Grant Crowle, hardware activist
The personal is political
Grant Crowle outside his hardware store
Grant Crowle outside his hardware store
 
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Grant believes better town planning is vital to helping small retailers do better, and to the creation of lively communities
HNN Sources
Grant Crowle first came to the attention of HNN through a series of irascible but oddly enjoyable emails about a Bunnings small format warehouse store that had been proposed in Balmain, a suburb of Sydney, NSW. The proposed store would be quite close to one of Grant's two hardware stores, which are evocatively titled "The Hardware Store".

It's not uncommon for HNN to receive emails and notes from hardware retailers who are concerned about what a nearby Bunnings could do to their businesses. Grant, however, had gone further than just complaining. He was, umm, in close personal touch with individuals who might have been responsible for putting up a protest sign on the proposed site - which was rapidly taken down.

As it turned out, the Balmain store is more than just your average Bunnings urban infill project. It's an entirely new style of building. Instead of the "crammed to the scuppers" design that has worked well in areas such as Melbourne's urban-edge semi-compact Collingwood Bunnings store, the Balmain project is much more a warehouse-style store scaled down. Among its unique features is an internal turntable, to enable delivery trucks to better navigate the urban traffic situation.

While the design is very interesting, it also has to be said that the way in which Bunnings has attempted to get around issues such as traffic congestion in this busy, wealthy, inner-urban Sydney suburb has been, well, somewhat "creative". And in one of those things "that just happen", this particular high-concept Bunnings store has found a worthy opponent in the person of Grant.

Though "opponent" is perhaps a little unfair. As our conversations on this topic have developed, what has emerged is the portrait of someone who is quite a deep thinker on urban issues. Grant's concerns are not just that a major competitor might move directly into a neighbourhood he has had to himself for some years. It's really that planning bodies and councils are, in his opinion, not really doing their jobs.

From Grant's point of view the Bunnings application does not go far enough in answering basic questions about issues such as traffic flow. While the turntable is an interesting innovation, it doesn't answer the key question of where delivery trucks will park while they wait to access the store. He also has a lot of questions about the application's modelling of general traffic flow. He says from what he has seen, the most recent application suggests that traffic flow will not increase, because they will be taking customers from businesses like his own. As Grant tells us, "A mate of mine who used to be a traffic engineer said he had never seen that argument used before."

Whether councils and city planners approve what he might call "dodgy" proposals from major retailers is one thing. Equally important is whether they are actively working to find and develop inner urban space for all the commercial enterprises that are vital to making an urban area "work". That includes large-scale retail, such as hardware stores and furniture shops, but also vital services such as automotive repair, air-conditioning servicing, and even light manufacturing. Grant's point is that all too often councils and planners will work diligently to help a major retailer move into an area, but knock back environmentally sensitive, well thought-out plans to integrate retail and services into residential areas.
History

Grant is typically succinct when asked about how he became a hardware retailer.
I was a boat builder and sailor. Then that industry got really hard by the late 80s and early 90s, so I thought I would buy a hardware store, as that would be so easy. [Grant grins.] Stupid man!
And now here I am 30 years later and I'm still trying to do it. I bought a store in Burwood (NSW) and the guy shafted me a little bit and we worked really hard at it but it was a tough environment. I ended up selling it to some guys and then I opened this store.
I knew the area. There used to be Brown's Hardware up the road which was quite successful, but was just too expensive. So we sort of brought a bit of Burwood pricing into Balmain. And gave people what they wanted. From the very first day the local community really supported us.
I was a local too in Balmain. I just lived down the road.

Balmain is, of course, an area of high property prices, with the average dwelling costing around $2 million. It's split about 50/50 in terms of renters and owners, and skews lower in the age range with under 39 year-olds dominating. It features considerable harbour frontage, and is located around 4km from the Sydney CBD.

Grant's store was at one time a factory for Leatherman tools, and later became a depot for Campbell's Soup trucks, before passing into the hands of the Sydney College of the Arts. It's a high-ceilinged space, but the overall floor space is relatively limited - typical of an inner-city hardware store in a high-growth area.

It's also one of those hardware stores where, through long years of hard experience, Grant and his team have managed to pack a lot of stock into the space.
I know that we stock probably four times the industry average, stock per metre. There is about $385,000 worth of stock here.

Grant is also very obviously someone who works hard at improving his stock position with brands, moving away from those that return smaller margins, or offer direct competition through distribution at Bunnings.
I was having a discussion with our Dulux rep the other day, and I showed him the figures going back five years, where we have basically reversed what we sell. We put Haymes in about five years ago, or probably less, and now we are doing around $140,000 with them a year. Previously, we were doing over $140,000 with Dulux, and now we are doing only $70,000. So I've grown the paint segment, but as I told the rep, the Dulux part of that has nearly halved.
We only have a little bit of the trade paint and will broaden it with Haymes; we are a Haymes trade depot. But it is really hard yakka in Sydney, it seems to be.
It just comes down to dollars. All major paint brands all make good paint for all different levels, for premium and for entry-level. It's horses for courses. Tradies who are coming in to do offices and that, we say don't buy a $200 can of 15 litre, we can sell you a $110 can, and it will last the two years it needs to last, until the next refurbishment.

In fact, Grant has been quite active when it comes to finding brands in paints, coatings and stains that work better with his store.
You may know Feast Watson, which makes Intergrain, are exclusive to Bunnings. That has caused a lot of friction in the industry. We've always been a large timber stockist because the local area has a lot of timber, so we had full shelves of Intergrain. We felt like telling them they can take them all and put them where the sun don't shine! [Laughter.] Instead, we decided to sell the stock off at a steep discount.
Orica wasn't happy with us, because we put it up on our website, "Return of sale because of exclusivity to the green shed". Anyway, the state manager rang up and said they wanted us to take that down. Feast Watson said, "Why are you doing that when we already offered to take the product back?" I replied that after supporting their brand for 30 years I felt that I could earn more money discounting it than receiving a credit.

Grant has replaced Intergrain with a range of alternative brands, including Haymes, Sikkens and Cutek. He says that as a result, the store did not see any drop off in sales revenue from that category. Grant is particularly enthusiastic about the Australian-made Cutek.
Cutek is the big mover with architects and specifiers. They buy the tin, and buy the stain, separately, so they can add it in themselves. So a landscaper will buy a big drum and he will pour out what he needs. Their cleaners are fantastic, great for stripping off products like Cabot's Aquadeck. These will actually strip it all off. They are amazing, they will keep working for a week.

While the store currently stocks Flexovit, Grant admits he wants to shift to Klingspor, but hasn't found time to make the necessary data changes in the POS system to accommodate that. Other suppliers have also lured him with special offers.
We've been buying a large amount of cutting wheels from Makita lately. They have set deals where you can buy 200 boxes of wheels and we can get a proper price. They have an unusual pricing system. There is a large disparity based on size of the order. There are not many incentives for small guys to push the brand because the next discount level is quite high. So that makes it really hard sometimes to achieve the sale because you are competing with someone who is on a better discount level.
It would be easier if the pricing was a flatter structure. I understand you are giving some of the big guys deals, but then the big guys can always shaft you. In general, though, I think Gavin [Keane] has done really well to get HBT on special prices with Makita and other suppliers, that's really helped.

While Grant is a strong fan of Makita power tool accessories, as with many smaller retailers, selling the actual power tools is another thing.
Makita are a good brand, they are a good tool. We're not too concerned about the sales volumes on the Makita tools. If we sold $50,000 worth of power tools for the year, we are selling $150,000 of accessories and accessories. The accessories are selling at 55% gross profit margin, and power tools are selling at 15% gross profit margin. The power tools themselves are there to say I sell power tools, and I sell accessories.

One of the tricks Grant uses to better utilise the small space to provide all that people need is to not take a "one of each" approach, but to rather carefully select which brands he does stock.
We have just about everything our customers need in the store. Well, it's what they need 90% of the time, and the other 10% of the time we will get it for them.
It is interesting, in the industry you used to get a "good, better, best" in the range. I've been with a focus group for quite a long time and we would go on store visits. Two of the stores we went to were Kents at Orange, and Camerons at Batemans Bay. Both are pretty good operations but a few of us said when we got there, what's with all these rows of silicone?
I said they are all different, but also they are all the same. At this store we decided over time that this kind of stocking was really a failure of the staff selling the product. They think they have to have several different brands to sell basically the same product. And that takes up a huge amount of space.
For example, we are selling the HBT brand of silicone, which is 100% silicon for $3.99 a cartridge. So there's no real need to buy the cheap stuff. The funny thing with that, we sell Soudal, we've got a roofer that buys boxes off us, and we gave him the HBT one and we said it's the same thing, and he said to us, no it's not. So I asked Soudal, can you 100% guarantee me that it's the same? They said it's 100% the same. But the roofer said, "I'm still not sure..."
When we were at other stores, for the study group, they told us, 'We understand your problems with space'. I told them, guys, you have no idea. I pointed out to them that they were using space for no real reason. The shops looks really smart from the outside, but when you get in them and you look at them the way we do, quite critically, all of a sudden we found stock hidden behind doors, stairwells. There were trowels and boxes of tiles, etc.
And then the paint department, it was one-deep and had the same product displayed four times. But all the paint accessories were at the back of the store. We asked why are they out there? Our trays and brushes are directly opposite the paint cans. That's the best way to pick up additional sales.

A little surprising for overbuilt Balmain, Grant says the store does a good trade in gardening products as well.
People are amazed at how well we do with gardening products here but people in Balmain have smart little gardens. We've had two local gardening stores close down recently, but we go through a tremendous amount of potting mix, and stuff like that. But we don't sell anything that's alive - no plants. That's dead stock - literally! We used to stock seeds a long time ago but that was such a nightmare. The reps needed to change the packets due to the expiry dates. We eventually just said, forget it, it's too hard.

There are some products that Grant has an obvious liking for, which he gets a great response for from customers as well. Walking down one aisle, he grabs a big bushy broom off the rack, and holds it up to us to smell.
Hand-made brooms made in Australia. Smells like hay, made from millet. From Tumut. We sell six to seven at a time to people at Christmas, They are the biggest selling thing so far on our website at the moment. So we like putting the Sabco next to it, which isn't a bad brand, at $25, but people still like to buy handmade brooms for $70. I make people smell them before they buy them!

Grant is also serious about ecommerce, and has developed his own website. As everyone does, he's had a few issues with this. Some of those issues are major, but others are small and annoying. For example, while Grant is a great supporter of Haymes paints, he's had real problems just getting images from them to use on the website, while companies such as Dulux are keen to help him out.

Grant admits that some of the numbers when it comes to ecommerce for smaller stores may not work out all that well, but the issue is larger than only profit.
I don't think [ecommerce] is hugely viable to a large degree, but I think it's a leakage issue. For example, one of our issues is the amount of people who buy Velux [skylights] online, and Velux don't give those guys the same deal we get, because we are a stockist, we display the product etc, but the margins are so slim it doesn't matter. It's a bit like selling power tools. It doesn't matter if you're not making anything on it as long as you're selling it. So it's about leakage, about stopping people going elsewhere.
We said to Velux we need a flat 12.5% across the board otherwise it's not viable having it on the website. Velux are the best company to deal with in the industry. Their margin for stuff-ups is like 0.02%. In 15 years of dealing with them they've only stuffed up about four jobs. It doesn't happen very often. But they are very disciplined. People ring up and say but I want to get some Velux product today. Well, it just doesn't happen. [Laughter.] You have to wait like everyone else.

While the website might not directly supply much profit, Grant sees it as helping to develop a lot of secondary business as well.
People have been contacting us through the website and we've had a couple of really good jobs from Spantech out of it, like $2500 worth of posts and steel beams.
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HI News Vol.4 No.2: The hardware activist
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