Big box update
Highest levels of satisfaction for Bunnings
Bunnings satisfies most customers, according to Roy Morgan
Bunnings satisfies most customers, according to Roy Morgan
 
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Bunnings attempts store in Coolum again, Baldivis staffing and Victor Harbor opening
HNN Sources
Bunnings satisfies most customers, according to Roy Morgan Research; Morgan Stanley believes a slowing housing market could hurt Bunnings; another push for a Bunnings store in Coolum (QLD); confirmation for Kingaroy (QLD) opening; expansion for Albany (WA) store; early 2019 launch date for Port Macquarie (NSW); staff restructuring at Baldivis (WA) outlet; employment offered at new Bunnings Caringbah; and Victor Harbor officially opens.
Bunnings "best performer" for customers

Research company Roy Morgan has found that in the 12 months to May 2018, 89.5% of hardware store customers were satisfied, an increase of 2.2% year on year. All other significant hardware retailers showed improvement with Bunnings up by 1.3% points to 89.8%.

These are the latest results from Roy Morgan's "Hardware Store Satisfaction Report" which is based on personal interviews conducted face-to-face with over 50,000 Australians per annum in their own homes. This includes over 9,000 interviews with people who have shopped in a hardware store in the last four weeks.

With eleven million people shopping at Bunnings in an average four week period, they are the dominant player in this market with around 95% of hardware shoppers and have the highest customer satisfaction with 89.8%, according to Roy Morgan.

Its research also revealed Bunnings had an increase of nearly 600,000 customers over the last year and were the only retailer to show an increase, apart from True Value Hardware (up by 1,000).

In second place for satisfaction was Home Timber & Hardware on 89.4% (up 1.5% for the year), followed by Mitre 10 with 88.1% (up 0.1%). These top three performers are only separated by 1.7% points and all remain well ahead of True Value Hardware on 79.3% (up 4.7% year on year). Industry communications director, Norman Morris, said:
Satisfaction levels with hardware stores is higher than most other retail categories and over the last year they are showing that they are continuing their customer focus, with all four of the majors showing improvement.
To date there has been limited competition from online players but our research shows that in an average four week period around a quarter of a million people purchase some hardware online. With increased competition from new players like Amazon, bricks and mortar hardware stores will need to focus even more on customers, particularly the advantage they are likely to have regarding their ability to provide personal advice.
Online visits

Inside Retail also recently published a list of the most visited Australian shopping websites, based on data from coupon site Cuponation. JB Hi-Fi topped the list with approximately 74 million local visits between January and June this year.

Bunnings came second with 68.82 million local visits to its website in the same six-month period, according to Cuponation.
Slower housing impact on Bunnings

Investment bank and financial services group, Morgan Stanley believes Bunnings may start to feel the negative impact of a cooling housing market as lending for renovations appears to have peaked.

Government data seems to indicate that as banks tighten lending, less people are looking to update the house for sale.

Fairfax reports Morgan Stanley analysts suggest that Bunnings' strong trading is likely to slow from the fourth quarter of 2018, based on lower auction clearance rates.

They said, however, that Bunnings' like-for-like sales growth could continue and margins increase as either the housing slowdown reverses or proves counter cyclical. People may not sell but decide to update the couch or kitchen. Analysts said in a report to clients:
We think a combination of tightening lending activity from the banks and home owners losing confidence in the housing market has led to the decline in lending for renovations.

The latest Corelogic data shows that auction clearance rates are down 15 percentage points year-on-year, to 53% in July. Morgan Stanley analysts said:
Whilst Bunnings' Australia and New Zealand like-for-like sales growth has held up so far, we think the second half of 2017 and the first half of the 2108 period was supported by the Masters exit and the third quarter of 2018 result looks to have been assisted 200-300 basis points by weather, meaning that underlying like-for-like sales may have been as low as 4.7%.

According to the latest Australian Bureau of Statistics (ABS) figures, in trend terms, lending for alterations and additions (renovations) of homes fell to 17-year lows of $310.8 million in May, down 22.6% from the most recent peak of $401.3 million in September last year. The annual decline of 19.9% was the lowest in seven and a half years.

Ryan Felsman, senior economist at CommSec, said Aussies had found it incredibly difficult to find a local tradie in recent years as the housing market was going gangbusters. He said:
However, a decline in home prices, particularly in Sydney and Melbourne, and tighter lending restrictions and anaemic wages growth appear to be impacting homeowners' views towards their castles.
In fact, homeowners appear to be less enthused about taking out a loan to renovate their abodes. Loans for renovations fell to 17-year lows in trend terms in May, suggesting that more people are shelving immediate plans to add extra rooms or revamp kitchens and bathrooms as the housing market slows in some cities and regions.

The ABS defines alterations and additions as all structural and non-structural changes which are integral to the functional and structural design of a dwelling. The ABS says examples are garages, carports, pergolas, roofing and re-cladding. But they do not include swimming pools, ongoing repairs, or maintenance and home improvements which do not involve building work. Morgan Stanley analysts said:
Historically, there has been some relationship between lending activity for this purpose and Bunnings Australia and New Zealand like-for-like sales growth, hence we think this is an indication of the headwinds Bunnings faces in the near term.
Bunnings pursues Coolum store

Despite being rejected multiple times, Bunnings is pushing on with its Coolum development, reports the Sunshine Coast Daily.

The big box retailer has said its warehouse, restaurant and servo could boost local employment. However some opponents have cited the project's size and visual amenity as reasons for blocking it.

Sunshine Coast Regional Council recommended rejecting the retailer's plans. So Bunnings went to the Planning and Environment Court in Brisbane.

Bunnings's barrister Danny Gore said the warehouse size differed in the company's two remaining proposals. He told the court one plan was for a 5850sqm warehouse. The other proposed warehouse was 8600sqm. The servo and restaurant were 300sqm each, in both plans.

Judge William Everson said it seemed "very unorthodox" for Bunnings not to have decided which proposal to advance.

"The barrister said although Bunnings had already decided to ditch one proposal, with the two surviving proposals "it really will depend on the way the evidence unfolds". Ultimately, differences between the two surviving plans would probably be "marginal" but that too might change, Mr Gore said. He also provided a traffic engineer's report.

Judge Everson said traffic and parking issues might differ. He told the court that all sides had to agree on what the bones of contention were.

The court was also told local businesspeople and residents, including parents of local schoolchildren, might give evidence.

Related:
Bunnings tries a second time to build in Coolum - HNN
Albany store will be bigger

A time frame on the planned expansion of Bunnings Albany is yet to be decided after a major development of the store was announced late last year.

The hardware retailer is expected to double in size and expand by 6000sqm into three lots but details of when the it will begin are not yet known. Bunnings property -general manager Andrew Marks told The West Australian:
The timing and details of the expansion works have not been finalised at this stage...

The planned development is the first major expansion since the store opened 18 years ago.
Kingaroy store start date

South Burnett Regional Council announced that the Bunnings store in Kingaroy should be open by Easter 2019. Councillor Terry Fleischfresser, who has been working with Bunnings' property development manager on bringing the new store to town, said this was a huge confidence boost for the region. He told the South Burnett Times:
The new Bunnings opening by Easter will create 40 new jobs for locals. There is currently a lot of development in the region which means a strong future for our business sectors.

Cr Fleischfresser said having big retail stores like Bunnings in the South Burnett allowed residents to keep their shopping dollars in the region.
No longer will locals drive to Toowoomba or Dalby (to shop at Bunnings), they can do all their shopping right here.

Construction on the store is expected to start soon.
Port Macquarie warehouse on schedule

Bunnings' state operations manager NSW north, Cheryl Williams, said the construction work on the $43 million, 18,000sqm Port Macquarie store is progressing as planned. It is expected to open its doors in early 2019. She told the Wauchope Gazette:
Once complete, the existing team will transfer to the new store and will be joined by more than 60 new team members. Stock from the existing site will be distributed to other Bunnings stores and racking will be recycled within the store network. Bunnings has been a part of the Port Macquarie community since 2003...
Baldivis staff changes

Bunnings in Baldivis, which employs 108 people, recently offered some of its team members several "employment options", including redeployment to other stores, reduced hours and suspension of work. State operations manager WA Hayley Coulsen said the decision was not taken lightly and Bunnings would continue to work to find the best solution for all team members. She told The West newspaper:
As with any of our new stores we review and adjust team resources as required, and this has been the case for our Baldivis store.
We recently offered some Baldivis team members several employment options, including redeployment to other stores where possible, reducing their contracted hours or suspension of their role with the understanding that as other positions become available within the Bunnings network, they would be offered these roles.
Team members who take up other roles will have the option of returning to Baldivis in the future...
Caringbah store staff search

The Bunnings store on Koonya Circuit at Caringbah (NSW) is due to open in November, providing120 employment opportunities for Sutherland Shire residents and school leavers.

Complex manager, Emily Sakalis, started her career at Bunnings 14 years ago and has previously held positions at stores across NSW. She told The Leader:
I was the complex manager for the old Caringbah Warehouse, and am excited about looking after this bigger and better store. The Bunnings culture is positive and supportive and we strive to bring an element of fun to every day. This is something I've always valued.

Celebrations for the opening of the Caringbah store are planned for later this year.
Victor Harbor opening

Local community groups were strongly represented at the official opening of Bunnings' $25.3million, 10,000sqm Victor Harbor store in South Australia.

Complex manager Danny Leach outlined the company's policy of a partnership theme - using the skills and materials of Bunnings to support the work of community groups. The store has been involved in Whalers Housing in both Goolwa and Victor Harbor, kids' breakfasts and gardening projects in local primary schools, providing recyclable timber for Encounter Centre and help for dugouts at the Breakers soccer field.

The star of the official opening was AFL legend Malcolm Blight who coached the Crows to two premierships and scored 786 goals during his AFL career.

Quizzed by 18-year-old Bunnings team member Tahnee Thatcher, Mr Blight chose two career highlights - one was playing with his mates in the local Woodville footy team while the other was taking out two premierships as coach of the Crows. He told a captive audience:
Football is a team game so success is shared. People are the common ingredient in success. If you act enthusiastic, then you will be enthusiastic!"
HNN Sources


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