least, I hope not.

Another comment related to the lid being clear. As Jason explains:

Unfortunately it can't be done because having a clear lid means it has to be an acrylic and then you can't fold it. It will snap.

And the only one that picked it up on the spot was actually Vvo, (Ian Middleton from Australian Tile Geeks). He said once you've put your vacuum in your powder, after 30 seconds of mixing, then you take your lid off and finish your mix.

So the initial thoughts were that you had to fully mix with the lid on. But no, it's only to stop the dust for that whole 25 seconds. Then you take your lid off and you mix as you would normally require.

One positive outcome from the demonstration at Holmesglen TAFE with 18 apprentices is that the uLock will be the only bucket it uses, and Melbourne Polytechnic had similar feedback. An upcoming generation of tilers and tradies will be mixing products differently and more safely.

Patents

According to Jason, there is currently nothing like the uLock available in the market. He said:

The only similar product is in America where someone has made a ring with two little steps on it. And you would try and put your bucket in and that way, you'd put it like a flap, but it doesn't work because every single bucket around the world is different size.

It's not good in practice. So technically no, there is no such thing as a platform. And that's why I was able to have a patent on it. I have patented in 177 countries.

And it's been a year and a half with no contestants, and no one said this product is similar to mine.

In creating the uLock, Jason has also invested a lot of time putting together displays and signage for stores that will eventually stock it. As he puts it, "Visual merchandising is what I specialise in.

The way I've designed it, a store would potentially have a row of buckets. Then there would be a packet for the platform. And then on the top of those platforms, there would be a little shelf for the lids.

To display it, I've designed exactly the actual platform as a sticker that retailers can stick on their concrete floors in front of their trade counter.

So they [tradies] physically step on a piece of sticker - remember the ones during COVID? 'Please stay at a safe distance'. Mine are exactly the same. So they will be right in front of the trade counter and as soon as they step on it, it turns around and says, 'Have you got your safe mixing system?'

So it takes up no space. To a degree, it's like a little map. Not even, it's just a sticker on their floor.

In addition to the retail channel, Jason hopes to be able to partner with a number of well-known suppliers in the market.

For more information, contact Jason directly on 0407 332 811 or email:

Hastings Co-op in the mid north coast of NSW has closed three of its stores: Mitre 10 & CRT Wauchope, Kew Rural Store and Comboyne Rural Store.

Its general department store in Wauchope will close in August. Co-op chief executive Nick De Groot said keeping the stores open would have cost more than $5 million over the next five years. He told ABC News:

It's a very difficult business climate at the moment. The three years of COVID, significant inflation, and then the interest rates movements have created a flat and fallen retail environment.

Mr De Groot said he could have ended up struggling with payment defaults if he did not close the three stores.

In Port Macquarie News, Mr Groot said that while he appreciated the announcement would affect staff, members and the wider community the Co-op's short and medium-term financial position demands immediate action.

A number of our businesses are under performing and, with the cost of doing business constantly increasing, and unavoidable unfunded capital expenditure in excess of $5 million over the next five years, we will not be in a position to continue operating without substantial structural reform.

Mr de Groot said the Co-op has begun consultation and offered transitioning support to affected staff.

Late last year, the Co-op was exploring options to tackle its financial challenges with one of those options being the sale of the Cedar Service Station and sale and leaseback of Wauchope IGA + Liquor. The future of the service station is still being considered but no immediate sale is planned.

Mr de Groot has previously spoken on the financial challenges when he first took on the CEO role in June 2023.

Related

Tool Kit Depot

A new Tool Kit Depot (TKD) store will be part of a retail complex that is already home to Bunnings, JB Hi-Fi, Officeworks and Petstock, in Launceston (TAS). It is expected to open by the end of 2024.

The Bunnings owned store will stock up to 10,000 products spanning tools, equipment, safety and workwear from brands such as Milwaukee, Makita, Husqvarna and Hard Yakka. It will also offer tool servicing and a repairs workshop. TKD general manager Trent Emmins said:

We're excited to confirm construction is underway for a new Tool Kit Depot store in Launceston.

It'll span over 1500sqm and create around 15 new jobs for Launceston locals who'll be on hand to help customers with expert advice. We know Launceston is home to many tradies who want the highest quality tools and work equipment at great value, and who are often fiercely loyal to their favourite brands.

Mr Emmins said TKD was excited to be adding to its 14 stores across Victoria, Queensland, South Australia and Western Australia.

We look forward to sharing more details with the community as construction progresses.

Tradelink

Speculation surrounds the possibility of Metcash acquiring bathroom and plumbing supplies business Tradelink after telling investors at its Investor Day that it saw significant growth opportunities in hardware, with complementary businesses and adjacent markets, and was focused on strategic growth opportunities for Mitre 10 and Total Tools.

According to a report in The Australian, it "stopped short of saying it was interested in buying Tradelink, but the plumbing supplies business ticks a lot of boxes for Metcash". It goes on to say:

The question, as always, is price, and whether it can succeed against industry heavyweight Reece. It is understood that industry groups Reece and GWA have already passed on the Tradelink opportunity, after being sounded out.

Background

Fletcher Building announced in February it would explore a sale of its plumbing supplies business Tradelink after telling the market that it had written down Tradelink's carrying value by NZD122 million (AUD114 million). At the time, it said further ownership of the business was not in line with objectives.

Tradelink competes with much larger rival Reece in the plumbing category and sells products such as vanities, bathrooms, toilet fixtures and fittings for bathrooms, kitchen and laundries. It remains the second-largest player in the market.

The business is valued by Fletcher at about NZD150 million (AUD141 million) and some industry analysts have suggested it could achieve a price of about AUD200-AUD300 million.

Fletcher inherited Tradelink as part of its acquisition of its Crane Group in 2010 for AUD740 million. Banking sources told The Australian that Tradelink being sold off comes after the company has made unofficial efforts to sell Tradelink in past years.

Related

At a conference call to announce the acquisition, Ted Decker, Home Depot's chair, president and chief executive officer, said the deal will both complement the company's current business and add "new pathways" for sales.

We can expose their catalogue to our customers and we can improve the convenience to their customer. We are building our capacity to get more share of wallet for the complex project.

The company believes that the purchase of SRS adds USD50 billion to Home Depot's "addressable market" - ie. the amount of yearly spending it can go after. That potential business is now nearly USD1 trillion, the company said.

The acquisition continues Home Depot's foray into the vast and fragmented US market for the contractors (tradies) who do projects for homeowners and builders. Mr Decker said the combination of the companies' networks and Home Depot's diverse product line "provides the residential pro customer with more fulfillment and service options than ever before..."

The strategy is a complex calculation that depends on the housing market. Demand for materials and services has splintered, and Home Depot is trying to exploit the market's new directions.

US home prices have decelerated recently, but over the past several years, values are up dramatically. As a result, US homes are now worth more than USD45 trillion, Mr Decker said.

Yet current homeowners have often been reluctant to sell, since their existing mortgage rates are so much lower than what they would have to pay if they buy another home. That "locked-in" effect means many owners are spending money on maintenance, improvements and renovation.

Meanwhile, experts say there is a massive shortage of homes, thanks to the aftermath of the Great Recession, in which construction was minimal. So homebuilders are trying to catch up, and while building is nowhere near pre-recession levels, it is up. And that means demand for materials and services, but a different sort, and different scale, than with either DIYers or the contractors who do repairs.

Home Depot has more than 2,300 retail stores across all 50 US states. Meanwhile, SRS has roughly 760 locations in 47 US states and a fleet of over 4,000 trucks.

SRS has more than 2,500 sales team members, a fleet of more than 4,000 trucks and 760 locations in the US.

SRS is owned by private investors, and its purchase is more than twice the price of Home Depot's purchase of HD Supply four years ago. (Read more at the link.)

New DCs

The company has pushed hard into e-commerce and has opened four distribution centres with dedicated sites handling bulky construction materials - timber, insulation and roofing shingles, for instance - that contractors need.

Chip Devine, senior vice president of outside sales, told the Wall Street Journal that Home Depot is grouping together similar products in its warehouses so it can handle them in bulk, which cuts costs and speeds up fulfillment. Sales to the professional market account for about 48% of Home Depot's sales.

The company is looking to handle bulky items more efficiently so it can offer lower prices to its professional customers, Mr Devine said.

Home Depot estimates the market for bulky, big-ticket orders going to professionals is about USD200 billion. To win more business from those customers, Home Depot is adding features such as the ability to reserve products, have products delivered to job sites and to pay when items are delivered rather than paying after each order like retail customers.

Its four new warehouses, planned for Detroit, San Antonio, Los Angeles and Toronto, will add to an existing network of 14 so-called flatbed distribution centres that the retailer uses to stow bulky merchandise. Home Depot also fulfills retail shoppers' orders for those items from those warehouses.

For these flatbed distribution centres, Home Depot seeks bigger yards, compared with its standard distribution sites, that back up to railroad lines so the company can get building materials directly from suppliers.

The retailer used to fulfill orders for items such as trusses, drywall and shingles out of its stores, which clogged up aisles and tied up store associates who could otherwise be attending to retail shoppers. With the flatbed sites the company has been adding, Home Depot is putting "the focus on these core products that we never really could move very easily," Mr Devine said.

IDG acquisition

The home improvement retailer sees construction and remodelling professionals as a strong growth market in an uncertain economy. Professionals spend an estimated USD475 billion a year, Home Depot said.

In late 2023, Home Depot purchased International Design Group, a supplier of slab, tile, appliances and specialty products for kitchens and baths in a deal meant to help it will increase its business with contractors. The deal was made with IDG's owner, Mill Point Capital, a New York-based private equity firm.

IDG, created by Mill Point last year together with other acquisitions, has about 1,000 employees. It owns Construction Resources, a distributor of products for flooring, walls, countertops, decking and fireplaces with 39 showrooms. In a statement, Home Depot said:

The acquisition combines Construction Resources' expertise in complex, cross-category professional projects with the Home Depot's scale, product authority and distribution expertise.

The Australian Bureau of Statistics (ABS) has released stats hardware retail turnover through to December 2023.

Comparing calendar 2023 with calendar 2022, South Australia (SA) once again showed the strongest growth in percentage terms, while Western Australia (WA) showed the biggest gain in actual turnover. SA was up by $57 million to $1766 million, an increase of 3.3%. WA grew by $71 million to $2783, up 2.61%. The Australian Capital Territory (ACT) was the only other region to show a net gain for the year, up 1.68% and $9 million to $540 million.

In percentage terms, Northern Territory (NT) was down the most, losing -4.24%, or $11.7 million to $265 million. New South Wales (NSW) lost the most in pure dollar terms, down by $224 million for the year to $7547 million, or -2.9%. Queensland (QLD) was down -2.3% or $123 million to $5274 million, and Tasmania (TAS) lost $4 million or -0.7% for annual turnover of $603 million. Victoria (VIC) managed a nearly flat result at a loss of 0.2% or $12 million, to close the year with $6582 million in turnover.

For Australia as a whole, total revenue was $25.36 billion for calendar 2023. That was down by $238 million on calendar 2022, a decline of -0.9%.

To add some perspective on what we can call the end of the COVID-19 era, comparing revenues from 2019 with 2023, SA grew by 50%, ACT by 45%, TAS increased by 43%, NSW and QLD both by 31%, and NT by 17%. VIC had the lowest growth rate, at 16%. Australia overall grew by 30%.

In dollar terms the top four were NSW, which gained $1796 million, followed by QLD at $1240 million, VIC at $896 million, and WA at $792 million. Australia overall saw revenue from 2019 to 2023 increase by $5.70 billion.

New South Wales

December 2023 was not as good as the month for the two prior years in terms of turnover, but remained well above the result for 2020. The first three months of the year saw it equal or exceed 2022, which it did again in September, but overall its performance was down.

Victoria

Surprisingly, 2023 was not a bad a year. While it trailed behind 2022 for seven months, it also reached new highs in three months: August, September and October. It did, however, finish on something of a down note, along with several other states, with December showing the lowest level since the start of the COVID-19 pandemic.

Queensland

For QLD, 2022 was such a good year that it's not surprising that 2023 saw the state lose some of the lustre on its sales results. While 2023 handily outperformed 2021, except for December, it just couldn't reach any new highs.

South Australia

In contrast to QLD, SA saw 2023 beat 2022 every single month except December, setting new highs over the other eleven months.

Western Australia

WA saw a somewhat similar performance to SA in terms of highs, though 2023 and 2022 were very closely matched. The only month where 2023 for the state lagged 2022 was April. It finished the year by narrowly beating the 2022 sales figure in December 2023.

Tasmania

Since October 2021, the results across the years for TAS have been virtually welded together. For the state 2023 was just barely under 2022.

Northern Territory

The NT is influenced by different economic conditions to the rest of Australia, so it's not surprising to find that its 2023 were well below those for 2022 and 2020, but somewhat matched up to those of 2021. The year began well, with sales exceeding those of 2022 for the first half, but they trailed significantly in the second half.

Australian Capital Territory

Leaving aside the volatility of 2021, for much of 2020 as well as 2022 and 2023 there had been a distinct pattern to hardware sales in the ACT. For 2023 new records were set for seven months, though December did finish down on both 2021 and 2022.

Analysis

Looking at the above graphs and the graph for Australia overall, one conclusion is that, at least in Australia, the summary of the nation's stats really doesn't reflect the conditions in the nation overall.

The graph shows that 2023 closely followed 2022, lifting above it for only three months, and going under 2021 for only one month, the conclusion of the year in December.

Yet while the national graph doesn't show everything that happened in the various states and territories, it does reflect a year that would have been a "wash" on 2022, were it not for inflation. Yet even there, hardware retail was unusual in that 2023 saw the industry under the influence of directly deflationary pricing in areas such as timber.

The generally agreed forecast is that home building will slow in March 2024, and that the strong building cycle along the major east coast states from August to December will be a little weaker than over the previous three years. Much of that is going to depend on when the multi-unit dwelling builds lift, which is a function of culture as much as anything. But it seems likely that there will be a jump in multi-unit starts by October 2024.

The one note of warning that HNN would sound is that we do believe many economists are far too certain as regards the inevitability of only interest rate cuts from the Reserve Bank of Australia (RBA) through 2024. We see there being a 50% chance that the forecast of flat rates with a chance of a 0.25% cut will be enough to stimulate the real estate market post June 2024. If that happens, it will not be surprising if the RBA steps in with a rate rise.

On 5 February 2024 Metcash announced that it was seeking financing through an equity raise comprising a $300 million fully underwritten institutional placement, along with $278 million from Metcash's own existing cash and debt facilities, to purchase three entities.

The first entity to be acquired is SFG Group Holdings Pty Ltd, known as Superior Food, which is a leading Australian foodservice distribution business, servicing clients such as aged care homes and canteens. The company has 23 branches around Australia, with a high concentration on the east coast, especially in Queensland. It employs around 1300 people.

The other two entities relate to the hardware industry. Bianco Construction Supplies Pty Ltd is a construction and industrial supplies business servicing the South Australian and Northern Territory trade market. Established for 40 years, it specialises in building materials, and its core customer base consists of builders, concreters, bricklayers and landscapers. It has ten sites, with nine in South Australia and one in Darwin, Northern Territory. Those sites include one frame and truss operation in Adelaide.

Alpine Truss Pty Ltd is one of the largest frame and truss constructors in Australia, located in Wangaratta, Victoria, and servicing both central/northern Victoria and southern New South Wales (as well as the Australian Capital Territory). Its core site is a 35,000 square metre (3.5 hectare) facility.

From the perspective of Metcash's food business, the acquisition of Superior Foods does signal a considerable change in the company. Superior Foods is evidently meant to form part of the Metcash food business, an expansion into an area that is somewhat outside the shadow cast by the dominant duopoly in Australia's food business sector.

Perhaps most importantly, it's a move by Metcash into an area where logistics relate less to supplying retailers, who then form a relationship with a customer base, and more a move into logistics that directly interface with the end customer. It's Metcash enhancing a portion of its business that is highly services based.

While the Superior Foods acquisition represents a genuine expansion in business categories, the acquisition of Bianco and Alpine Truss seems more like a "supersized" version of the background acquisitions that Metcash undertakes on a regular basis. It's a well-established feature of most of Metcash's contracts with its Mitre 10 members that Metcash is offered the final right of purchase on some store sales. As it seeks to expand its footprint in corporate-owned and corporate-controlled stores, there has been a steady flow of this type of acquisition.

Yet, as you read through the presentation to analysts for the hardware investment, and the accompanying materials, it becomes evident that Metcash CEO Doug Jones does see something of an equivalence between the investments in these two different sectors of the Metcash business. It's tempting to see this investment presentation as being almost a "mini" investor day outing, outlining not just how the acquisitions fit into strategy, but the details of that strategy itself.

In fact, part of what Mr Jones seems to really be doing here, through these investments and their presentation, is more clearly establishing the direction Metcash will take in the post-COVID-19 era, as inflation fades and some of the urgency leaves the overall housing market. The overall lift in hardware retail revenues across Australia has been welcome. However, it seems clear that FY2023 likely represents "peak hardware" - which raises the question of where corporates such as Metcash will find ongoing growth.

The hardware investment

The introduction to the Bianco and Alpine Truss acquisitions follows the pattern we're familiar with in regards to Metcash. The core strategy for the company - which has been somewhat replicated by Bunnings - as regards trade is referred to as "whole of house". It's the idea that the goal of its main hardware operation, the Independent Hardware Group (IHG) is to capture as much of the value of any house build that it supplies.

Added to that is an overall expansion opportunity, as Mr Jones describes it:

The addition of the Bianca and Alpine to the IHG network brings a broader range of products for our existing members to offer their customers and closes out a few gaps in our offering to the independent builder customers.

Not overtly mentioned anywhere as far as HNN can determine, is also that Bianco provides a decent slice of business in the South Australian market. Australian Bureau of Statistics (ABS) hardware retail revenue numbers indicate that the SA market, though relatively small, continues to grow at a higher rate than that of the larger east coast states.

Where we begin to see something of a departure, though, from a standard investment pitch on the part of Metcash is where Mr Jones shifts to speaking about what he sees as the recent "transformation" of Metcash:

You've heard me talk about the transformation of Metcash, and I just want to talk about that a little bit more. Explain what I mean. So in recent years, Metcash has been transforming itself from primarily what you would call an old fashioned food and wholesale liquor wholesaler to an integrated wholesaler, banner operator and retailer with sustainable business models, materially improved operations and transformed retail networks with healthy market positions.

He goes on to talk about what this transformation has meant for the food business of Metcash, then shifts to hardware:

In hardware, the addition first of Home Timber and Hardware and then Total Tools together with IHG's organic growth and continued consolidation of the fragmented market has underpinned the growth in the hardware pillar and the transition in the group.

Later he expands on this by describing more of the growth and transition.

When we bought Home Timber and Hardware, we committed to targeted synergies of $15 million and delivered more than $30 million, and of course, with Total Tools where we've committed to $5 million of synergies, we delivered $7.5 million. But much more importantly from a growth and EBIT returns basis, which was made possible from within Metcash and IHG through the structure of their operational support, sensible governance and healthy capital deployments.

After describing more of the details of the new acquisitions, and how they fit into the existing Metcash structures, he returns to outlining where he sees Metcash to be today in terms of its hardware strategy.

Turning now to the hardware acquisitions. You've heard me speaking often about the IHG whole of house strategy, and that's been at the core of our growth agenda for a number of years now. As I've said, when you establish a relationship with a builder at the frame and truss stage, it allows you to engage and serve that builder more meaningfully and expand the proportion of their total project needs - in other words, to allow us to win a greater share of their spend.

Bianco and Alpine support this in their respective markets and they both accelerate our expansion. They expand IHGs operational and financial scale and they fill obvious gaps in the network both geographically and in the case of Bianco through range.

...

IHG has got a great and strong track record of creating value through consolidation in this way. I'd say this is a well-trodden path of governance, operational support, sensible integration, and cross-selling to one another's customers. We see opportunities for over $5 million of synergies on a run rate basis by the end of year two, and we've got high conviction in those numbers ...

So Bianco Construction Supplies is well known and it's highly regarded in the market. The brand is strong and we will be maintaining it. It serves the South Australia and Northern Territory markets and has done so for more than 40 years from 10 locations. Included in those 10 locations is a frame and truss plant in Adelaide. As you know, we like frame and truss plants both strategically and financially.

Bianco specialises in the sale and distribution of building materials to builders, concreters, bricklayers and landscapers. What's noteworthy is the addition to the IHG range of new categories like reinforcing mesh, concrete slab hardware, structural steel and sand and soil ...

We turn to Alpine. This is a Victoria-based frame and truss operation, one of the country's largest. It's a 35,000 square meter facility in Wangaratta Victoria, and from there it serves the Victorian and Southern New South Wales building trade from small to large volume builders ... As you know, frame and truss is a key strategy for us and these two transactions expand our frame and truss total numbers to 24 in the network, 12 of which are co-owned or owned by us. In Alpine, we expect $2.7 million of synergies on a run rate basis by the end of year two.

Both hardware acquisitions, as I've said repeatedly, are in line with our current strategy and as I think I've said, we've got a great track record here. These are just larger in scale and impact. My own assessment is that the hardware acquisitions are about as aligned to proven strategy as it's possible to be. We're genuinely delighted to bring these into the fold and we are very confident with buying high quality assets at extremely attractive multiples.

Analysis

CEOs are forever rewriting the history of their companies to make the present-day situation seem like the natural outcome of longer-term planning. The current image of Metcash that is being presented is as an enterprise that is - to coin a phrase - post-conglomerate in its strategy.

This contrasts with the "pure" conglomerate activity which saw Metcash acquire automotive assets between 2012 and 2014, then on-sell these (as Metcash Automotive) to Bursons Auto Group in mid-2015. The investments that Mr Jones is seeking in 2024 have a much more distant investment horizon.

That's always been the case with IHG, formed through the acquisition of HTH. At the time of the acquisition of HTH, HNN and other analysts in the market predicted this would lead to the gradual "corporatisation" of not only HTH but Mitre 10 as well - which was somewhat dismissed by Metcash.

It has only been in the past two years or so that Metcash has been more open about these intentions. It now seems possible the network will eventually be over 70% owned and joint-venture stores. In other words, it's likely there will be broad similarities between the ownership structure for Total Tools and IHG store networks.

The overt reason for this was that, in fact, the acquisition of HTH brought some synergies, but not all that had been hoped for. It has been noted by several commentators that Metcash had expected to acquire a wider share of the independent market, attracting non-affiliated independents. That didn't happen, as independents found alternative means to acquire better contracts with suppliers, through fully independent groups such as the HBT National Buying Group.

As a result, the returns from hardware did not grow as much as hoped. To compensate, Metcash seems to have turned to the direct acquisition of retail operations, adding direct retail margins to its existing wholesale margins. As hardware was, overall, in a gentle growth phase even before COVID-19 hit, this helped to improve results. With the massive growth brought about by COVID-19, it turned out to be a brilliant strategy.

While there has been - and still continues to be - some pushback from IHG members regarding the ongoing corporatisation of the retail operations, this has, paradoxically, become more acceptable to store owners in the IHG networks precisely because the existential threat posed by Bunnings has decreased. It's paradoxical because Mark Laidlaw, the former CEO of Mitre 10 and then IHG, sold store owners on joining the Metcash network based on what he believed was the active threat Bunnings posed to independent store owners in general.

Defragmentation

Moving beyond that, and looking at the Metcash hardware strategy as it is today, there is one element of its strategy that seems something of a hangover from conglomerate thinking. That's the references to one of the main activities of both the hardware and food divisions as being the "defragmentation" of the market.

This is, of course, something of a logistics argument. The thinking goes that by consolidating the supplychain into a single source of supply, which negotiates with suppliers and then warehouses product for eventual dispatch to retailers, cost savings are made that outweigh the cost of the required infrastructure and services. For this to work successfully, of course, it's also necessary that the retailers themselves become less individuated, and more controlled by the consolidated source of supply.

One is reminded by this scenario of a famous statement well-known in the tech business community; that "there's only two ways I know of to make money: bundling and unbundling". Those words were uttered by Jim Barksdale, at the time working alongside Marc Andreessen - the two of them making up the principal driving force behind the early development of the first commercial web browser, Netscape. (Read more at the link below.)

While there is a bit of a tug there towards the speculative benefits of any kind of volatility, what it really points to is that money typically gets made when goods and services move back and forth between being commodified and then de-commodified. It is the cycle between innovation in the development of new products (unbundling) and innovation in the production of products (bundling) that generates exceptional growth.

If we look at Metcash's current IHG strategy, it is classic value creation through bundling - that's what is at the core of "whole of house". The drive to obtain frame and truss facilities is to ensure that the bundle provides complete end-to-end coverage. Yet it is, by its very nature, an extremely conservative strategy, that admits to little if any real innovation.

Lacking fundamental innovation, the only way to find growth is to rely on the "economies" of scale. Hence, of course, the great emphasis Mr Jones places in his presentation on the "synergies" he sees being created by these acquisitions. In terms of scale acquisitions, it is from such synergies that the corporate equivalent of something like what economists term "spillover effects" originate.

The difficulty is, however, that the benefits of these synergies, unlike those of innovation, tend to be finite and confined. They are effectively a discount on acquisition costs, but tend to deliver only fading benefits over time.

That said, there is little doubt that these are "good" acquisitions, and that Metcash has followed a cautious and carefully planned path in seeking investment. It is just that at the end of the day, analysts and others could not be blamed for asking whether this is all that Metcash has to offer. Is this the very best use of well over half a billion dollars in the 2024 market, with its current opportunities?

The Australian Bureau of Statistics (ABS) has released stats for building approvals through to December 2023. For much of the hardware retail industry, seeking to forecast what happens in the first half of calendar 2024, approvals for private detached houses are one of the most important indicators. Much of the building supplies purchased through retailers goes through builders building in this market.

To start with the approval data for private detached houses across Australia, it's interesting to note that while there is a common narrative that approval levels were high throughout the COVID-19 pandemic years, that's not really the case.

As the graph indicates, the major surge began in September 2020, and continued through to November 2021. Some months were elevated during 2022, notably March and August, but by 2023 approval numbers were back in a very normal range.

New South Wales

For NSW, even during the peak year of 2021, the number of approvals remained in range of the most recent previous "boom" year, 2018. That said, the overall elevated levels of approvals did persist through 2022 as well. For 2023 approvals were slightly below the historical average.

Victoria

In VIC the pattern of approvals closely matches that for Australia overall, with a big surge in February 2021 that continued through until November. For the rest, however, approval numbers are within a more normal level, with 2023 at the lower end of the expected range.

Queensland

The pattern repeats with QLD: a big surge in approvals for the final quarter of 2020, then a record-setting surge for February through June 2021, followed by a return to more normal levels for 2022, and a slightly sub-par 2023.

South Australia

SA follows a different pattern from the east coast states. There is the same lift in approvals at the end of 2020, then a surge in approvals beginning in February 2021 that continues through to August. After that, both 2022 and 2023 are positive on historical averages, though 2023 is below 2022.

Western Australia

The boom in WA gets started a little earlier, arguably in September 2020, and it really persists, in a milder form, through to the end of 2021. Approvals for 2022 are above average, and those for 2023 are close to average, but on the positive side.

Tasmania

The effects of the COVID-19 "boom" were somewhat muted for TAS. While a surge did begin in September 2020, and continued through until June 2021 (with a brief resurgence in November 2022), overall there was a smaller surge in demand than other states. For 2023, approval numbers were somewhat volatile, but on the low side through to July, then entered a pattern of general decline.

Northern Territory

Given the small size of the housing market in the NT, the numbers are somewhat volatile. There is a surge beginning in September 2020 that goes through to December, the restarts for February through to April 2021. There is then a second surge from July through to November 2022. For 2023 there is a brief peak in March, then a general reduction in approvals through to the end of the year.

Australian Capital Territory

It is little surprise that the ACT has its own unique patterns for private detached house approvals, given the unique nature of this market. As can be seen in the graph, the COVID-19 surge for 2021 is somewhat U-shaped, peaking in March, declining to August, then reaching a new, higher peak in November and December.

Likewise, 2022 actually outperforms 2021 for June, July and August. Then 2023 remains low through to September, before peaking in November.

Analysis

What we really run into in analysing what is going on in the private house market is the actual structure of this part of the industry. It is a quite low productivity, low capacity sector, that has difficulty attracting investment capital due to a lack of medium-level consolidation - there tends to be individual building operations, and very large builders, with little in-between.

As such, when high demand levels hit, as they did in 2021, the industry response is not growth, but an increasing backlog of work to be done. Given the additional constraints on building supplies through the pandemic years, what has happened in the industry is that it has taken until the end of first half calendar 2023 to work off much of that backlog.

That is perhaps a major reason why there is a forecast of a kind of "collapse" in the detached housing market post March 2024. It seems what we will see in the second calendar quarter of 2024 (April through June) is fairly average demand represented by approval numbers slightly below the average. But given the absence of the backlog, how well builders do will depend on how quickly they are willing to adjust prices down on items such as significant renovations.

At the same time, it's likely that there will be a boost in multi-unit dwellings, especially apartment blocks of nine and more storeys. So builders could switch from constructing private houses to being subcontractors on significantly large builds. As those larger builds bypass both retailers and smaller wholesalers, this could contribute to a decline in the hardware retail market.

That said, there is significant retail "runway" in the renovation area, if retailers are ready to innovate. All-electric kitchens, better insulation for energy conservation, and integrated smarthome services are all growth areas. The difficultly we see with retailers taking advantage of these opportunities is really in the current culture of hardware retail. It's necessary to sell today's products to today's generation of homeowners.

Metcash (MTS) released its results for its FY2024 H1 in early December 2023. These cover the six months from 1 May 2023 through to 31 October 2023. While the company portrayed the results as being relatively positive in the face of mildly adverse market conditions, the share price for MTS immediately subsequent to the results release fell to its lowest level since May 2021 - though remaining well above the pre-COVID-19 range.

For Metcash overall, total sales revenue rose by 1.3% to $7837.7 million. Meanwhile, "underlying" earnings before interest and taxation (EBIT) fell by 3.4% to $246.5 million.

For Metcash hardware overall - including Total Tools Holdings (TTH) and the Independent Hardware Group (IHG) - revenue increased by 2.9% to $1783.5 million, and underlying EBIT fell by 5.1% to $110.6 million.

Total Tools Holdings

For TTH total sales grew by 18.2% to $350.9 million, as the store network grew. The actual network sales were $589.7 million, up by 4.1%, but down 2.1% on a like-for-like basis. For the joint-venture stores, overall sales were up 27.8%, but down 1.5% on a like-for-like basis.

Total sales outside of acquisitions fell by 1.1%. In response to an analyst's question, Metcash CEO Doug Jones stated that like-for-like sales in TTH had fallen "in the low single digits". He also stated in response to another question that store margins for TTH had "compressed slightly in the last year, primarily in the last six months". He went on to suggest the causes for this:

There's three key reasons for that: slowing volumes and increased cost of doing business pressures similar, but not as dramatic as in IHG, and competitive and promotional pressures, as you've described. As you would expect, in any market like this, as volumes slow competitors are going to work harder for their customers' business. I think it's as simple as that.

EBIT for TTH went up by 5.3% to $49.3 million. However, outside of acquisitions, EBIT fell by 8.1%.

Independent Hardware Group

For IHG overall sales fell by 0.2% to $1.43 billion. Scan sales - taken from a subset of stores - rose by 0.7%, with DIY up 1.4% and trade up 0.3%. Like-for-like sales, however, were reported as "flat", with DIY up 0.8% and trade down 0.4%. Overall, DIY transactions were down 0.6%, while basket value (per transaction total) rose by 0.7%.

EBIT for IHG fell by 12.2% to $61.3 million.

It is somewhat difficult, given these numbers, to fully understand what Mr Jones has meant when he suggested Metcash hardware is tracking the overall market. For the period in question - 1 May to 31 October - total hardware retail sales across Australia, contrasting 2023 with 2022, fell by 0.13%. Moderate falls in Victoria were countered by gains in New South Wales.

Ben Gilbert, an analyst with Jarden Australia, asked a question about future trends for hardware:

There seems to be a bit of a view out there in the market with this that ... the forward order book comes off in a rational way around March, post-March. Just interested in how your customers are telling you they're seeing the forward order book. And then the pricing versus volume dynamic in hardware as well ... which you obviously called out.

IHG CEO Annette Welsh responded:

I think spot on in terms of how the forward order book looks. And I think it also depends by state. Certainly Metro Melbourne, and New South Wales Metro would be in a more challenging environment than those of our other states. Plus also, remember that we are number one to the small and medium builder who have generally a better line of sight and a more positive outcome on the future.

The other part to that being, you asked a question around the price versus volume. I would say, we have seen deflation - and we called it out in the pack - significant deflation in that timber market in the first half. That's really now come to a balanced position. We don't see too much more deflation coming through, but we also don't see too much inflation at the same time. So volumes, I think from that perspective in our view holding well.

Mr Jones continued the answer:

And last thing I'd add is that the position that Annette described of serving those small and medium homebuilders means two important things. One, we have really good relationships at our store level, whether they're owned stores or independent stores. And so we have good visibility to how they're feeling and how they're trading.

And secondly, they're telling us that in the main, they've worked through any of those fixed price contracts that were causing the network so much trouble. So by nature, they have less exposure to it. But that they're feeling much better about their pricing going forward.

Hardware performance

It's worth noting that the only reference to online business that we could find in relation to hardware was a note that online sales for TTH fell by a further 7.2% during the half, and now represent 5.1% of "non-account sales".

One reason given by Metcash for the drop in performance by hardware had to do with additional charges, as Mr Jones explained:

Firstly, approximately $4 million in regulatory occupancy costs and labor related costs, particularly in Victoria. And it's higher than other pillars because we're domiciled in Victoria. And we have a higher retail store base, which the other pillars don't have, which has a high exposure to CPI-linked occupancy cost, state land tax, and employee related Fair Work increases.

This point was taken up near the end of the results presentation, when analyst David Errington of Bank of America asked a key question about Metcash's hardware business:

So is it right to come out with the view that maybe there's some more opportunity to hold and maybe grow your margin a little bit in food, but going forward in hardware, as you say, as you're going into retail, you're going to have a bit more costs and the costs there seem to be more sticky in terms of Victoria, et cetera, et cetera, seem to be the cost of doing business with this regulatory stuff, labor costs going up. It seems that the cost lever in hardware is a little bit less available. Is that a fair approach to consider?

Mr Jones responded:

In hardware you're right to point out that particularly as a result of some of the Victorian specific increases FairWork, taxes, state land-based costs, those were significant hits. And we've spoken about that, and we did for one of them in our year-end results. That said, there is no shortage of efforts in the retail network, both in our own stores and those of our partners to manage those costs. It's very difficult to take out a big cost hit like that and manage a slowing in volume growth at the same time.

What happens in retail, of course, and again, we've spoken about this before, is that a retailer's EBIT margins are more exposed to volume ups and downs than a wholesalers. And in hardware and tools, which is more cyclical and less defensive, you have that aspect as well. As I've said a few times now, that will continue to improve as the long-term demand and the long-term market position that we have in IHG and Total Tools manifests in what we believe is an environment where more building is required.

Analysis

It's interesting to speculate whether without TTH, IHG might have returned more positive growth. In noting the categories that each saw growth opportunities emerge, Metcash lists paint, garden, kitchen, bathroom and laundry categories as growing at over 8% during the half for IHG. For TTH, Metcash lists cordless power tools, outdoor power equipment, accessories and hand tools as the key growth categories. Did some of TTH's growth take expansion away from IHG?

There are a range of different, interesting factors at work in these results and their presentation. It's worth noting, as Mr Jones did in response to a question by Lisa Deng of Goldman Sachs, that the current performance of Metcash hardware in relation to its pre-COVID-19 and pre-TTH days remains elevated.

The one thing that I do just want to point out, when you look at our hardware retail business, while the margins are down for reasons that I think we've discussed at length today, they actually remain above the long-term average. In fact, not just the long-term average, they're higher than they ever were pre-COVID. So while we would like them to be as high as they were in the peaks of the last two years certainly and we're working hard to bring them back up, it's a material indicator of the health.

HNN has pointed out clearly over the past five years that as Metcash has shifted from being mostly a hardware wholesaler to more of a hardware retailer that it is much more exposed to market risk. One way of viewing its current situation is that after the successful hardware retail party that happened over the COVID-19 years, it now faces the subsequent hangover as demand dips down again.

But that would be overly simplistic. The additional levels of revenue brought about by societal changes during the COVID years have changed something of the culture of hardware retail in Australia. There is, for example, more acceptance of the gradual corporatisation of Mitre 10 stores, largely because this is seen as less threatening to stores that choose to remain 100% independent, now that overall revenues are elevated.

Here we really need to circle back to Mr Jones' statement that the market position of TTH and IHG

...will continue to improve as the long-term demand and the long-term market position that we have in IHG and Total Tools manifests in what we believe is an environment where more building is required.

One difficulty with this view is that even the Housing Industry Association (HIA) doubts that a resurgence in building after the decline during FY2024 will see a radical increase in the number of detached housing starts. According to its November 2023 document "HIA State and National Outlooks: The home building rollercoaster":

Multi-unit starts will also continue to recover slowly from their decade lows through the pandemic, as investors respond to low rental vacancy rates ... [P]rivate sector investors will continue to return to the apartment market as the effects of the pandemic wane. This should see a sustained recovery in multi-unit starts, through to at least the end of the decade. There is also variance in the forecasts for each region and across buyer types. It is anticipated that New South Wales and Victoria will see the most significant slowdown in detached starts, and the most significant growth in unit commencements.

Given the housing crisis, those multi-unit dwellings are likely to be six-storeys and above - not the sort of jobs that the smaller builders IHG relies on will really take on. This means the medium-term markets might shift significantly away from those Metcash can readily access.

Yet what is slightly dangerous in what Mr Jones has to say from a purely corporate perspective is that corporations, unlike individually-owned retail businesses, must always find growth. We can admire the fact that Metcash has managed to squeeze out more growth from aspects of its business such as IGA and food, despite heavy competition from a dominant duopoly, and a range of additional discount chains. Likewise, its hardware operations remain in the shadow of what some might consider a "functional monopoly" instituted by Bunnings.

The question is, with the Australian economy arguably beginning to shift in the same direction as the far more successful US economy, towards what we might call the "post-industrial", do the existing hardware and food businesses really represent the best growth opportunities, from a corporate perspective?

Taken further, this could go in two directions. One direction might be to change strategy with hardware, from strong growth - Ms Welsh has the declared intent for IHG to be the number one supplier to trade builders - to a lean operation with a focus on lower sales but stronger return on capital (RoC).

The other, potentially parallel direction would be to see IHG as a platform with a specific retail presence in a wide range of communities. The "sideways" opportunities this enables might include, for example, converting Mitre 10 into a retail brand that also offers electric vehicle charging.

FY2025 is really going to be the first truly post-pandemic year. But that doesn't mean a return to the FY2019 economy. It's more going to be an economy suddenly slammed by developments that have already taken hold overseas, but been delayed in Australis due to the exigencies of pandemic recovery.

The ultimate question is, which hardware operations will be agile enough to take advantage of new opportunities, and which will remain trapped in a self-definition that has more to do with the 1990s than the 2020s.

A new Bunnings outlet has replaced an old store in Noarlunga, in the southern suburbs of Adelaide (SA). It features 1400sqm more retail space and 60 extra carparks, representing a $37 million investment by the company. The additional space expands the old store on the same site. Complex manager Sonny Papst told the Messenger-Eastern Courier:

Our team has been working tirelessly over the past few months getting everything ready to open the doors to our brand-new warehouse.

The brand new 12,500sqm site will have a five-lane drive-through trade and timber yard, dedicated special orders desk, kitchen design centre, kids playground, cafe, and more.

Bunnings said this store will include LED lighting, energy efficient heating and cooling, on-site water reuse, and solar panels to reduce its environmental impact despite it being larger.

The previous store had been in the Noarlunga community for over 24 years. Mr Papst said:

We know locals are really excited about the bigger and better store and we can't wait to welcome them inside and show them what we have to offer.

Part of the store opening celebrations have seen the Bunnings Noarlunga team deployed for "hands on support" for community groups in gardening, landscaping, and painting projects at the Noarlunga Hospital Emergency Department, the Trevor Parry Community Rehabilitation Centre, and the local "Transition to Home" NDIS centre.

Bunnings becomes "Hammerbarn"

During the month of February, six stores in Australia - and one in New Zealand - will be rebranded to "Hammerbarn" as seen in the popular Bluey children's series. In Australia, they are located in Keperra (QLD), Munno Para (SA), Cannington (WA), Glenorchy (TAS), Blacktown (NSW), and Carrum Downs (VIC). In New Zealand, the Hamerbarn store is in the Auckland suburb of Glenfield.

Exterior signage of the participating stores has changed and there is exclusive Hammerbarn merchandise including garden gnomes, Bluey themed DIY workshops as well as branded aprons and trolleys for kids to use in-store. Life-size Bluey and Bingo mascots have also entertained families.

The collaboration between Bunnings and Brisbane-based Ludo Studios, who created the Emmy-award winning series, pays homage to a Bluey episode where the cartoon blue heelers visit a Hammerbarn store.

Hammerbarn's resemblance to Bunnings is no coincidence, with the episode taking inspiration from the real-life Bunnings Keperra store. In the episode, the characters visit their local hardware store to buy a pizza oven, with Bingo and Bluey getting a trolley full of their own items to use to build mini-homes - complete with garden gnome "husbands". Ludo Studios said:

The design of Hammerbarn draws inspiration from the Bunnings Keperra store in Brisbane, the home of Bluey, which adds an extra layer of significance.

Kate O'Connor, director of brands and licensing (Australia and New Zealand) at BBC Studios - international distributor for the Bluey series - said going to Bunnings was a "quintessential" experience of growing up in Australia.

That's why we couldn't be more excited to see this iconic Bluey and Bunnings collaboration come together - and on such a grand scale - giving Kiwi and Aussie fans the world-first chance to experience Hammerbarn for real life, including exclusive and very collectable merch like Bluey and Bingo's much-loved garden gnomes that feature in the episode.

Reflecting on how the campaign came about Ms O'Connor, told Mediaweek:

I reached out to Bunnings' managing director Mike Schneider, and explained a little bit about the brand, the episode, and the reach of the episode. I wasn't really sure how much he would know about Bluey, but he got back to me pretty much straightaway and was really enthusiastic about a collaboration together. He mentioned that his wife had bought him the Hammerbarn book for Christmas!

Once Mike was on board, it started filtering down through both of the organisations at once, and we all started brainstorming - we got to the point where the scale really exceeded our wildest expectations. Bunnings has never done anything like this before, but despite that, they really matched us in terms of innovation and drive...

Bluey is one of the most-watched television shows in the world at the moment, which is just amazing. We don't take that for granted. It's in more than 60 countries, 30 languages, it was the second most streamed show in the US last year, and definitely the most streamed show in Australia.

Being able to do something like this with Bunnings - which is ultimately a store for adults - goes to show the versatility and appeal of Bluey across various demographics.

In Mediaweek, Tess Connery writes that it is a bold move to remove the name of a brand during a campaign but that's exactly what has happened when a number of Bunnings stores became Hammerbarn. It is a move that Ms O'Connor said reflects the strength of both the brands involved. She said:

...The campaign doesn't say Bluey or Bunnings anywhere, but because there's this knowledge and love of these two icons, just having the word Hammerbarn means something to audiences and consumers of both."

Ms O'Connor said the goals of the campaign came down to bringing Bluey to more Aussies than ever before.

One of the key objectives is to really weave Bluey deeper into the cultural fabric and keep Bluey front and centre in the zeitgeist, to really maintain that momentum. We know that Hammerbarn is a fan-favourite episode, and we also know that many Aussie families have referred to Bunnings as Hammerbarn since the episode aired in season two. So we knew that this was something that could make a huge impact.

Belmont Bunnings

The former site of Bunnings Warehouse in Belmont, a suburb in the City of Lake Macquarie (NSW), is on the market. It is listed for sale with James Wilson and Ben Wilkinson of Colliers on behalf of the owners, Bunnings Property Management Ltd.

The site is on the market for the first time since the hardware retailer closed its doors in early 2021 to relocate to new premises at the Bennetts Green shopping centre, according to the Newcastle Herald.

The single level 12,820sqm warehouse occupies a 4.038-hectare site at 393 Pacific Highway. Mr Wilkinson said the expansive land holding provided "excellent repositioning opportunities for industrial, retail or mixed-use usages" for developers or owner-occupiers.

Mr Wilson has overseen the sale of several Bunnings Warehouse properties across NSW including Eastgardens in Sydney which fetched $75 million along with Port Macquarie ($44.65 million), Coffs Harbour ($30.6 million) and Albury ($30.4 million).

During COVID-19 restrictions, Belmont Bunnings was leased to the NSW government for use as the state's first regional mass COVID-19 vaccination hub in July 2021 until August 2022. It took just over a month to renovate the former Bunnings site into a medical facility with the capacity to administer up to 20,000 COVID-19 vaccines a week.

Expressions of interest close on March 6.

Court case

Bunnings employee Nicole Moldenhaue has lodged a claim against Bunnings for more than $500,000 after she said she sustained a back injury moving heavy products onto shelving at the retailer's Maroochydore store. In an exclusive report in The Australian:

According to the claim lodged in the Brisbane District Court, Bunnings had a policy of discouraging staff from lodging WorkCover claims and of attempting to manage work-related injuries internally.

According to court documents, the policies meant Ms Moldenhauer delayed seeing her own doctor until three months after the alleged injury.

Ms Moldenhauer was told in December 2018 by a duty manager that after six sessions of physiotherapy paid for by Bunnings, it would not pay for any further treatments and enquired whether she wished to lodge a workers' compensation claim. In The Australian, the claim states:

The manager reminded her that if she did so all staff in the Maroochydore store would lose their bonuses. Ms Moldenhauer did not then appreciate that her right upper limb symptoms were in fact related to a disc injury in her cervical spine.

Ms Moldenhauer alleges the injury occurred while she replenished stock items as heavy as 20kg on the top shelf of a racking system. In order to complete the restocking, Ms Moldenhauer had to stretch her arms and manually handle items from an electronically operated raised platform. The claim states:

To perform the work, it was necessary for her on occasions to reach forward, fully extend her upper limbs, bending at the waist and bearing her weight on tippy toes to reach and take a hold of the stock.

Ms Moldenhauer claims Bunnings failed to take reasonable steps to eliminate manual handling risks and to properly instruct her on using the platform safely. Symptoms of her injury included numbness and soreness.

According to the claim, Ms Moldenhauer did not pursue her own investigations into her symptoms because of Bunnings' policy of discouraging staff from lodging WorkCover claims as well as attempting to manage work-related injuries internally and not report them to WorkCover Queensland.

Ms Moldenhauer did not see her general practitioner until February 20 2019, more than three months after the injury.

In a defence lodged with the court, Bunnings denied Ms Moldenhauer was required to lift products as heavy as 20kg onto shelving and "anything above that weight would need to be handled by two persons".

Bunnings said the injury was not reported contemporaneously to the company and Ms Moldenhauer had expressed uncertainty as to whether the injury was "work related given her activities at home with three children".

Bunnings said it "remains uncertain as to the truth or falsity" of the other ­allegations.

Ms Moldenhauer's lawyer, Travis Schultz of Travis Schultz and Partners, said it would not be appropriate to comment on the specifics of the case, but under Queensland law, employers were obliged to report to their workers compensation insurer any work-related injuries they became aware of. Mr Schultz told The Australian:

While employers have an interest in managing their statistics regarding workplace injuries, the legislation imposes a duty on employers to complete a report in the approved form, and give it to their insurer if a worker sustains an injury for which compensation may be payable.

Bunnings-owned Beaumont Tiles has opened its first NSW clearance outlet located in Smithfield.

The tile retailer also launched its fourth store in Western Australia within the City of Melville which sits on the shore of the Swan River in Perth. It has a diverse and multicultural community which enjoys a rich built and natural heritage.

The Beaumont Tiles clearance outlet in Smithfield (NSW) has a 1,000sqm storefront with a large parking facility.

Beaumonts said this one-stop shop in Sydney's western suburbs offers "cash and go" for bargain hunters and renovators who are looking for last-minute renovation needs. Selected items are discounted up to 60% off the retail price.

The significant range of stock it offers will suit professional builders and tilers, DIYers and home decor enthusiasts. Jerry Lloyde, retail manager at Beaumont Tiles said the store's proposition is built around the needs of the area, where bargain hunting is a characteristic of its consumers.

Previously the stunning tiles on offer were only available in our retail stores at retail pricing, however with the evolution of our store network, we have now opened an exclusive channel to market to clear stock and give consumers the advantage of buying high-quality products at clearance pricing.

The clearance outlet in Smithfield gives consumers the luxury of first-grade tiles at their fingertips starting from $29.95m2, with bathroomware and hard flooring also available, along with trade tools and accessories, providing everything you need for your renovation under one massive roof.

Beaumont Tiles' clearance outlet is located at 3/18-20 Sturt Street, Smithfield NSW 2164.

Myaree, WA

The opening of the Beaumonts' Myaree store in Melville should help many renovators who live in quality-built 80s and 90s properties in the area.

The store has a showroom with over 700sqm of displays, tiles, bathroomware and hard flooring.

Beaumonts said it provides expert guidance and exclusive technology designed to simplify the renovating process from concept to completion for DIYers and professionals.

Its What's My Style quiz and BeVisual Live visualisation tool are designed to help local renovators identify their style of choice and show them what their hard flooring and tile choices will look like in real time.

The store's location is Tenancy 1, 80 Norma Road, Myaree, WA 6154.

The expansion of its Beaumont Tiles outlets into WA has been underway since the tile retailer was purchased by Bunnings in 2021. At the time, Bunnings managing director Mike Schneider said Beaumonts offered specialised products and services that were not able to be offered through the Bunnings warehouse format. He told The Australian Financial Review:

Beaumont Tiles has a strong management team in place and operates in a large, competitive category that has the opportunity for strong growth.

The acquisition represents an opportunity to build on the success of the Beaumont Tiles business and invest in its future growth.

Related

Mitre 10

Petrie's Mitre 10 in Dubbo (NSW) now has an in-house Design 10 studio as part of its retail store. It is the third to be opened in NSW, after Coffs Harbour and Orange, according to Dubbo Photo News. Petrie's Mitre 10 marketing manager Lucy Mcdonald said:

Basically, Design 10 is our answer to a high-tech showroom... helping you decide on your kitchen, bathroom, laundry, the flooring, the cladding: it's about picking the pretty bits of your home.

It's a fully-integrated working display, our team have huge screens to walk you through your plans to see how they will look, before you make your final decision.

It showcases kitchen, bathroom, and laundry products such as appliances, sinks and tapware, toilets, bathroom accessories, heating and cooling, outdoor living products, engineered and solid timber flooring solutions, and cladding.

It is holding a grand opening event on 29 February.

Related

Bianco

Bianco Construction was established by Italian immigrant Nick Bianco who left school aged 14 to begin a bricklaying apprenticeship. In 1970 and in his early 20s, he started his one-man bricklaying business. Seven years later, he established the hardware and hiring business.

By the 1990s, he employed 250 staff. Over time his Bianco Group of Companies expanded operations to include a structural steel business and construction and safety division with a workforce of more than 400.

In 2006, he took sole ownership of Adelaide United Football Club and a year later was awarded a Medal of the Order of Australia for his contribution to the construction industry and his philanthropy.

In 2009, he relinquished control to the Football Federation of Australia amid suggestions his company was in financial difficulty.

Bianco Construction Supplies went into receivership in June 2011 with debts of $60 million as it could not service loans taken out on its new steel fabrication facility at Gepps Cross.

In the same year, the company was rescued by Mr Bianco's son Russell and a consortium of staff and building industry companies who acquired the business from the receivers.

Most recently, Metcash said Bianco generated $144 million in sales and a $13.9 million profit in the 12 months to 31 October 2023.

The food, liquor and hardware wholesaler also purchased Wangaratta-based Alpine Truss for $64 million. See more about Metcash's acquisitions in this edition of HNN Flash #141.

ARDEX Australia is nearing completion of its manufacturing regional headquarters in NSW. It is the single largest infrastructure investment - $140 million - that the privately-owned, global company has funded in its 70 years of operation.

Oceania regional managing director, Fabian Morgan, said the move underscores the company's future-focussed sustainable vision.

We are passionate people who are driven by innovation, responsibility, integrity and belonging. The site's 50-year design life and targeting 6-star green rating are testament to our vision, values and plans for reinvestment back into our people, profitability and planet.

The site's customised advanced design includes a world-class 35-metre high powder manufacturing tower used to vertically mix raw materials efficiently. The new liquids manufacturing plant is an industry-first for its orientation and size, and has a 20-metre silo tower for storage and transfer of raw materials to the multi-level mixing plant. Mr Morgan said:

Our commitment to local manufacturing and Australian-made supply brings certainty and stability to customers.

Other Industry 4.0 elements include automation, electric vehicles and forklifts, solar panel system spanning 17,000sqm, rainwater tanks, and energy efficient lighting - targeting the site a 6 Star Green Star Design As-Built v1.3 rating and a serious contender for awards.

The ARDEX Oceania HQ site doubles the size of the company's current research and training facilities. It is part of The YARDS industrial estate, developed by joint-venture partners Frasers Property Industrial and Aware Real Estate. It is the first in Australia to achieve a 6 Star Green Star Communities v1.1 rating from the Green Building Council of Australia. It includes solar installations, water harvesting and recycling, and full electrification to facilitate a seamless transition to fossil fuel-free energy sources in the future.

The location is strategic for an optimal national logistics network for the warehouse. It is nearby the 24/7 Western Sydney International Airport and future Southern Link Road in the Western Sydney Aerotropolis, close to the M4 and M7, and within Greater Western Sydney's sought-after industrial zone, alongside Microsoft and Amazon.

Bunnings is ARDEX Australia's largest customer and Mr Morgan told CEO Magazine the partnership has inspired more innovation within the company. He said:

We've launched an ARDEX-brand range of bespoke hand tools, which re designed from the ground up specifically for the consumables we sell.

For the first time, ARDEX will merge its manufacturing, warehousing and support office along with DTA Australia, Nexus Adhesives and WEDI, in April 2024.

The site also complements the other nine manufacturing and 14 distribution centres around Australia and New Zealand.

CEO of Big River Group, John Lorente, said the rebranding is a proactive step to streamline operations, create unity across the business and unlock new opportunities for growth.

By aligning our local service excellence with our national scale, we aim to enhance our operational efficiencies while driving excellence and innovation in our solutions to better serve our customers, suppliers, and shareholders.

With a legacy spanning over 120 years, Big River Group believes it is positioned for future growth while remaining committed to stakeholders. Mr Lorente said:

We understand the importance of clarity and consistency in how we represent ourselves to the market. Our rebranding effort signifies more than just a visual transformation; it leverages our extensive experience and service autonomy across the group, empowering the company to adapt swiftly to evolving market dynamics while maintaining a steadfast focus on customer satisfaction.

By consolidating our resources and expertise under a cohesive brand identity, Big River Group is poised to capitalise on synergies and drive sustained growth in the years to come.

There is a need to be representing ourselves as one Big River team showcasing our capability for our customers and suppliers.

Our mission, 'Committed to doing good business with good people to build better projects' serves as a testament to our commitment to operating as one team, delivering exceptional value and product solutions to the market.

The phased roll-out of the rebranding initiative will commence with the introduction of the new logo, followed by subsequent brand assets throughout the year.

Key highlights of the initiative include:

Related

The results for hardware retail sales to November 2023 do not show anything like a sharp slowdown. What they show, for the most part, is relatively flat performance, with a general trend downwards.

While that is better news than many expected, it's worth remembering that, unlike four years ago, the Australian economy has gone through an inflationary period, which would indicate that the slight decline might show a market that is more significantly on the downside from the status quo.

The stats are divided into 12-month periods ending in November. We reference these with a "p" prefix, so p2022 refers to the period from December 2021 to November 2022.

Once again, most of the growth that was present in the market occurred outside the three major east coast states, comparing p2023 with p2022. In percentage terms, South Australia (SA) grew the most at, 4.8%, and, at $80.9 million additional revenue, was close the winner for overall growth in dollar terms, which was Western Australia (WA) with $82.5 million, the result of 3.1% growth. While these are decent numbers, they are significantly down on the p2022 to p2021 comparison, where SA grew by close to 20%, and WA grew by 9.5%.

Queensland (QLD) and New South Wales (NSW) led in terms of losses. QLD was down 2.71%, dropping $147.0 million in revenues. NSW fell by 2.16%, losing the largest amount for the comparison, at $167.1 million.

Both Victoria (VIC) and Australian Capital Territory (ACT) saw revenues increase by around $11 million, with the ACT up 2.1%, and VIC up 0.2%. Tasmania (TAS) and Northern Territory (NT) showed mild declines. TAS was down 0.8% and $4.8 million, while NT was down 1.9% and $5.2 million.

For Australia overall, there was a mild decline of 0.5%, and $138.6 less total revenue. Perhaps the most interesting way to look at that situation is to compare the total revenues collect for August through to November. This shows a broadly very flat result, as show in Chart 2:

The biggest surprise is perhaps that hardware retail grew by over 4% and $100 million for VIC.

New South Wales

As Chart 2 indicates, in 2023 NSW did not experience a surge in sales for either October or November.

Instead, sales remained relatively stable from August to November.

Victoria

VIC shows the same kind of moderation as NSW for November 2023, but differs elsewhere.

While the revenue trails near the bottom of post-COVID-19 results for March through June 2023, from July through to September 2023 it manages to record three record-setting months.

Queensland

It's clear from the graph that p2023 is simply the second-best period QLD has ever had. It consistently trails p2022, but not by much.

The only drift away from this has come in November 2023, so the figures for December 2023 will prove crucial.

South Australia

In almost the inverse to QLD, 2023 has been the best period ever for the SA. While it has closely followed p2022, it has out performed that period in every month.

Western Australia

Like SA, WA had its best ever period in p2023, though it did track p2022 closely - until October and November 2023.

Tasmania

As a note, the ABS did not collect stats for TAS from January 2020 through to October 2021. HNN has estimated the revenues for those months.

It's very clear that TAS for p2023 has very closely followed p2022, though it has also underperformed by a little as well.

Northern Territory

While the NT did well through to June 2023, it has subsequently underperformed p2022, as well as previous periods.

Analysis

Averaged out for Australia, we see the results in the final chart:

While there has not been a lot of growth - in contrast to a year previously, there is certainly a degree of strength in managing to repeat the performance of p2022 - as well as posting an overall record for September.

While there are OK results and nothing to be overly concerned about, low growth in an inflationary landscape is not a good sign.

Related

As Melbourne hardware store owner Frank Penhalluriack prepares to sell his eponymous shop, he looked back on his historical fight to extend weekend trading hours that saw him face government fury, cop huge fines and spend 19 days in jail. He told the ABC:

I would have liked things to be different, but I wouldn't do anything differently.

Mr Penhalluriack didn't set out to change weekend trade at a time when shops would grind to a halt by 1pm on Saturdays. He just wanted to sell things. He said:

I had no idea at all ... I'd been to America, and I'd experienced some of the big hardware stores, big chains, making lots of money selling things on a DIY basis.

Along a friend who worked as a draftsman, they opened a tiny shop. It was open seven days a week. He said:

And it must have been at least 12 months before anybody said boo.

At the time, laws allowing trade on a weekend in Victoria were a mix of conflict and confusion. Mr Penhalluriack said:

Like most laws, I suppose, it's full of loopholes.

Certain kinds of shops could open but what they could and couldn't sell wasn't defined clearly.

Traders like Mr Penhalluriack and Bob Wolstenholme of Werribee Hardware stayed open in spite of the laws - and received substantial fines. When Mr Penhalluriack refused to pay a $4,000 fine in January 1982 (equivalent to around $17,000 today), police seized goods from the store. But it didn't end up as they'd expected.

The driveway of the local police station was the site of what the ABC reporter on the scene called "the craziest auction seen in Melbourne for many years".

Someone paid $100 for sandwich plates worth only $17, as friends and supporters spent up so that most of the stock could be returned to the store. A jigsaw drill attachment worth only $19.99 was sold for $1,000, as supporters made their point to police.

Not that they weren't mischievous themselves: one tried to pay for a $100 purchase with 20-cent coins. Most of the goods were returned to the store.

But the fines kept coming. Mr Penhalluriack and other traders kept receiving summonses - essentially notices to pay fines - for all the days they were illegally open.

Mr Penhalluriack said he received so many, he used the A4 notices to spell out "OPEN WEEKENDS" across the glass windows at the front of the store.

The dispute escalated until the amount set to be paid topped more than half a million dollars (around $1.7 million in today's money) and he was asked to surrender himself to police in April 1984. Given one last chance, Mr Penhalluriack told the arresting officer:

I won't pay a cent.

He spent 19 days in custody, some of it at Pentridge Prison, which has been home to some of Victoria's most violent criminals including Mark "Chopper" Read. Released on May 6, 1984 to the cheers of a crowd, he expressed his thanks.

The dispute ground through court for another two years until a decisive victory set aside the $500,000 fine. By then, community sentiment changed, and the liberalisation of trading hours was being implemented across Victoria and leading to other states changing their rules. Mr Penhalluriack said when he was victorious at the hearing in 1988:

Any law that comes between you as a customer, and me as a shopkeeper, is an ass of a law.

Since then, he has gone on to run in state government elections and successfully join his local council. Mr Penhalluriack still works at the shop for a few hours, several times a week and he's given his staff plenty of notice about the impending sale.

He also isn't worried about what he'll do when the shop has been sold, and pays tribute to his wife's support. He said:

Oh, I'll be kept very busy! I'm not a person for backing down. I have a mind of my own and I think that it's important you exercise your mind, even at the age I am.

Ingram's Home Hardware

Owners of Ingram's Home Hardware stores will build a hardware retail centre on the outskirts of Kingscote, on Kangaroo Island (SA), reports Messenger-Hills News.

Plans reveal a 1500sqm hardware and garden supplies store about 900 metres from the town centre, on about 13ha of farming land on the intersection of Karatta Terrace and Playford Highway.

An existing trade and building supplies shed is already on the site and would be linked to the new outlet.

Matt Ingram said the 71-year-old family business had grown out of its central store and needed a larger hub to relocate its other retail offerings. He told Messenger-Hills News:

We'd expanded into a new site already, now we're building a new premises to move the retail side. We started in a little 200sqm shed in the main street, then we did a 950sqm shed behind the original shop - and got busier and outgrew it.

The business plans to bring its other shopfronts under one roof, maintaining the one in Kingscote. Mr Ingram said:

We were running four sites - the driveway was a shambles, it was a one-lane highway, stuff was everywhere, so we committed to coming out here. We've got nowhere else to go and you can't rent anything, can't buy anything. This way I'll never have to shift again, that's my plan.

The centre will include a paint shop, tile shop, housewares and gardening suppliers, to supplement the existing trade, building and plumbing supply shed. Nearly 100 additional car parks form part of the proposal. It will remove the need for large trucks delivering bulky building and hardware supplies heading through the main street.

Plans also indicate Ingram's will continue to run the store in Kingscote's main street, selling homewares, fishing bait and tackle and camping equipment.

Related

Astley's Plumbing and Hardware

Astley's Plumbing and Hardware is relocating from its current location on Coborra Road, Dubbo (NSW), and moving into one of the hangars at the former Dubbo RAAF Base.

The hangar will be transformed into a service and trade centre, including a showroom, space for supplier showcases and consult rooms. At the back of the site will also be a drive-through, according to the Daily Liberal.

Astley's operations manager Shane Fuller said it was an "exciting move for Astley's".

Our new facility will allow us to introduce more suppliers and products that support local trades, as well as expand our retail offering and showroom to DIY enthusiasts while maintaining our high level of customer service and care.

The heritage-listed site was used as the Royal Australian Air Force training facility and storage site during World War II. The existing structure will be maintained as part of the fit out and any upgrades that need to be made to the structure will be done in accordance with the heritage management plan. It is currently being developed by Maas Group Holdings.

A Maas spokesperson acknowledged the heritage aspects and cultural significance made the site significant for Dubbo. They told the Daily Liberal:

We recognise the site has been under-utilised for some time and are proud that we are able to facilitate local, century-old businesses like Astley's to grow and expand on the site.

Emerald Mitre 10

Chief executive Justin Benjamin of Emerald Cooperative Society (Emerald Mitre 10) said its $3.9 million expansion - now almost complete - was prompted by a simple explanation. He told CQ Today:

We have run out of room ... We are conscious that modern retailing is always changing, and consumers always demand more.

The current number of SKUs in the store is approximately 26,000. We estimate the extension will allow us to take our inventory to about 32,000 SKUs, offering the people of Emerald more choice.

The world has moved on. It is no longer acceptable to have unsealed carparking that causes dust issues.

The extension will provide an additional 1200sqm of sealed parking at the front of the building as well as fully concreted rear access from Sullivan Street, allowing very large vehicles and delivery vehicles to load and unload away from retail traffic in all weathers.

Mr Benjamin said the Co-op had fully self-funded the extension and all involved with the project, except the steelworks supplier, were local companies and contractors.

He said that over the past five years, the Co-op had injected nearly $!0 million into the Emerald economy through rebates to shareholders and had donated $720,000 via a community donations program started in 2008. In the last financial year, it donated $110,000 to community groups.

Long before Bunnings invented their 'sausage sizzle', the Emerald Co-operative Society was providing space at our store for community fundraisers.

This became even more important when some 15 years ago, the owners of all Emerald shopping centres decided to ban such fundraising or to charge a site fee, which would have to come out of monies raised.

Community groups rely on Emerald Mitre 10 to fulfil this function, which the board is pleased to do.

Pontings Mitre 10

The store celebrated a century of trade in late 2023, reports The Warrnambool Standard.

As one of Warrnambool's longest-serving family businesses, it was founded by siblings Walter and Len Ponting, who purchased Dawkins and Sons Ironmonger, renaming it Ponting Brothers, supplying products to builders and farmers in the region. Walter's three sons Alex, Jim and Walter junior took it on in the 1940s.

Today the business is owned and operated by directors Walter "John" Ponting and Pam Madner and Michael Miller. It employs more than 60 people, including the third-generation family members.

Mr Ponting told The Warrnambool Standard that 35 years ago he would never have imagined he would be running the business recalling how his dad "dragged" him out of the surf to work in his sawmill.

Mr Ponting said after the sawmill's closure he came to work at Pontings with his two uncles, sister, cousins, a brother-in-law and his former wife Raelene, with his children Leah, Emma and Harry later doing stints in the business.

Mr Ponting likened being in a family business to being on a roller coaster ride with "lots of different opinions to be considered and lots of personal highs and lows".

As part of the store's centenary, an honour board listing the names of more than 620 of its past and current employees was created. It now stands proudly inside on the wall near the Lava Street entrance.

In 2019 Pontings became a Mitre 10 store. Ms Madner said the transformation of the next-door site, a former petrol station on Raglan Parade which it purchased in 2021, into a purpose-built timber storage shed and truck unloading bay in the trade yard had improved customer and staff safety and accessibility.

It has been a much-needed space to grow our business.

Related

Approval is being sought to expand the Bunnings store in Cairns, Far North Queensland.

A development application (DA) was recently submitted to Cairns Regional Council to expand the existing Portsmith Bunnings store to an adjacent landholding that would include an additional 2000sqm bulk trade area and 1000sqm staging area. According to the DA, a completed expansion would represent an overall investment of $31 million. In The Cairns Post, the report states:

The proposal involves the expansion of the existing Bunnings Warehouse Store, to facilitate an increase in the range of goods sold and to improve the operational efficiency of the existing facility.

Based on traffic impact assessment, (planners) do not anticipate any adverse impacts to result from the proposed expansion and, therefore, no mitigation works or upgrades are required.

Patrick Siegel, co-director of NQ Building and Construction, said the increased supply of bulk materials the Bunnings' expansion could bring would be beneficial for the city's construction sector. He told The Cairns Post:

It's good to get more competition in town. We need more bulk supply for trades. Supply has been an issue. Hopefully this brings a better range to choose from.

Mr Siegel said customer service at other stores could be better, so he hoped Bunnings' standard of customer service would be high at the expanded store.

At the moment some stores have poor service. But you just have to take it. It's no good.

Port Augusta

A Bunnings store is expected to be built in Port Augusta (SA). Bunnings general manager - store operations Jess Hitchin said the start of the build would begin soon. She told The Transcontinental:

We're pleased to confirm positive progress has been made and we're now hopeful construction of the new Bunnings store can begin in a few months.

The bricks-and-mortar store is located on the corner of Daw Street and the Stuart Highway near the Eyre Highway turnoff.

The DA had been delayed by minor changes, including the lowering of the roof by 15cm and further resealing works of Daw Street.

The store should retain the usual Bunnings layout while the application stated there would be 142 car parks.

Related

Adelaide Hills

Initial construction has begun on the new $40 million Bunnings store in Totness, in the Adelaide Hills (SA). The 16,300sqm site is double the size of the existing Bunnings that is close by.

However, the store would be moved nearer to the freeway under planning changes, reports Messenger-Eastern Courier.

Originally proposed as a two-level building with undercroft parking and a nursery, the changes mean the new Bunnings would now be one level with an uncovered 350-space carpark, requiring a shift west.

It has been moved to incorporate land that would have still been home to other bulky goods outlets, and the changes allow trucks easier access to loading docks.

Developers must also provide a 20-metre buffer of trees or landscaping between roads and buildings. Consultation is taking place with the Department of Infrastructure and Transport (DIT) to grow screening on its land along the Mount Barker freeway entry ramp. Planning consultant Emma Barnes told Messenger-Eastern Courier:

For the streetscaping along the freeway, it will mean that a portion of that landscaping is on DIT land, but it will remain 20-metre in width. There could well have been other bulky goods on that corner, which will now be dedicated to landscaping, which is a good outcome. There would have otherwise been other buildings there.

The project is being led by developer Totness Commercial.

Cleaning category

At the Wesfarmers Strategy Day in mid-2023, Bunnings said it would include more leading brands in its cleaning range, while also widening the variety of products available. During his presentation, Bunnings managing director Mike Schneider said:

Cleaning is another area where we have strengthened our range of authority in response to the elevated and sustained customer demand we saw emerge during the pandemic. We've introduced more market leading brands that consistently attract higher frequency purchases.

See page 22 here:

Since then, Mr Schneider said he believes a move into the home cleaning market - valued at $5 billion - will see the hardware chain gain a significant slice of the category.

It will be in direct competition with the main supermarkets as well as bulk goods specialist Costco, and targeting consumers, tradies and small businesses that often buy cleaning products such as liquid handwash paper towels in bulk.

Bunnings has a strong focus on bulk packages at better prices for a range of leading popular cleaning brands such as OMO, Finish, Dettol, Sukin, Cold Power, Sard and Hoover.

In-store, the layout varies depending on the size of the store, with the largest outlets having up to four dedicated aisles. To make space for cleaning, Bunnings will tighten its range of window furnishings and curtains which Mr Schneider believes can generate better margins.

As the cleaning products were being launched into stores, Mr Schneider said after 13 interest rate hikes consumers were hunting for value. He told The Australian:

Consumers are incredibly focused on value, probably more than I have really ever seen in any other point of time ...

...What we learned from pets was that really strong value and bulk products are things that are really important for consumers because I think in categories like cleaning, consumers have a really acute eye for the value of a bulk product, right down to the unit of measure.

So consumers are very quick to work out what that equates to 'X dollars' a litre or per 100ml or whatever it is, and by bringing a bulk offering into the market, we are increasing our range by over 200 products ... consumers are really being blown away by the value offering that's there. And we've established some real credibility and trust in another consumable category like pets and translating that into a cleaning range has been really well received.

By the end of 2023, Mr Schneider said:

The recent launch of our expanded cleaning range is all about delivering customers everyday value and an even wider range of necessity products with bigger quantities and better prices. While it is still early days, we're hearing really positive feedback from customers and our data is indicating the range is boosting visitation and cleaning basket size.

Mr Schneider also told The Australian that Bunnings is increasingly focused on home improvement - not just hardware - and the moves into pets and cleaning reflected that repositioning of a brand which has been evolving for many years.

I don't think we have called ourselves a hardware store now probably almost since when I joined in 2005. And the way we talk about our merchandising focus is anything "from the front gate to the back fence". That gives you a fairly strong licence ... Cleaning is a form of home maintenance. Keeping your home clean is as relevant as changing your light bulb or putting mulch in your garden.

Woolworths and Petstock

The Australian Competition and Consumer Commission (ACCC) has given the green light for Woolworths to move ahead with acquiring a controlling stake in speciality pet retailer PETstock.

The deal was initially announced in December 2022 and will see Woolworths buying a 55% stake in Petspiration Group, which trades as PETstock.

The purchase price for the 55% stake is now expected to be $438 million, reduced from $586 million. The adjusted enterprise value is about $1.46 billion, Woolworths said.

ACCC chairwoman Gina Cass-Gottlieb said the regulator had significant concerns that PETstock's previously completed acquisitions (between 2017 and 2022) of the Best Friends Pets, Pet City, and Animal Tuckerbox chains and the Pet & Aquarium Warehouse store in Eltham, Victoria, might have contravened the Competition and Consumer Act.

In response to the ACCC's' concern, the Woolworths and PETstock offered to provide court-enforceable undertakings.

PETstock will sell 41 specialty pet retail stores, 25 co-located veterinary hospitals, four brands and two online retail stores.

As part of its undertakings, PETstock must ensure the sale of the businesses to be divested will result in a standalone, independent and long-term competitor nationally and in local markets, and that the buyer can compete with PETstock in pet specialty retail. It must also keep those businesses in question competitive and economically viable until they are divested.

The ACCC has accepted the undertakings and will not oppose the proposed acquisition.

The COVID-19 pet boom spurred Woolworths to invest in the $10 billion specialty pet sector last December, according to the Australian Financial Review (AFR).

PETstock is the second-biggest player in the sector behind TPG Capital's Greencross. PETstock continued to grow over the past year with underlying sales increasing by 10% to $892 million in the 12 months to October and underlying EBITDA relatively stable at $125 million, Woolworths said.

Related

Property deal

The country's largest owner of Bunnings warehouses, BWP Trust is striking a deal to take over smaller landlord Newmark Property REIT - whose tenants include Bunnings, Officeworks and Kmart. BWP Trust is the owner of 75 mostly Bunnings Warehouses.

Under the bid, BWP - which has a market capitalisation of $2.2 billion - would buy all shares in Newmark in an off-market takeover comprising 0.4 BWP shares for every one Newmark share owned.

The Newmark board supports the proposal, which values NPR shares at a 43% premium. Newmark has a market capitalisation of nearly $181 million.

According to The Australian, the deal is billed as an opportunity to combine two complementary portfolios of quality assets and similar tenant profiles. It creates a combined portfolio of $3.5 billion and sets up the Bunnings-owning trust for long-term capital growth.

The combined portfolio will remain heavily exposed to Wesfarmers' businesses, reports the AFR. That would make it harder for the landlord to negotiate higher rents, Jarden analyst Lou Pirenc said in the AFR.

It's hard to push Wesfarmers to increase rents when in most locations it's not as if you can kick them out and replace them with a non-Bunnings. Most sites will be fairly specific for Bunnings.

In The West Australian, UBS analyst Tom Bodor maintained his "sell" rating on BWP, based on "challenged earnings growth given low returns on development spend, unfavourable new leases with Bunnings, higher debt costs and inflation normalising".

Sydney Tools is planning to open a branch in Gympie (QLD).

Bayswater Holdings lodged a development application (DA) with Gympie Regional Council to build the new showroom and warehouse on a vacant block, directly opposite the local Bunnings store. CoreLogic RP Data records show Bayswater Holdings bought the half-hectare block in December 2022 for $2.5 million, reports The Gympie Times.

The proposed one-storey showroom would include 2927sqm of floor area and be split into two tenancies, one about 600sq m larger than the other. The DA said the larger shop would be leased to Sydney Tools.

Fifty parking spaces would be included for customers and staff on site. This would be five less than the minimum number required for the development, but Bayswater Holdings argues in the application 50 spaces would still be "sufficient".

Sydney Tools is already established in the Wide Bay Burnett, with a proposed outlet at Bundaberg getting the green light by the region's council in 2021.

The council has not yet made any decision on the current application.

Related

Total Tools

The appointment of Richard Murray in the top job at Total Tools comes at a time when Wesfarmers (Bunnings) is continuing its roll-out of Tool Kit Depot, according to The West Australian.

In September, Mr Murray made a surprise departure from Premier - the company behind major clothing and retail brands Peter Alexander, Smiggle and Just Jeans - after just two years in the job. It was despite Premier sales growing to the point where it's now considering splitting Smiggle and Peter Alexander into separate businesses. The Australian Financial Review (AFR) reported at the time that Mr Murray was unhappy at being excluded from talks about owner Solomon Lew's plan to carve up his operations.

Prior to this, Mr Murray led JB Hi-Fi for seven years to become one of the nation's largest retailers and one of the biggest retail stocks - fuelled by the 2016 acquisition of The Good Guys.

Total Tools owner Metcash told the ASX that Mr Murray would replace Paul Dumbrell -who had already announced late last year he would step down. Mr Murray will report to Metcash CEO Doug Jones, joining his nine-person executive team. In a statement, Mr Jones said:

Richard's deep retail experience and proven track record ideally positions him to play an integral role in the continued success of Total Tools as the number one player in the Australian professional tools market. He has a huge passion for the sector and Total Tools, both as a retailer and a serious tools and DIY enthusiast.

In the AFR, E&P Capital's Phillip Kimber said Mr Murray was a "very experienced executive" and that he would be "well known to investors after having been CEO of large, listed companies". Metcash's entire market capitalisation is $3.5 billion, compared with Premier Investments' $4.3 billion and JB Hi-Fi's $5.8 billion.

It is considered a big name hire for what is relatively a small business inside Metcash, an ASX-listed mid-cap and the sort of ASX company that flies below the radar.

Related

https://hnn.bz/articleID/2023-46-1700189320720}Metcash gets 100% of Total Tools - HNN Flash, November 2023

DataRoom in The Australian has also reported that after making a number of acquisitions, Metcash is now looking at hardware stores to buy, including "online hardware business" HBT, which could expand its existing stable of stores trading under brands such as Mitre 10 and Total Tools.

Private equity firm Pacific Equity Partners (PEP) will compete directly with Wesfarmers in the industrial and safety supplies category, after buying distributor ATOM and seeking to double its earnings in coming years.

PEP managing director Tony Duthie said the firm had agreed a deal to acquire an 80% stake in the company, reports The Australian Financial Review (AFR). It plans to grow ATOM's footprint, including via bolt-on acquisitions of smaller rivals.

While Mr Duthie declined to comment on the purchase price, the deal is expected to value ATOM at a few hundred million dollars. He told the AFR:

There's a strong organic growth story both in terms of natural tailwinds given the sectors and the heightened focus on safety. There's also an ability to scale the network nationally and increase it from the 11 sites there now as well as some strong M&A opportunity.

He said PEP would work with ATOM's management team to identify bolt-on acquisitions.

There are a number of family-owned small players that are specialists from the product space or geographic space, and they could in-fill our network nicely.

ATOM sells safety equipment such as gloves, protective goggles and workwear, along with lubricants, tools, nuts and bolts, cleaning supplies and other industrial consumable products. Its customers include miners, infrastructure builders and owners, and defence contractors. Mark Bishop has owned the business for about a decade.

The company turns over about $350 million of products a year and is the second largest player in the sector behind Blackwoods, which is owned by Wesfarmers.

ATOM's chief executive, Jason Johnson - a significant shareholder - would remain with the business as an executive and investor under the new ownership structure, Mr Duthie said.

Related

Techtronic Industries

Power tool company Techtronic Industries has been ordered to pay penalties totalling $15 million after admitting it had engaged in resale price maintenance conduct in relation to Milwaukee branded products, including power tools, hand tools and accessories, according to the Australian Competition and Consumer Commission (ACCC).

The total penalties, ordered by the Federal Court, are the highest imposed for resale price maintenance in Australia. Resale price maintenance (also known as RPM) occurs when a supplier of goods specifies a minimum price below which a reseller must not supply, offer to supply, advertise, or display those goods for sale. In a statement, ACCC deputy chair Mick Keogh said:

The ACCC submitted to the Court that this level of penalty was appropriate given the seriousness, duration and extent of Techtronic's conduct. It sends a strong signal to deter others from engaging in RPM, and should serve as a warning for all other businesses.

Resale price maintenance is illegal because it is harmful to price competition, which may mean consumers pay a higher price than they would in a truly competitive market.

Techtronic admitted that, between January 2016 and July 2021, it entered into 97 agreements with retailers and dealers which restricted the sale of Milwaukee products below a specified minimum price.

Techtronic also admitted it enforced the restrictive RPM provisions in its contracts 29 times between December 2016 and May 2020, for example by issuing warnings to dealers who offered to sell, or sold, Milwaukee branded products below the specified minimum price, or by withholding supply from two dealers.

The Court also ordered Techtronic to post corrective notices on its website and to its dealers, implement a compliance program and pay part of the ACCC's costs. The Federal Court will publish its written reasons at a later date.

Techtronic cooperated with the ACCC. The parties filed joint submissions, a statement of agreed facts, and joint proposed orders.

The ACCC instituted proceedings against Techtronic in November 2021.

Related

Daniel Cooper, chief executive of building materials and home-building group BGC recently told The Australian Financial Review (AFR) that it plans to relaunch the sale of the company. He said:

We will reinitiate the sale in the near future.

However the price was yet to be determined. The company was previously on the market for around $1 billion.

The revival of a sale process follows the sale of BGC's plasterboard and fibre cement divisions to Belgium-based global building materials manufacturer Etex, announced late last year.

Included in this deal is BGC's plasterboard plant in Western Australia, a 56,000sqm facility located in Perth, and a network of nine warehouses across Australia and New Zealand.

Prior to the acquisition, Etex already had a significant presence in Australia with 14 sites and commercial brands such as Siniat plasterboards, Promat passive fire protection and high-temperature insulation, and EQUITONE fibre cement cladding panels.

This sale is expected to close in February, which BGC said would solve its debt troubles. Mr Cooper said.

The sale strengthens our position, leaves us with zero debt and many millions in the bank.

The company added that it "has returned to normal trading in [this financial year], as home builds return to normalised levels and margins."

BGC had abandoned previous attempts to sell the business due to economic headwinds.

Related

Adbri

Building materials giant CRH and Australian family-controlled business Barro Group have offered to buy concrete maker Adbri in a deal that values the company at around $2.1 billion.

The joint bidders still require the approval of the remaining Adbri shareholders for any transaction to proceed. New York-listed CRH's proposal is indicative and non-binding, and Adbri has granted exclusive due diligence, according to the AFR.

Formerly known as Adelaide Brighton until a name change in 2020, Adbri has set up an independent board committee. It told the ASX it had "entered into a process and exclusivity deed" with CRH and Barro Group until February 28, 2024 to progress a potential transaction.

The Adbri board intends to recommend the deal unanimously, subject to a binding agreement and an independent expert's assessment, in the absence of a superior proposal. The CRH bid will also require the approval of the Foreign Investment Review Board.

In The Australian, analysts are expecting the offer to succeed given the size of the offer price premium - 41% - and outlook for the building market.

Adbri turned over $1.7 billion in 2022 for a net profit of $102.6 million, down on the $116.7 million achieved the previous year. It operates more than 200 plants and facilities across Australia.

For CRH, the proposed deal marks the first big move by the company outside its core European and North American markets since it acquired businesses in the Philippines and Brazil eight years ago under the EUR6.5 billion takeover of an international portfolio of assets from Lafarge and Holcim.

The Australian Bureau of Statistics (ABS) has released stats for hardware retail turnover through to September 2023.

We can treat the trailing 12-month through to September as periods, which we denote with a "p" prefix. So p2022 refers to the period from October 2021 through to September 2022.

The ABS data shows us two major points: on that trailing 12-month basis, turnover for Australia as a whole has now entered negative growth. This is by a small amount, but given underlying inflation, it is likely indicative of a larger market contraction.

The second point, however, is that across Australia results for both August and September 2023 have been broadly positive. Up, as we all know, is good, in any circumstance.

In terms of how much direct inflation there is in the hardware retail market, that remains difficult to determine. In our recent article on the ABS stats for the Producer Price Index (in this e-newsletter) as it relates to construction, we indicate that this is broadly flat. However, if you consider the categories listed, many of those that more directly relate to hardware retail have trended down. It is somewhat likely as a consequence that inflation for hardware retail is below the 5.4% consumer price index (CPI) increase for p2023 - but will still be significant.

The overall numbers

Australia overall saw sales of $25.46 billion for p2023, down $21 million from p2022, a decline of -0.08%. That contrasts with an increase of 7.54% for p2022 over p2021.

In both percentage and dollar terms, Queensland (QLD) saw the steepest fall for p2023. Revenue was down $85 million, representing a decline of -1.58%. Both New South Wales (NSW) and Victoria (VIC) were close to that, with declines of $81 million/-1.05% and $72 million/1.08% respectively. Tasmania (TAS) also recorded a fall for p2023 over p2022 of 0.93% and $6 million.

In both percentage and dollar terms, South Australia (SA) had the steepest increase, gaining 6.28% and $103.9 million. Western Australia (WA) was just slightly under that with $103.4 million, representing an increase of 3.88%. Northern Territory (NT) grew by 3.05%/$8 million, and Australian Capital Territory (ACT) went up by 1.35%/$7million.

The chart below illustrates the specific revenue comparisons between the states:

The chart below shows the shift in growth from the three major east coast states to the rest of Australia, in dollar and percentage terms.

While the east coast dominates in terms of market size, the rest of Australia has been outgrowing it in percentage terms.

New South Wales

In the contrast between p2022 and p2023, the decline in revenue over April, May and June have dragged down performance in the most recent period. While August 2023 came in marginally below August 2022, September 2023 has seen revenue nudge past September 2021 to provide an all-time high for the month.

The question that remains is whether revenues over the coming quarter will run high, following the December quarter over the two previous years, or if it will fall back to 2020 levels. Based on a range of factors, HNN expects the results for the three months of the quarter to be around the $1.9 billion to $2.0 billion mark, averaging just above December quarter 2020.

To add some overall context to this result, it's worth noting that from p2019 to p2023 retail turnover in NSW increased by 33.1%.

Victoria

Of all the states, VIC has actually benefitted the least from the COVID bump to hardware retail. That's largely down to its subdued performance in p2021, when sales increased by only 0.1%, a period when both NSW and QLD boosted sales by over eight percent. The gain from p2019 to 2023 for VIC is the lowest for all states and territories, at just 17.1%.

Given that, it's a little surprising that in a time where p2023 sales trailed those for p2022 consistently, the state outperformed p2023 throughout the September 2023 quarter. That was especially true for September itself, with sales up 8.9% over September 2022. That's not against a weak comparative either, as sales in both August and September 2022 were the highest to date, a feat obviously repeated in 2023.

While this is encouraging, HNN still expects total retail turnover for the current December quarter to come in just below that of NSW, at $1.8 billion to $1.9 billion.

Queensland

QLD began p2023 by setting record highs in sales for October and November 2022, and just nudged a new record in February 2023. However, from June through to September 2023 the state has underperformed the previous period.

Again, to provide some perspective, sales for p2023 were up over 30% on those for p2019, increasing by $1.3 billion.

South Australia

Every single month of p2023 has seen SA set a new record for hardware retail sales, with September's increase of 9.2% over September 2022 only the fourth highest percentage gain for the period.

It's difficult to predict what December quarter of 2023 will bring, but it is likely to be over $500 million in total revenue. SA has been the state to most benefit in percentage terms from the COVID bump, with hardware sales up over 50% for p2023 against p2019.

Western Australia

Like SA, p2023 was a good year for WA hardware retail, with only April 2023 dipping below results for p2022, and every other month setting a new record for the state.

The overall COVID bump from p2019 to p2023 has been 39.5%.

Australian Capital Territory

Through until April 2023 performance for p2023 closely followed that of p2022, but since May 2023 the territory has outperformed the previous period. That culminated in a 10.4% lift for September 2023 over September 2022.

ACT saw a COVID bump of 45.7% from p2019 to p2023.

Tasmania

As we've started to fully cycle out of the data blackout that happened for the state during the COVID years, we can present at least the two post-COVID years.

As the chart indicates, p2023 followed p2022 very closely.

Northern Territory

NT also has enough data available to now present the two most recent periods.

In part due to its size, NT tends to be volatile in its results, but these do indicate that p2023 outperformed p2022 until July 2023, and has underperformed p2022 for all of the September quarter. However, that is in part due to an exception p2022.

Analysis

The primary fact to understand about the current Australian economy is that it is the intent of the Reserve Bank of Australia (RBA) to create conditions where Australians will spend less, especially on housing.

The overriding influence on the economy is a shortage of supply, which means that even moderately high demand can lead to inflation. As mentioned in our analysis of the ABS Producer Price Index numbers for construction, the ABS sees demand in construction for the September 2023 quarter as being split. While supplies used up until first fix have seen diminishing demand, and hence price reductions, second fix supplies continue to see high demand, and hence price increases. This would indicate that the RBA has started to achieve its goals.

Where HNN sees real concern for hardware retailers is in how the more DIY market plays out over December 2023 and March 2024 quarters. As we mentioned in our analysis of the DIY market, we've grown used to both analysts and corporate CEOs relying on a model that sees DIY pick up when house sales slow. There has always been some truth to that, but it has become an increasingly simplistic analysis as other factors come into play. It might have been a leading market modality back in 2018, but in 2023 and 2024 it is just one factor among equals.

One of those factors is that HNN is seeing increasing anecdotal evidence that DIY has become less popular. It seems to be moving to a more narrow focus. We do think one area that could see growth is in repair as opposed to improvement, with an increased willingness among homeowners to take on annual, seasonal tasks to ensure their homes stay in good shape.

All that said, it is true that Australia's hardware retail industry has managed to stay surprisingly robust and resilient through some quite turbulent economic times, as the chart indicates.

Even if revenues pull back to the levels of p2021, the industry will have retained much of the growth experienced during COVID. While that won't be good news for corporate hardware retailers, for independents there have been real gains in both market size and share. As we also expect to see the number of business exits from hardware retail increase through calendar 2024 (as owners seek to exit on a high), we see conditions continuing to improve for those independents.

The Australian Bureau of Statistics (ABS) has released its stats for the Producer Price Index (PPI) through to the September quarter of 2023. The ABS has recorded a zero percentage gain, after four years (16 quarters) of continuous increases going back to December quarter 2019.

Overall, the prices of "inputs" - such as construction materials - into house construction have flattened. However, this is something of a split situation, according to the ABS. With demand for new housing easing during the most recent quarter, prices have declines on materials used during the initial phase of construction, but those needed during second fix - such as paint - continue to trend high.

On the other side, output from house construction, labour costs continue to rise, and are the main reason why house construction prices rose by 1.0% for the quarter. For the four quarters to September 2023, prices rose by a cumulative 3.9%.

Category performance

We can roughly classify the construction material categories into four groups: where there has been a substantial price index fall to a level going back more than 12 months: where there is some price decline in the most recent 12 months; and where there is a near-flat or only very small increase in price; and where there is a substantial increase.

Overall, as the ABS states, there has been a near flat performance for September quarter 2023, as shown below:

We've chosen to break the data into periods from December quarter to September quarter not because it is seasonal (as with retail sales and building approvals), but because the 12-month-on-12-month comparisons make it easier to understand what's going on.

Substantial price falls

To start with the good news first, there have been substantial price falls in six categories:

ABS PPI for construction: Ceramic Tiles

Other Electrical Equipment

Reinforcing Steel

Steel Beams and Sections

Steel Products

Structural Timber

Mild price falls

Not quite as great, but still very encouraging, there are a further 10 categories which have undergone slight price falls and indicate in most cases a stabilising market. These categories are for:

Aluminium Windows & Doors

Carpet & Other Floor Coverings

Ceramic Sanitaryware

Electrical Cable & Conduit

Electrical Equipment

Fibrous Cement Products

Plywood & Board

Switches & Distribution Boards

Termite Barriers

Timber Board & Joinery

Stable prices

In this group are categories that were either flat, or had only mild deviations from flat, representing price stability. There are nine categories included:

Copper Pipes & Fittings

Cupboards & Built-in Furniture

Metal Garage Doors

Mirrors & Other Glass

Other Metal Products

Plumbing Products

Shower Screens

Timber Windows

Increasing prices

Then there are the 19 categories that did actually increase.

On 15 November 2023 both the Wesfarmers-owned Bunnings and Swedish furniture group IKEA announced they would no longer sell engineered quartz stone (EQS) products. This came in the wake of a report from Safe Work Australia which recommended a nation-wide ban on the product by early 2024. Unions have also been active in campaigning for such a ban.

This relates specifically to kitchen benchtops, where EQS is used as an artificial manufactured alternative to natural granite (and other stone). It has many advantages, in that it is both less expensive and requires only minimum maintenance.

The bans will be completely in place by the end of 2023, though it's likely the effective date will be earlier than that.

However, working with EQS without safety precautions and with a degree of carelessness can result in stonemasons contracting silicosis. This has been known for some time, but efforts to reduce exposure have proven ineffective.

While the debate over what to do with EQS had developed over more than the past two years, there remains a good deal of inaccurate information about both the product and its situation in Australia.

Silica and the problem with EQS

Perhaps one of the biggest problems with EQS is that the hunt for a more familiar analogue to the material and its problems have led people to compare it to asbestos - which it, pretty much, in no way really resembles. Equally, people seem very confused about what actually causes the danger with EQS.

The main difference between EQS and asbestos-based products is that there are no circumstances under which EQS becomes friable, and a source of simple contamination. In some forms asbestos crumbles to dust, and contamination can occur by simply moving the product around, or cutting a board product with a handsaw.

Where asbestos releases very fine fibres, the contamination by the silica in EQS is the result of very small particles. These particles are known as respirable crystalline silica (RCS). The only way of producing those particles is to work on the substance with some kind of power saw, drill or grinder. Having finished EQS benchtops in a house or commercial business produces zero risk in everyday use.

What is not broadly understood in the tradie community is that RCS is not the dust you see, but particles so small they are all but invisible. These particles really cannot be seen without some form of vision magnification, as they are much smaller than the diameter of a human hair. So if you are controlling only for visible dust in your work practices, you have somewhat missed the point.

In the realm of lung disease, the size of particles is measured in terms of the "Particle Matter" index (PMx). Larger particles in dust might have a PM of 100, and these are the ones that get stuck in your mouth and the top of your throat, and can be spat out. Particles with a PM of 10, will get down into your throat and the top of your lungs, and probably make you cough, until they are in your mouth and can also be spat out.

The ones that are of concern are those with a PM of less that four. These can go down all the way into your lungs, and are too small to make you cough. It is also the case that not all particles of the same size will behave the same way. Heavier particles will tend to fall to the ground, and lighter ones to float on air currents.

This is where the really bad news about RCS comes in: silica dioxide forms relatively low-density particles. Once they've been formed and released into the air, they are going to drift around for some time. If you want to read more details on this Microanalysis Australia - a commercial material analytics firm - has a very accessible guide at:

If you are looking for an analogy that works, you could think of RCS as being more like a poisonous, odourless gas that gets released whenever you work on tiles with a power tool. You're not going to see it, and it's not going to have an immediate effect, but cumulatively, over time, it could first disable you, then kill you. It really is that serious.

In its simpler form, silicosis is caused by the lungs trying to wrap the particles up so that they are harmless to the body. When the particles are some kind of bacteria this works great, as the bacteria eventually dies and breaks down, the threat is eliminated, and the inflammation goes away. Unfortunately, as the RCS particles are somewhat "unnatural" and cannot break down, their ongoing presence triggers an over-response, somewhat like an auto-immune disease, and that wrapping up becomes so widespread that it eventually destroys the lung.

In a more complex form, if the RCS particles are small enough, they can go deeper into the respiratory system and directly interfere with the way the lungs transfer oxygen to the blood. It is very, very unfortunate, but patients with this form of the disease literally suffocate.

There are also additional bodily functions that can be impaired. This can lead to cardiovascular diseases, as well as pulmonary tuberculosis, additional autoimmune diseases and kidney disorders.

It's also very unfortunately the case that once it gets started the process cannot be entirely reversed. That said, if silicosis is detected early enough, there are some treatments that can provide relief from silicosis symptoms. Whole lung lavage - effectively "washing out" the RCS particles from the lungs - was a treatment originally tried in China, and has now been further developed in Australia, with some apparent success (though longer-term benefits remain to be determined). More details of this are available at:

There has also been some success with various medications to help inhibit the inflammation.

At the moment the only known treatment for end-stage silicosis is a double-lung transplant, which is itself a difficult operation to undergo. The three-year survival rate for the surgery is around 76%, and typically life is extended for a total of another six to seven years.

Preventative measures

Again, unlike working with asbestos, actually preventing the spread of RCS when working with EQS is not all that difficult. In general, silica is hydrophilic (water-absorbing), as its surface typically has silanol groups on its surface - though it can be made hydrophobic through the use of additives. This means that techniques such as wet-saw cutting are highly effective in all but eliminating the risk from RCS.

In other words, it is possible to handle EQS safely, and the real failure has not been with the product itself, but rather with getting tradies to understand the risks and to alter their behaviour.

That failure really comes down to three different parties: the tradies themselves, the various WorkSafe entities around Australia, and the manufacturers of EQS. In a better situation, all three of these would have come together to find a solution. Instead, we've seen comparative inaction.

The real problem with this failure is that it indicates how broken safety systems in the construction industry really are. We don't know what new products and construction techniques will be developed over the next decade, but we do now know that the existing safety systems simply cannot cope with any complexity, and that links between manufacturers and safety organisations are precarious at best.

The second risk: tiles

One reason this systemic failure is so important is that there is a second front in the spread of silicosis through exposure to silica-rich products: tiles.

One marker of just how pervasive silicosis is now thought to be in tilers comes from WorkSafe Victoria. The following chart illustrates the increase in rates tilers are required to pay for coverage.

This chart shows the rates for tilers and stonemasons in the set of industry rates that are over 2.5%:

Tilers now have the second highest rate in Victoria - second only to stonemasons. WorkSafe Victoria has admitted this is mostly down to an increase in silicosis among tilers.

The big question with tilers is: why now? There has not been an introduction of a radical new product, such as EQS into the industry, so what has gone on?

It's also evident that the actual work safety practices of tilers have not deteriorated over the past five years or so (in fact, they've improved). Also, there have not been any radical innovations in how tiles are handled (except more wet saws, which is a good thing).

So we've been left with one central suspect for the increase in silicosis: the tiles themselves. Have the tiles in use in Australia somehow increased their concentration of silica to the point where the safety of tilers has been endangered?

One factor that indicates this may be the source of the problem is the commonly listed of ranges for silica content in tiles. The figures most often quoted for ceramic tiles is between 5% and 45%. That's one heck of a range. It would be evident that tiles with 5% of silica would pose a minimal risk, and those with 45% could pose a substantial risk for RCS. Less alarming, but still indefinite, porcelain tiles are typically listed as having a silica content between 15% and 25%.

If we wanted to get more definitive data on silica content, we would need the sales figures from at least Australia's top two tile retailers/wholesalers for each line of tiles, along with the silica content of each of those tile lines. We would need that data for 2010, 2015 and 2020. Then we could compare how what we might call the "tile demand silica loading" varied over time, and draw conclusions as to whether the exposure had shifted.

Unfortunately, though that data exists, there is no way we will ever get access to it. So, absent the perfect, "definitive" data, we need to see if we can develop some kind of "indicative" data in its place.

What we came up with was this: we started with the tile products listed by several of Australia's top tile retailers, and downloaded all of the available product data sheets (PDSs) from their websites for current products. Then we processed those PDFs to extract three pieces of data: the product name, country of origin and declared silica content (where listed).

What that provides us with is what we might call the "tile supply silica loading". There are a lot of caveats that come with this. It's likely that, as several tile suppliers were used, that some product lines will be repeated, with the same product being listed under different names. That could lead to over-representation of some tile lines.

The other glaring problem is that, without adequate weighting for the number of tiles actually sold and installed, we could uncover higher levels of silica in tiles that had low distribution, and were thus over-represented. That's a very real problem, but as it turns out the tiles with higher levels of silica fall into a group that is know to be widely popular.

The chart below shows two graphs. The doughnut graph on the left shows the proportion of tiles on sale by country of origin. The doughnut graph on the right shows the same data, but only for tiles with over 37% of silica content.

Not only is a substantial portion of the high-silica tiles sourced from China, but taking all the low-wage producing countries together, they account for 73% of all the high-silica tiles (Spain is also a major contributor).

So, one of the most likely scenarios is that, as tile imports from China - and other low-wage nations - radically increased from 2015 onwards, the tiles most tilers used in their daily work ended up increasing in silica content. That has meant that the safety practices most tilers learnt as apprentices prior to 2015 are simply no longer adequate for the materials they now work with.

Analysis

What the silicosis situation has done is to, once again, illustrate that the current relationships between industry, government bodies and unions representing trades is not in a good place. There has been a great deal of dithering over the past three to four years - while more tradies became ill with a disease that is not only devastating to the patients, but to their families as well.

The decision to ban EQS is being portrayed as being equivalent to banning asbestos, even though the two situations are widely different. The ban on EQS is very evidently about how dysfunctional the industry/government link has become. The real solution was to convince trades to follow basic safety precautions when working the EQS. That failed. That has left only the current draconian solution.

If there is a pathway back to a more sane situation, it may emerge out of the tile industry. There is no way to ban tiles, though there might be additional restrictions placed on tiles with more than 35% silica content. But overall the only solution is to mount an effective campaign that gets trades to better follow safe practices.

On 13 November 2023 Australian retail conglomerate Metcash announced it would acquire a further 15% of Total Tools Holdings (TTH) later in the month, bringing its stake to 100% in the trade tool retail franchise. The price ticket runs to $101.5 million.

This follows on from the initial acquisition of a 70% stake in December 2020 for $57 million, followed by an increase to 85% ownership near the start of FY2022/23 for $59.4 million.

The ASX announcement trumpeted the success of the operation:

The business has delivered remarkable growth with annual sales in the retail network almost doubling from $585m in FY20 to $1,085m in FY23. In addition to strong demand, the growth has been supported by an expansion of the retail store network from 81 to 112 stores, with plans to add around 10 stores a year for the foreseeable future.

Associated with this, the current CEO of TTH, Paul Dumbrell announced he will be leaving that role, which he has served since 2018, effective some time in April 2024.

Contrasts

The ongoing growth of TTH stands in stark contrast to the relatively slow growth of the Wesfarmers rival in the tradie tool market, Tool Kit Depot (TKD). This currently has only 16 stores nationwide, mostly in South Australia and Western Australia.

An article on News.com.au by Rebecca Le May quoted Ben McIntosh, chief operating officer, commercial at Bunnings, as setting out somewhat more ambitious plans back in December 2021.

Ms Le May reports that he laid out a plan to build a network of 75 stores around Australia. As TKD grew out of the acquisition of Adelaide Tools in 2019, 16 stores would seem to be a relatively slow pace of development.

Analysis

Perhaps the most amazing element of the competition for this market is that no competitor has thought to emulate the highly successful Kingfisher owned Screwfix, which originated in the UK. Screwfix began as a catalogue-based trade tool supplier, then moved online. It has expanded into physical retail stores, but some 60% of its orders still originate online.

What differentiates Screwfix from the online offerings of companies such as Total Tools is that it has moved to ultra-fast delivery, managing one-hour delivery times across 45% of the UK. For busy tradies on a worksite, it solves the supply problem when a job needs to be completed rapidly.

Wagga City councillors recently voted to reject Bunnings' proposed amendment to its $24.9 million development on the corner of the Sturt and Olympic Highways in Wagga Wagga (NSW), reports The Daily Advertiser.

The current approved plans for the 18,000sqm site allow customers to enter the site from Pearson Street and the Olympic Highway. But while customers may exit onto the Olympic Highway, council ruled light vehicles could not exit from Pearson Street when the development application (DA) was approved, citing "road safety and efficiency reasons".

Bunnings asked council to reconsider, to allow light vehicles to conduct left-turns only onto Pearson Street. It also called for an extension to the median strip along Pearson Street, which would inhibit drivers from turning right at the location. (See more at the link.)

Councillors rejected that option seven to one.

While councillors agreed more had to be done to fix looming traffic issues when the new Bunnings store is built, there was disagreement on the best way forward. Tabling an amendment to defer the decision, Cr Richard Foley sought to allow more time for consultation, but Cr Rod Kendall argued the request should be put to bed.

The meeting heard the council had received correspondence from Bunnings raising the prospect that if councillors deferred the amendment, the company would be open to negotiations. However, general manager Peter Thompson argued councillors could reject rather than defer Bunnings' DA request, a point backed by Cr Kendall.

Cr Kendall argued it was important "the traffic issues be addressed holistically once and for all before [the new Bunnings] is built". He said with traffic issues seemingly the "only sticking point", rejecting the request would clear the way for another solution to be found.

In its resolution against Bunnings' request, councillors also called on Mr Thompson to contact Bunnings and request discussions between it, council and Traffic for NSW. Cr Georgie Davies, who supported deferring, was the only councillor to vote against the final motion.

Wollongong

Sydney-based property development group, Level 33 has purchased adjoining sites in Wollongong (NSW) owned by Bunnings.

Level 33 was the successful purchaser of the former site of the North Wollongong Bunnings store, located at 73-75 Gipps Street. That 2.73-hectare site was listed for sale earlier this year, and sold for $40 million.

The Gipps Street site was sold by Perth-based company BWP Management Limited, the property trust which owns a number of Bunnings sites throughout Australia and is itself part owned by Bunnings' parent company Wesfarmers.

The property was bought by the Trust in 2003 for $12 million. In mid-2022, Bunnings indicated they would be vacating the store when the lease expired in early 2023.

BWP Management Limited managing director Mark Scatena said the Trust identified the best use for the site was high density residential redevelopment.

More recently, the 5152sqm site at 60-72 and 74 Flinders Street was for sale via an Expressions of Interest campaign. Level 33 purchased this site for an undisclosed price. CoreLogic records show the site was owned by Bunnings Properties Pty Ltd, according to the Illawarra Mercury.

Level 33 managing director Eddy Haddad told the Illawarra Mercury the plan had always been to purchase both sites. Mr Haddad said they had purchased the latest property to "connect it to our current site", in accordance with their plans for the Bunnings site, which were to create "a mixed use village".

It will expand on what we've currently got there... To build off the community we're looking to build on Gipps Street.

New Zealand

Bunnings' biggest store in New Zealand, located in Westgate and seen as one of Auckland's fastest growing regions, is for sale. Bunnings' second-largest New Zealand store in New Lynn, is also for sale.

Westgate

Located at 21-33 Fred Taylor Drive, Westgate, the building has 16,001sqm of gross lettable area on a 20,724sqm freehold site. The main retail area spans 9278sqm, while there is a 1876sqm timber yard, 1093sqm building materials yard and a 1133sqm crop cover nursery. It is zoned Business-Mixed Use under the Auckland Unitary Plan.

Surrounded by a host of national-brand tenants, the property is part of a prominent commercial development, which includes West Auckland's major retail and commercial hub and occupies a pivotal position in the heart of Westgate.

As an emerging metropolitan centre, it is set to become the primary destination for the surrounding community.

Next to the property, Universal Homes is actively developing 1400 homes with additional parks and walkways. Just 1km north a major development from the Hugh Green Group will cover approximately 256ha and include up to 8000 homes.

Directly north, the Sonn Group is embarking on the development of their 27ha site, where they plan to construct 1800 terraced homes and apartments.

New Lynn

The Bunnings store in New Lynn is situated on a 2.2ha site. The property features a net lettable area of 10,722sqm made up of a large-format store and associated facilities including retail, timber yard, garden area, cafe, offices, canopies and inward goods area.

The store services the high-growth catchment of New Lynn and was purpose-built for hardware retailer in 2014.

Bunnings New Lynn is being offered via an international expressions of interest campaign, closing on December 6, unless sold prior.

Mackenzies Home Timber and Hardware (HTH) has taken out the Independent Hardware Group (IHG) QLD Trade Centre of the Year award for the second time in five years. There were 149 HTH and Mitre 10 stores across QLD that were judged for this year's award.

Mackenzies general manager Cameron Quartermaine said the award is for the whole team. He told the Goondiwindi Argus:

It is fantastic to be recognised for the hard work every member of our team puts in to keep our store at the highest standard. It is a great representation of our community and highlights the community support we receive, and it also helps put Goondiwindi on the map.

This is the second time Mackenzies have won this award, winning it four years ago. It comes off the back on winning both the national Home Hardware Store of the Year and the Hardware Australia QLD Trade Store of the Year in 2022.

Dongara

The Dongara Mitre 10 business -not the land - is for sale. Trading as Dongara Building and Trade Supplies, it recently won IHG's best medium store in WA award for the second time in five years.

Located in the historic Dongara region known for its fishing, farming and tourism industries, the store offers a diverse range of hardware, building products and general trade supplies. According to the agent, Elders Real Estate:

Dongara Mitre 10 is a great opportunity to own an outstanding hardware business that provides a profitable return for its owners...The owners have operated the business for many years, and under their stewardship, it has flourished and shown increased profitability year-on-year.

Mount Gambier

Mitre 10's K and B Timber and Hardware store, located on the Jubilee Highway in Mount Gambier (SA), has opened its doors to customers.

Regional operations manager for the K and B Timber and Hardware Group, Bob Jones said he was thrilled the store was ready to go, and the new space allowed them to expand their services. He told The Border Watch:

We have a fantastic drive-through for builders, it's all undercover. [There's a] new outdoor area with our new stockists...

We have a vastly bigger improved garden centre and large outdoor offering, and the actual hardware itself is a far greater range than we've ever seen before.

The store is co-located with Total Tools, which has been open for several months.

Related

Dubbo

PETstock Country Dubbo is the latest to become part of the pet store group's 268-location portfolio. Husband and wife team Darren and Kristy Bayley are the managers behind the store.

Ms Bayley said the store has a wider range of products than what people would usually find in city stores, including a selection of premium dog food, horse food, good quality hay and horse riding apparel. She told the Daily Liberal and Macquarie Advocate:

It does have a little bit more of a country feel, we've got a lot more equine products and cattle product and feed out the back for the chooks and the sheep - a much larger range than the normal Petstock metro stores.

We want to work with our customers too, if they have a specific budget we can steer them in the direction of the best quality food for that budget, we're not here to upsell, it's all about the pets.

Related

A new fire-retardant paint, formulated by engineers at UNSW Sydney, has become the first to pass a rigorous Australian standard test that simulates a bushfire attack.

It has achieved the Bushfire Attack Level (BAL) 40 standard which assesses the bushfire resistance of buildings and construction materials. BAL-40 indicates that a building or material has been tested and approved to withstand higher levels of radiant heat (up to 40kW/m²) and ember attack during a bushfire, and therefore provides increased protection against bushfires in areas prone to extreme fire conditions.

To pass the BAL-40 test, an external windowed building facade was treated with the paint and exposed to the flame attack of a BAL-40 furnace for 10 minutes.

The facade consisted of timber weatherboard, specifically radiata pine which is the most combustible and commonly used timber in Australia. FSA FIRECOAT paint was applied as a primer and undercoat paint, before a standard commercial Dulux topcoat was added.

During the flame attack, the facade was monitored using thermocouples to test the internal and rear temperatures and to determine the ability of the UNSW-developed paint to protect the structural integrity of the building facade, as well as prevent the flames from spreading to the inside and rear of the facade over 60 minutes.

The paint succeeded in passing all six of the stringent criteria, the first time any paint has achieved the BAL-40 rating.

Professor Guan Yeoh, from UNSW's School of Mechanical and Manufacturing Engineering, led the team that spent nearly five years perfecting the formula to ensure the paint incorporates the best fire-retardant properties.

The resulting product is a type of intumescent paint which means it is designed to expand as a result of heat exposure.

The specific chemicals in the paint also produce a thick layer of char which offers an insulating barrier and effectively deflects the heat from the fire away. Prof. Yeoh is also director of the ARC Training Centre for Fire Retardant Materials and Safety Technologies at UNSW. He said:

The special additives we include in the paint mix formula promote the growth of the char, which is the important insulating element. The char is what helps the substrate, that is your house or your building, stay protected from the fire.

In the rigorous tests you can see this char being created, but at the end you can just wipe it away and the wood underneath has virtually no damage.

One major challenge for the research team was to ensure the all-important char, once produced, would not simply fall off vertical surfaces such as external walls. The char needed to remain firmly in place to continue to work as a fire barrier. Prof. Yeoh explains:

Forming a char on a horizontal surface is fine, but for this application we needed to include additives into the paint formula to ensure the char would also hold very well on vertical surfaces. Which is a challenge.

If it just falls off, that defeats the whole purpose. The char - which is basically pockets of air and carbon - can be more than 50mm thick, so retaining it in place can be tricky.

But it's so important because it's providing the insulation and preventing the penetration of the heat.

One of the big advantages of the new paint is that it does not need any special equipment to apply it, meaning it can be brushed or sprayed onto a variety of surfaces - including existing render, timber, aluminium, steel, concrete, plasterboard and brick - in the same way as normal paint.

The carbon ingredient means the FSA FIRECOAT product is only available in grey, but any standard coloured topcoat can be applied without affecting the fire-retardant properties.

Prof. Yeoh said the new fire-retardant paint could help prevent bushfires from spreading over a wider area, given the fact it protects buildings from burning down.

If a building is not protected in any way and it starts to burn then it can become a source of heat for the fire to continue, like a chain reaction. So we can say this paint assists in limiting the spread of bushfires because it prevents a building from igniting and therefore compounding the original fire.

Many people are saying that we are currently experiencing a dry season. But when it is a dry season, that often means that bushfires are just around the corner.

We wanted to push the boundary with this paint so we did tests on probably 200 different formulas in the first couple of years of research before we arrived at the best one.

That was using very high-grade materials, which would have made the paint too expensive to produce, so we then tested again with more commercially available ingredients to ensure we got the same performance in a final product that people can afford.

Tony Overstead from Flame Security International, which has secured an initial order from Bunnings to supply 80,000 litres of FSA FIRECOAT paint, said:

The release of this fully accredited BAL-40 rated fire retardant paint, we believe, will better protect buildings and other assets from direct exposure to flames and extreme radiant heat. This will make a significant difference not only to the cost of building in affected areas, but also the potential risks to life and property.

Flame Security International is pleased with the strong collaborative research partnership established and the safety products achieved through the support of the Cooperative Research Centre project (CRC-P) Round 5 grant with UNSW.