Retail update

Vadoulis Garden Centre closure

Fletcher Building is understood to have launched the sale process for its plumbing supplies business Tradelink: report

Milton Vadoulis, owner of Vadoulis Garden Centre, recently announced on social media that his Gawler-based garden centre in South Australia is shutting down for good. In the Messenger-Eastern Courier, he said:

After 64 years, three generations and two sites, it is with a heavy heart and mixed emotions that I have to announce the closure of our Gawler operation.
I'd like to thank you, all our beautiful loyal customers, our fantastic staff and wonderful suppliers for a great journey and wonderful memories.
For me personally, after running the business for 47 years, it is time to hang up my secateurs.

Vadoulis Garden Centre has been in operation since 1960 and a fixture in the local community since 1969 after growing too large for its original Barossa location. The 4000sqm site is stocked with a range of plants, outdoor furniture, giftware, books and jewellery and has been staffed by a team of 15 full-time and casual workers.

The social media post received hundreds of likes since it went live, with customers and other businesses offering words of support and sharing their sadness at the community's loss. Amanda from Barrow and Bench Mitre 10 wrote:

You should be proud of the welcoming garden retail experience you created over many years Milton.

McCourts Garden Centre described Mr Vadoulis as "a leading light in our industry and inspired and mentored our business from when we started 26 years ago".

Mr Vadoulis is regarded as Gawler's unofficial mayor and said "red tape" behind the scenes of the business was becoming impossible to keep up with. He told the Messenger-Eastern Courier:

It's very difficult to run a business currently ... all businesses like myself, small businesses, not garden centres, we're always saying 'the red tape is killing us'. Everyone says, 'yeah, yeah, yeah' but then they keep putting more and more on us, it's just the reality.
It's just too hard, I think that we will be lucky to have a small business around in five years, because they're just putting too much compliance and red tape in front of us all the time.

Mr Vadoulis didn't dispute that rules relating to health and safety were important but said the vast difference between large businesses and small ones made it hard to cope. He said:

If you're a big multinational, you've got a department that can handle that, but you know, a small-business person is sitting around a kitchen table trying to sort all these papers.

Mr Vadoulis said many of his friends in business were experiencing the same difficulties, with some already closing and others considering the "emotional" choice.

I think in the next year, maybe even 18 months there is going to be a lot go through (closure), and there is many reasons for that, but the main one - it's just too hard. And it's a shame ... I mean we have been here 64 years, we're in the third generation.

Choosing to close affects owners, staff who lose their jobs as well as loyal customers. Mr Vadoulis said:

I've had customers coming in [since the announcement] and hugging me and crying every couple of minutes, saying 'Where am I going to go now?'
When I closed up last night, I walked through and shed a tear because it's what you've worked your whole life for - and it's disappearing before your eyes. Unfortunately, I doubt very much that another garden centre would take over from us in Gawler, who knows, but in my experience it won't happen.

The centre is running a closing-down sale and offering product discounts, while the cafe will continue to operate as usual until June 30.

Tradelink

It is understood information memorandums have been sent out by Miles Advisory which has been hired to sell the Tradelink business by New Zealand-based owner Fletcher Building, according to a report in The Australian.

Tradelink has over 100 showrooms and more than 230 branches across the country, supplying products such as vanities, bathrooms, toilets fixtures and fittings for bathrooms, kitchen and laundries.

It is valued at about NZD150 million, but some in the market say it could possibly sell for more, with such businesses selling for seven to eight times their annual earnings before interest and tax. Yet NZD122 million was wiped off its carrying value in February this year.

One prospect which could be pitched to prospective buyers is the opportunity to gain a distribution network where sites could be repurposed.

The view is that Metcash will take a look, with the business potentially a good fit with its hardware division including Total Tools and Mitre 10 stores. It is understood industry groups Reece and GWA have already passed on the Tradelink opportunity. But it is believed both trade groups and private equity firms have already expressed interest.

Related

Tradelink up for sale - HNN Flash, April 2024
  • Sources: Messenger-Eastern Courier and The Australian
  • retailers

    Retail update

    Envy Lawn Garden Legend

    Positioned as a premium lawn and garden care retailer, the North Queensland store recently opened to cater for "grass fanatics"

    Envy is a concept store, owned and operated by Zac Holm, a Townsville-based golf course greenkeeper turned store manager who has extensive expertise and passion for outdoor spaces. He is supported by an agronomist (lawn scientist) and a groundskeeper for Queensland Country Bank Stadium.

    Mr Holm said the store caters for "lawn fanatics", along with those wanting to take lawn care more seriously, often inspired by a neighbour's lawn. He told the Townsville Bulletin:

    [We offer] products and services where people can come see, touch, feel the different varieties of grass, and also use the equipment that we've got for sale, and see the different fertilisers that we have.
    It's a premium store for lawn and garden care, at the other end of the spectrum from Bunnings.

    The business's own-label fertiliser has been popular in preparation for the cooler months. Mr Holm said:

    {We have} a lot of knowledge, paired with commercial grade products (and equipment) aimed at the retail market.

    The Envy store is one of the first tenants in a newly constructed shed featuring an industrial exterior and retail interior. RWC Townsville leasing agent Troy Townsend was excited about the new addition to Townsville's retail landscape. He said:

    Envy brings a unique offering to our community, filling a gap for premium lawn and garden care needs.

    Ray White Commercial (RWC) Townsville director Stacie Stockham said Envy Lawn purchased 336-342 Ingham Road, Garbutt in October 2022 before local builder Paul Raiteri of Raiteri Constructions carried out extensive upgrades. It has signed a five-year lease.

  • Source: Townsville Bulletin
  • retailers

    USA update: Costello's Ace Hardware

    Generational leadership

    The family-owned hardware retail business has grown from a single hardware store to a network of 48 locations across five states: New York, New Jersey, Maryland, Pennsylvania, and Virginia

    The company's success began with the sheer determination and passion of founder, Vincent Costello. Having been forced to close his air conditioning business during the oil price recession in the 1970s, Vincent was presented with an opportunity to take over ownership of a small, fledgling hardware store in Deer Park, a suburb on Long Island in New York. With ten children to provide for, he took the risk, despite the challenges of the economy and having no previous retail experience. Michael Costello, Vincent's son, and current CEO, told Store Merchandiser magazine:

    It was his strong values and hard work that guided him through the years that followed. Over the course of five years, he transformed that 2300-square-foot store from dismal sales to a thriving location that offered extraordinary customer service. He was a genuine problem solver and 'people person', always advocating for the customer and helping them in whatever ways he thought best. There was an era of consistency about my dad. He was great at building strong and trusting relationships, which led to an incredible alignment between him, customers, vendors, local businesses, and the community.
    Dad was driven by the idea of growth, both personally and for the business. He was compelled to make himself smarter every day by taking risks and learning from mistakes, as he knew that growing the business relied on the personal growth of himself and his employees. He built a rapport with his landlord, who then acquired another commercial building and offered him the chance to open another location.
    By refinancing his home, he opened the second store, a 5000-square-foot industrial space, in 1982. The same thing happened for our third and fourth stores too, as the landlord developed shopping centres in the little-known town of Nesconset, and then Farmingdale. We were not well-funded back then. Success came through hard work, patience, and doing more with less. Eventually it paid off, which fuelled further growth into larger outlets.
    Aside from stores, a major turning point in our history occurred when we became Ace Hardware (Ace) retailers, which was in the early 1980s as we were opening the second store. The partnership had multiple benefits, as being associated with a successful brand gave us instant credibility, lower cost of goods, and freed my dad from the heavy demands of product sourcing, which freed up time for him to do what he enjoyed - helping customers. Also, while Ace was well-known in other parts of the country, ours was only one of two stores on Long Island at the time, so our partnership had opportunities for mutual growth.

    Michael has learned first-hand from his father. He said:

    I was just ten years old when my dad took over the first store, so although I was too young to work, I hung around - probably causing a nuisance - and helped out where I could with cleaning and putting away stock. I spent a good chunk of my childhood like this, which looking back, gave me an opportunity to learn from scratch and has shaped how I lead the business today.
    I have nine siblings in total, with six of us currently involved in the business. My three older siblings had already established their careers or were at college by the time our dad had taken over the first store, so they didn't have the same opportunity to get involved as some of us younger siblings did. With our dad's support and guidance, myself and my siblings, Michael, Jaime, Tim, Dan, Joey, and Bobby, became owners in 2001, opening a 24,000-square-foot home centre, our largest store to date. We have maintained our leadership structure since his passing almost eight years ago.
    We are all equal owners and are all active in the day-to-day operations of the business. My sister is our president, my brothers occupy the roles of marketing director, merchandising specialist, district operations director, and IT director. We also have some from the next generation involved too, not in leadership roles just yet, but learning the ropes from their parents as we did from ours.

    New growth

    While Michael, Jaime, Tim, Dan, Joey, and Bobby have retained their father's hunger for growth, they have changed the company's approach to opening new stores.

    Our early growth has historically been ground-up stores, or in other words, leasing an empty building and building a team from nothing. This was fuelled by population growth and changes in competition, which led to the demise of many regional home centre brands.
    However, there aren't nearly as many open markets in the areas we operate, so we have shifted our focus over the past ten years more towards acquisitions of existing stores. Growth through acquisition serves us in two ways. Firstly, it decreases risk. We are not starting from the ground, we have a team, a customer base, and history, as in many cases we are acquiring businesses that have been around longer than we have.
    Secondly, we get to provide a succession plan for a business that doesn't yet have one, which provides our business with a strong social purpose. We are passionate about helping fellow small business owners in our industry, and we want to continue the legacy they have worked so hard to create, supporting the local community and economy.
    We recently acquired Smith's Ace Hardware (Smith's), which saw us take on an additional five Ace stores in New Jersey and Pennsylvania. This was our largest acquisition to date, but it was a successful transition. As Smith's already operated Ace stores, we had many similarities like using the same computer platform and technology, which allowed for seamless integration...

    The conversation turns to the current activities of Costello's Ace and how Michael is planning to take the business to further heights of success. He said:

    We're currently in the process of relocating one of our stores, as well as building a new site from the ground up in New Jersey. There are a lot of moving parts and we're also preparing to announce another New Jersey acquisition, which is super exciting.
    Our growth has historically been one step at a time, so there are always ongoing conversations about growth, whether through additional stores or acquisitions. We have ambitious plans to double the business over the next five years and grow our family to more than 75 stores by 2030 while developing a world-class team and maintaining the high level of customer care we have become known for.

    Visit the website here:

    Costello's Ace
  • Source: Retail Merchandiser
  • retailers

    USA update: Loud Mouth Barbeque

    Ace Hardware home brand

    The hardware retail co-op has launched a line of BBQ sauces and seasonings as part of its aim to be the "BBQ destination in all neighbourhoods"

    Ace Hardware's range of private label Loud Mouth[tm] BBQ sauces and rubs is designed to give the hardware retail group's members a proprietary assortment that enhances their product mix in this category.

    They were developed exclusively for Ace retailers and takes its private label product development efforts in a new direction. Brian Wiborg, senior vice president of merchandising for Ace Hardware, said:

    [We're] not just introducing a new product - we're igniting a flavour revolution in the world of BBQ ... Our decision to develop Loud Mouth Barbeque was reinforced by the desire for bold, high-quality BBQ products at an affordable price point.

    The assortment includes Boom Shaka-Laka - Apple Habanero BBQ Sauce, Kaa-Blamo! - Hot n' Spicy BBQ Sauce, That's Poppin' - Savory Blend Rub, Mmmm Baby! - All Purpose Rub, Whoa There! - Smokey Sweet Rub, Uhh-Huh! - Hot n' Sweet Rub, and Zowie! - Hot n' Spicy Rub.

    Melanie Hill, director of advanced concepts and retail innovation at Ace Hardware spoke with Store Brands about the development the range.

    Ms Hill said that the job of her team is to think ways of amplifying the Ace brand to build demand and loyalty among consumers. Knowing that Ace is established as a destination for barbecue products, the retailer already carries a lot of top brands but the team were aware that its lineup was ready for something new and "fun". It is always looking for new ways in which Ace can create differentiated and exclusive products.

    Ms Hill explained it was a collaborative effort across the company. She said:

    Legal helped us with trademarking, our IP and creative teams worked to create the brand, and our marketing team has put together a really awesome launch plan. We took great care to make sure that we included consumer insights by doing taste tests and 'shop alongs' with customers. We partnered with Old World Spice as our vendor that created the product line. They worked with us to make sure the flavour profiles and the formulations would be products everyone would enjoy.

    In terms of coming up with the name "Loud Mouth", Ms Hill said Ace wanted a brand that expressed the idea that barbecue is fun and associated being loud with it. The name tapped into the insight that good food can make you want to get loud, and it wanted the brand to have a little bit of attitude and excitement. She adds:

    That's what barbecue is all about. You're grilling for family and friends, you're outdoors having a great time.

    The Loud Mouth products will be carried in the Ace Hardware warehouse so retailers can select what they need as they need it.

    In-store, Ace has created eye-catching point of sale signage that allows consumers to see and experience something new and see what's different about Loud Mouth. It is also doing email marketing, social media, digital marketing and direct-mail pieces to our customers. There will also be demonstrating and grilling with the products as part of Ace's 100th anniversary block party celebration.

  • Sources: Ace Hardware and Store Brands
  • retailers

    Retail update

    Hammonds Paints reaches major milestone

    It was established when the population numbered just a few thousand in Warrnambool (VIC), then a fledgling settlement and still nine years from being officially proclaimed a town

    This year, Warrnambool-based Hammonds Paints, marks 150 years of continuous trading by a family now in its fifth generation. Managing director Nick Rule is justifiably proud of the business founded by his great-great grandfather Joseph Charles Hammond in 1874.

    It held a function in early April at Warrnambool racecourse for hundreds of former and present staff and their families to celebrate its long-standing success, according to The Warrnambool Standard. Mr Rule has overseen the business for nearly 30 years, taking over in 1995 from his father John Rule whose own tenure spanned 44 years. He said:

    We really wanted to acknowledge the achievement with all our staff. It's rare that we all get together.

    There are approximately 50 employees and contractors working across Hammonds Paints' five branches located in Warrnambool, Portland, Hamilton, Ballarat and Colac, in regional Victoria. Mr Rule said:

    All businesses are reliant on their staff and staff are reliant on businesses for their livelihood. You put a lot of trust into your staff and they respond. It's a two-way street and it works. I really care about our staff and in return they care about our business. We have had so many people who've worked for us for 30 to 40 years.

    The resulting wealth of knowledge and experience after so many years has been the linchpin of Hammonds' well-known marketing slogan: "Should've gone to Hammonds".

    Coined by advertising creative Marcus Tarrant in 1998 as part of a rebranding, it's a simple message, said Mr Rule, but one that encapsulates the Hammonds' point of difference. He explains:

    All of our marketing is centred on the fact that we are an independent paint specialist, as opposed to a mass merchant. We trade on having the right staff and expertise, not on a price point. We haven't waivered from it, we haven't altered the message. It gives the business an identity.

    It has also helped the business to survive in a dramatically changed retail landscape, he said, referring to the advent of big box retailer Bunnings. Mr Rule said:

    When I first started in Warrnambool there were 11 or 12 paint outlets in town. Bunnings has had a massive impact. We are now the only dedicated paint store in town.

    These days, Hammonds' market is split 60:40 between decorating (trade and DIY shoppers), automotive and industrial.

    Catering to the home building market, it is also the district's biggest painting contractor of large commercial works such as schools, factories, offices, hospitals, theatres and law courts. He said:

    Warrnambool has been pretty lucky over the last 30 years. We have a strong economy and there have always been some reasonable-sized construction jobs on the go.

    Mr Rule also stressed that a healthy automotive sector is vital to underpinning the business.

    History

    In 1874, the business was known as Hammond & Sons, providing signwriting, painting and decorating services. Thomas Samuel Hammond was the next in line, taking the reins after founder Joseph's death in 1932, before third generation Frank stepped up in 1945 for the post-war period.

    With Frank's health failing, the call went out to his 19-year-old nephew John Rule who was then in Melbourne studying accounting and doing an internship with Dunlop. Frank's sister, John's mother Grace and a cousin took over book-keeping duties.

    Returning to Warrnambool to take on the role in 1951, John came into a business that was primarily a paint contractor. In the pre-DIY days, retail trade was minimal. Now 92, John recalls the shop back then as "basic". He told The Warrnambool Standard:

    Dirt floors and lined with bales and bales of wallpaper and lining paper. There were also gallons of Rickshaw Red roof paint, made in Scotland, it was the best roof paint you could get then.

    Glazing and picture framing were also services provided by the business, both of which were later sold off.

    Paint was made from white lead, with colour choices limited to "PWD brown which was used on all the public works department buildings, a dark green, a white and a black. That was it," said John Rule.

    When Hammonds secured the distribution rights for a plastic paint called Spread Satin a few years later, it became a game-changer for the business and the start of a booming retail trade. John Rule recalls:

    Because it was cleaner and easier to use, this really unleashed the DIY sector. Soon after they launched rollercoaters, another boon for the DIY sector and Hammonds were early adopters.

    Expansion followed with stores opening in Portland in 1974 and Hamilton in 1988. When John's son Nick and wife Fiona took over the business in 1995, Hammond & Sons became Hammonds Paints and technology was rapidly changing the way the business operated.

    The business widened its reach with the addition of stores in Swan Hill, which has since been sold, Ballarat in 2014, and most recently, the Rules' son Jeremy has joined his father in a Haymes Paints franchise in Colac.

    While he's happy to have his son on board, Nick Rule said there's no pressure on any of his three children to continue the Hammonds family dynasty. And he is not planning on stepping away from the business just yet.

    The business is solid and from a management perspective, I'm happy to continue on. I love coming to work.
  • Source: The Warrnambool Standard
  • retailers

    Hardware retail update

    EW Bulte under new ownership

    Sunshine Mitre 10 in Maleny (QLD) court case win and a Home Hardware store is closing for the final time

    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.
  • Sources: Wimmera Mail - Times, Sunshine Coast Daily and St. George and Sutherland Shire Leader
  • retailers

    Hardware retail: Delivery partnerships

    Bowens partners with Uber

    In the US, online ordering platform DoorDash has added Lowe's as first home improvement retail partner

    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

    Bowens has an ecommerce plan - HNN Flash, August 2021

    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.
    retailers

    Retail update

    Hastings Co-op store closures

    Tool Kit Depot is building its first Tasmanian store and Tradelink up for sale

    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

    Hastings Co-op has a new CEO - HNN Flash, April 2023

    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

    Tradelink put on notice by Fletcher? - HI News, November 2016
  • Sources: Port Macquarie News, The Examiner and The Australian
  • retailers

    Retail update

    Beaumonts opens in new locations

    Design 10 studio at Dubbo Mitre 10 and Adelaide's Bianco Construction & Industrial Supplies has been sold to Metcash in a $82.2 million deal

    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

    Beaumonts joins Bunnings, consolidates the tile industry further - Tile Today, September 2021

    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

    Petrie's Mitre 10 officially opened its new drive through trade centre - HNN Flash, September 2022

    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.

  • Sources: Dubbo Photo News, The Australian, Adelaide Advertiser and InDaily
  • retailers

    Hardware retail update

    Penhalluriack's up for sale

    A move for Ingram's Home Hardware; Astley's Plumbing and Hardware relocates; Emerald Mitre 10 expansion; and Pontings Mitre 10 marked its centenary

    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

    Ingram's Home Hardware uses Tesla Powerwalls and builds large shed - HNN Flash, May 2022

    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

    Pontings Mitre 10 to expand - HNN Flash, April 2021
  • Sources: Australian Broadcasting Corporation, Messenger-Hills News, Daily Liberal and Macquarie Advocate, CQ Today and The Warrnambool Standard
  • retailers

    Retail update: Tools

    Gympie to get a Sydney Tools store

    Richard Murray, former chief executive of JB Hi-Fi and Premier Investments, was announced as the new CEO of Total Tools

    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

    Sydney Tools store proposed for Kensington, QLD - HNN Flash, June 2021

    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.

  • Sources: The Gympie Times, The West Australian, The Australian Financial Review and The Australian
  • retailers

    Retail update

    Mackenzies Home Timber and Hardware wins QLD award

    Dongara Mitre 10 is for sale after winning a WA award and K and B Timber and Hardware in Mt Gambier (SA) has opened its doors. PETstock also welcomes customers in Dubbo (NSW).

    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

    New location for Mitre 10 Mount Gambier and Total Tools - March 2023

    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

    Pet supplies store to change hands - HNN Flash, November 2022
  • Sources: Goondiwindi Argus, Farm Weekly, The Border Watch, and Daily Liberal and Macquarie Advocate
  • retailers

    Retail update

    Sydney Tools store in Kalgoorlie-Boulder, WA

    Haymes Paint stores open in Devonport (TAS) and Rosebud (VIC), and Hollimans Mitre 10 owner looks to build housing

    Sydney Tools has opened a branch in Kalgoorlie-Boulder, a city in the Goldfields-Esperance region of WA, around 595km northeast of Perth. The outlet is the retailer's 83rd Australian store and its only WA location outside of Perth. Operations manager Anthony Elias told the Kalgoorlie Miner:

    We stock a range of products which will see the local tradies and the DIY person have a one-stop shop in town. What they won't have seen in Kalgoorlie before is the range that's actually carried in the store.
    We're hoping that we will have a trade with mining companies or construction companies ... that are looking for quality products and accessibility of those product pretty quickly.

    Mr Elias also said the Kalgoorlie-Boulder store experienced an "exceptional" response to their grand opening.

    Based on our initial opening, it suggests that the town's been hanging out for it because we've had very good (trade) over the first couple of days.

    HR business partner Christopher Huntington said the Kalgoorlie-Boulder outlet currently employs 10 local staff.

    We've been able to acquire some great talent from the local area of Kalgoorlie which is great. We've got established people who already know the market, we haven't brought in outsiders.

    The Sydney Tools can be found at Tenancy 2/141 Boulder Road, Kalgoorlie-Boulder (WA).

    Haymes Paint

    The network of Haymes Paint shops has expanded with store openings in Devonport (TAS) and Rosebud (VIC). Both stores marked the occasions with special promotions, free coffee and big breakfast BBQs for customers. Devonport store manager Lauren Phillips said:

    I'm really delighted to be leading the team in Devonport. I love the mix of trade and retail customers that visit the store - no one day is the same. I'm passionate about colour and I enjoy inspiring customers to work with bright bold colours. My own home features red, black and white!

    The Rosebud store became part of the Haymes Paint retail network earlier this year. While the local community may notice a name change to the shop, previous owner and manager Tracey O'Shanassy has remained. With over 30 years of experience and a fascination with colour, Tracey is dedicated to giving customers outstanding service and expert guidance. She said:

    The transition to Haymes Paint Shop has been very smooth. I am proud to work with such a dedicated and enthusiastic team.

    Rosebud store manager, Tim Nichols, said:

    Our store opening has been incredibly fulfilling. Overseeing our wonderful team here in Rosebud as we work to achieve the goals we've set is truly gratifying. We look forward to welcoming the Rosebud community to our grand opening events.
    Paint has been an integral part of my career thus far, so joining a business with proud family values like Haymes Paint makes a lot of sense. I love helping customers make the right colour and product decisions and it's fantastic when they come back and tell you it looks great!

    Hollimans

    Charters Towers business Hollimans Group in regional Queensland has successfully sought approval from the Flinders Shire Council for residential blocks in nearby Hughenden.

    The company - which owns Hollimans Rural Mitre 10 and Hollimans Home Timber and Hardware - has formally expressed an interest in purchasing 22 blocks on which to place two and three-bedroom transportable houses.

    Hollimans managing director Ben North said the housing initiative was part of its strategy for business expansion in Hughenden and stable, good-quality housing was crucial to gaining and retaining staff.

    So far, Hollimans has identified 12 adjoining blocks of interest. However, purchasing blocks directly from a council and bypassing the auction and tender process requires ministerial approval.

    Flinders Shire councillors agreed to seek this ministerial approval at a council meeting in September. The council report noted:

    Employee housing is in short supply in Hughenden, but there is significant stock of vacant residential blocks. The provision of employee housing is crucial to the realisation of council's economic development plan.

    Councillors voted unanimously to seek a ministerial exemption for the direct sale of land to Hollimans. The sale will need to follow certain conditions, including the land being valued by an independent valuer to decide the sale price, and for council to retain a buyback provision in the event that residential development is not commenced within a time period "acceptable to council".

    Hollimans also owns Viper Water Solutions, Hollimans Transport (Weston's Transport), Wide Span Sheds, Pioneer Water Tanks and GoWild Outdoors (formerly Hollimans Gun Shop).

  • Additional sources: Kalgoorlie Miner and Townsville Bulletin
  • retailers

    USA update

    Ace Hardware experiences cyberattack

    The cyberattack crippled the hardware retail group's internal systems, resulting in shipment delays, and suspended online orders

    Ace Hardware's IT systems including 196 servers and more than 1,000 network devices have been directly affected by a cyberattack. More than half of those affected servers have been restored and are being certified by Ace's IT department.

    Describing the attack as a "fast-moving, dynamic situation" with details "changing rapidly", Ace CEO and president John Venhuizen sent an email to its more than 5,800 retailers to explain the systemwide outage. It said:

    ...We detected a cybersecurity incident that is impacting the majority of our IT systems. As a result of this incident, many of our key operating systems, including ACENET, our Warehouse Management Systems, the Ace Retailer Mobile Assistant (ARMA), Hot Sheets, Invoices, Ace Rewards, and the Care Center's phone system have been interrupted or suspended...

    In another update on the same day, the company urged stores to stay open, as point-of-sale systems, credit card processing, and Ace Hardware bankcard programs were unaffected.

    Leading up to the holiday season, scheduled deliveries are adversely impacted and customers unable to place online orders. There have also been multiple incidents of store owners experiencing follow-on phishing (fraud emails and texts) attacks.

    A cautionary notice reportedly warned Ace Hardware retailers of two different scams attackers are perpetrating, possibly with the information gathered from their initial breach. The notice said:

    Specifically, one involves a criminal sending a spoof email asking the retailer to send electronic payments meant for Ace Hardware Corporation to an alternate bank while we work to restore our systems. The email looks legitimate and appears to be coming from someone in the Ace Finance Department.
    The second instance ... involves a cyber criminal calling an Ace store posing as an Epicor employee asking for permission to gain access to the stores [sic] computer system through passwords, password resets and other remote means.

    Epicor Software Corporation is a Texas-based business software company focused on retail, manufacturing, and distribution - and presumably, an Ace contractor.

    Darren Guccione, CEO and co-founder at Keeper Security told the Dark Reading website:

    Breaches like this must serve as a wake-up call for organisations large and small to implement a zero-trust architecture, enable MFA [Multi Factor Authentication], and use strong and unique passwords.

    In addition, employees should be trained to identify suspicious phishing emails or smishing text messages.

    Related:

    Ransomware - Is your POS safe?: HI News, August 2019
  • Sources: Dark Reading, Bleeping Computer and Cyber News
  • retailers

    Indie store update

    Bailey's Key Hardware listed for sale

    The Toowoomba-based store in regional Queensland is considered a local icon and will change hands for the first time in 17 years

    Bailey's Key Hardware which has been a fixture on William Street in Crows Nest, a rural town in Toowoomba for 90 years, has been listed for sale through Hampton Realty, reports The Chronicle.

    The hardware store is set to stay, with owners Peter and Dianne Nightingale-Smith selling the 790sqm property, business and stock as a going concern.

    Mr Nightingale-Smith said the former English couple, who bought it 17 years ago as part of a business visa arrangement, had been well supported by the town. He told The Chronicle:

    The only way we could come out here was with a business visa, so we had to buy a business over here. We had to run that business and achieve a certain turnover, and after those two years we could do what we liked, but we're still here 17 years later. We just love the town, the people have been pretty good, and it's a nice place to live.

    Mr Nightingale-Smith said Crows Nest was lucky to still have an independent hardware store, at a time when the industry continues to experience consolidation mainly at the hands of big box retailers such as Bunnings.

    We still feel the impact from the 'big green shed', it still hurts us a bit, but especially after COVID, people are coming into us who haven't been there before.

    Selling agent and Hampton Realty principal Craig Allen said the offer was even more attractive thanks to increased investment in Crows Nest since the end of the pandemic.

    Crows Nest is really taking off, and there are more opportunities, so I think someone will head in there and grow this business even more.
    There are people moving to Crows Nest from the coast and wanting to get out of the hustle and bustle of the city.

    The couple plans to remain in Crows Nest and keep running the neighbouring gifts and homewares business Nightingale Crafts, in between travel.

    Bailey's Key Hardware was originally established by Arthur Bailey in 1933, before his sons Terry and Arthur took over the reins and the business remained in family hands until 1998.

  • Source: The Chronicle
  • retailers

    Retail update

    Deniliquin Mitre 10 sold to Dahlsens

    In Tasmania, contractors have begun work on the Clennett's Mitre 10 store in inner-city Hobart

    Deniliquin Mitre 10 owners Katrina Knuckey and Alan Braybon will hand over the ownership of the business to Dahlsens on November 15, 2023. The store will operate in addition to the existing Dahlsens store in Deniliquin, NSW.

    Mr Braybon, known as Bluey, will retire after 38 years as an employee and owner. Ms Knuckey will be staying on with the new owners, leading the team as manager of Dahlsens Mitre 10, as it will be known. Speaking for both of them, Ms Knuckey told the Deniliquin Pastoral Times:

    We don't make this decision lightly, with our priority always being the ongoing service to our customers and jobs for our team. We are staying where we are, as your local Mitre 10, with more support to better help you...

    Ms Knuckey also said she is "excited for the opportunity" to work for Dahlsens.

    I am also excited for the change and the challenges that will come with providing our customers with the same great service. The change is good for everyone. Dahlsens will be supportive, and I am looking forward to the future of the business.
    Geoff Dahlsen is a fifth-generation family member and is leading the commitment by the Dahlsens team to continue everything we've started.

    Mr Dahlsen said the good news is that the store will continue to service the Riverina community in an "even stronger capacity for many years to come".

    Very little will change. You will still see the same happy faces and great products you're used to, with Katrina Knuckey leading the team.

    Deniliquin Mitre 10 will be added to the more than 60 other Dahlsens sites located around Australia. The closest Dahlsens store is located at 205-207 Barham Road in Deniliquin, and managed by Doug Miller. The Deniliquin Mitre 10 and Dahlsens Barham Road trade sites will remain trading in their separate locations.

    Mr Dahlsen said to expect a "seamless transition" with business operations being largely unaffected during this period. He also expressed gratitude to Alan and Katrina for entrusting his family with the business and the team.

    We commend their leadership and commitment to the Deniliquin community. Our utmost priority is to honour and strengthen the foundation they have laid.

    Mr Miller said the change will be "great for Deni".

    I'm excited, and with the acquisition Dahlsens is securing the sustainability and future of the town. Katrina and I both live in the community and look forward to making things bigger and better, servicing our community.
    One thing I love about the family-run business is that we get such a say in how we run the business at our local level. We get to influence the way things are run. The stores are not just a cookie-cutter box version. They all look different, but we work together to bring in new ideas and the best service we can offer.

    Clennett's Mitre 10

    Construction has begun on the Clennett's Mitre 10 store in Hobart, Tasmania. Previously home to an automotive service department, the Patrick Street site will soon house the "much needed" and only city-based hardware store.

    The location, which will join the several existing Clennett's stores in Kingston, Huonville, Sorell and Swansea.

    In 2020, the company said the development would fill the void left by the demise of K&D, which closed its final store that year.

    At the time, the new site was described as 3900sqm with 1000sqm of retail space, a 2000sqm trade centre and off-street parking for 40 cars. The initial investment will be $2 million, with a further $4 million expected to be spent in the next 10 years.

    Related

    Mitre 10 store planned for Hobart CBD - HNN, July 2022
  • Sources: Deniliquin Pastoral Times and Pulse Hobart
  • retailers

    HBT 2023 Conference Member Highlights

    Innovation and execution highlights

    HBT has introduced "Member Highlights" at its 2023 Conference. The four stores which were the subject of a Member Highlight all bring something new to retail in 2023.

    At its 2023 Conference the HBT National Buying Group (HBT) introduced "Member Highlights". These enable HBT to highlight those stores that have made significant changes, and helped to introduce new retail ideas.

    The four stores to receive the first Member Highlights were, for the most part, highly innovative, and had undergone significant transitions during 2022 and early 2023. Presenting these stores, HBT provided a short, high-quality video introducing the store, followed by a question and answer session with the store owners, including questions generated by the attending HBT members.

    K&K Steel

    K&K Steel is located in Hastings, Victoria, which is 70km south of the Melbourne CBD (about an hour's drive), on the eastern side of the Mornington Peninsula. One of the owners of the store, Bill Heyblom spoke with HBT's Andrew Graham, one of HBT's managers of member services, about the recent deep-reaching changes to the store.

    Those changes really arose from an understanding that in order to grow, the store needed to change its focus so as to attract more customers. As Bill told Andrew:

    When we bought the business, it did a little bit more in the job lots and that sort of thing, house lots ... but we're not set up to actually move heavy material. We also lost a few of our tradesmen [customers]. They retired and we had to sit down and decide what we wanted to do.
    We've got a really great fabricator who is very artistic and very creative and he loves the challenge. So we've found that we are getting people in that will ask for a weird job. They've gone to other places and said, no, we can't do that. That's not in our capabilities. So we embrace the difficult, we go down and we grab our fabricator, we have a chat with the customer and say, this is what you want, is this how you want it done?

    Bill provided an example of the kind of work they moved to doing, to the delight of their customers:

    We had one lady come in [whose] grandfather used to race speed cars. She had the tail section of his speedway car and wanted to make a TV table out of it. They didn't know how to do it, so they brought us a photo of what his speed car looked like. With a bit of thought, the fabricator managed to fabricate it so that it looked like the bump bar on the back of the speed car. When they left, they were just ecstatic. The father came in after that, he just said 'amazing'. Couldn't believe that this could be done.

    While that goes to the substance of how K&K changed its business model, much of the substantial change has been about how the store has changed its appearance in terms of product display and placement. One of the major changes was reducing the height of shelving. K&K wanted a clear line of sight across the store. However, they found it difficult to source the kind of shelving they wanted - so they built it themselves., developing mobile shelving on wheels.

    We had a need to be able to display a lot of things in a small area while keeping with this height limit. We had to think about how we did it. So we designed the shelving ourselves. The beauty of using them is that we can change the store around in half an hour. We now have the ability, if we want, we can shuffle things around. We can move one item, we can move rows of items so that the store doesn't get stale, so that people don't come in and walk right past things they might need because they know where the other thing is.

    One result of these changes is that Bill has noticed a shift in the customer base.

    We found that we are actually getting more female customers come in now. It used to be that they only came in if their husband sent them in for something, but now we're getting the females that come in and go, oh, can you help me with this and do that? I need something like this. So it's all tied into making [the store] more inviting for people to come into.

    Such a transition needs lots of help, of course. K&K benefitted from the support of many of its major suppliers.

    We spoke with our major suppliers, Bordo, Klingspor. They jumped on board straightaway, said, yeah, what do we want from us? How can we help you? ITM were another one that said, great, let's do it. We're also Metabo dealers. And they jumped in and said, alright, we can do something for you there. Most of the people that we consider our main suppliers jumped in. They jumped on board and gave us extra bits and pieces. We got in with Allstate Trailer Parts and they were great.

    At the core of the changes, however, was K&K's relationship with HBT. In fact the initial impetus for change came from Bill's business partner overhearing a remark at an HBT Conference that if you hadn't changed your store much over the past five years, you likely needed to make changes as a priority.

    I've been working at the business for 20 years and the previous owner was reluctant to do anything. We talked about we needed to change things, but he didn't want to put the effort in.
    HBT has, from day one, opened doors for us that we couldn't get to otherwise. It's been a good asset to get ideas from. We've been able to approach people and say, what can we do here? We're in discussions at the moment on how we can improve the outside of the building. The outside is tired and we need to do something there. And Andrew and I, and Roger and Jane, we've working out what steps to take next. So it's been great in helping us to look for ways forward to change the product range, and to expand on what we are doing.

    One question that came from the floor was about what K&K did to retain staff - a common theme at the 2023 Conference. Bill admitted he didn't have any real solutions, especially as much of the longer-term staff had reached retirement age.

    We've had nothing but trouble getting staff. We were down to one fabricator and I get a phone call on a Saturday morning when I wasn't working, from Roger saying, just had a guy drop off a resume. I said, did you let him out the door? So we quickly rang him up and got him back in, and by 11:30 he had a job. He's turned out to be the best person we've employed. He's just so creative. He's incredible.

    Earlier in the conference in a keynote speech by Bernie Brookes, former CEO of Myer, the concept of "Uber" staff, who want to work retail as almost part of the gig economy had come up, and Bill confessed that much of his current staff followed that model.

    Talking about the Uber personnel. We've actually gone basically to that by default, where you've got four staff members and none of them are full-time. They all wanted to just do casual or part-time work.

    Cooma H Hardware

    The town of Cooma is located about 115km due south of Canberra (about a 90-minute drive). It's also located close to the Snowy River 2.0 project, which has become a major driver of the Cooma economy, and of sales at Cooma H Hardware.

    Two of the owners of the hardware store, Jannene Rixon and David Van der Plaat, spoke with HBT's Jason McElligott. Jannene began by explaining how important customer service is to the store:

    A lot of people say they come back because of our customer service. I had a girl in probably about two weeks ago, she'd been down to Mitre 10. They didn't have the screws she needed. She was trying to put her kids' bunks together. She couldn't do it that night. They were devastated. She came and got the screws from me. I saw her in Woolies that afternoon, and she said, 'Oh thank you. The service out there was so good. The bed got together, the kids were so happy!' So that's what we like to do and in a small community you get the feedback.

    While Cooma has benefitted substantially from the Snowy River 2.0 project, David does point out there are some downsides, especially when it comes to hiring staff.

    It's a double-edged sword. It's created something like a mining boom. Property prices went up, things got really busy, but it's created major issues with staffing and stuff as well because they've come in and they're paying money. So they've got guys out there, out of school, they are earning $3000 a week in the factory, for an 18 year-old. Made it really hard to retain staff.

    According to David, they've given up trying to directly supply the main contractor on Snowy, Future Generation. Instead they service the contractors working for Future Generation.

    What we've found a really growth area for us is servicing the contractors because you're dealing with people who know we're talking about and we're doing very well with that.

    Jannene also points to growth in their core building sales as well.

    At the moment, our trade business is sort of growing. A while ago we had a change in staff and one of our guys stepped up and has started doing a lot of our quoting and is getting back to our builders in a really timely manner. So we are sort of growing the trade section because we're getting back to builders. Up in the Jimenbuen area, there's a fair bit of building work happening. So we're getting a lot of work up there that we weren't getting before, as the person in the role previously wasn't getting back to people quick enough.

    Recently HBT helped Cooma move to the H Hardware livery for their hardware store. Much of the inspiration for the redesign came from David.

    With the new building, I designed it all myself. I love looking around hardware stores. So when I travel around, I find a hardware store to walk into. I've been doing it for years, so I sort of knew what I wanted. I just sat in with a piece of paper and drew a box and started from there, sort of thing. And then we sent our plans to HBT, they did the H Hardware, logos and that design all that up the outside.

    Fix & Fasten

    Fix & Fasten is a fastener specialist retailer, with stores in Sunshine West to the west of the Melbourne CBD, and another in Campbellfield, to Melbourne's north. Andrew Graham spoke with the retailer's two principals, Jason Filia and David Sevrakov. F&F is part of the Industrial Tools & Trades (ITT) division of HBT, and both Jason and David participate in HBT's steering committee.

    One of the most interesting aspects of F&F is that the retailer utilised the Toyota-inspired "kanban". Taiichi Ohno, an industrial engineer at Toyota, was essential to its development during the 1950s. The system originated with Toyota emulating some of the stocking practices of supermarket systems.

    At the most basic level, kanban helps to aligns inventory levels with actual consumption. When the manufacturing area has consumed its stock of a part, a signal is sent to its local inventory for replenishment. The inventory sends a signal to the external supplier, and it is restocked.

    While that seems almost obvious, many inventory systems still work through bulk orders, which are replenished on a schedule, rather than through demand signals, often resulting in either overstocking or understocking.

    The insight that F&F brought to the market is that by interlocking with customers via kanban, they create a system that provides a strong barrier to entry for competing suppliers - it's not enough to just have a screw or bolt that is fractionally cheaper, an entire system would need to be replicated. As David describes it:

    Our kanban system is a supply solution that we've developed into the market. It allows us to manage our major accounts in a controlled fashion, taking the urgency out of what's always urgent, which is workshop consumables. You know, a $5 thing can stop a whole workshop. So what we've developed is the kanban, which is a bin rotation system.
    The cost savings that has not only through our customer but through our own business is amazing. Procurement, the old fashioned walk around with pen and paper to take in the weekly order that they would do is eliminated. To be honest, sometimes we almost make some positions redundant because it just looks after itself. It allows us in our business to actually control the purchasing, allows us to buy better, we know what's coming and yeah, it's a really good system the customers love, and it locks the customer for forever.

    HBT has been one of the core pathways to success for F&F. As Jason explains:

    The HBT supplier base being so large and various has provided us with product ranges that traditionally we haven't had any exposure to. That broad buying range has allowed us to be competitive, and, with our service offering, our customers are actually potentially forcing us to take on extra product range because of that service and the way in which we're delivering the product.

    David was especially full of praise for HBT's online portal that links suppliers and members.

    The online portal that's been developed over the years, especially now, is a great asset to our business. Even just to search products, to search suppliers. We've got our own signings from our sales teams, our purchasing officers, so they can really just jump on and work through the portal and find out what they're after and that sort of stuff. Accurate pricing, notifications and communication through the portal is second to none.

    While F&F faces the same problems with staff as other retailers in hardware, the company has developed a more active approach to managing the situation, according to David:

    Something else we've taken care of is, I suppose with our staff, we've sort of thought outside the box and instead of getting traditional fastener staff, we sort of look for specialists. So currently we've got a hydraulic specialist within our business. We've got a sealant specialist that we've gathered from outside our traditional industry and rely on them to help us build that category. So we've built this, I suppose, structure of specialists within our own business through the sales team that we can lean on when we get a certain, I suppose, lead into silicone we'll take that account manager with us and help us.
    The other thing we've identified is obviously [the current staff] are not going to be around forever, so we've got to bring the new generation through. So we started a skill-invest type scenario for succession. We're bringing teenagers through the business. They do a 12-month course, they get a certificate at the end of it and then, if they're up scratch, we retain them as a full-time employee And we've had some great success with that. We've got some young kids within our business that I suppose have got the "want" to move through the business. The old-school heads have got all the knowledge, but bringing those young ones through means they can feed off that knowledge for the next generation.

    Hoadley's Hardware

    Definitely one of the strong crowd favourites at the Conference was the presentation of the Hoadley's, who are a delightful young couple who decided to open a hardware store in Blayney, a town in New South Wales, west of Sydney, between Bathurst and Orange.

    It seems to have been a long time since younger people could just open such a store, with little knowledge about how the retail end of thing works, and go on to enjoy some success. But Tayla and Blake Hoadley, with their two young children, have managed to do exactly that.

    One key to this was the amount of help the couple received from HBT's general manager - member services, Mike LoRicco. Blake is frankly honest about is lack of experience when he describes the process of getting going:

    I was going to start a hardware shop. I knew there were buying groups, but I didn't know where to start. So I was ringing Bremick or Macsim or anyone. I rang directly and said, "I'm starting a hardware shop will you, supply me?" And they all said, oh yeah, we should be able to.
    So I was ringing all these people going, well how am I going to work all this? Anyway, long story short, I was scrolling the internet trying to find a buying group, and found one, which was IHG actually. I got in contact and that worked, I had my hopes up, but then I started getting suppliers in and got talking about HBT. So I looked HBT up on the website, sent an email and, funnily enough, the next day, Mike actually rang me. Yeah, we got talking and then Mike came out to see me.
    It's all started from there really. It's been good.

    As a native son of Blayney, and a tradesman (plumber), Blake was aware that there was a real need for another hardware store.

    It was hard to get materials if you needed them. And then because the [existing] shop that was there was never, well they had stock, but they didn't always have the right amount. If you needed 10 fittings, it might've only had four. So I'd find myself going to Orange or Bathurst to get materials to do my jobs. Every tradesman you talk to in Blayney would say that and they just get someone to deliver it from Orange or Bathurst, which is half an hour away. So I talked to dad about it early on, probably two years before we actually did it, and said we should do a hardware shop in Blayney, but we never sort of did it. And then here we are, we're doing it.

    Even though Blake has an "in" with the trades, the store still balances more towards DIY.

    Well, we're sort of probably 40% trades, 60% DIY at the moment. So we don't have heaps of trades and we've got a lot of up and coming tradesmen similar to my age that are coming through. All the older tradesmen haven't been to my shop because they don't like change. They're stuck in their ways and where they shop. But all the younger ones, I'm starting to get along with them really well, making friendships coming in. It's been great.

    Not only has HBT helped out, but so have the suppliers.

    Suppliers been really helpful actually. Setting up core ranges or top sellers because I'm new to this game, I didn't know where to start. When I first thought I was just starting a few screws, different varieties, but we got 10 bays of screws, all different screws and I didn't think I'd have to have that many screws, but it's surprising it's your bread and butter stuff, that turns over really quick, but you've got to have the screws to be able to sell the screws so you if you are going to have only a small range, probably going to lose some of the customers, we'll lose some sales.

    While Blake is busy building relations with the suppliers, his wife, Tayla, helps to make the store friendlier.

    I pride myself more on the customer service side. We are very family orientated and Blayney's such a small community, tight knit, everyone loves that sort of feel. So I'm in there to be bright and bubbly to say hello to everyone to stop Amelia, our daughter, running down the aisle past someone and knocking them over or something. So yeah, Blake's the guy with all the answers to all the questions and I'm the one to just be there for everyone and greet them and make them feel welcome. And as Blake said, I feel like that's why people come back is that we try hard to help everyone where we can, we can order things in or at least try our best to. But it's just that nice small community feel and we feel that that's what everyone loves and that's what I sort of stick to.

    That said, Tayla has definite plans for a more involved future.

    We have a seven month old baby. I'm technically on maternity leave still. But once he's in day care and that sort of thing, I'd love to get into the shop and really dive into that side of the shop. But until then, I definitely have lots to learn. Lots to learn, but we complement each other in that way. Blake has such a background in the industry and I'm there to be bright and bubbly. So yeah, we complement each other.

    Blake, like any good hardware retailer also has his eyes fixed on the future, and it's no surprise what he most wants: more space.

    Bigger shop, big area because we're only in probably a thousand square meter area, including the outside yard. So we're limited to the room and we'd love a bigger shop to do more things. Such as pet stuff or nursery, maybe going to the mower side of things as well. When ee took over, it was a mower shop and there's very much demand for that in Blayney. Time will tell. If we run into a heap of money, it'd be good. See what happens.
    retailers

    Retail update

    "The Other Hardware Store" campaign continues

    Queensland based Sunshine Mitre10 has produced videos of its store in North Lakes and recently opened outlet in Aura

    Back in 2021, Mitre 10 invited Australians to check out the "other" hardware store, through an advertising campaign created by Dig agency.

    Mitre 10 recently launched the latest iteration of "The Other Hardware Store" campaign. The agency said:

    This new work builds on the 'why' showing how you can trust Mitre 10 to deliver the care and expert advice you need to get the job done right, first time.

    Marketing manager at Mitre 10, Kath Carroll, also said:

    It's customer service and expert advice that drive a strong point of difference for the Mitre 10 brand. Our customers repeatedly tell us that when you visit a Mitre 10 store you get all the information you need so you can avoid the back and forth. This new creative builds on the work we've done since launching The Other Hardware Store and acknowledges the relationship and trust we have with our trade customers.

    David Joubert , executive creative director at Dig, said:

    There's nothing worse than struggling on a DIY job and feeling like the world is watching. So, in true Mitre 10 style, we delivered a simple message with distinction: you can trust Mitre 10 to get the job done right. First time. And save yourself from a little... scrutiny.

    A video of the campaign can be viewed on the following link:

    Mitre 10 advertising campaign on Vimeo - August 2023

    Related

    Mitre 10 positions itself as "The Other Hardware Store" in a series of ads - HNN Flash, May 2022

    Sunshine Mitre 10

    The Sunshine Mitre 10 superstore in Northlakes opened in 2022. General manager Neil Hutchins said his team is proud to be part of one of the fastest-growing areas in Queensland.

    More than two years before the store opened, the Sunshine Mitre 10 team saw the potential of the North Lakes location and Mr Hutchins is pleased with the results so far. He told the Moreton Daily:

    We recognised early that North Lakes would be a great location for another store in our network, which now includes over 20 locations throughout Queensland, from Weipa in the north, to St George in the west, and south to Brisbane.
    Moreton Bay is recognised as one of the fastest growing regions in Australia with a population of over 490,000 people and predictions of up to 30% more over the next decade.

    The North Lakes store is more than 8400sqm, with more than 3400sqm under roof. It is located at 49 Stapylton Street, close to Ikea and the Westfield shopping centre and easy to get to from the Bruce Highway. Mr Hutchins said:

    That makes it super easy for our customers to get in, get out and get on with it, especially with our great Trade Drive-Thru.

    He said the Sunshine Mitre 10 team is also getting involved in the local community, not just by employing locals but also through community and sporting sponsorship.

    What is now Sunshine Mitre 10 was started by the Lanham family on the Sunshine Coast more than 110 years ago. Being a part of and supporting the communities in which we operate is really important to us.
    That's why in North Lakes we have already created sponsorship partnerships with North Lakes Leopards Rugby Union, Hammerichs Coffee and various local schools and retirement villages.

    A video of the North Lakes store can be viewed at the following link:

    Sunshine Mitre 10 North Lakes store on Vimeo

    A video of the Aura store can be viewed at the following link:

    Sunshine Mitre 10 Aura store opening on Vimeo
  • Sources: Mumbrella and Moreton Daily
  • retailers

    Retail update

    Beacon Lighting's profit slide

    The retailer is focused on growing trade sales, including introducing a tradies' frequent flyer scheme called Beacon Trade Club

    Beacon is the biggest provider of speciality lighting, ceiling fans and globes, and reported full-year revenue of $311.955 million, up 2.5%. However, profit declined 17% to $33.6 million, just shy of analyst expectations of $35 million.

    The retailer, which has 119 stores serving both retail and trade customers, warned of a slow start in July.

    Consumer sentiment [retail customers] has been adversely affected with rising interest rates, inflation, and economic uncertainty.

    As a result, Beacon has focused on growing trade sales, including introducing a tradies' frequent flyer scheme called Beacon Trade Club. It said trade customers had responded very well at a time of consumer pessimism.

    Total trade sales increased by 21.6%, trade sales through stores increased by 22.5%, and online trade sales increased by 36%.

    Overall trade sales accounted for 29% of sales for the year, compared with only 15% five years ago. Executive chairman Ian Robinson said Beacon's commercial order book has been "surprisingly consistent," as pent-up COVID demand comes through.

    We thought that with all the talk about the slowing down of volume residential building we would see a fall-off. The order book hasn't changed much over the last 12 months and is not expected to.

    Beacon also plans a large number of store openings to expand its reach to 195 outlets.

    In The Australian, Citi analyst Sam Teeger said he was more confident about the retailer's outlook following an earnings briefing.

    Beacon appears optimistic it can hold gross margins at similar levels to 2023, noting freight tailwinds, lower factory prices, and low stock turns mean what is being sold today was purchased eight months ago. Trade remains the No.1 priority ... and 2024 growth is expected here. While the US has been disappointing the company remains committed to this market.

    Related

    Beacon will continue to push into the wholesale market - HNN Flash, October 2022
  • Sources: The Australian and Adelaide Advertiser
  • retailers

    HBT Conference: The buying team

    Jody Vella heads up the HBT buying team

    Jody Vella, general manager - buying for HBT National Buying Group, describes how HBT is evolving its Conferences, as well as its overall businesses. He sees hardware retail continuing to grow, and independent retailers continuing to play a significant role.

    The HBT National Buying Group (HBT) is holding its 2023 Conference in Cairns, Queensland from August 21 through to August 25. HNN caught up with Jody Vella, the group's general manager - buying, to find out what's happening, and how the group has evolved post-COVID-19.

    Focus on growth

    Jody - and HBT in general - is very much convinced there is room for further improvement and growth for independent hardware retailers in the current and emerging market.

    Greg Benstead [HBT CEO] and I will be talking on Tuesday. The main part of the presentation is that we want [members] to grow. That's the whole idea of why we're here. That's why the members have invested, and we absolutely love that they've invested four days with us. And so for us, it's in our interest, all of our interests, to help them to grow.
    And the question is, how do we help them grow? So there's some things that we're going to be talking about, about how to better interact with HBT and why they should interact and transact. We'll talk about the supply portal [HBT's online link to members] and we'll use some case studies of what others have done and how they've managed to really perform well with HBT.
    But it's a positive conversation. It's a conversation about: we want you to grow and we stand ready to help and this is what we think. If you're not doing this, then maybe you should think about doing that type of thing.
    The opportunities are there. The independent hardware channel is very important and it's growing. I think it's a credit to every one of our members and our suppliers that support us. I just think that you've just got to be a bit smarter about it. Not work harder, just work smarter, and just be a bit more strategic in what you do and how you partner with people, with suppliers, and how you use their expertise as well.

    Conference evolution

    Since Greg joined the group as CEO, there has been a constant evolution in the annual Conferences - in part a response to ongoing growth in member numbers. That said, 2023 marks the sharpest departure from the previous Conferences. As Jody explains it:

    I think as the conferences have evolved since 2019 - of course we couldn't do any in the two years with COVID, but last year's and this year's, there's been a continual evolution about what we're trying to do and the information we're trying to impart. We're trying to turn it into a real networking event, an information sharing event.
    I think it's just good to get all of our members and all of our suppliers in one place at one time. It's the only time where we can network, learn and find out what others are doing. Hopefully we can provide bits and pieces that they can take back to their stores, or put into the business plan for suppliers, to improve the way they go about doing business, interacting and growing sales with HBT.

    One of the core areas of evolution is in the way the members of Jody's team do their presentations.

    The key characteristic about all the presentations is that our suppliers are going to be up there on the stage with us. So they'll be up there talking and it'll be a question and answer session, as opposed to here's a 40 slide PowerPoint presentation that we'll talk to you about. And then questions at the end.

    The teams' Wednesday presentations cover a range of topics. Marcella Indries, who specialises in garden ranges, will be talking about the pet category and impulse buys in general. Jonathan Hall will discuss changes to insulation regulations, and the opportunities this offers. Kate Lamb will discuss how retailers can display some of the larger and bulkier items more effectively, to get better value from their floor space. Kevin Marshall will discuss power tools, joined by power tool suppliers and an HBT member. Peter Hurley will present one of his well-received talks on the timber industry.

    Rounding off those sessions, Alix Coates will discuss how to make better use of HBT resources to better market member businesses. According to Jody, this is something of a major focus for HBT in 2023.

    I think we've really got our marketing and promotional program together. There's still a lot to be done on that, but I think we've taken a big step forward with how that's come about and put procedures and processes, and protocols in place to really drive those promotions. Not only drive them, but cycle them the next year and continue to grow business for the suppliers and for the members.

    A passion for independents

    For HBT's executive team, helping out independents is something of a passion, and that's especially the case for Jody. His career has taken him from a corporate beginning with Coles, to helping independents with FoodWorks, and now to HBT.

    I've been involved with independent businesses for, well. since 2009 when I started at FoodWorks, independent supermarkets very similar to HBT. And I just admire these people, because I think that they go out there, they're true entrepreneurs. They may not think of themselves as that, but they are. They service their community, they play an important role in the local community and they provide services.
    I think that for any business, it doesn't matter what it is, whether it's a supermarket or a hardware store or a music shop or a camera store or whatever, you cannot beat independent businesses.
    It's the same in HBT. We have such a diverse range of stores, and each one of them is unique. And I just think that I take my hat off to them, I really do. I think if they're going to have, I suppose, the guts and the courage to go and do this, then they should be supported by people that really are as passionate as they are. That's what we do.
    As we say to the suppliers every time we raise the subject of improving the deal [offered to members]. We do so not for us, but on behalf of their own customers. And I just think, as Greg would say, we sleep well at night because everything we do is for the members.

    Ongoing coverage

    It is becoming evident that, as significant other groups in independent hardware lean further into a corporate/independent model, HBT is one of the national groups helping to establish the fundamentals for independent hardware retailers.

    In line with that HNN will be offering ongoing coverage during this weak which extracts the parts of the conference that have general significance for the hardware retail industry overall.

    retailers

    Garden and nursery update

    The Green House Ballarat expands

    Allan's Nursery in Youngtown, Tasmania has been sold to a local buyer for $2.4 million, and is expected to be turned into a residential development

    Ballarat-based nursery and garden centre, The Green House is transforming a suburban warehouse into a retail and hospitality destination. Co-founders Di and Daniel Hannon announced the launch of a second location opening in Spring 2023.

    The new store - located at 415 Sturt Street - is described as a "mini-Green House," stocking a range of plants and homewares. It will run as a pop-up from September to late December, with potential to become permanent if successful.

    The Hannons made the tree-change from Melbourne to Ballarat about 15 years ago, establishing a bed and breakfast/wedding venue at Springmount, then selling that to launch The Green House in 2020.

    Combining a nursery, cafe, bar, and events, the venture has proven very successful despite being tucked-away in a former factory site, and relying largely on word-of-mouth advertising.

    The hope is to win even more fans in the lead-up to Christmas at a location with greater foot traffic. Di Hannon told The Ballarat Courier:

    It'll be a way of letting people know we exist because a lot of people still don't know about us in Ballarat.

    Allan's Nursery

    The sale of Allan's Nursery in Youngtown, part of Launceston (TAS), will bring to an end a business that supplied gardeners with plants and seedlings for 58 years. Founder Bill Allan told The Examiner:

    We finish up on the 1st of December so there's going to be lots of bargains. We'll probably open part of this to the public, so there should be some healthy gardens this year.

    At its peak, the Allan's business employed 60 staff across garden centres located at Prospect, Youngtown and Rocherlea. Mr Allan and his late wife Noelene built the Youngtown facility from scratch and built up a robust customer base that included Bunnings and Mitre 10. He said:

    I'll miss the staff ... I'll miss getting the orders out and thinking to myself, 'that's a nice plant'. I made the motto that if it's not good enough to go out, and we've maintained that policy.

    The nursery may be selling but the Allan's legacy will live into the future. Allan's Garden Centre Prospect is trading under separate owners and Mr Allan has bred several plants that will stay in seed, including the Allan's Early Red tomato and a pansy called Storm Cloud. The flower comes in 13 colours. Mr Allan said:

    What's different about this pansy is the stripes through the petals.. It's absolutely first class.

    Storm Cloud is also the name of the boat that brought Mr Allan's great-great grandfather and grandmother from Scotland to Tasmania though they didn't find out until after two years after naming the pansy.

    Mr Allan's retirement plans don't include hanging up the garden gloves. He said:

    I'm going to finish breeding that pansy [improving it]. I am building a little glasshouse at home.

    Related

    Allan's Nursery in Tasmania is on the market - HNN Flash, October 2022
  • Sources: The Ballarat Courier and The Launceston Examiner
  • retailers

    HBT Conference 2023 - Showtime!

    Showtime! pre-conference edition

    All the news about the upcoming HBT Conference. Find out the background behind the keynote speakers, interviews with retailers, and even where you can get the best coffee in Cairns.

    Download Showtime! 2023

    For 2023, HBT National Buying Group has chosen to take some bold moves - moving the Conference from May to August, and staging it in Cairns. "Under the hood" the changes are even more innovative: there is now a retailer services Tradeshow as well as a products Tradeshow, and the "traditional" Conference dinner has been replaced by a series of more engaging networking events.

    Those events range from tours of the gorgeous surrounds of Cairns, to a "Business & Brews" session at a local brewery, where suppliers and retailers can better get to know each other.

    As HBT CEO Greg Benstead has commented, the standard HBT holds itself to is delivering specific quantifiable results in the actions it takes for its members - recognisable "take-aways". What is unique about the 2023 Conference is that each part of the event holds itself to that standard, but so does the entire conference experience itself.

    For example, the idea of having a separate Service Supplier Trade Show, where software suppliers can present their products on Tuesday, overlapping with the very important topic of Planning Succession for Business - and having the latter repeated so that members feel more free to visit both.

    The thinking behind this is that over the coming two to three years, these "background" services are going to become ever more important. We're likely to see more rapid evolution in their development, and new linkages between these services and broader cloud-based services.

    Likewise, succession planning is going to achieve newfound importance. As businesses grow, simply calculating the value of a business becomes more complex - which is a good "problem" to have! But there are value issues in selling to outside companies, and fairness issues in handing on a business to the next generation, or the extended family.

    The daily sessions are geared towards helping retailers make better use of the boost in business that post-COVID construction and consumption has brought to hardware retail. Plus there are two really outstanding keynote speakers: Bernie Brookes, ex-Myer CEO; and Grace Brennan, who started the now-iconic "Buy from the Bush" movement.

    In this edition of our pre-conference "Showtime!" publication, HNN gives you the background on the keynote speakers, interviews with some retailers attending the event - and even a guide to the best coffee places, when you need to nip out from the conference and grab a quick brew.

    Download your copy by clicking/tapping on the image/link below:

    Download Showtime! 2023
    retailers

    Indie store update

    Mooroopna Hardware under new ownership

    Established by Allen and Jenni Hunter in 1983, the store was sold to Mitre 10 after 28 years. But five years later in 2016, the corporate head office closed it down before it was reopened by Mr Hunter because of community demand.

    Familiar faces, Joey and April Campanelli have taken over at Mooroopna Hardware, located around 181 kilometres north of Melbourne in the City of Greater Shepparton. It follows Allen and Jenni Hunter's retirement when they sold the business to the Campanellis.

    Joey Campanelli has been working in the store for 12 years, and April Campanelli for the past three. April Campanelli told Shepparton News:

    I mean, everyone knows Joey's face. I've been in the background, but everyone knows Joey. When I say that I work here they go, 'Oh, how long have you been here?' because I've been in the office.

    The husband-and-wife team has also retained the existing staff of around a dozen people. She said:

    Fantastic staff. We're like a family. Keep it nice and tight. Everyone works together ... that's the best part.

    The couple, who have four children, said they have also had strong support from customers welcoming them into their new roles. Mrs Campanelli said:

    We sent out an email at the start of the month, and there was so many 'Congratulations!' and that sort of thing, and customer support is the most important part. We won't have a business without them. So we really appreciate all of that.

    They said customers shouldn't assume that locally owned businesses don't have the same reach or access to products as the larger retailers, saying what counts is relationships. Mrs Campanelli said:

    We try to focus on what customers want, so if they come in and they say, 'I need this!' Joey has a such an amazing resource of reps and everything.
    I think we even had one at like eight o'clock at one night, a customer called him and said, 'I need this stuff. I need this. How quickly can you get it?' and it's like, 'Okay, I'll send this person a text. I'll see what's going on'.

    It's that personal touch the couple is determined to hold on to and ensure there's a hardware business in Mooroopna for many years to come.

    The Campanellis said they have a passion for local community growth and success, to ensure there are local opportunities for the future of their children and community.

  • Sources: Shepparton News and Mooroopna Hardware
  • retailers

    Retail update

    Fagg's Mitre 10 just got bigger

    New Total Tools store planned for Queensland, Jamiesons Joinery and Building Centre changes name and Beaumont Tiles expands into Western Australia

    Geelong-based Fagg's Mitre 10 has expanded its footprint in regional Victoria after merging with G. Gay and Co. Mitre 10 in Ballarat. G. Gay and Co. includes Wilsons Mitre 10 located in Maddingley, a suburb of Bacchus Marsh, which became part of the business in 2022.

    The combined entity will include eight stores, about 20 delivery vehicles, and 400 staff. It aims to expand product lines including timber, construction materials, plaster, power tools, hardware, and gardening supplies. In a statement, the group said:

    ...Customers will benefit from an enhanced shopping experience with improved in-store layouts, updated digital platforms, and an increased focus on innovation.
    The improved customer experience will also provide access to a wide range of products and services across a broad geography area, through a single trade account ... The merger will also create opportunities for staff development and provide a platform for sharing expertise.

    General manager of Fagg's Group, Andrew Pitman, said the merger will uphold the store's legacy with each location retaining its current name.

    We're introducing a new brand masthead for the business. It's a new business that we'll all hang under.
    There's three distinct family businesses that have been running for years, we'll certainly be recognising the heritage of those family names. They've significantly contributed to their own communities over that time. We don't want to dismiss that.

    The merger is expected to provide a crossover benefit for customers. He told Times News Group:

    With the combined stores, it gives customers the opportunity particularly for builders to shop more broadly across what is an aligned geographical area. It's a really good union and partnership. Getting bigger means you're far more resilient and robust going forward.
    There'll be some efficiencies. For Ballarat builders down in Geelong, we can turn around deliveries at a quicker time since we'll be doing deliveries from out that way, and the same for Geelong builders working in Ballarat.

    Part of the merger will see offerings previously exclusive to individual stores potentially incorporated across the businesses. Mr Pitman said:

    The Ballarat group have their plastering business that we don't necessarily have. In Geelong, we have Design 10, our bespoke showroom for builders which focus on kitchens, bathrooms, and laundries as well as timber cladding and floors.
    We see opportunities to provide those services into Ballarat and the plaster business into Geelong.

    Fagg's has been operating in Geelong since 1854, and was started by brothers Samuel and William Fagg in the 1850s. In 2017, it acquired Belmont Timber, and currently operates stores in Torquay, South Geelong, Wallington and Belmont.

    G. Gay & Co was founded in 1918 and took on the Mitre 10 banner in 2014. It has three stores across Ballarat.

    Total Tools

    A development application has been lodged for a Total Tools store in Springfield, a suburb of Ipswich (QLD), according to a report in The Queensland Times.

    Specifically, the application proposes a two-storey development with a Total Tools warehouse on the ground level, and a lower ground level compromising two unknown businesses. The 5467sqm premises is currently vacant and located within Springfield Town Centre.

    The 3200.30sqm ground-level will be host to a Total Tools trading floor, storage space, staffroom and an outdoor recreation style staff lunch space. The two lower-level buildings intended to complement Total Tools will both have retail showrooms greater than 400sqm.

    The space will be home to 61 car park spaces with five spaces made for trailer parking and nine on street parking areas.

    Jeffs Joinery and Building Centre

    Jamiesons Joinery and Building Centre in Cowra (NSW) has been renamed as Jeffs Joinery and Building Centre.

    With expansion over the years, the business structure has changed to offer two main services. The first is joinery and manufacturing that provides cabinet making services from manufacturing kitchens to wardrobes and laundry cabinetry, timber windows, timber screen doors, and more.

    The second is the building centre and timber yard that sells to both retail and trade customers. Products include timber, building supplies, tiles, hardware, plumbing and bathroomware, with a fitout showroom for bathrooms and kitchens.

    Col and Janellle Jeffs purchased the business from the Jamieson family in December 1988. They have grown it from five staff to 14 and believe it was time for a change in branding. Col told the Cowra Guardian:

    Now is the time for the next generation. And the Jamieson family were supportive.

    With the hard work we've put in, from where we started to where we are today, there's been a fair expansion of the business.

    It's nice to see a new generation and under the Jeffs banner there's the added incentive to drive the business. We've been privileged to operate under the Jamieson name for 35 years and with Troy taking over operations of the business, it was time for change.

    Not that Col and Janelle are going anywhere. As Col said:

    We'll be here for a few years yet.

    A strong family team helps build success, but Troy Jeffs said they couldn't do it alone.

    My family has always said, and I would agree, good staff makes a good business. Having staff that are committed, honest and loyal are important attributes to making a business work.
    This in turn flows over to how our customers are treated. One must believe in the product you are offering your customers, stand by your decisions and be fair and honest with your customers.
    You also need to have the drive and commitment to succeed which in turn enables the business to grow and prosper.

    And when it comes to personal service the Jeffs say it is what has stood them apart from their competitors. Troy said:

    We strive to achieve the best personal customer service and advice to our customers, whether it be trade enquiries, handymen or the home renovator.

    Col added:

    We're a one stop shop in knowledge no matter what you're building ... We're also a little bit unique because we have the diversity of being able to cut a bit of board to selling a vanity, the cross section of the business means the customer benefits.
    We can cut you a bit of timber to size, make you a kitchen, make you a new door, or sell you a full bathroom and tiles or the roof for your house. The diversity is something the town needs. We find we can cater for all budgets.

    Jeffs Joinery and Building Centre is the only combined joinery/timber yard/building supply business in the Central West, according to the Cowra Guardian. Troy said:

    Seeing such a successful business grow from the hard work that my parents put in, drives me to continue their legacy and continue to grow the business and provide to locals and surrounding areas as we have done for many years.

    The business has provided support through sponsorship and donations to local sporting groups, schools, the arts and a variety of charities. Troy said the more local support they received, enabled the business to better support the community, employ more local people and continue its growth.

    Origins

    The original joinery business was started by Bill Jamieson and traded as W R Jamieson. In the 1940s, Bill was employed as an apprentice carpenter and joiner with H S Francis & Co, which was located in Vaux Street, the current location of Jeffs Joinery and Building Centre.

    In 1945, Bill went out on his own operating a joinery from a shed at the back of the family home.

    By 1949 Bill moved to set up business in Railway Lane where it operated as a timber yard and joinery works. It was here that the business name changed to Jamieson and Son when more of the family joined the firm.

    Bill retired in 1984 and the business continued under the ownership of Bill's son John, his wife Gwen and son Stephen.

    A tragic plane crash in 1988 which took the lives of Stephen and John's apprentice, resulted in John making the difficult decision to sell or close the business. This is when the Jeffs took the big step of buying the business with the official changeover taking place in December 1988.

    During this time the business was primarily a joinery, but it also sold timber and hardware. Under the guidance and help from John, the business expanded, warranting a need for a larger premises and was relocated.

    In 1994 Col and Jannelle purchased Henry H S Francis Building Supplies (which had begun as a sawmill in the mid 1850s), and Jamiesons Joinery was on the move again to Vaux Street. The Jeffs absorbed the Henry H S Francis business into the renamed Jamiesons Joinery & Building Centre.

    Beaumont Tiles

    Bunnings-owned Beaumont Tiles announced it is opening four new stores in Western Australia by the end of the year.

    The tile retailer has already opened its first store in Joondalup, to be followed by stores in Mandurah, Midland and Myaree in the coming months. Beaumont Tiles CEO Danny Casey, said that while Beaumonts previously had a presence in WA through its Builders Selection Centre to serve big builders, the opening of the new retail stores would provide West Australians with an extensive tile and bathroom range, and hard flooring options the rest of the country has access to.

    The entry of Beaumonts into WA will provide homeowners with a new experience when they are undertaking a new build or a renovation, given the breadth of products we offer and the expertise we provide to help them with their dream home.
    The experience will be unlike anything consumers have had up to now, with the offer of styling consultations and innovative technology, such as our BeVisual Visualiser and an exclusive What's My Style quiz designed to help make the process easier.

    Mr Casey said the new stores in WA have a larger footprint than the current showroom format and will feature a new fit-out style designed to enhance the renovation experience for retail customers, the trade and renovators.

    At Beaumonts, we are always looking for ways to make things better for our customers and our new store at Joondalup plans to bring a more spacious and comfortable feel that we will eventually roll out across the country.
    It will offer an immersive experience with trending bathroom settings, product displays, a cafe, and a play table, allowing customers to create flat lays and different tile designs to style their homes...
    We also offer complete bathroom packages to provide homeowners with a more effortless way to get their renovation started. These include custom designed packages by interior experts such as Shaynna Blaze, and packages inspired by Block contestants' designs, including one from WA's resident blockheads Ronnie and Georgia.
    At Beaumont Tiles, we are looking forward to bringing a new building experience to Western Australia that helps get their renovations started with our innovative store experience and broad hard flooring, bathroom ware and tile offering.

    Research undertaken for Beaumont Tiles shows that 16% of WA households intend to undertake a home tiling project in the next 6-12 months.

    The move into WA will see 40 new jobs created in roles including sales, interior design, warehousing and logistics and management.

  • Sources: Times News Group, Geelong Advertiser, The Ballarat Courier, The Queensland Times and Cowra Guardian
  • retailers

    Metcash/IHG results FY2022-23

    Finding growth in a flattening market

    Metcash CEO Doug Jones made his second presentation of full-year results. The hardware division has continued its expansion, with the company doubling-down on increasing corporatisation and investment in Total Tools. While IHG and Total Tools continue to show growth, questions remain over how well they will fare in FY2023/24.

    Australian retail conglomerate Metcash has released its results for the company's FY2022/23, which runs from May 2022 to April 2023. Overall results are regarded as good, with the company's CEO, Doug Jones, declaring that "It has been another record year for Metcash, and one that represents continued progress on the outstanding results in the prior two years".

    Overall revenue (excluding charge-through sales) was $15.8 billion, up by 4.21% over the previous corresponding period (pcp), which was May 2021 to April 2022. What Metcash terms underlying earnings before interest and taxation (uEBIT) was $500.8 million, up by 6.03% on the pcp.

    According to the financial notes attached to the results, the "underlying" refers to the exclusion of the following items: Project Horizon implementation costs; put option valuation and business acquisition costs; Mega Distribution Centre transition costs; and Impairment/(benefit), net of reversals.

    Net profit after tax (NPAT) for the reporting year was $259 million, up by 5.54% on the pcp.

    Hardware

    HNN is providing a summary of the hardware division results here, with a more thorough evaluation in the upcoming edition of HI News.

    For the hardware division. sales revenue, excluding charge-throughs, was $2,344.1 million, up by 15.30% on the pcp. Underlying EBIT came in at $219.2 up by 14.58% on the pcp.

    Overall hardware sales including charge-throughs came to $3,400 million, an increase of 10.6% over the pcp. Independent Hardware Group (IHG) sales, also including charge-throughs, were $2,800 million, up by 3.7% on the pcp.

    Like-for-like sales for the IHG increased by 2.7% over the pcp, with Metcash claiming trade sales grew by 3.8%, and DIY sales by 0.6%. This contrasts with the pcp, where Metcash claimed trade sales grew by 12.7% over FY2020/21, and that DIY was up 6.7%. According to Australian Bureau of Statistics stats, the background growth for the FY2022/23 period was 3.7%, as compared to the pcp.

    The company reported that IHG sales grew by 7.9% in the first half, but declined by 0.6% in the second half. It stated that demand was firm during the second half, but that "sales [were] impacted by member management of working capital". Asked about this by an analyst, the CEO of the hardware division, Annette Welsh, responded:

    I'd say [the diminished result] was really very much focused on good inventory management at a wholesale level. Both but mainly in trade, the robustness of the DIY and trade sales at a scan, retail level, have rebounded well after that Q3/Q2 adverse building conditions and bad spring, and so confident in the retail performance and pleased that the inventory management of independents and our own network will give us a good setup for the year ahead.

    Total Tools Holdings (TTH) like-for-like sales grew by 4.8% over the pcp. In response to an analyst's question regarding performance in the first six weeks of FY2023/24, Mr Jones responded that TTH like-for-like sales were essentially flat, which he regarded as a relatively good result in a down market.

    Overall sales for TTH, including non-organic growth through acquisitions, increased by 61.9% over the pcp, totalling $583.5 million. (Presumably, sales for TTH in FY2021/22, originally reported as $367 million, have been revised downwards.) According to the results announcement:

    During the year [FY2022/23], the Total Tools store footprint has continued to expand with the further acquisition of ownership interests of between 51% and 60% in eight Total Tools independent retail stores for $31.7 million, together with the establishment of three greenfield JV stores.

    Online sales for TTH grew by 3.4%, and now represent 9.4% of sales. Overall online sales for the hardware division grew by 0.6%, and now make up around 6% in total.

    Analysis

    It remains difficult at times to parse exactly how Metcash is thinking about hardware. As an example, Mr Jones referred to the results for DIY in IHG as being "robust" - a comment that was repeated by Ms Welsh in answer to an analyst's question - where like-for-like sales grew by 0.6%.

    Tracking inflation in this area is difficult, but it's highly likely inflation exceeded 0.6% by a considerable margin, which means DIY would have contracted somewhat - possibly by 4% or more. "Robust" seems not a particularly helpful description in that context, so one wonders if there is perhaps a different context under consideration. Perhaps this relates to the discipline brought to store inventories.

    As one analyst commented, market forecasts see Metcash likely facing much tighter markets in FY2023/24. The really significant element to understand about Metcash remains that the company has radically altered its risk profile over the past four to five years. That is down to, in particular, the partial and complete corporate acquisition of retail operations in IHG, as well as a similar expansion in TTH.

    So far, this has not shown up as much of a risk, as hardware retail has continued to expand over that period. However, by making these changes the company has obviously exposed itself to considerable downside risk, if the hardware market contracts.

    The risk itself, simply as risk, is not especially dire. What is really of concern is that the company, to this point, has had a very conservative, risk-averse business model, which is typical of wholesale-only operations. While wholesale operators may have considerable fixed-cost investments in warehouses and machinery, they are also able to substantially upscale and downscale their operating costs in response to market conditions.

    That's not the case with retail operations, where downscaling is always a balance between saving costs in the short-term while preserving the ability to expand once the market has improved. Given its history, it is a major concern whether Metcash has the in-house expertise to handle the need to respond to a down market in hardware.

    retailers

    Retail update

    WB Hunter sold

    ATS Building Products partners with the Parramatta Eels and Terang & District Co-operative has released its annual report

    Listed transport, logistics, and rural supply company, Lindsay Australia (Lindsay) has acquired rural merchandising business WB Hunter.

    WB Hunter was established in 1947 in Shepparton, in north-central Victoria, about 180 kilometres north of Melbourne's CBD. According to Shepparton News, the business was developed by the late Bill Hunter who was a former mayor and community leader. He worked together with a transport company.

    It began as a small operation offering a few bulk goods and has grown into a retail business that has eight locations including Echuca, Tatura, Euroa, Katandra, Yarrawonga, Corowa, Wangaratta as well as the Shepparton store.

    Queensland-based Lindsay announced it purchased the business for $34.6 million. The acquisition will allow its subsidiary Lindsay Rural to take on a diversified sales mix of agricultural supplies and support services that has over 10,000 commercial and retail customers.

    It means Lindsay can expand its rural footprint beyond its core market in Queensland into the more populous states of NSW and Victoria. Analysts believe the acquisition gives Lindsay's rural business the ability to scale within one of Australia's core horticulture, dairy and mixed farming regions. A little over one-quarter of revenue is currently attributable to Lindsay's rural services. Acting Lindsay chief executive Craig Baker told Shepparton News:

    The acquisition expands Lindsay's presence in key growth markets of Victoria and NSW and provides a strong platform for pursuing further growth opportunities across these regions.

    The purchase by Lindsay Australia also ends ownership of the business by the Hunter family. However chief executive Michael Moroney will continue in the role. Mr Moroney is a WB Hunter director family member.

    Financing of the acquisition will comprise of an upfront cash component, a scrip component of $7.2 million and a deferred cash payment for the inventory assets of about $14.5 million. All cash components of the transaction will be funded through Lindsay's existing cash holdings.

    Lindsay advised the Australian Stock Exchange it expects to achieve earnings for the 2023 financial year of between $85 million and $90 million. It also informed the ASX on 26 June that CEO, Michael Kim Lindsay resigned his position, effective June 30, 2023.

    ATS Building Products

    Rugby league club Parramatta Eels recently announced a multi-year partnership with ATS Building Products that is based in Western Sydney. It has six locations and a head office in Northmead. The partnership comes in a year when ATS Building Products will be celebrating its 20-year anniversary.

    The Parramatta Eels said it is very proud to be an integral part of a thriving Western Sydney community, one that is diverse and entrepreneurial and rich in history and heritage. Parramatta Eels CEO, Jim Sarantinos said:

    ATS Building Products are a well-known and respected organisation, and one that we are looking forward to building a long-term partnership with. We are thrilled to welcome a brand with such a strong passion and commitment to Western Sydney and all look forward to bringing the partnership vision to life.

    The partnership will see ATS Building Products have a strong presence at Parramatta Eels home games at CommBank Stadium as well as across Parramatta Eels' digital channels. ATS Building Products founder and CEO, Haytham Moshi said:

    We look forward to building a strong partnership on and off the field.

    Terang & District Co-op

    The co-op's annual report showed it has added 130 new members, bringing membership to 3371, the largest number in its history. It also reported a profit of $1,053,015. It is the second time in three years the co-op's profit has topped $1 million.

    Chief executive Kevin Ford and chairman Geoff Barby said the profits allowed the co-op to reinvest. In The Moyne Gazette, they said:

    This keeps the co-op and town vibrant and appealing. The successes of recent years allow the board to contemplate and plan essential capital projects that will enable continued growth for the future of the co-op.

    In 2023-24 it will invest $450,000 in introducing new IT operating systems into all business divisions and a $250,000 solar power system.

    Mr Ford also said the strong result was built on consistent sales performance from Mitre 10 businesses, while the IGA + Liquor Supermarket continued to perform well, delivering revenue of more than $15.5 million.

    We are very proud of what we have been able to deliver to the community in the last few years. Not only do we have a great supermarket and a great trade and retail home improvement store, we have an engaging and exciting community co-operative.

    Terang & District Co-op employs more than 120 staff and supports local contractors, suppliers and growers where possible. Its sponsorships and donations increased to $85,830, and more than $233,000 in members' rewards were distributed. Mr Barby said:

    The support of members and customers enables us to support our community.

    Mr Ford said total turnover was $28.4 million, down 2.1%. He said considering the closure of the dairy side of 360 Dairy Solutions, the team achieved an "outstanding result for members".

  • Sources: Shepparton News, Market Talk (Wall Street Journal), Parramatta Eels and The Moyne Gazette
  • retailers

    Retail update

    Trotter's Mitre 10 rebrand finalised

    Porters win award and industrial and safety products distributor ATOM is seeking a buyer to replace its majority shareholder

    There is a new shopfront at Trotter's Mitre 10 in the town of Euroa, north-east of Victoria. The previous teal and orange branding of Home Timber & Hardware and name Saville's Plumbing and Hardware Supplies has been replaced. Ian and Rosalie Trotter, who have owned the business for the last two years, have finally put their name on the shop in Railway Street.

    The store was known as Saville's Plumbing and Hardware Supplies in Euroa for over half a century, according to the Euroa Gazette.

    Now known as Trotter's Mitre 10, the building has been freshly painted in the colours of the Mitre 10 banner.

    Trotter's Mitre 10 continues to stock plumbing supplies, timber, hardware, pool water testing and products, custom flashing, paint, gas refills, key cutting, plaster, and garden irrigation and supplies. It is also an Adventure Kings stockist and have introduced a new range of plants and decorative pots.

    Porters

    Porters Mitre 10 Mackay in Queensland was named as a top store in the country at the recent National Timber and Hardware Awards. The Mackay city store won in the category for a retail store over 2500sqm.

    Porters Group CEO Hayden Cargill said taking out the award meant a lot to the team and the Porters family. He told the Daily Mercury:

    Without the continuous support for our local community, we wouldn't be able to achieve such high recognition at a national level.
    I am incredibly proud of our entire team. It is a true testament to their hard work and dedication. It is an honour to be recognised as one of the best hardware businesses in the country.

    Porters have sites in Mackay, Northern Beaches, Glenella, Sarina, Marian and Cannonvale and employ more than 200 staff.

    ATOM industrial and safety

    ATOM sells industrial hardware and safety equipment through 12 warehouses around Australia. Items include protective clothing, safety equipment, material handling equipment, cutting tools, pneumatic tools, lubricants, fasteners, transmission products, hydraulics and general industrial products.

    The business is now up for sale, according to The Australian Financial Review (AFR).

    ATOM is managed by CEO Jason Johnson with founder Mark Bishop and his son, Scott, owning 90% of the company. The vast majority of revenues (80%) come from its Australian business, but it also operates the largest industrial tools supplier in Papua New Guinea and Solomon Islands, under the Bishops brand.

    Earnings before interest, tax, depreciation and amortisation (EBITDA) is estimated to be around $40 million.

    Prospective buyers could compare it to Wesfarmers' industrial and safety division Blackwoods or construction and asset maintenance supplies business Jaybro. The latter was purchased by Quadrant Private Equity for $600 million to $650 million in 2021, or a 10 times multiple, reports the AFR.

    Background

    Since its establishment in 1972, Bishops has been an integral part of the development of Papua New Guinea (PNG) through the supply and service of products to a multitude of projects across the agriculture, mining, forestry, manufacturing, marine sectors, and more recently, the oil and gas industry.

    It began with two brothers, Mark and Wayne Bishop and has now grown to over 300 staff.

    The original business in Port Moresby focused on general engineering, mechanical and marine maintenance.

    Today Bishops operates six branches in PNG including Port Moresby, Lae, Mt. Hagen, Kimbe, Madang, Kokopo, and an equipment hire/crane hire division. Industrial sales remain the core of the business.

    Brands sold through its outlets include Bosch, Stihl, Cigweld, Flexovit, Insectshield, Spanset, Warrior, Milwaukee, Puma, Enerpac, Alfagomma, Macnaught, Steel Blue, Howler, CRC, Penrite, Loctite and Wacker.

    Bishops has also developed an import program and introduced established product names to the PNG market such as King Tony hand tools, Bulldog boots, Hardman clothing, PPE Select and Wirra safety products, and Genpower generators.

  • Sources: Euroa Gazette, Daily Mercury, PNG Business News and Australian Financial Review
  • retailers

    Hardware retail update

    Hardware store planned for Sinnamon Park, QLD

    Mitre 10 is leaving its site in Mount Gambier's CBD and the garden centre at Acheson's Mitre 10 wins award

    There has been speculation about the identity of a new hardware outlet in the fast-growing, light industrial area in the Brisbane suburb of Sinnamon Park, according to Westside News.

    The development application from the Trade Coast Properties includes a 1000sqm hardware and trade supplies outlet, a vet, shops, retail and indoor sports. Its proposal is for a 11,200sqm, four-level building at 532-554 Seventeen Mile Rocks Road, and forms stage two of the overall redevelopment of the site.

    Bunnings told Westside News it is not part of the new building.

    Two levels would be for undercover parking for 384 cars. Another 114 car spaces were planned for a proposed stage 1 building as well.

    The research, technology industry and warehouse component would take up most of the new building, just over 9000sqm. The new structure would be built behind existing buildings on the site and the proposed stage 1 building.

    The huge 40,000sqm site slopes down to the Brisbane River and is mostly surrounded by bush and industrial or non-residential users.

    Seventeen Mile Rocks Road has become increasingly busy in recent years due to several developments including a multi-stage retirement village, with a new stage expected soon, a large church with parking for about 400 cars, a 24-hour animal hospital and major storage facility.

    Mitre 10 in Mount Gambier

    A 1.3-hectare property, which houses Mitre 10 on Sturt Street and Beaumont Tiles on Bay Road in Mount Gambier, SA is up for sale through Leedwell Property.

    Mitre 10 is moving to the old Bunnings building on Jubilee Highway later in the year, along with Total Tools, after Bunnings abandoned that site when Masters closed all of its stores, including the one at the Mount Gambier Marketplace shopping centre, in 2016.

    The walls of the current Mitre 10 are heritage-listed as a former flour mill dating from 1882.

    Leedwell Property partner Jamie Guerra said the site was suitable for a range of uses, including residential. He told ABC News:

    It may be anything from more of that large format retail. Someone may see a value in some of the buildings because there's a heritage component to an element of it, but equally someone may see it as a more redevelopment site.

    Mount Gambier deputy mayor Max Bruins said he would like to see a hotel or apartment-hotel at the site.

    Personally, I'd love to see some more high-level accommodation within the CBD.

    Related

    Mt Gambier Mitre 10 makes a move - HNN Flash, March 2023

    Acheson's Mitre 10

    The garden centre at Acheson's Mitre 10 in Forbes, NSW has been acknowledged by the National Timber and Hardware Association as the best in the country for 2023. Acheson's Mitre 10 co-owner Jacinda Acheson (with Aaron Acheson) told the Forbes Advocate:

    We were very surprised and super, super proud. It's a tribute to the entire team.

    The story of the garden centre actually began two years, when the team took delivery of the first semi-trailer load of plants. Ms Acheson said:

    We had a full launch day planned in September 2021 ... We had invested so much into this.

    But COVID-19 restrictions were reintroduced, with only essential shopping was allowed and only essential workers were to attend the workplace. Not about to let the plants die, Ms Acheson called Melissa Shaw and the two worked around the clock to put their stock online, offering free delivery to get off the ground. She said:

    We took a picture of every single plant and pot we had just got in, manually uploaded them to a website. It was a logistical nightmare but we did it - we made it work.

    Then in March 2022 it began to rain. In June, a hopeful Garden Centre team made their order for that coming spring. Two full truckloads of plants rolled in August but spring did not arrive.

    October saw the Achesons cut off from the business, pumping around the clock to keep water out of the house. By the first November flood peak they were living on site when the water went shin-deep through the garden centre. Two weeks later they had to move upstairs as an even bigger flood peak came through, this one through the building as well as knee-deep through the garden centre. Ms Acheson said:

    One of my really big pots - they weigh about 150kg - it actually floated to the other side of the carpark.

    When the water receded, however, the reality of the task ahead was overwhelming. The mess left behind could only be described as "horrible" and the rest of the team was still cut off by water.

    By February 2023 they were ready to begin again, levelling the ground, putting in new drainage, even laying artificial turf across the entire area.

    Judging for the awards took place in April and the Achesons pay full tribute to their team for winning the award.

    Greg Horan and Allan Brockmann spent four weeks rolling out the artificial turf on the ground, and February was when we had the heat. Marg Stirling and Cherie Reid are in the garden centre every single day through 45 degree heat, to minus twos, in the rain, keeping it up to that really, really high standard.
  • Sources: Westside News, ABC News and Forbes Advocate
  • retailers

    Retail update

    Sydney Tools outlet for Bathurst, NSW

    Pet store retailer, Pets Domain is looking to return to its roots and has Northern Tasmania in its sights

    A development application (DA) has been lodged with Bathurst Regional Council to build a Sydney Tools store in the growing Kelso business precinct, reports the Western Advocate.

    The proposed development, would come at a cost of $2.9 million, and involves the construction of the retail premises on a site located at 10 and 12 Ingersole Drive.

    There would be 1311.5sqm of retail space on site, along with 179.3sqm of storage space and provision for amenities. The single-storey building would be primarily constructed from precast concrete panels, structural steel and steel studs.

    The building is proposed to be eight metres high above the adjusted ground level, which exceeds the height of buildings planning controls.

    A variation request has been made, with the developer arguing that compliance with the development standard is unreasonable or unnecessary in this instance, and that there are sufficient environmental planning grounds to justify contravening the development standard.

    When it comes to parking, a total of 31 on-site car spaces would be provided, including one disabled parking space. Bicycle parking spaces will also be available at the entrance to the building.

    The Statement of Environmental Effects with the DA includes the proposed operational hours and anticipated customer volumes.

    In a recent interview with The Weekend Australian, Sydney Tools co-owners and brothers Elvis and Jason Bey said they are seeing economic headwinds that will not ease for a long time. Jason Bey said:

    There are headwinds coming up, but we're trying to stay ahead of the game. We've got about 80 stores now and are planning to roll out another 10 by the end of the year.

    He admits he has to be judicious about the growth, with staff costs increasing. Mr Bey also said some landlords are asking for big rent rises.

    One positive for the business is the big drop in the cost of shipping containers - now about $500 each rather than $10,000 at the height of the COVID-19 freight snarl in late 2021 - but local trucking costs are increasing rapidly too. Mr Bey said:

    Our costs are increasing and I'm not sure that ever goes backwards again. We invest a lot in our training and you never want to lose staff because we're not paying them enough. But there are still opportunities out there and I feel there are markets that are not serviced that we can be in.

    Pets Domain

    There are plans for a new Pets Domain store for one of three undeveloped blocks that back onto the Legana Tavern, 6 Tatana Way, Legana are before the West Tamar Council in Tasmania.

    According to The Transcontinental, the proposal is for the construction of a new bulky goods development and is estimated to cost $1.1 million to construct. The plan stated the development was in keeping with the surrounding retail precinct.

    Pets Domain has 55 stores across Australia, including one in southern Tasmania at Cambridge. Chief executive Jason van Peelen founded the chain and is from Launceston.

    Related

    Pets Domain stores return to Tasmania - HNN Flash, December 2022
  • Sources: Western Advocate, Weekend Australian and The Transcontinental
  • retailers

    Retail update

    Border Builders Mitre 10 turns 70

    A Petbarn store has been announced for a shopping centre in Toowoomba, QLD undergoing a redevelopment

    Border Builders Mitre 10 in Goondiwindi, QLD started out in the early 1950s as a partnership between Bede Byrne, a plumber with more than 20 years' experience and a builder, Ross Noud.

    The descendants of Bede Byrne continue to run the business and recently celebrated its 70th anniversary. At the helm today are Alwyn and Patrea Bauman and their son Matthew.

    Alwyn Bauman spoke to the Goondiwindi Argus about the key milestones the hardware retail business has achieved. It remains a household name with the local community.

    1953: On 12 May, Border Builders and Plumbing Supplies begins trading from rented accommodation at 107 Marshall Street, Goondiwindi, providing a retail hardware service to the town.

    1960: The business moved to a freehold location, (its permanent address) at 119 Marshall Street.

    1968: Two apprentices, John Byrne (plumber) and Gary Noud (builder) completed their training and joined their fathers in the business. By this time, Border Builders and Plumbing Supplies had emerged as a significant professional supply outlet for the district. Its main customers were tradespeople and farmers.

    1971: The company changed from its tradition of independent purchasing and joined the Mitre 10 buying group.

    1985: Bede Byrne passed away after a long battle with cancer and John Byrne assumed control of the Byrne share of the business. John and Gary maintained their successful partnership into the second generation.

    Late 1980s: Began making aluminium windows and security products.

    1991: In April, Gary passed away as the result of a severe asthma attack. For the next 12 months, Ross Noud returned to fill the gap. By the end of the year, the Noud family share was offered to John Byrne, with options to continue, or to reform a new partnership.

    1992: On the first of March, the Noud share was sold to Alwyn and Patrea Baumann, who was John Byrne's sister.

    By this time, the business was operating from three freehold properties, with the main display floor of 800sqm located opposite the council chambers and close by the post office.

    The two other buildings were located at the back of the site, fronting Callandoon Street. One housed bulk trade products on over 1325sqm and the other, steel and rural property supplies, on 1010sqm.

    1997: On 1 July, the Bauman family (Alwyn, Patrea and Matthew) assumed total ownership of Border Builders Mitre 10. With Matthew joining the business, the company had begun its transition to the third generation of the Byrne family.

    2000: The Bauman family purchased the Millmerran Hardware and began trading as Millmerran Hardware True Value.

    2002: On 20 June, Enid Byrne (the sole surviving member of the original partnership) opened the new Border Builders Mitre 10 Home and Trade Store at 119 Marshall Street.

    2006: A new building in Campbell Street, Millmerran, was constructed.

    Petbarn

    Pet supplies company Petbarn will open its second store in Toowoomba, QLD after it signed an eight-year lease with a five-year option at Wilsonton Shopping Centre.

    Co-owned by Consolidated Properties Group (CPG) and CVS Lane, the centre has been in its second stage of the $25 million redevelopment since August last year, according to the Toowoomba Chronicle.

    Petbarn will be the largest space to date, encompassing 850sqm of the 2163 qm site on the corner of Bridge Street and Richmond Drive.

    CPG national manager of retail leasing Rob Clifton said the addition of Petbarn was a "very big deal" not only for the centre, but the Toowoomba region too. Mr Clifton told the Toowoomba Chronicle:

    The pet industry has obviously had a huge growth spurt with the amount of people adopting pets during COVID-19 and this retailer has seen that growth creating a real need for a second store in the region.

    Petbarn is expected to open in August, as the centre's second stage of construction nears completion.

    TPG Capital owns Petbarn as well as vet clinic Greencross, and has an asset value exceeding $100 billion.

    It recently announced it is acquiring a smaller Melbourne-based rival Habitat Pet Supplies which has five stores. Subject to approval from the competition regulator, Greencross plans to merge the newly purchased business with its Petbarn division.

  • Sources: Goondiwindi Argus, Toowoomba Chronicle and Australian Financial Review
  • retailers

    Retail update

    Hastings Co-op has a new CEO

    The current economic climate and rising operational costs is affecting small, family owned and operated businesses like Ibis Siding Garden Centre which recently closed

    Community-owned co-operative Hastings Co-op has appointed Nick De Groot as its new CEO, following the passing of CEO Allan Gordon in March this year. Mr De Groot will start in the role in early May.

    Retail World reports that Mr De Groot brings more than three decades of diverse management experience to the Co-op. This includes senior leadership roles with KPMG, Essential Energy, the Roads and Traffic Authority of NSW, Mid North Coast Local Health District and most recently I-Med Radiology MNC.

    He holds a Bachelor of Financial Administration and Graduate Diploma of Applied Finance and Investment. Mr De Groot was previously a non-executive director with Bundaleer Care Services, Port Macquarie Chamber of Commerce and Hastings Co-op (since November 2022). Commenting his appointment, Mr De Groot said:

    I'm very excited about the appointment and appreciate the significance of leading Hastings Co-op into the future. Having been on the Hastings Co-op Board, I have a deep understanding of the challenges and opportunities we face and the Co-op's importance to the local community.

    Hastings Co-op has a long history in Hastings and Camden Haven, in the mid-north coast region of New South Wales, since 1916. According to its website, the co-op employs 400 people across eight business units including: supermarkets, hardware and rural supplies, liquor stores, fuel, department stores, condiment manufacturing and car hire.

    There are three hardware and farm supplies outlets in Wauchope, Comboyne and Kew, operating under the Mitre 10 and CRT banners.

    Ibis Siding Garden Centre

    Kym Gilbert, owner and manager of Ibis Siding located in Goolwa, part of the Fleurieu Peninsula in South Australia, said his business's biggest financial drains were wages, electricity and insurance. This had been the straw on the camel's back following COVID-19 and the floods. He told The Victor Harbor Times:

    At the end of the day, there's simply no profit.

    Mr Gilbert also claims large players like Bunnings, which opened in Victor Harbor in July 2018, have drained much of the prospective clientele from smaller businesses. He said:

    Bunnings setting up in Victor takes clientele away and that stings. I don't know how many more businesses are gonna close down on the Fleurieu, but it's happening.
    If you lose your small businesses, you lose tourism. The Fleurieu region's country towns depend on local business, no one wants to come all the way to Victor Harbor to shop at Bunnings.

    Mr Gilbert said he had a real estate agent from Adelaide approach him to sell the back four acres of scrubland of his property for $1.4 million, but even this sum could not tempt Mr Gilbert back into opening again.

    At the end of the day, with overhead costs the way they are, we'll just continue to go backwards.

    Ibis Siding opened in July 199 and was a joint venture between the four Gilbert brothers - Kym, Chris, Lee and Jim and their mother Christine, who passed away in 2012.

    At its height, the centre stocked over 2000 plants - potted and seedlings, most of which were grown as tubestock at Currency Creek on the Gilbert family farm. Mr Gilbert said:

    We started the business together, we specialised in natives, such as Geraldton waxes and wattles, with a real focus on natives specific to the region.

    Mr Gilbert was a beekeeper in the 1980s, which has given him a well-rounded knowledge of the region and how to work the land best.

    Local knowledge is being lost, it's really sad.

    Another concern he has is the loss of sponsorship opportunities for local sports teams, which small business supports in regional areas. Mr Gilbert said:

    We always sponsored the footy club, Goolwa footy club and the netball club and we've always done the raffles, pub events and supported the CWA. I served the community for a long time, it's a bittersweet departure.

    Mr Gilbert wishes to thank his loyal customers for supporting Ibis Siding over many years and his staff.

    Business Victor Harbor chief executive officer, Colin Shearing said small businesses local to the Fleurieu have been somehow holding off their rising operational costs in the current economic climate, but believes this will not last long.

    Businesses have weathered increased costs [such as] dramatic insurance increases (particularly those businesses now deemed by insurance companies to be in 'flood-prone' areas up to 150% increase in premiums), energy cost hikes, supply shortages, wages increases, increased fuel costs and 'fixed term' interests rates are being turned over to variable rates.

    As regional towns like Victor Harbor and Goolwa with expanding populations become targets of national and international retail enterprises, fewer profits are funnelled back into the community. Mr Shearing said:

    Small to medium sized businesses contribute $617 million to the local economy... the big national and internationally owned retailers do not re-invest their profits back into SA in the same way.

    However Bunnings area manager Justine Burrage said the connection it has developed with the locals in the region is important to the business. She told The Victor Harbor Times:

    Supporting the community is at the core of what we do. Our teams do a tremendous job of providing ongoing, hands-on and grassroots support, whether that's through our weekly sausage sizzle, heading out to help with a community garden or painting project, product donations to local organisations or hosting DIY workshops in store.

    Bunnings does sponsor local sporting teams or purchase direct sponsorship packages. Ms Burrage said:

    ...we support them through our sausage sizzles, hands-on support with projects like upgrading facilities, as well as general product donations.

    Referring to the concern raised by local small business owners, Ms Burrage also said Bunnings usually employs staff from within the region.

    Our teams live and work in the communities we operate and we always strive to provide both ongoing employment opportunities in regional areas and quality, localised advice to customers.
  • Sources: Retail World Magazine and The Victor Harbor Times
  • retailers

    Retail update: Hardware

    Ison & Co to close Sanctuary Point (NSW) store

    Former Metcash executive told a federal government select committee that big businesses were trying to buy up independent Mitre 10 stores and mainly referenced Bunnings for this "anti-competitive" practice

    A timber and hardware outlet that is part of Ison & Co's group of four stores, located in Sanctuary Point (within the City of Shoalhaven, NSW) is set to shut its doors permanently by the end of May 2023. It plans to sell the Sanctuary Point site after the store closes.

    Staff members will be relocated to the company's other stores in Huskisson, Nowra and South Nowra. The products available at the Huskisson store would be expanded to include items usually available at Sanctuary Point.

    Company director Phillipa Loadsman told the South Coast Register the decision to close was not taken lightly, and came after more than a year of deliberations. She described the closure as a consolidation, driven in part by the residential zoning at the Sanctuary Point store making it difficult to develop the outlet in a way that could properly meet the community's needs.

    Ms Loadsman said Ison & Co was a family business that had been servicing the Shoalhaven since 1917 "and will continue doing so". She said customers could still expect quality products, professional advice and friendly customer service at the other three stores.

    The Sanctuary Point store was opened in the early 1990s, and Ms Loadsman thanked the local community for their business and the personal relationships it has have fostered over the past three decades.

    Bunnings "anti-competitive": Metcash

    In a submission to the federal parliament's select committee on the cost of living, outgoing Metcash food pillar chief executive Scott Marshall - now chief executive of Reece Group's Australasian operations - has accused Wesfarmers-backed Bunnings of being "anti-competitive".

    Letters from Bunnings managing director Mike Schneider have been sent to at least seven Mitre 10 owners this year asking about acquiring these stores, Mr Marshall told the Senate committee.

    In a addition to the cost of living, Metcash was asked to participate in the Senate inquiry to provide insights into competition and its impacts on pricing.

    The Australian Financial Review (AFR) reports that Mr Marshall noted issues with creeping acquisitions by larger players including Coles, Woolworths, Endeavour and Bunnings, which often buy out smaller independent stores in areas where they wanted to expand.

    Mr Marshall told the inquiry in March that stronger competition laws helped consumers facing rising costs of living, because more competition helped to keep pricing power in check. He outlined 22 large-format high-turnover grocery and hardware stores that had been pruchased by large corporates over the past nine years, which made "their loss a greater impact on the wholesale supply network operated by Metcash and, by implication, the independent network". He also told the inquiry:

    In addition to the acquisitions noted above, there have been instances where Metcash has sought to preclude what it considers to be anti-competitive acquisitions by acquiring an interest in the relevant retailer (in the grocery sector or otherwise), in circumstances where the retailer has been approached by a major retailer.

    Mr Schneider told the AFR the retailer regularly sought out opportunities to expand its network, through greenfield development and occasionally business acquisition.

    We know from experience that there's ample room for larger retailers, smaller retailers and specialty providers alike in the regions and categories we operate in, and think that choice and competition is great for consumers.
    There have also been instances over the years where local independent hardware store operators have approached us regarding a potential sale of their store. We've been pleased that on occasion we've been able to provide these independent business owners with a viable succession option.

    Despite the alleged approaches, the last time Bunnings successfully acquired an independent Mitre 10 store was in 2019, in Hamilton (VIC).

  • Sources: South Coast Register, The Australian Financial Review and Daily Mail Australia
  • retailers

    Retail update: Reece

    New Reece store approved for Orange, NSW

    Reece has said a softening in sales volumes which was identified in late 2022 is set to continue for the rest of the year

    A Reece plumbing and bathroom supplies store is set to open after Orange City Council voted in favour of its development application. The $3.4 million project will fill the currently vacant lot at 52 Leewood Drive.

    Councillor Kevin Duffy said he hoped a new business would bring costs down for residents. He told Central Western Daily:

    I'm going to support this 100 per cent. We have another developer in town who is going to provide a service for hardware and building supplies.
    We've seen costs go through the roof in the industry so the more competition to bring costs down the better.

    Earlier this year, Reece Group chief executive Peter Wilson said volumes declined 2% in the December quarter compared with a year ago in the Australasian business which as 650 showrooms.

    At the time, he said he expects volumes to keep being subdued. He told The Australian Financial Review (AFR):

    We are preparing for this to continue over the remainder of the year.

    Reece has embarked on a cost-cutting drive to compensate. Price rises on products of 11% in the December half helped underpin an 11% rise in sales revenue in the Australasian region. Net profit after tax for the whole group was up 18% to $186 million.

    Reece also appointed Scott Marshall as the chief executive of its Australasian operations. Mr Marshall is a former chief executive of supermarkets and convenience at grocery wholesaler Metcash.

    The Melbourne-based company made a big bet on the US market in 2018 with the $1.9 billion acquisition of MORSCO, which operates in 16 states.

    Plumbing opens the data pipe - HI News 4.05, page 52

    More recently, the group announced it acquired Barsco Inc., a Dallas-based distributor of refrigeration and HVAC equipment, parts and supplies throughout Texas. Barsco has 12 locations across Texas. (Financial details were not disclosed.)

    Reece has been rebranding its 212 US outlets to the Reece banner, with all the Californian stores now trading under the Reece name. The slowdown in the United States in the December quarter was even more pronounced, with volumes down 6% compared with a year earlier. The rate of product inflation in the US was 22%, double that of Australia.

  • Sources: Central Western Daily, Australian Financial Review and Modern Distribution Management
  • retailers

    Retail update: Rural supplies

    Yarrawonga rural services business wins CRT award

    Rural merchandiser Tom Grady has lodged plans to expand his store and Yolla Co-Op wins AIRR awards

    Murray Valley Rural Services has won CRT Business of the Year from 290 stores around the country.

    It has been a finalist for the past eight years and won the south region state award in 2019. Owners Graeme and Meegan McInness were thrilled to be recognised by their industry peers at CRT and Nutrien. Mr McInness told The Border Mail:

    I feel that our ability to provide the full range and service offering to match the corporate stores, combined with the flexibility to act quickly and decisively on opportunities as they arise has been the key to the success of the business.

    Mr and Mrs McInness established the Yarrawonga store in March 2000, and opened their Berrigan store in 2013. It services clients from as far as Corowa-Rutherglen, Urana, Finley, Tocumwal, Cobram and Wangaratta.

    CRT is part of the Nutrien Ag Solutions(r) Group.

    Related

    Ruralco sold to Canadian agribusiness - HI News 5.2, page 23

    Tom Grady store

    A drive-through service and improved parking are two of the main improvements in the proposal to expand the Tom Grady Rural Merchandise store in Gympie (QLD).

    There will also be a detached building for storage and new display and office space. The expansion would be built on land which Mr Grady had built up when the store last expanded in 2022.

    Overall, the latest upgrades would boost available parking at the shop from six spaces to 27, including one bay for people with disabilities. The car park would be covered by an awning.

    Mr Grady said the additions would make for "quicker service", according to The Gympie Times.

    Related

    Plans to expand Tom Grady Rural Merchandise Store - HNN Flash, January 2022

    AIRR awards

    Yolla Co-Op in Wynyard (TAS) took out four awards at the 2023 Australia Independent Rural Retailer Awards earlier this year.

    The company won the Victoria and Tasmania member of the year award for 2023 and 2022 - both of which were handed out at the same ceremony. In addition, Yolla Co-Op employee Kurt Hill won the young guns award, and the company also took home the national supplier choice prize. Yolla Co-Op general manager Ben Davis told The Burnie Advocate:

    We are thrilled to have won these awards, which highlight our team's dedication to providing our customers with exceptional service, top-quality products, and value for money.
    Winning the national supplier choice award is a particular honour, as it recognises the trust and support our suppliers have in us to deliver excellence in everything we do.

    Related

    Yolla Co-Op opening Latrobe store in Tassie - HNN Flash, October 2021
  • Sources: The Border Mail, The Gympie Times and The Burnie Advocate
  • retailers

    HI News 7-01: HBT Conference

    HBT Conference, Building Approval stats and Metcash Investor Day

    This feature-packed issue includes: The real story of the 2022 HBT Conference; Building Approval stats for NSW, VIC and QLD, on an LGA basis; and the Metcash Investor Day

    The pandemic has changed hardware retail in Australian permanently. This issue traces some of those changes, in the HBT National Buying Group, the pattern of dwelling approvals around Australia, and the effect on the Metcash-owned Independent Buying Group.

    Download Hi News 7-01

    HBT Conference

    The following is an extract from the main story:

    At the conclusion of the HBT National Buying Group Conference in May 2022, HNN faced a real problem. We knew what we needed to write about that conference. But we also knew we couldn't do it. Not then.

    So we decided to do some light immediate coverage, and to provide some space before returning to the subject, hoping that conditions would have changed somewhat, making it more possible to write the story the way it needed to be written.

    Things did shift in the direction we had predicted, with a general slowdown, but also a relief from some of the immediate pressures of the pandemic.

    So now we have the chance to write that story.

    The New Geography of Approvals

    Extract:

    COVID-19 was hard enough to deal with, but it's turning out that the aftermath of the virus presents strong challenges, as well.

    For hardware retailers - and the construction industry as well - the problem this presents aren't just about where we are now, today, but also where we have been. The changes to the housing industry, on both the demand and supply side, have been so big and constantly shifting that it's hard to even track backwards, let alone go forward.

    One way to start getting a clear picture is to take a good statistical look at the past, and a glimpse at the near present. To provide some of the materials for this, HNN has undertaken a thorough statistical review of building approvals, using data from the hard-working statisticians at the Australian Bureau of Statistics (ABS).

    Metcash Investor Day

    Extract:

    The reason why independent store owners are concerned about corporate control comes down to what gets optimised in a buying group. What corporates seek to do is to optimise for the entire network. They tend to make decisions that result in the network improving sales and revenue.

    The difficulty with this is that those network decisions can disadvantage individual stores, even as they boost overall network results. If those stores have corporate ownership, that doesn't matter, as it is the total net revenue or profit that matters. If the disadvantaged stores are independently owned, however, it does matter, as they lose out with no real compensation.

    In the independent buying group situation, stores make their own choices. The buying group might ask them to purchase from specific suppliers, as concentrating orders leads to better prices, but they have no final control over the stores.

    While this continues to be of some concern in IHG, HNN would suggest that it is, in the current market, outweighed by other considerations. Specifically, there was an unplanned consequence of the HTH acquisition, which is that currently, outside of Bunnings, IHG now has a near-complete monopoly on strongly branded hardware retailers in Australia.

    Download Hi News 7-01

    retailers

    Metcash FY2023 H1 results: transcript

    Analyst's questions from results presentation

    Weather blamed for disappointing results

    HNN has already reported on the financial results for Metcash's first half of FY2023, covering the six months from May to October 2022.

    As Metcash did not post the recording of its results presentation in its usual place, there has been no general transcript available for the announcement. HNN is making its own transcript available under Creative Commons 4.0 copyright, which means the only restriction is that HNN must be attributed as the source. A straight text file is available at:

    Metcash FY2023 H1 text transcript - HNN

    The presentation

    Metcash CEO Doug Jones introduced the hardware division results:

    Turning our attention to hardware, sales were up 16.8% with growth in both DIY and trade demand. The performance was across both IHG and Total Tools. And we've seen excellent contribution from acquisitions, as well as continued strong performance in the online channel. IHG sales were up 7.9%. As we flagged towards the end of the half, we did experience adverse building conditions, the flooding, and inclement weather undoubtedly impacted the ability to get onto site. In DIY we really haven't had a Spring. This has impacted outdoor, garden and paint categories. We're confident that the pipeline in trade remains strong. The recovery of the DIY Spring sales is less likely and dependent on the quality and length of the Australian Summer.

    After revisiting the results numbers, Mr Jones further commented on hardware:

    Key drivers are the continued strong underlying demand supporting the strong trading results in both businesses, the pleasing performance of the acquisitions, and this is offsetting some of the costs we're experiencing like in the other pillars in labour, freight and fuel. Also offsetting the marginally higher trade contribution in IHG. The return on sales of 6.7% is pleasing given the diluting effects of high margins from franchise and exclusive brands income in Total Tools of the added retail network sales and increase in trade and commercial customer mix across the pillar.

    Mr Jones stated that there are now 171 stores that are in the Sapphire program, and that the Ravenhall distribution centre has opened.

    Under the heading of build trade, we've now completed 40 Sapphires of standalone trade stores, and we're targeting all 50 of those standalone stores. We've completed the acquisition of the Petries Mitre 10 in Dubbo, and the Five Star business in Queensland. And we continue to bed these down. And I remind you that we now have 11 frame and truss facilities in the network. We've maintained the focus on trading technology to reduce cost and effort for all the customers and this has seen strong acceptance from those customers.
    In Total Tools as I mentioned, as of this morning, the network is now 104 or 102 at reporting date, with a further four to be opened before the end of this calendar year, and we remain well on track towards the goal of 130 by 2025. Our JV joint venture and company owned stores is now at 39, as I said. We have a further seven planned this year. It's really pleasing that we've seen strong appetite from our JV partners to remain in the network We're better for them and their support and leadership is an important strategic advantage for Total Tools. We have continued strong performance from exclusive and own brands in Total Tools. And this will be supported by the future move into the IHG Ravenhall facility. Loyalty customers still contribute around 90% of sales and we're making great progress on our personalisation journey.

    IHG questions

    Questions from analysts began with Michael Simotas from Jeffries asking a probing question about the basis for performance in hardware:

    My first question is on hardware and specifically the weather impact that you've called out across the DIY and trade. So in DIY the categories that are impacted by weather are also the categories that seem to be slowing down globally due to a COVID pull forward. How confident are you that this is all weather related impact and not an underlying slowdown? And then similarly in construction, obviously weather has been pretty challenging in the last couple of months, but it's been pretty onerous for the last couple of years. Again, how confident are you that there's no underlying slowdown in demand?

    The CEO of Metcash's hardware division, Annette Welsh, replied.

    Thank you for the question. And it's certainly one we look at very closely ourselves. I might just answer the trade one first. As we spoke about at the Investor Day, the confidence in the pipeline of the market is still as strong as we talked about back then. And I would say, you know, having been in New South Wales and Victoria during the that heavy weather period, there was no ability for our vehicles to leave our stores and land on sites anywhere. So as the weather is, and I can only talk for New South Wales and Victoria. But as the weather seems to be improving, we're certainly seeing that return to the levels that we anticipated. So no current concern there.
    Your point is a really good one in relation to the perhaps just I would call it the coincidence between garden paint and outdoor being affected. And they were the biggest ones for COVID uplift, I would say we'd already seen some paint rebalancing, coming through post COVID into sort of the last half of last year and the first half of this year. But I would say there's absolutely no question there has not been a Spring in most of the states. And the reason we have confidence is we can see that the results in Queensland and [Western Australia] are giving us an indication that this is a weather impact, and currently nothing more than that.

    Other questions about IHG more or less followed up on the same subject. Shawn Cousins of UBS asked, about the loss of revenue due to weather:

    Can some of this be recouped, particularly in trade, by trades working through Christmas?

    Ms Welsh responded (in part):

    In relation to can we recoup the sales from the weather or the adverse building conditions, we see that to be unlikely, essentially, the length of build times will just become longer. So we don't anticipate that likely in this financial year, and we'll see it more likely into next financial year.

    Lisa Deng of Goldman Sachs echoed some of that question as well:

    As we're starting to see weather patterns improve, do we expect that to basically go back into positive territory into the second half?

    Ms Welsh responded:

    We've given you the outlook in terms of the last four weeks, I don't think we're going to do it much more than that. But as we've as I've already spoken to, and all of us would have experienced, Spring has not sprung. And Summer, we are hoping for a better position from a DIY perspective and trade, the outlook still looks positive.

    Perhaps the most interesting question though, was the follow-up asked by Mr Cousins:

    And then more generally, you've called out the underlying strength in the business. From whom do you believe you're gaining market share from please?

    To which Ms Welsh replied:

    The question on market share is an interesting one, we don't have any analysis or information that gives us any insights into share. But as you know, that they're building numbers that are sizeable in terms of what they've been over previous years. So I think there is a degree of rising tide here.

    TTH questions

    Brian Raymond from JP Morgan asked:

    Just on Total Tools, obviously, great result in terms of the earnings delivery, but just trying to look through the uplift from JV conversions and look at the underlying network growth. It looks like on my numbers EBIT, ex-acquisitions up 4%, sales ex-acquisitions up 9.5%. I just want to understand how, how that's trending. From an underlying perspective, I'm sure there's a lot more, certainly a lot of moving parts that would drive that. Are you seeing any kind of cannibalisation from your stores being rolled out to your competitor stores on the existing network? It'd be great to get some colour around the underlying performance excluding acquisitions.

    Annette Welsh responded:

    No, I think probably the underlying performance, it's best to shape it in the mix between our NSO wholesale and our joint venture retail stores, I think that will probably give the better colour. And I'm probably not going to define that as much as you'd like around the mix. We have no concerns in the underlying performance, although the costs of challenges around supply chain out of China did have an impact in the first half on our EBIT performance from a margin perspective, but no concerns around cannibalisation or competitive pressure in the half.

    Tom Kierath of Barrenjoey asked for more detail in TTH growth:

    Good morning, guys, just one on Total Tools I think you referenced there, like-for-likes in retail 4.7% [up] in the half? Could you maybe just give us a bit of colour on how that kind of trended through the half. And then what that number is for November. So you've quoted there 100% sales growth for November, but it is really not that relevant, given the changes in the store ownership base.

    Annette Welsh provided some details:

    Certainly can thank you. It's been a bit similar to, I would say, the trade business. Strong first quarter, a second, a slightly slower second quarter. And similar, as I said, to what we're seeing everywhere else in relation to the slowdown in the second quarter, but some of that's also varying number of days around the strong promotional activity that we do with suppliers, and aggressive trading days. And we've got a different mix of those this year, versus last year in the first half versus the second half. And don't read anything into that, that's just how they fallen, in a competitive market. So, to summarise, similar to what you've heard from us in trade, slowing into the second half, to that 4.7%. Slowing into the second quarter to hit that 4.7%

    Analysis

    As mentioned in HNN's initial report on these results, the background growth in hardware retail for Metcash's reporting period was 6.9%. With DIY/Consumer comp sales up by only 1.5%, and even trade comp sales up 5.2%, Metcash would seem to be steadily losing share in the hardware market. Given that the Bunnings result more-or-less tracked the background growth numbers, one would have to conclude that non-Metcash independent hardware retailers were the likely growth leaders.

    One could imagine that there are three strategic paths which the independent members of IHG - especially Mitre 10 members - may be going down. The very best informed members are likely fully aware of the ongoing corporatisation of IHG - and Metcash hardware in general - but see the strong branding the company provides as more than compensating for any losses incurred due to IHG optimising for the network rather than individual stores.

    A second strategic group would be somewhat bothered by the corporatisation, but sees it as having minimal effect on their individual stores, either because they have a speciality (e.g., specialised timber sourcing), or because their location (e.g., a long-established store in a sparsely populated region) offers a buffer.

    The third group would be retailers who are somewhat invested in the history and community of Mitre 10, and take at face value Metcash's asseverations that its primary goal is to enable independents (rather than to provide adequate RoI to investors).

    The question is, as TTH continues to roll out more stores, and inevitable conflicts with existing Mitre 10 and HTH stores develop, which of these groups will be most affected, and what will their reactions be? What do they do when they review results for a quarter and find that revenue from power tool accessories has fallen by 30% (for example)?

    Such events could be a catalyst for considerable out-network store migration, or it could have only a modest effect. The modest effect might be result of TTH as being seen as an industry-trend, rather than just an IHG strategy - it's not going to make much difference to a retailer if sales are lost to Bunnings' Took Kit Depot or TTH.

    On the other hand, if independent buying groups, such as HBT National Buying Group, are able to offer more effective branding opportunities, backed up by online branding and advertising, the prospect of leaving the network could be attractive. This could then drive a negative feedback loop for IHG: as more independents leave the network, the network becomes more corporate.

    Metcash's best strategy at this point could be to ramp-up advertising for its Mitre 10 brand. That would be, however, expensive, and for the moment the company seems to prefer to prioritise expensive investment-based boosts, such as off-market share buybacks.

    retailers

    Retail update

    Stephen Iser receives IHG award

    Mt Gambier Mitre 10 makes a move; Byron Bay Mitre 10 closes; and awards for Ponting's Mitre 10 and Margaret River store

    Hume & Iser's Stephen Iser has been inducted into Independent Hardware Group's hall of fame. Mr Iser was celebrated by other members at the group's national conference in February. He recently told the Bendigo Advertiser:

    My entire family kept it a secret. I had no idea, and I was up there with my wife and our CEO, and my hardware manager and my timber manager.
    I was told to go up there because we won the Victorian large format Mitre 10 store so we could be (in the running for) the national large format store of the year too.
    It just hit me like a ton of bricks so I was walking up the stairs and my wife (Gail) was behind me and I didn't hear any of what they were announcing. Then Gail said look who is here and it was my son, daughter, daughter-in-law and our five grandchildren.

    Mr Iser said the moment was one of the highlights of his long career after working in the family business for 50 years. The store is in its 140th year of operation. He is now enjoying retirement although he remains a part-owner and director.

    You just get time back, you've got time to do things without being under the pump. When you're a business owner you're always here seven days a week and on the phone on weekends, you're never away from it.

    Looking back, Mr Iser believes change was necessary for business to flourish and if the company did not change over the years, the family would not have had a business. He told the Bendigo Advertiser:

    We've changed every year with new initiatives, just different ways to do business and stuff like that. Shows like The Block and Better Homes and Gardens where they show people how you can do a room up for $200, that's just been a boon for us.
    Everyone's into DIY and doing their own stuff and, in particular, with the pandemic, that was just unbelievable for us. Everyone was locked up in home and they were doing stuff at home.

    He said despite current difficulties with interest rates and the cost of living, he was confident the team would make it through.

    Look, I've been here that long that I've seen it come and go, I've been here when interest rates were 20%, that nearly killed us but we got through it.

    Mr Iser recalled the 1990 recession that caused sales to drop by 50% overnight. He said:

    If we (had not had) some good assets to sell we probably wouldn't be here, it's simple as that. It was very, very tough.

    Related: Stephen Iser and his store was featured in a past edition of HI News where he went into detail about its history and challenges over the years.

    The wisest Iser - HI News 5.4, December 2019, page 45

    Mount Gambier

    A site located on the corner of Jubilee Highway West and O'Leary Road in Mount Gambier (SA) previously home to a Bunnings store is set to be the new location for Mitre 10 Mount Gambier and a Total Tools store. Both are owned by K&B Timber and Hardware. K&B Mitre 10 general manager Jarrod Spearman spoke to The Border Watch and said:

    I think it gives us the opportunity to launch a pretty special store and remind the community there's another hardware store out there. The addition of Total Tools provides us that complementary option for the trade customer as well.
    We're well and truly in the planning stages now, but we envision both stores trading by mid-year.

    The current Mitre 10 store along Sturt Street will remain open as normal until the new location is ready.

    Mr Spearman said the development would provide an additional 15 staff to the current team. He told The Mount Gambier News:

    I think anytime you get to reuse a fantastic site like this can only be good for the community, You can see that Mount Gambier is expanding out - and this will absolutely support the new residents and the new businesses that are fuelling that growth

    Herbert Commercial sales manager Matt Kain said large-scale developments signalled to investors Mount Gambier was stepping towards the next layer of growth. He said:

    It has certainly become evident through a number of our commercial transactions, that here locally, Mount Gambier is being seen. Some of the bigger retail national brands that probably - skip over smaller regional areas - Mount Gambier is stepping into that next calibre of size.

    Byron Bay

    The Mitre 10 store on Johnston Street in Byron Bay (NSW) has now closed. The announcement was made via a Facebook post.

    The store has been owned by James and Lisa Mitchell since 2001, having first opened its doors in 1991. There is a Bunnings Warehouse less than a 10-minute drive away, in Byron Bay's industrial estate.

    Reacting to the news of Mitre 10's closure in Byron Bay, store manager Richard Gibson described its closure as "the price of progress", according to Daily Mail Australia.

    Over the years the store has played an active role in the local community, reports Byron Shire News. In 2016, the hardware retailer joined forces with Byron Bay's premier annual aquatic event, The Byron Bay Ocean Swim Classic and Mini Swim, by becoming the sponsors of the Mini Swim.

    Warrnambool

    Ponting's Mitre 10 in regional Victoria was crowned Australia's top store of its size at the IHG awards in Queensland.

    Now in its milestone 100th year in business, co-owner Pam Madner (with John Ponting) told The Moyne Gazette:

    It's a fabulous award to be getting in our 100th year of trading ... We feel lucky that we've inherited a business that is still surviving today.
    We've got fabulous staff. The staff are amazing, and we have a lot of loyal customers, which is really about our relationships.

    Started by Walter Ponting and brother Len, it is now a third-generation family-run business. Ms Madner said its switch to Mitre 10 in 2019 was a turning point for the business and helped it achieve the win.

    I think it made it a better shopping environment for customers to want to come in. I'm excited to be part of the Mitre 10 team. Since we joined. we've had three of our best trading years.

    Award judges said the store's focus on stock management, its dedicated team, a mindset of innovation and challenging the status quo had driven growth across its trade and DIY departments.

    The transformation of the next-door site on Raglan Parade into a purpose-built timber storage shed and truck unloading bay in the trade yard had "significantly improved the safety and accessibility" for customers and staff.

    The judges said in the DIY department, the team was continually challenging itself on how it could do better and working to improve its offering for customers.

    They said the business' growth was underpinned by a strong and well-executed marketing campaign which included eye-catching displays and a sales driving value statement, as well as gaining new online followers on Tik Tok and Meta "making them relevant to a new generation".

    It's the second time the business has won the national award, but the 2021 event was held virtually during the COVID-19 pandemic.

    Margaret River

    Margaret River's Mitre 10 outlet has won the Western Australian State Store of Year 2023 award which was announced in late 2022. It was deemed the winner based on sales, customer service, store standards, stock availability and community involvement.

    The store only took on the Mitre 10 banner in October 2019, after transitioning from the Home Hardware brand. Store manager Paul Brown said it was extra special to receive the award after only being part of the Mitre 10 group for just over three years. He told the Augusta Margaret River Mail:

    We're all thrilled to have taken out this prestigious award. Our fantastic team provide our customers with professional and dedicated customer service, always striving towards 100 per cent satisfaction.
  • Sources: Bendigo Advertiser, Byron Shire News, Daily Mail Australia, Mount Gambier News, The Moyne Gazette, Naracoorte Herald and Augusta Margaret River Mail
  • retailers

    Retail update

    Tool Kit Depot Gympie opens its doors to customers

    David O Jones Mitre 10 owners say they have no intention of leaving Ararat (VIC) after a "For Lease" sign was placed outside its Campbell Street store

    After helping to launch the first Tool Kit Depot store on the eastern seaboard, Tool Kit Depot Gympie store manager, Braden Bunker, said his team was looking forward to meeting local tradies and helping them with their next job. He said:

    There has been strong demand for online orders to Queensland, so we are glad to now be able to provide Queenslanders with the opportunity to shop in store and become a trusted trade partner with locals....
    Our team worked hard ... getting products on the shelf in preparation for the store opening. It's been a huge effort by all involved and we're really proud of what we've achieved.

    With sites already operating in South Australia and Western Australia, Tool Kit Depot said the new Gympie store provides tradies and serious DIYers with a one-stop-shop for tools, outdoor power equipment, storage, welding and construction equipment, safety and workwear, as well as a workshop for repair and services.

    Its in-store tool repair centre sets the brand apart from its competitors. Customers can have their tools serviced on site, with genuine expert advice across all product ranges including specialist carpentry equipment. Stores will also provide a battery bar service.

    In addition to a premium range of products from suppliers such as Festool, Husqvarna, Hard Yakka, Milwaukee and Makita, the Tool Kit Depot range extends to products from AEG, Irwin, Empire, Kango and Full Boar.

    In addition, there will be trade nights and invitational events such as beer and pizza nights, where tradies will get a chance to see demonstrations by product company representatives and sample the latest product lines and services.

    Spanning 1,200 square metres, the new store represents a $3 million investment in the Gympie community and has created 14 new jobs for locals with trade experience. It is located at Tenancy 2, Hall Road, Glanmire, across from Bunnings.

    Related

    Gympie store prepares for official opening - HNN Flash #123, December 2022

    David O Jones Mitre 10

    Store owner Simon Jones said he and fellow owners David and Margaret Jones are currently negotiating a new lease agreement with landlords, because their current agreement expires in January 2023. While negotiations previously resulted in a stalemate, Mr Jones said both parties had finally reached an agreement. He told the Ararat Advertiser and Stawell Times:

    We haven't wanted to leave the premises, and we won't be leaving the premises as well, I'll make that clear right now...We met with them again and have come to an agreement, pending us seeing the new leasing agreement, which is amended...

    Mr Jones clarified jobs were staying in Ararat, and that he'd even explored other property options in case current negotiations fell through. He said:

    It would have been extremely difficult, but we still would have been trading at another site in Ararat had we vacated the Campbell Street site. There was never any question about a Mitre 10 presence in Ararat, and never a question about the Jones' being in Ararat either. We were always committed to that.

    Mr Jones said Ararat residents had been very supportive of the store, particularly during recent difficult years, with business expected to grow even further for the "silly season".

    Our Christmas period has already been very, very good, both from a retail point of view and our trade customers as well.

    David and Margaret Jones purchased the business from previous owners Max and Bernie Perovich in 2013.

  • Sources: Tool Kit Depot and Ararat Advertiser and Stawell Times
  • retailers

    Retail update: Mitre 10 Mega (NZ)

    Hardware retailer faces court action for blocking competition

    The competition watchdog in New Zealand is taking a Mitre 10 operator to court over action allegedly to prevent Bunnings build

    New Zealand's Commerce Commission alleges a company operating a Mitre 10 Mega store bought land in Tauranga and tried to prevent a Bunnings Warehouse from being built on it.

    The commission has filed proceedings in the High Court in Wellington in an anti-competitive land covenant case against NGB Properties Ltd for allegedly contravening section 28 of the Commerce Act.

    NGB is a sister company of Juted Holdings Ltd and operates the Mitre 10 Mega in Tauranga, the commission said in a statement.

    Section 28 prohibits land covenants that have the purpose, effect, or likely effect of substantially lessening competition.

    The regulator has alleged that NGB bought a property in Tauranga and placed a covenant on the land to prevent Bunnings from building close to a Mitre 10 Mega store owned by an NGB-associated company Juted Holdings.

    That amounted to a purpose of substantially lessening competition for the retailing of hardware and home improvement goods in central Tauranga, according to the commission.

    The commission and NGB had agreed on a settlement to resolve the proceedings, and a penalty hearing in the High Court at Wellington will be scheduled shortly.

    Because the matter was before the court, the commission was unable to comment further for now, it said.

    Bunnings director of store operations and New Zealand, Ben Camire confirmed the commission's case against NGB Properties Ltd was related to a land covenant allegedly lodged to prevent a Bunnings Warehouse from being built in Tauranga. He said:

    As the matter is before the courts, we are unable to provide further comment.

    A Mitre 10 New Zealand Ltd spokesperson acknowledged the negotiated settlement in the case.

    NGB Properties is an independently owned business which shares directors and shareholders with another business that is part of the Mitre 10 co-operative. Mitre 10 New Zealand was not involved in the matter...

    Background

    The Commerce Commission action is the first step in a crackdown it plans against the anti competitive use of land covenants and lease exclusivity agreements, that it said are used by big, established retail chains to protect their dominant market positions.

    There have previously been ugly turf wars in hardware retail, between incumbents such as the Mitre 10 Co-ops, and more recent arrivals including Bunnings. In Queenstown, the Environment Court found the Mitre 10 Mega owner had abused court process in its attempts to stop a new 8100sqm Bunnings store opening 500 metres away. Mitre 10 owner H&J Smith was ordered to pay the maximum NZD60,000 in legal costs.

    And in 2011, the Commerce Commission issued warnings to Mitre 10 and Bunnings over misleading advertising in which both claimed to have the lowest prices.

    Attempts by challengers to open new stores have been subject to continuing delays. Four years ago, the owners of Bunnings in Whanganui announced plans to open a new 8400sqm store, spending NZD19 million in the town and creating 50 new jobs. Locals welcomed the news, saying it would "give Mitre 10 a run for their money". But today, the land beside the BP on London Street remains vacant. The project has been tied up, first in resource consents and now in other unspecified delays.

    According to Commerce Commission analysis, the three largest merchants hold more than 80% of sales of key building supplies, though this is slightly diminished from five years ago. In some regions, there are only a couple of building retailers, limiting competition in prices.

    There are several key factors in finding suitable sites. These include location - retailers need sites with plenty of customer traffic, and easy access to facilitate delivery of materials to building sites. The site needs to be large enough for a building supplier, which can be particularly challenging in urban areas, given that merchants need a large amount of land. And the land must be appropriately zoned for development.

    The commission has found that some suitable blocks of land come with exclusive lease agreements or covenants attached. This is registered by a previous owner or tenant, and restricts how that land can be developed or used.

    Fuel retail chains, supermarkets and building supply merchants all use this tactic to stop competitors coming onto their turf. It's such a problem in supermarkets that the New Zealand Parliament in 2022 passed a law nullifying such covenants, and the two big supermarket chains agreed to get rid of them.

    But large, established building supplies incumbents like Mitre 10, Carters and Placemakers have been slower to change. The problem is such that the Commerce Commission is now warning it will use its new powers under section 36 of the Commerce Act, to stop them engaging in behaviour that will "have the effect of substantially lessening competition".

    The commission has identified 60 restrictive covenants set in place for building merchants, and another 80 exclusive leases that potentially limit competition.

    Most of the covenants block competition for years to come - and the remaining ones don't have a fixed expiry date. Sometimes new merchants are precluded from operating on a site, long after the merchant who benefits from the covenant has left the area.

    The covenants are over land adjoining, or near, land leased by a merchant, where the landlord has agreed to lodge a covenant for the merchant's benefit.

  • Sources: Bay of Plenty Times, Stuff NZ, Radio New Zealand and Newsroom (NZ)
  • retailers

    Metcash H1 FY2023 results

    Inorganic growth, organic market loss

    Metcash has released its results for its H1 FY2023. While the results show broad growth in its hardware division - IHG and Total Tools - the store like-for-like sales reveal organic growth is below the overall growth rate for hardware retail sales.

    Metcash has released its results for the first half of its FY2022/23, which includes the six months from May to October 2022. Overall the company reported that revenue came in at $8.9 billion, up by 7.8% on the previous corresponding period (pcp), which was the first half of FY2021/22. Earnings before interest and taxation (EBIT) were $255 million, up 10.3% on the pcp. That results in net profit after tax (NPAT) of $126 million.

    The company notes that on a three-year basis - referring to results prior to the pandemic, from May to October 2019 - revenue increased by 32% and EBIT by 64%.

    Unfortunately, Metcash has not posted a recording of the results presentation, so this report is derived from the company's press release, its slide presentation and ASX filing.

    Hardware results

    In terms of overall hardware sales, including both the Independent Hardware Group (IHG) and Total Tool Holdings (TTH), revenue including charge-through sales, was $1732.6 million for the half, an increase of 16.8% on the pcp. However, some $134 million of this was from new joint-venture and company-owned stores, which means organic growth was 7.7%.

    EBIT for hardware came in at $116.6 million, up by $17.7 million on the pcp, an increase of 17.9%.

    In comments provided in a press release, the new Metcash CEO, Doug Jones, had this to say about Metcash's hardware operations:

    Our independent retail networks performed well. Overall network health continued to strengthen, and retailers are operating with a high level of confidence and reinvesting to further improve the quality of their stores and offer.
    The success of our investments in Total Tools and IHG, and significant growth in the underlying performance of the Hardware pillar, has led to a rebalancing of the Group's earnings profile with Hardware now the largest contributor.
    We now have ~160 company-owned or joint venture stores in our hardware network that together are delivering significant sales growth.

    IHG

    Sales at IHG came in at $1.4 billion, an increase of 7.9% on the pcp. Metcash also claims the wholesale EBIT margin was 2.8%, while the overall EBIT margin was 4.9%.

    However, like-for-like (comp) sales were up only 4.1%, with trade rising by 5.2% and DIY/consumer sales by 1.5%. The company states that trade sales continued to represent 64% of overall sales, despite the growth disparity.

    The company states that some 30 Thrifty-Link and True Value stores have been converted to Home Timber & Hardware (HTH) stores, as part of IHG's move to a two-brand strategy of Mitre 10 and HTH. The overall goal is to reach 400 Mitre 10 stores and 200 HTH stores in the network.

    TTH

    TTH saw sales of $566.7 million an increase of $296.9 million on the pcp, up 93.4%. In organic growth terms, sales grew by 9.5%. The company reports that comp sales were 4.7%. TTH EBIT increased by $13.7 million to $46.8 million, an increase of 41.4%. Two new stores were added to the network during the half.

    Analysis

    As mentioned above, without the benefit of the presentation recording, it's difficult to fill out the necessary background. However it is worth noting that overall hardware retail sales as provided by the Australian Bureau of Statistics (ABS) increased by 6.9% when comparing the period from May to October 2021 with May to October 2022.

    Taking the comp sales recorded by both IHG and TTH, that means that in terms of organic growth from existing stores, both of these actually lost market share during the half.

    HNN will be releasing our analysis of Metcash's Investor Day held in October during this week. We had decided to hold off on doing our analysis until the half-year results were released, as in the past we've noted discrepancies in the figures used in those two presentations. Hopefully Metcash will release the recording of the presentation of these results, and we will be able to update this article as well.

    retailers

    Retail update: Tool Kit Depot

    Gympie store prepares for official opening

    Tool Kit Depot offers everything from power tools to storage, a battery bar as well as repair services at the new store in Gympie, Queensland

    Tool Kit Depot area manager Wayne Sheehan and store manager Braden Bunker recently gave a sneak peek tour of the new store in Gympie to the Gympie Times. It is located at Tenancy 2, Hall Road, Glanmire, opposite Bunnings Gympie. Mr Bunker said:

    It's exciting to be a part of this milestone, opening Tool Kit Depot's first store on the eastern seaboard, and we look forward to paving the way for more to come. Gympie is a key base for tradespeople who need professional tools and equipment, so it's great to be able to provide them with the best brands, service and value.

    The store offers up to 10,000 products across tools, storage, workwear and power, welding and safety equipment as well as a tool repair centre and expert advice. The 1200sqm store is a $3 million investment and has created 14 new jobs.

    Mr Bunker said Gympie is a prime location and a "big opportunity" considering the commercial market in tools.

    The closest tool shop is 45 minutes away for a decent tool specialist. We think this will be pretty good for the locals.

    Before becoming Tool Kit Depot's store manager, Mr Bunker worked as co-ordinator at Bunnings Gympie. He has been part of the Bunnings family for the past 11 years.

    The business has sourced all of its staff locally. Half of the team moved from Bunnings while the remainder are tradespeople.

    It is expected to open by December 12, to be followed by an official opening soon after.

    Related

    First Tool Kit Depot opening in QLD - HNN Flash #117, October 2022
  • Source: Gympie Times
  • retailers

    Europe update

    B&Q to roll out convenience stores

    Parent company Kingfisher has opened its first Screwfix store in France. The expansion of Screwfix in France is helping the group drive growth.

    B&Q is expanding its presence on the high street in the UK with new B&Q Local convenience stores.

    The DIY and home improvement retailer has plans to launch two stores in London's Palmers Green and Camden districts with the new name in the first quarter of 2023. They will be the first to bear the B&Q Local brand, which B&Q recently applied to register as a trademark. In a statement, Graham Bell, chief executive of B&Q, said:

    Depending on the test and trial we could probably see quite a few, there are 50 odd catchments where we're not represented. But it's finding the physical location and getting planning permission.

    Retail veteran Mr Bell, who previously worked for Asda, said B&Q had looked to the success of the big grocers' convenience stores for inspiration. He said:

    Grocers have led the way with [ventures like] Sainsbury's Local and Tesco Express.

    B&Q's smaller stores themselves offered a "takeaway range that's probably most of the DIY generic bits and pieces" but also allowed shoppers access to "the full proposition you would get in one of our large stores", he said.

    You'll still be able to plan and buy a complete kitchen and order lots of goods in larger stores and get them delivered the next day for click and collect.

    However, Mr Bell stressed B&Q planned to continue opening larger stores as well as the convenience outlets. B&Q had cycled through "a lot of different names" before deciding on B&Q Local. He added:

    Customers have this expectation and they want a bit of clarity. We've tried to do something with the fact that they're local communities, local stores and local access for convenience.

    There were "huge populations" that struggled to reach B&Q's larger stores, he said, particularly in urban areas.

    London is a huge catchment and we obviously can't get the representation of the large stores that we'd like. It's areas we're not so represented in and allowing those communities ease of access.

    Related

    Kingfisher bets heavily on speed and convenience - HNN Flash #50, June 2021

    Screwfix France

    The first Screwfix France store officially opened in Wattrelos in Lille, with three to four more stores set to open by the end of January 2023, all in the Hauts-de-France region.

    The store openings follow the successful launch of the Screwfix banner as an online retailer in France in April 2021. The website, www.screwfix.fr, has seen a positive response from customers to date, with strong traffic and conversion rates and growing brand awareness across the country.

    Screwfix France aims to gain a share of the significant trade professional market in France, which has an estimated total market size of over GBP20 billion. The business will be based on the proven Screwfix model in the UK and Ireland, with product ranges adapted to the French market.

    Each Screwfix France store will offer around 10,000 products aimed at trade professionals with an additional 5,000 products available online - ranging from plumbing and electrical products to power tools and workwear. Customers will be able to click & collect from store in as little as 10 minutes.

    In preparation for serving the growing business, Screwfix France opened its first distribution centre, in Nanteuil-le-Haudouin, Oise, earlier this year, enabling next day delivery to home or site. Thierry Garnier, Kingfisher CEO, said:

    Kingfisher's strong relationships with French suppliers, combined with our deep knowledge of French customers and ranges, mean we are perfectly placed to bring the proven Screwfix model to France.
    After a positive response to Screwfix France as an online retailer, we are now building the business for meaningful growth, from opening a new distribution centre to investing in scalable new IT. The expansion is being led by experienced teams made up of talent from across Screwfix UK, Kingfisher in France and beyond.
    We are very happy to be opening the first Screwfix stores in France and believe they offer tradespeople a proposition unlike anything else in the market.
  • Sources: Telegraph.co.uk and DIY Week
  • retailers

    Retail update: Bowens

    2022 represents a key year of growth

    In October, the building supplies and timber group opened a store in Melton (VIC) after acquiring Melton Timber & Hardware

    The official opening of the Bowens Warragul store in regional Victoria was attended by hundreds of invited guests, according to the Warragul & Drouin Gazette.

    Since opening its doors in September, Bowens said the Warragul store has worked largely with small to medium-sized builders and trades, and attracted over 500 new customers.

    It predicts that over the next 12 months, the store will make approximately 12,000 plus deliveries to local builders and homes throughout the region. The store has already created over 30 jobs in the community. Bowens director and chief investment officer, Andy Bowen, said:

    We are excited to officially celebrate the opening of the Warragul store with the local community. A part of our continued store operations strategy is listening to our customers, their feedback and experiences are part of the secret to our success, and we are looking forward to connecting with them directly and further supporting the Warragul community.

    Related

    Bowens opens in Warragul, VIC - HNN Flash #112, September 2022

    Melton store

    As part of acquiring Melton Timber & Hardware (MTH), Bowens has kept on its previous owners Brad and Scott Morton to lead the team for the store's next evolution.

    MTH has been a mainstay of the local community for decades after their father, Ken Morton first started trading in 1969. Ken originally worked for Bowens at its North Melbourne store prior to starting MTH so the acquisition represents a full circle moment.

    The store currently has 16 staff, with Bowens planning to grow the team and servicing capabilities. Long term, Bowens will relocate the store to the recently purchased 5ha industrial site at Cobblebank in Melton. Mr Bowen said:

    As a market leader in the industry, Bowens is committed to supplying the best quality products and advice to builders and trades alike, especially in areas experiencing significant growth. We recognise Melton as a key growth corridor and are thrilled to be ensuring the long-term serviceability of building supplies to the Melton area.
    We will continue to lean on Brad and Scott's community knowledge and experience to tailor our service to local builders and ensure the seamless integration of Bowens and Morton family business values.
    We intend to maintain the best elements of MTH while adding further value, where possible. It is our job to ensure the local community feel comfortable with the changes and, most importantly, receive the building products they require on time and in full...

    Store manager, Scott Morton, said:

    Since our father founded the store, we have witnessed first-hand the growth of Melton and the surrounding community. As the area grows, so does the demand for high quality building materials and increased support. Bowens ensures both in the long term and will enable us to continue to deliver for the Melton community...

    Since October, the Bowens Melton store has been a service centre until the new, larger store in Cobblebank has been built. It is expected to be finalised in 2024 and will be the 18th Bowens store in Victoria.

    Related:

    Bowens' new site in Cobblebank in the City of Melton - HNN Flash #93, May 2022
  • Sources: Warragul & Drouin Gazette and Bowens
  • retailers

    Retail update: Nurseries

    Native Grace garden centre wins industry award

    Petries Mitre 10 Dubbo has been named Independent Hardware Group's 2022 NSW Garden Centre of the Year

    Native Grace at Robertson, launched by Luke and Catheryn Maitland in November 2020, has been awarded the Best Small Retail Nursery at the Nursery and Garden Industry NSW & ACT (NGINA) awards.

    Hosted by ABC Presenter, Costa Georgiadis, the awards recognise wholesale/production nurseries, retail garden centres, allied suppliers, apprentices and the next generation of industry leaders from across NSW and the ACT for being at the top of their fields.

    Luke and Catheryn, reinvigorated the 60 year old centre, one of the oldest in the Southern Highlands which had been closed for ten years prior.

    Luke Maitland is a horticulturist who specialises in native plants and the centre has hundreds of plants, a cafe and a retail store. He told Southern Highland News:

    It is an honour to be recognised by the industry for all the hard work the team have put into the nursery over the last 12 months.
    Having launched in November 2020 we've had major challenges including COVID and floods so it's a great way to end the year on a high winning this award. It was an exciting moment to be presented the award by legendary gardener, ABC talent Costa Georgiadis.
    We'd like to thank the Nursery Garden Industry NSW ACT for this Award and for their support and efforts, it's really terrific to have such a strong industry body who supports businesses.

    According to the judges, Luke and Catheryn Maitland created a "little gem of a place" at Robertson. They said:

    It is a clean, neat, tidy and impeccably presented garden centre. It has a design studio creating sustainable Australian Native gardens for clients, a gift shop focusing on Australian products and bush foods and there is an onsite cafe van. The stock is top quality, and it is a winner in so many ways.

    Petries Mitre 10 Dubbo

    The team at Petries Mitre 10 Dubbo is preparing for the national title announcements in early 2023 after winning 2022 NSW Garden Centre of the Year for Independent Hardware Group.

    Judging criteria included the best use of space, range of stock and stock presentation, sales, signage, customer service and more.

  • Sources: Southern Highland News and Dubbo Photo News
  • retailers

    Europe update: Kingfisher

    Strategic partnership focuses on technology

    Kingfisher is using Google Cloud in a new five-year partnership for a range of solutions, from infrastructure to data analytics

    B&Q's ecommerce range is expected to grow from 300,000 to more than four million in coming years, as its online marketplace grows. At the same time, the Screwfix website is expected to become a hundred times faster through re-platforming.

    Both results are predicted as parent company Kingfisher capitalises on Google Cloud's infrastructure, platform services, and artificial intelligence (AI) solutions. It should provide customers with faster and more intuitive searches, as well as improve the efficiency of deliveries such as its less-than-one-hour Screwfix 'Sprint' service.

    Adopting Google Cloud technologies will also allow Kingfisher to experiment with advanced testing environments at much lower cost.

    In addition, Kingfisher plans to create a new, real-time order system that will vastly improve stock accuracy, and deploy visual search using Google Cloud AI tools to help customers discover the product replacements that most closely match their needs.

    A long-time user of SAP software, Kingfisher, has begun moving its legacy data to Google Cloud. JJ Van Oosten, chief digital and technology officer at Kingfisher, said:

    At Kingfisher, we have an ambitious technology strategy in place. Google Cloud is an engineering organisation at its heart, while simultaneously understanding the complex retail landscape. As we look to the next phase of growth and the kind of talent we want to attract, this meeting of minds was a real draw for us.
    To reach our goal of creating a world-class engineering centre, we need a technology stack that will support us to experiment and move quickly. Google Cloud is helping to position us as a true digital leader, and our global teams and customers will benefit as a result.

    Related

    Home Depot extends Google Cloud deal - HNN Flash #56, July 2021
  • Sources: Reuters, Internet Retailing and PR Newswire
  • retailers

    UK hardware revenues track downwards

    Pandemic boom not sustained

    While the results from UK hardware retailers Kingfisher and Wickes were not disastrous, they do track a downwards trend in the market. With an economy set to endure yet another bout of austerity, including high energy prices, it is difficult for the retailers to capitalise on the few market advantages.

    With the UK undergoing somewhat linked political and financial crises, it's hardly a surprise that forward-looking statements from hardware retailers are couched in cautious terms. Where hardware retail markets in the US and Australia show a degree of robustness and stability even as interest rates rise, the UK (and French) markets seem to have become flat, possibly trending backwards if inflation is taken into account.

    In particular, with winter coming on, there is grave concern about the impact of increased energy prices, both for customers but also for retail businesses themselves. The flip side of this is that there is some increase in retail sales of products that will help consumers conserve energy in their homes.

    Kingfisher

    Kingfisher's major home improvement chain in the UK, B&Q, reported sales of GBP935 million for its third quarter FY2022/23. In constant currency terms, this was down 2.7% on the previous corresponding period (pcp), which was third quarter FY2021/22. In like-for-like (comp) terms the decline was 3.5%.

    The company reports strong demand for products such as insulation, while the bathroom and storage categories retained sales. Unseasonably warm weather meant that outdoor category sales fell. Online sales continue to grow, and B&Q's Tradepoint product, for tradespeople saw sales increase.

    Screwfix, Kingfisher's trade-oriented rapid service brand, fared better, with revenue of GBP610 million, up by 4.9% in nominal terms. However in comp terms, sales fell by 0.5%. The company reported that demand from trade customers remained strong, especially in building, joinery, bathroom and storage. Sales in tools, hardware and the electricals, plumbing and heating categories remain constant. Screwfix continues to expand, opening 17 new stores in the UK and Republic of Ireland, as well as its first two stores in France.

    In Kingfisher's French businesses, Castorama reported sales of GBP564 million which represented an increase of 0.8% in constant currency terms. Sales were steady from DIY and do it for me (DIFM) customers, with heating products and energy efficiency solutions helping to drive sales.

    Brico Depot recorded sales of GBP533 million, an increase of 0.2% in constant currency terms. Building and joinery as well as insulation helped to drive sales.

    Other international sales, including France, Spain, Portugal and Romania reported overall sales of GBP621 million, an increase of 8.4% in constant currency, and comp growth of 6.7%.

    Overall, Kingfisher Group had sales of GBP3263 million for the quarter. In constant currency, this represented growth of 1.7% and comp growth of 0.2%. From a year-to-date (YTD) perspective, in constant currency, the group has negative growth of 1.4%, and negative comp growth of 2.7%.

    On a three-year comp basis, the revenues have grown by 15.3% for the quarter, and 16.2% in YTD terms.

    Kingfisher has dropped its guidance for pre-tax profit from GBP770 million to a range of GBP730 million to GBP760 million.

    Wickes Group

    While Wickes does not release much detail, the company says that trading stabilised during third quarter 2022/23. Where its core business had negative growth on an annual comparison basis for the first two quarters, in the third quarter it reported 0% growth.

    However in its DIFM (Do-It-For-Me) business, Wickes reported growth of 12.2%, resulting in total growth for the quarter of 2.6%.

    According to the company:

    Local Trade sales performed strongly, with our TradePro customer base continuing to increase by 10K per month to [circa 720,000], as we continue to grow the awareness and appeal of the scheme through its compelling value proposition. DIY sales remain below last year although with no signs of further softening since our July trading update.

    Analysis

    Chart 1 shows the sales for the UK hardware market, as provided by the UK Office of National Statistics (ONS). This is based on a 100-index.

    As this indicates, while the UK market did experience some of the same lift to the hardware retail market, in their case in May 2020, that market has also seen wide fluctuations, and has been gradually moving back to convergence with the pre-pandemic market.

    This is shown more clearly in Chart 2, which tracks the percentage change in the index.

    It can be clearly seen that in the most recent p2022 (the green line) this consistently tracks in negative territory, as the market drifts back towards its pre-pandemic levels.

    retailers

    Indie store update

    Tamworth Building Supplies' trade event

    The event allowed some participants to discuss what they perceived to be the industry's current challenges

    For the first time since the pandemic, 30 suppliers put up a stall at Tamworth Building Supplies for tradies, DIY enthusiasts and renovators, and offered information about the industry.

    Manager Steven Brazel told The Northern Daily Leader he was pleased to put on the event, and celebrate moving past the issues caused by the pandemic. He said:

    The supply issues aren't actually a big problem at the moment for our industry. It's actually fairly stable now, so there's actually a bit of a glut of timber and things like that.

    However recent floods affecting New South Wales and extreme weather has held up the process of getting materials out west, and to Narrabri. Mr Brazel said:

    You just can't get there. Wherever it's flood affected, it is hard for us to get gear to them.

    Usually tradespeople spend the lead up to Christmas "running around", according to Mr Brazel. He said:

    It usually is a madhouse leading up to Christmas. Because everyone wants to get into their new house, or finish a renovation.

    But this year is slightly different, with homeowners feeling the sting of interest rate rises, he said.

    One of the stall holders, Hyne Timber, participated in the trade event to raise awareness for its new product range. NSW sales manager Richard Dawson said COVID-19 put a strain on the sawn timber producer's staff numbers.

    But the biggest issue for the company remains the black summer bushfires of 2020 in northern Australia. It will take a decade or more for the forestation to bounce back, he said.

    We're still working through those numbers, and pulling timber from other areas of NSW for service as normal.
  • Source: The Northern Daily Leader
  • retailers

    USA update

    Ace Hardware reports strong quarter in Q3 2022

    The hardware retailer continues to grow its revenue and income partly through private label products

    For the third quarter of 2022, Ace Hardware posted revenues of USD2.2 billion, an increase of 10.0% from the same period last year. Third quarter net income was USD100.6 million, an increase of 1.3% from 2021.

    In the quarter ended October 1, total retail revenues for the quarter were USD193.4 million, an increase of USD4.3 million since last year. Wholesale gross profit was USD272.5 million, an increase of USD34.4 million since Q3 2021.

    The approximately 3,600 Ace Hardware retailers who share daily sales data reported a 5.8% increase in US retail same-store-sales during the third quarter of 2022. Estimated retail inflation of 11.2% helped drive the 9.5% increase in the average ticket price. Same-store transactions were down 3.4%.

    Ace also added 35 new domestic stores in the third quarter of 2022, and closed 10 stores. It announced earlier that it has already opened 130 new stores in 2022, and is planning to open at least an additional 40 stores in Q4 for more than 170 by the end of the year. John Venhuizen, president and CEO of Ace Hardware said:

    My sincere thanks to the entire Ace team for their determined and relentless pursuit of our three strategic imperatives - service, convenience, and quality - which delivered yet another quarter of record sales and profit. Revenue and income ... now stand 44% and 66% higher than just three years ago. Despite, and in some cases because of rampant inflation, the Ace team continues to deliver superior financial results and exceptional customer service to and for our neighbours.

    Related

    Ace Hardware continues its brick-and-mortar expansion - HNN Flash #108, August 2022
  • Sources: Store Brands and Ace Hardware
  • retailers

    Retail update

    Pet supplies store to change hands

    Furney's Town and Country in Dubbo, NSW will become part of the PETstock network

    Long-established pet store, Furney's Town and Country will be rebranded under the PETstock banner after more than 35 years.

    Current owner Michael Edwards has been a fixture during this time after working at the store - including sister business Pet Xtra for 25 years - and becoming the owner. He has seen the business go from strength to strength with the support of the community. He told the Daily Liberal and Macquarie Advocate:

    We only recently moved the business down here to the old Holden car dealership site and that's been hugely popular and successful. We sold the old premises with apprehension, it always is when you move a large business, but it's worked amazingly well.
    I went to work with the Furney family to run the site when it was a significantly smaller stock feed store. And we expanded on the pet side of things and opened the Pet Xtra on Erskine Street. And it continued to grow and grow.
    We've been very lucky to have that experience and have the support of the Dubbo and regional community.

    Ready for retirement, Mr Edwards said age and finding a "like minded buyer" made now the right time to take a step back from the business he has built. Australian owned and operated pet retailer PETstock has 47 stores across NSW and will take over the store.

    ...The store offers a great service to the community and PETstock is very conscious of community support, and that's always been key to me.

    The new owners planning on expanding the range of services to include DIY dog wash, grooming and personalised pet ID tags. PETstock state Manager, Tom Ginty Wise, said:

    In addition to expanding existing services, the store will support local organisations, such as local rescue groups, by providing them with free in-store space, temporary or permanent, for our PETadopt program where adoptable pets can find forever families in a convenient and friendly environment.

    Mr Edwards said he is optimistic about the direction PETstock would like to take the home-grown business in, and said the handover seemed fitting given the similarities in the history of both stores.

    In so many ways PETstock comes from a similar background in that they started off with a young family and a small stock feed store.

    After decades of helping Dubbo locals care for everything from horses to hermit crabs, Mr Edwards said:

    When you've been involved in something for so long and you've built a lot of relationships through the years with your clients and customers, that's what I will miss. That interaction with people.
    Often those relationships go beyond a business interaction and you take genuine interest in what their activity is ... it's quite a range of people you meet. And they all have such a genuine interest in their pets.
  • Source: Daily Liberal and Macquarie Advocate
  • Main image credit: Furney's Town and Country Facebook
  • retailers

    USA update

    Lowe's sells Canadian interests to New York private equity firm

    True Value is expanding in the farm category after it acquired the brand trademark rights of Agway Farm & Home Supply

    Lowe's has struck a deal to sell about 450 stores in Canada to Sycamore Partners for USD400 million in cash and "performance-based deferred consideration". Its Canadian business, based in Boucherville, Quebec, operates under various banners including Rona, Lowe's Canada, Reno-Depot and Dick's Lumber.

    Marvin R. Ellison, president and CEO of Lowe's, said in a statement that the sale of its Canadian subsidiaries "is an important step toward simplifying the Lowe's business model."

    While this business represents approximately 7% of our full year 2022 sales outlook, it also represents approximately 60 basis points of dilution on our full year 2022 operating margin outlook.
    By executing this transaction, we will intensify our focus on enhancing our operating margin and [return on invested capital], taking market share in the US and creating greater shareholder value.

    The company said it would register a USD2 billion write-down related to Canadian retail activities in the third quarter of 2022.

    Sycamore Partners managing director Stefan Kaluzny said the private equity firm would "establish Lowe's Canada and Rona as a standalone company headquartered in Boucherville, Quebec."

    The companies say they expect the transaction to close in early 2023, subject to regulatory approval.

    Background

    Lowe's entered the Canadian market in 2007 and expanded its footprint in 2016 with the purchase of Rona for USD2.3 billion. The acquisition was controversial at the time, with a major Quebec company being sold to foreign interests, and many Canadian politicians tried to stop the deal.

    The retailer's sale of its Canadian interests is a recognition by the company that it couldn't make the takeover work. The business has struggled and Lowe's has cut jobs and closed dozens of stores in several provinces.

    For Rona, it will likely be the beginning of another period of turbulence. Private equity firms typically hold on to investments for a limited period of time and the chain is almost certainly headed toward new ownership after Sycamore decides the time is right to sell.

    Lowe's began a strategic review of its Canadian operations in the third quarter of fiscal 2019 and later that year announced actions to improve the performance and profitability of that business segment.

    In fiscal 2020, the company had pre-tax operating costs of USD45 million related to inventory write-downs and other closing costs.

    True Value

    The Agway acquisition expands True Value's capabilities in the Farm, Ranch, Auto & Pet (FRAP) category. As part of the purchase, True Value has also obtained the rights to select private-label products and equipment. Currently, close to 600 retail stores operate under the Agway name. True Value CEO Chris Kempa said:

    Purchasing the Agway brand is an excellent fit for True Value as we continue to grow through strategic acquisitions. Farm & Ranch is an important category for True Value and owning the Agway brand deepens our capacity to support our retailers in providing their customers with the products they need.

    Agway Farm & Home Supply was formed as a farmer-owned cooperative in 1964. Today it is a wholesale product distribution company serving a network of independent retailers, primarily in the US Northeast. Agway stores carry a variety of products including lawn and garden, wild bird seed and supplies, pet products and farm supplies.

    The Agway transaction represents True Value's second completed acquisition in 2022. In March, True Value announced the purchase of Majic, the Yenkin-Majestic Paint Corporation's consumer paint division.

  • Sources: Montreal Gazette, Retail Dive, Globe and Mail and True Value Company/PR Newswire
  • Main image credit: Retail Insider Canada
  • retailers

    Indie store update

    West Rocky Hardware, "best in the west"

    Stanthorpe Mitre 10 has won Independent Hardware Group's Garden Centre of the Year in Queensland

    Rockhampton local Peter Hunt is the owner of West Rocky Hardware, part of a portfolio of businesses that also include Think Water and Wandal Need and Feed.

    Located in West Rockhampton (QLD), Mr Hunt operates his three businesses under one central hub for an easy shopping experience. He told CQ (Central Queensland) Today:

    We saw a need for a hardware store on the southside of Rockhampton. After the closure of Gunna Do Hardware, someone had to pick it up. This warehouse became available, and based on the community interest, we decided to give it a go...

    West Rocky Hardware has been operating for 12 months, and Mr Hunt said he is excited about the future of the business.

    We are learning what to keep and are finding it's quite seasonal. Coming into Spring, we are selling many gardening products like mulchers, potting mixes and weed killers.
    People are also buying a lot of seeds to make their own veggie gardens.

    Describing themselves as "not your average hardware store", Mr Hunt is proud to offer residents an alternative option compared to larger companies. He said:

    Overall, our store prides itself on our service with a smile and knowledge of what we sell. West Rocky Hardware is the type of store for the DIY person. We have a good range of products that balance quality and price.

    Mr Hunt said that being in business has taught him a couple of things, but the biggest has been confidence and believing in yourself.

    Your first instinct is normally right, so have the confidence to know you can do any task you put your mind to.
    Owning the other two businesses, Think Water and Wandal Need and Feed, for 12 years has given me the confidence to go into hardware. We are trying to make it the hub for people's daily needs.
    As we evolve, we will be looking at expanding to other areas as well.

    Located on 234 Lion Creek Road, West Rockhampton, West Rocky Hardware is next to Think Water and Wandal Need and Feed.

    Related

    Rockhampton hardware store is up for sale - HNN Flash #15, July 2020

    Stanthorpe Mitre 10

    Stanthorpe Mitre 10 owners Bill and Melissa Kerr said it was an amazing feat to win Garden Centre of the Year for Queensland. Melissa Kerr told Warwick Today & Stanthorpe Today:

    We are actually at the bottom end of the category because we are a medium end store. We came up against bigger stores throughout the state and they have bigger store areas then us.
    It was exciting and a big surprise to have won the award. We are all very proud of our achievement.

    Stanthorpe Mitre 10 competed against Mitre 10, Home Hardware and Timber and Thrifty Link and True Value Hardware stores across Queensland to take home the award. Mrs Kerr said:

    The competition was tough and to come up winners, being a small country town is excellent. It was a team effort with Kay-Lee Antonello and all our staff and suppliers; we'd like to thank them. We'd also like to thank our loyal customers.

    After the initial expansion of the old garden centre, it was completed with metal display shelving, an automatic watering system and shadecloth for protection from the elements.

    Mrs Kerr said she remembered standing back with her very keen gardening team member Kay-Lee thinking how they were going to fill this area. Then the task of filling the garden centre with plants, pots, decorative ornament and features began.

    Now, we have started to overflow past the garden gates and feel we need to expand again...
    The locals are our greatest supporters, and the new garden centre is the talk of the town. We have visitors from as far as New South Wales and the coast dropping in to see what is new in store.
    retailers

    Indie store update

    Blayney, NSW gets a new hardware store

    Gubbins Pulbrook Mitre 10 in Moss Vale, NSW has picked up a store award from the group

    A new destination for DIY enthusiasts and professional tradies will be open for business in the farming town of Blayney in the central west region of New South Wales.

    Hoadley's Hardware is located at 22 Adelaide Street in the old Blayney Mowers and Heating building.

    Blake and Tayla Hoadley are behind the venture with plumber Blake well aware of just how quickly Blayney is growing. He told the Blayney Chronicle:

    With all the developments going up around the town there's a big need for all the essential hardware items, especially on the weekend. We'll stock a good range of items including bags of cement, timber, Wattyl paints, Villaboard, Gyprock and plumbing supplies.

    "All the essential stuff that you need and if you want it quick, you won't have to wait until your next trip into Orange or Bathurst," Tayla said.

    Moss Vale Mitre 10

    The team at Gubbins Pulbrook Mitre 10 in Moss Vale won hardware store of the year in trade and retail at the recent awards given out by Mitre 10. The awards are determined by secret shoppers who visit the stores in the network. Owner Nick Gubbins is thanked his staff and customers and told 2ST:

    We built the store eight years ago, the locals wanted it, and it's their store. It's all because of their support.

    The hardware store is located at 54 Berrima Road, Moss Vale (NSW). The other retail locations in the Gubbins Pulbrook group include a retail and trade store in Mittagong and one in Bowral.

  • Sources: Blayney Chronicle and 2ST
  • retailers

    Retail update

    First Tool Kit Depot opening in QLD

    Gippsland Power Equipment opens another branch in the town of Warragul, Victoria

    A Tool Kit Depot (TKD) outlet will soon open close to the Bunnings Gympie (QLD) store, just south of the city. It will be the first Tool Kit Depot retail store on the east coast of Australia.

    The Bunnings-owned business is in the process of moving into a new building recently completed in the precinct adjacent to the Bruce Highway and on the southern outskirts of Gympie, according to The Gympie Times.

    Construction on the project is expected to be completed on November 14, 2022, with doors to open to the public shortly after.

    Tool Kit Depot is positioned as a one stop shop for tradespeople. In a statement it said:

    We sell only the most respected brands of power and hand tools, safety and protective gear, outdoor power equipment and more. Our range is epic - but we're not just a tool supermarket. Our full-service workshop offers expert servicing and repairs, plus tool hire to keep you working.

    Earlier this year, Bunnings Group managing director Michael Schneider said the company planned to expand its Tool Kit Depot network beyond Western and South Australia ... moving into regions where it sees "strong under-served demand for professional tools".

    It has established the TKD brand in Western Australia with four stores and has also refreshed the existing (Adelaide Tools) stores in South Australia.

    Related

    Bunnings Strategy Day 2022 - HNN Flash #97, June 2022

    Gippsland Power Equipment

    Gippsland Power Equipment (GPE) have been offering its exclusive range of products and services to Warragul (VIC) and surrounding areas since opening in September.

    GPE's exclusive quality brands include Cub Cadet, Rover and Gravely & Supaswift. It employs five full time technicians with over 50 years combined experience and have a reputation for fast turnaround times and quality workmanship.

    There is a huge turning area for utes and trailers, making it easy to get repairs in and out. It services brands including Husqvarna and John Deere.

    The other GPE outlet is located at 259 Princes Way, Drouin (VIC).

  • Sources: The Gympie Times, The Australian and Warragul & Drouin Gazette
  • retailers

    Retail update: Beacon Lighting

    The group will continue to push into the wholesale market

    Beacon has shifted to "must haves" as new housing developments and renovations were completed. This means trade customers such as builders.

    Following Beacon Lighting's recent annual general meeting, chief executive Glen Robinson said he is optimistic about growth as housing construction and renovation rebounds from lock­downs, promising a strong sales pipeline. However, he believes robust consumer spending since the pandemic began will start to fade away as rate rises rein in discretionary spending.

    With 119 stores in its network, Beacon Lighting will continue to push into the trade market and remain focused on its growing North American operations. In The Australian, Mr Robinson said:

    At the end of the day, if you are building or developing a house, doing a renovation, you have got to eventually put the light fitting at the end of a wire. You can have discretion whether you want to go for something cheap or something more expensive, but we offer both.
    I think we are enjoying those times at the moment. We are usually at the end of the project, we are late cycle, and that is seeing us through pretty well at the moment.

    He added there was a "massive backlog" in construction.

    Mr Robinson said same-store sales had been encouraging since the start of the new financial year, although year-on-year sales might moderate as the lighting speciality retailer cycled very strong 2022 sales.

    I think probably looking at other retailers, we are doing well. We are pretty confident at the moment, but we are heading into a (federal) budget period, there is inflation, and we've got to be cautious.

    He also said inflation and higher rates would slow discretionary spending.

    The reality is that is bound to happen, things will probably have to slow down a bit, but there are still a lot of (housing) developments that have to be done. Discretionary might slow down a bit, as interest rates tighten, but people still have to finish their projects and there is still a good pipeline there.

    Background

    In August, Beacon Lighting posted record annual sales and profits, helped by its US business and the new division that caters to trade professionals.

    Its annual revenue had risen 5.4% to $304.3 million. Profit lifted by 8.2% to $40.726 million, a record, as it opened five new stores in the period and saw strong growth for its recently established Beacon USA business, which booked a 51.9% rise in sales for the year.

    Beacon said its new initiatives for trades saw a 22.3% lift in sales. At the time, Mr Robinson said:

    Supporting our trade customers and growing trade sales remained Beacon Lighting's number one objective in fiscal 2022. Our trade customers responded very well to the various trade strategies, which resulted in strong growth in trade club members, trade sales and online visitations to the trade website.

    Total online sales up 31.3% to $34.1 million, which included an increase in Trade Club online sales of 67.6%.

    Related

    Beacon Lighting's first half results - HNN Flash #78, January 2022
  • Source: The Australian
  • retailers

    Retail update: Mitre 10 and Metcash

    A win for Benalla Mitre 10's garden centre

    Metcash chief executive Doug Jones provided another trading update during an investor roadshow in Adelaide

    The Mitre 10 outlet in Benalla in north-eastern regional Victoria has been recognised as having the best garden centre across the store network in Tasmania and Victoria.

    Benalla Mitre 10 retail manager Stacey Stylianou said this was the third year in a row the store had picked up the award. She told Benalla Ensign:

    ...It feels really good to win again. The other two which we picked up we only got last year due to COVID-19 restrictions. Our owner Gary Woodruff and our operations manager Brad Collette went down to the awards day.

    Ms Stylianou said the criteria for the award was tough so the whole staff were very proud of the achievement.

    It is about good customer service, how it's set up, how its maintained, the look of it and sales numbers. It takes everything into account.

    Metcash trading update

    Metcash chief executive Doug Jones recently told investors that he is building on the company's five-year plan to boost its retail network by upgrading stores, introducing wider ranges and new formats such as Supa Valu, trimming prices, and upgrading distribution centres and digital systems. Metcash will spend $110 million on distribution centres by 2025. In the Australian Financial Review (AFR), he said:

    We were in growth before COVID in the food business and, like many trends, COVID accelerated this one. The destination bigger box stores suffered as people wanted to shop more locally. We now firmly believe customers have stayed.
    We are refreshing the stores, continuing to invest in the range and price. We relaunched our price match campaign this week.

    Strong sales momentum has continued in the first half in all of Metcash's business units, underpinned by the improved competitiveness of its retail divisions, and by wholesale inflation, which is sitting at 5.8%. Wholesale inflation was up 4.9% in the first quarter, excluding tobacco and fresh produce.

    Sales jumped 17.1% in the hardware unit, with sales gaining 9.6%, underpinned by like-for-like sales of 4.6%. Total Tools sales have surged 75.2% so far in the half. Mr Jones said inflation remained high, particularly in trade, although there had been an improvement in the availability of supply.

    Total Tools is targeting eight to 10 new sites a year with a network size of about 130 stores by 2025, from its current 101 stores. The Wesfarmers-backed Tool Kit Depot continues to make a move into professional tools, but Mr Jones was not concerned. He said:

    We are not going to rest on our laurels. We have a strong pipeline of stores ... in the future, we think there are at least 170 stores that we can open across the country. What's really pleasing is that we're seeing strong performance from the new stores.

    Mr Jones said COVID-related costs had started to ease, as had supply chain challenges. However, he warned the availability of labour remained tight.

    Under Project Horizon, Metcash is replacing nine enterprise resource planning (ERP) systems with one system to simplify the business. Metcash said a key focus into calendar 2023 is the food and liquor program update, adding there is no change to Horizon capital expenditure.

    Mr Jones flagged an increase in funds employed, driven by multi-year investments in its hardware businesses, distribution centre redevelopments in Victoria and WA, and more inventory due to inflation, as well as digital and other bolt-on M&A (mergers and acquisitions) opportunities.

    Related

    Metcash issued a trading update just prior to its AGM.

    Sales are up by 8.9% across the group for the first months of FY23 - HNN Flash #110, September 2022

    Metcash results FY2021/22.

    Sales slow, but remain at high level - HNN Flash #100, July 2022
  • Sources: Benalla Ensign and Australian Financial Review
  • retailers

    Retail update: TKD and Bunnings

    Tool Kit Depot sponsors Adelaide Strikers

    For the third time, Bunnings will lend a helping hand worth $200K to women's footy clubs

    Women's Big Bash League (WBBL) team, Adelaide Strikers has welcomed Tool Kit Depot (TKD) as its new principal partner. TKD's general manager Trent Emmins said the partnership will be exciting news for its team and customers. He said:

    Tool Kit Depot is really pleased to join the Adelaide Strikers family as principal partner for the Women's Big Bash League 08. With a shared commitment to professionalism, expertise, and love for the job we do, we look forward to this being the beginning of a meaningful partnership, on and off the field.

    With five stores in South Australia, TKD is the all-under-one-roof power tool, equipment, safety and workwear destination for trade professionals. South Australian Cricket Association's chief commercial officer Phil King said:

    This announcement has only heightened our organisation's anticipation for the coming season ahead of the Strikers' first match...It's great to see two organisations with local roots come together to help each other thrive and support the growth of the game.
    We truly appreciate Tool Kit Depot's support of our Strikers women's team and are looking forward to what we can achieve together this WBBL season, starting with our match against the Sixers...

    The Strikers and Tool Kit Depot have agreed to a one-year deal.

    In SA, Tool Kit Depot stores are located in Mile End, Lonsdale, Parafield, Melrose Park and Gawler.

    Women's footy

    The Bunnings Helping Hand program will once again help community football clubs. The initiative is designed to assist community football clubs to build and upgrade female-friendly facilities that are important to the continued growth of the women's game at a local level. A total of 10 x $20,000 grants will be on offer as part of the program.

    Since its inception, the Bunnings Helping Hand program has provided $240,000 to more than 17 football clubs across Australia through its grants program. Bunnings' director of operations, Ryan Baker, said:

    Creating an inclusive and welcoming environment where people feel a sense of belonging to be their best is important to us. We have been lucky to play a small role in the growth of the women's game at a local level through the Helping Hand program and our local store teams have loved lending their support to recipient clubs to upgrade their facilities to be inclusive for women and girls.
    Grassroots sport is a cornerstone of strong and resilient communities and it's a pleasure to be able to extend this opportunity to even more clubs this time round.

    AFL executive general manager customer and commercial, Kylie Rogers said:

    The Bunnings Helping Hand program is a welcome initiative to support the rapid growth in participation of women and girls' football across the country.
    The AFL has a stated ambition of building or upgrading an oval per week every week for five years to cater for growth in the grassroots game, particularly in women and girl's football. The grant program provides a lasting legacy for female football - ensuring better facilities are available for future generations to come.

    Three-time AFLW Premiership player and 2022 Bunnings Helping Hand ambassador, Erin Phillips said:

    The initiative provides much-needed funds to support the development and growth of the women's game at a local level. I encourage community clubs to jump on board and apply for a grant to help provide a better environment for their women's programs.
    The NAB AFLW competition wouldn't be where it is without grassroots football club and now that we've seen a large uptake in women's football, we look to strengthening that from the bottom up.

    Nationally, 47% of venues are used for female football competition and training, however, only 34% are considered female friendly, as shown in the Women's Football Vision 2030, released last year.

    Applications for the Bunnings Helping Hand program are open until 11 November.

    Entrants are required to explain in 200 words or less why their club needs funds to implement female-friendly facilities and an overview of the intended project, as well as images of their current facilities to support their entry.

    Winners will be announced ahead of the 2022 NAB AFLW Grand Final Season 7.

    Related

    Bunnings supports women's footy - HNN Flash #43, April 2021
  • Sources: Adelaide Strikers Media and Glam Adelaide
  • retailers

    Retail update: Industrial

    Stealth Global updates on 2025 strategy

    Group managing director Mike Arnold discusses the business offering, M&A activity, clients, 2025 strategy and financial targets

    In a brief interview with Tim McGowen from ShareCafe, Mike Arnold talked about how Stealth Global operates "a diverse distribution network across its portfolio, customer types, geography, brand and infrastructure, connecting customers with products across multiple sales channels and markets". He describes the company as "an industrial supply company". Mr Arnold said:

    We sell industrial goods as well as safety, truck and trailer automotive products as well as general workplace supplies. So our simple tagline is, providing supplies and solutions for every workplace. We listed the business in 2018 October. And since that time, we've had quite a large raise from $20 odd million in revenue to $100 million revenue in FY22.

    Mr McGowen said:

    And there's been quite a bit of M&A [mergers and acquisitions] activity, you've acquired some businesses along the way. How does your internal growth look? What does that look like relative to your growth from those acquisitions?

    Mr Arnold:

    We've made five or six acquisitions actually, in the last three and a half years. In FY22, we grew organically by 21%. And the year prior to that, we grew at about 18%. So we've been very deliberate in terms of building our capability first and foremost, and scale, reaching $100 million odd turnover, having the network in place so that we can get the buying power to be stronger as a business. But ultimately, organic growth is equally as important as that acquisition growth.

    Mr McGowen:

    And who's your typical client? How do you sell to them and who are you competing with?

    Mr Arnold:

    We run an omnichannel strategy. So we have branches that cover business customers, we have retail outlets that cover the retail and trade consumer, we also have independent members ... to give us that buying power and network reach. So we actually cover all those platforms and how we cater our services in those particular markets is very different.
    ...The beauty about it is we give multiple options to all different customer types, from large to small. And clearly large customers have more complex needs. We're fully integrated, and we can provide IT solutions around that. Or anybody can buy a single product from us, whether that be in a store, or through one of our sales reps, or online.

    Mr McGowen:

    And you spoke about reaching your target of 100 million in revenue, and you've got a 2025 strategy. So where are you positioned in regards to that strategy?

    Mr Arnold:

    ...Right on track, in fact, probably ahead of track. We doubled our store locations in FY22 so we now have 274 locations throughout Australia. Our run rate after the first two months of FY23, we're sitting about an eight and a half percent organic growth, which is great. And from a strategic point of view, we're embryonic in the acquisitions that we've just completed. So the upside of that, and obviously offsetting that against inflation, gives us the ability to actually increase our margins. So our margins have developed from 18 and a half percent to 30.2, in FY22. And we see that there'll be a higher push towards that as we get the integration of those new acquisitions completed.

    Mr McGowen:

    And Mike, the stock looks cheap. It's probably off the radar of some of the fund managers at the moment, and probably some retail investors. What are the sort of financial targets that you're looking towards, moving forward?

    Mr Arnold:

    So we've always had a strategy for 2025 to have an 8% EBITDA [Earnings before interest, taxes, depreciation, and amortisation] with about a 5% net profit before tax, and there's been a number of periods that we've looked at in other markets and how we've modelled our business to achieve that. So clearly, it's tried and tested. And our model is heading towards that.
    Everything we've done was about building a revenue scale and scale around capabilities. We have invested and continue to invest in building that, and building capability. Now our push is very much on better margins, and a lower cost operating model focused on profitability. So we're really comfortable about where we are and where we're heading.
    We are cheap. Absolutely. And I think for a business doing over $100 million to be having a valuation or 11 and a half is clearly something that we are going to put more effort into. Getting your business more well-known and obviously, in front of the right groups. We are focused on getting the business right, first and foremost, particularly in the last couple of years. And we're now set to obviously take the advantage of that.

    Headquartered in Perth (WA), Stealth Global Holdings Limited is an Australian publicly listed, multinational distribution group with interests in Australia, the United Kingdom and Africa under five subsidiary brands: Heatleys Safety & Industrial, C&L Tool Centre, Industrial Supply Group, Australian Workplace Supplies, and BSA Brands (UK) in a joint venture with Bisley Workwear.

    Related

    Stealth Group completes United Tools acquisition - HNN Flash #91, April 2022

    Source: ShareCafe/Finance News Network

    retailers

    Retail update: Rural

    Oberon Industrial and Farming Supplies

    Combined Rural Traders kicks off a new cross-platform campaign called "It Starts with CRT"

    Peter Hammond and his family have been running the Oberon Industrial and Farming Supplies store in the central Tablelands region of NSW, for 13 years.

    Mr Hammond was a farmer, and still has a number of farms in the area managed by family members. When the opportunity to buy the store came up, he decided that it would be a good opportunity to have an additional source of income. He told the Oberon Review:

    Owning the store would also give the farms access to products at wholesale prices.

    The store carries a very wide range of products including clothes, the essentials for equipment maintenance such as chain and two-stroke oils and filters, farm and garden chemicals, fencing wire and fittings, and almost anything else that someone might need for a farm or garden.

    The fortunes of farm suppliers can follow the fortunes of farmers, but the store isn't badly affected by droughts, floods or changing seasons. Mr Hammond said:

    Even at the worst of times, farmers need to buy things and seasonal changes just mean that our biggest selling items change throughout the year.
    What customers want in winter can be totally different to what they need at other times of the year. This means that we have to be ready for the changes, but after thirteen years we usually get it right.

    A recent addition to the products offered has been the Stihl range, which now occupies a significant space in the store.

    The store operates well with a small team of four. Expanding the store could require more staff but Peter is satisfied with the level of service he can provide with the number of people working there.

    Anyone working in retail needs a sense of humour, Mr Hammond said, because "the customer is always right" even when he isn't. A year or so ago someone decided that he needed a few spare chainsaws and drove a vehicle through the front of the store one night and made off with six saws.

    The store is part of the Combined Rural Traders (CRT) network that includes a few company-owned stores as well as some that are majority owned by the store operators.

    The Oberon store is one which is completely independently owned. Unlike a traditional franchising operation, store owners are shareholders in CRT. The company is the wholesaler to the stores and passes on the benefits of pricing gained from buying in large quantities, with about 240,000 products available from 650 suppliers.

    By being part of the CRT network, Mr Hammond said he can source almost anything a farmer or grazier might need. If it's not in the shop today it can be there very quickly.

    CRT campaign

    To reinforce CRT's dedication to regional farming communities, digital agency Next&Co partnered with creative agency GK Collective for the latest "It starts with CRT" campaign.

    For the first time, the campaign stepped into the farmers' shoes to showcase their relationship with CRT, particularly the support CRT offers for all farming activities, from cropping to animal health.


    The campaign has been rolled out across TV and print, with an initial call to action, "It Starts with CRT", while the digital component of the campaign includes a retargeting strategy to help customers find their local store. Nutrien Ag solutions national marketing manager of Independent Business, Sarah Wilcock, said:

    This campaign distils the relationship that farmers share with their local CRT store, being the first point of call for any farming activity, from cropping to drenching. The inspiration for the campaign was the relationships between farmers and CRT stores that the business has watched grow and flourish over time, while facing the challenges and changes in the industry.

    Next&Co was recently appointed to lead strategy, planning and media buying for CRT. It will manage all CRT's TV, radio, print and digital media planning, buying and strategy, focused on maintaining the brand's presence in market and building reach.

    Related: CRT is part of Nutrien Ag Solutions.

    Nutrien Ag Solutions increases stockpile - HNN Flash #91, April 2022
  • Sources: Oberon Review, Ad News and Mumbrella
  • retailers

    Retail update

    G. Gay & Co Mitre 10 store to be revamped

    The Wendouree store was the largest hardware store in Ballarat, Victoria when it opened in 1977

    The largest store in the G. Gay & Co Mitre 10 group of three stores will undergo renovations to become more "tradie friendly".

    Customers will still be able to shop at the store located on Howitt Street, Wendouree (VIC) but the building - which was built in the late '70s and has had several extensions - will be renovated between now and March 2023.

    Trade sales manager Jake Weber said it was business as usual during the changes. He told the Ballarat Courier:

    The work's already started. We have new racks and have also laid slabs. Some of the walls are coming down as well. The Wendouree store is our biggest, at 9000 square metres, and 95% of our customers are already tradies.

    Ballarat's two other Gays Mitre 10 stores will remain open and continue to focus on the retail trade. Mr Weber said staff numbers would remain- and possibility increase - after the renovations were finished.

    He also said members of the Gay family were still actively involved in the business, over a century after it began selling building supplies and mining equipment.

    G. Gay & Co was established in 1918 by Godfrey (Gough) Gay with Bill Valpied and George Norris. They originally sold new and second-hand building materials, timber and mining supplies after starting a timber yard in Armstrong Street, Ballarat.

    The business started to include new materials and phased out the second hand products. It continued to expand at the Armstrong Street site under the management of Edwin Gay, Godfrey's son. He was a fitter and turner for a local foundry for years before taking on the family business around 1932. His son Jim spent six years at the same foundry before joining the business in 1956, at the age of 22. In 1977, he relocated the business to the Howitt Street location.

    G. Gay & Co expanded over time, with second, third and now fourth generations joining the team. The Gillies Street South site was purchased in 1991 and another in Albert Street Sebastopol in 2014.

    The three stores switched from Home Timber & Hardware to the Mitre 10 banner almost a decade ago.

  • Source: The Ballarat Courier
  • retailers

    Retail update

    Plans for Sydney Tools opposite Bunnings in QLD

    The development proposal includes a large retail showroom complex that would cover more than one hectare of land

    Sydney Tools has lodged plans for a three-building precinct on Carrel Drive in Harristown (QLD) that will include 10 tenancies over nearly 11,000sqm of floor space. The site is directly opposite the Bunnings Warehouse on Anzac Avenue.

    According to the submission by town planning consultant, Paul Kelly from Precinct Urban Planning, the proposal would be split into three buildings, separated by a new road called Hyde Court. In The Toowoomba Chronicle, Mr Kelly wrote:

    The design of all buildings ensures visual interest when viewed from the street and internal carpark through the use of extensive glazing, sun shelters and above awning signage panels for entries to individual tenancies.
    The visual appearance is also enhanced through the use of contrasting colours and mix of building materials particularly along frontages where direct access cannot be provided.

    The application also includes a request for a different infrastructure charges calculation, with Mr Kelly's report arguing much of the proposal would be used as storage rather than as a "showroom". The report said:

    This request is based on the fact that the large areas to be used for storage purposes within each tenancy will not be used for retail purposes and will have the same or lower demand on services as would be the case for a 'warehouse' use over these same areas.
    The applicant would be willing to meet with relevant Council officers prior to a decision being made on infrastructure charges for this application if required, to provide further information with respect to this request.

    The development will be supported by more than 200 extra car parks.

    Reports were also submitted in relation to traffic impacts, landscaping and waste management.

    While the land is included on the Department of Environment and Science's environmental management register, a letter from Range Environmental Consultants found the proposal would be consistent with an existing site management plan.

    The council has yet to respond with an information request.

  • Source: The Toowoomba Chronicle
  • retailers

    UK update

    DIY retailer Woodie's trials a same-day delivery service

    It has partnered with retail platform Buymie, the first outside of the traditional grocery shopping space for the company

    Buymie is a grocery delivery service that operates in the UK and will enable customers in southeast Dublin to order from 20,000 DIY and home improvement products stocked in their nearest Woodie's store.

    The pilot scheme with Woodie's - which is part of the London-listed builders merchants business Grafton Group - will initially see shopping delivery services provided exclusively in the area, with a view to expanding nationally soon after.

    Buymie co-founder and chief executive Devan Hughes said the deal was a "flagship moment" for the company. It is the company's first foray outside grocery, where it works with retailers such as Dunnes and Lidl in Ireland.

    Mr Hughes said the deal was partly inspired by his own experiences with becoming a homeowner and the various trips he had to make to pick up goods for his own DIY projects. He told the Sunday Independent:

    Over the years I have been very focused on grocery as a category ... With the experience of becoming a homeowner, which involved multiple trips to my local Woodie's store picking up pieces for the house, my own experience made that retailer and category interesting. So we had conversations, and they were equally excited about the possibility for same day delivery.

    The new service, 'Woodie's powered by Buymie', emulates the extended 'Asda Express powered by Buymie' trial in Leeds and Bristol, where Buymie has integrated into the grocery retailer's delivery options.

    Buymie designed the customised Woodie's app in partnership with the Woodie's team, which will see the retailer leverage the delivery capabilities of Buymie and its network of independent personal shoppers.

    It makes Woodie's the first retailer in Ireland to access Buymie's newest enterprise technology platform.

    Suzanne Quinn, Woodie's chief commercial officer, said the partnership was an opportunity to build and grow its online delivery offering.

    Our online business has seen rapid growth in recent years and this partnership allows us to further build and grow our omnichannel proposition, keeping ease and expertise at our core.
    This partnership with Buymie is an important step for us as we continue to find new ways to help our customers shop the way that suits them.
  • Source: Sunday Independent
  • retailers

    Retail update: Bowens

    Bowens opens its 17th store in Warragul, VIC

    This store expects to service hundreds of local builders with a commitment to ensure building products are consistently delivered on time and in full

    The brand-new Bowens Warragul store is the first of three new store openings in the coming months for the group with Melton (due to open in October) and Cheltenham (in February) as well as major extensions planned at existing sites in Hastings and Epping.

    The Warragul site will not only better support local builders, but relieve demand on the neighbouring Pakenham store, delivering quicker supply for local businesses, saving them time and money.

    With 35 planned new full-time jobs for the area, Bowens has recognised an increased construction demand across West Gippsland.

    Bowens is proud of its top-quality customer service, with account managers prioritising developing strong relationships with local builders and the broader community, as construction demand in the area continues to grow. Bowens director and chief investment officer, Andy Bowen told the Warragul & Drouin Gazette:

    We are excited to be formally opening the doors of our newest store in Warragul, marking the seventeenth store in Bowens' network across Victoria.
    We've been watching the demand in the area grow and are proud to be able to better service local builders in and around Warragul.
    We'll be looking to support the community in meaningful ways outside of building supplies and look forward to better connecting with the people of Warragul. Part of that will be hiring local talent and creating jobs for people in West Gippsland and the surrounding areas.
    Some staff already living in the Warragul area will be relocating from the established near-by Pakenham store.
    The size and location of the Warragul store will create more full-time employment opportunities as we scale up, eventually aiming to have 35 full-time employees based out of Warragul.

    Long-time employee and Bowens Warragul store manager, Dean Armstrong said:

    I've worked with Bowens for 19 years, living in Warragul for 11 of those, so I know the community really well.
    As Warragul store manager, I'll be able to work closely with builders in the area and better understand their ways of working, projects and priorities. Our main goal is supporting local builders, keeping up with increasing demands and ensuring our orders are delivered in full and on time.
    The new store will represent a great opportunity for Bowens to support local causes and groups, showing our commitment to the local community.
    Hitting the ground running, we're bringing some of our experienced staff from the Pakenham store across, ensuring our top-quality service remains.

    The Bowens Warragul store will integrate existing and new employees, with many team members already living in the Warragul area moving across from existing stores.

    Related

    Expansion plans for Bowens - HNN Flash #92, April 2022
  • Sources: Warragul & Drouin Gazette and Bowens
  • retailers

    USA update

    Lowe's debuts "digital twin" store

    The home improvement retailer worked with graphics chip maker Nvidia to build digital versions of its stores in Washington and North Carolina

    Lowe's Cos. said it has created immersive, interactive three-dimensional models of two of its US stores to achieve better visibility into inventory data and store layouts.

    The models, also known as digital twins, are essentially fully virtual versions of the physical stores, updated in real time with information from sensors and point-of-sale devices such as cash registers.

    Seemantini Godbole, chief digital and information officer at Lowe's, said its purpose includes helping store planners optimise layouts and better perform analytics on inventory and sales data.

    Additionally, store staff on the ground can access the digital twin by wearing augmented reality headsets. They can then see detailed information about the inventory in front of them, including partially obscured items in hard-to-reach places.

    "The way I think about it is, we are trying to give superpowers to our associates [store staff]," said Ms Godbole, adding that floor staff tasked with restocking or reorganising inventory can check their work by overlaying a hologram of the digital twin over the actual version to ensure they've placed the correct inventory in the correct place.

    Although the project is in its initial stages, Ms Godbole said it is showing promising results. So far, the digital twins have been used to better understand when two specific products are frequently bought together so they could then be placed closer to each other.

    Ms Godbole said Lowe's had already done some of the groundwork for this by creating three-dimensional, virtual representations of its products to put them on its website for customers shopping online. Additionally, it already had some sensors in place.

    Lowe's said it has no clear timeline for when it might extend the digital twin technology beyond Mill Creek (Washington) and Charlotte (North Carolina). Ms Godbole says it's unlikely the company would roll it out to all its stores in the immediate future. She said it might explore doing so for a handful of stores, potentially giving priority to those that frequently update their layouts to focus customers' attention on seasonal products.

    About digital twins

    The concept of a digital twin has been around for a while and involves creating virtual three-dimensional versions of all kinds of real-life objects or places.

    Until now, most uses for digital twins have been concentrated in factories and the manufacturing sector, said Tom Mainelli, an analyst at research firm International Data Corp. Creating digital twins of machines can help train workers on how to use the machines and provide internal visibility into any problems with them without having to take them apart, he said.

    One challenge with manufacturers, he said, has been the complexity of creating digital twins, especially of older machinery where information about its components doesn't already exist in digital formats.

    Built by its Lowe's Innovation Labs team, Lowe's digital twin is a completely virtual replica of a physical home improvement store, created in Nvidia's Omniverse environment. It fuses spatial data with other Lowe's data, including product location and historical order information, and pulls all of these sources together into a visual package that can be accessed on a range of devices, from desktop computers to Magic Leap 2 augmented reality (AR) headsets. Jensen Huang, founder and CEO of Nvidia, said:

    AI and digital twins are reinventing the retail experience for associates and customers, in person and online.

    Nvidia is known for its graphics processing units - graphics chips originally designed to deliver cutting-edge performance to video games. They have gone on to help power everything from artificial intelligence calculations in data centres to cryptocurrency mining.

    A few of the areas that Lowe's is currently exploring with its digital twin include:

    AR reset and restocking support

    Wearing a Magic Leap 2 AR headset, Lowe's store staff can see a hologram of the digital twin overlaid atop the physical store in augmented reality. This can help them compare what a store shelf should look like versus what it actually looks like, and make sure it's stocked with the right products in the right configurations.

    AR "X-Ray Vision"

    "X-ray vision" is the ability to gather and view information on obscured items on hard-to-reach shelves. For example, under normal circumstances, an associate might need to climb a ladder to gather information on a cardboard-enclosed product held in a store's top stock. With an AR headset and the digital twin, they could look up at a partially obscured cardboard box from ground level, and determine and view its contents via an AR overlay.

    AR Collaboration

    With access to a Magic Leap 2 AR headset, store staff can do more than just view the digital twin - they can also update it and collaborate with centralised store planners in new ways. If a store associate notices an improvement that could be made to a proposed planogram for their store, they could notate that on the digital twin with an AR "sticky note."

    Store visualisation and optimisation

    The digital twin enables new ways of viewing sales performance and customer traffic data to enhance the in-store experience using 3D heatmaps and distance measurements of items frequently bought together.

    Using historical order and product location data, Lowe's can also leverage Omniverse and Lowe's created AI avatars to simulate how far customers or associates might need to walk to pick up items often bought together. Lowe's can also test changes to product placements within Omniverse to create better customer and staff experiences.

    Related

    In June, the retailer debuted more than 500 free digital assets in Lowe's Open Builder, its metaverse hub.

    Lowe's Home Improvement enters the metaverse - HNN Flash #99, June 2022

    Lowe's unveiled its Measure Your Space tool last year to allow customers to scan and measure their spaces before making home improvements.

    Lowe's releases beta version of measuring tool - HNN Flash #71, November 2021
  • Sources: Wall Street Journal and PR Newswire
  • retailers

    Retail update: Sydney Tools

    Proposed store in Hervey Bay

    Sydney Tools submitted a development application for a warehouse, showroom, and storage facilities

    Industrial power tools group Sydney Tools has revealed plans to build a $4.5 million hardware and trade supplies outlet in Hervey Bay (QLD).

    According to the development application (DA) currently before Fraser Coast Regional Council, the project will take about 18 months to complete and support more than "30 jobs locally across various trades".

    The developer is looking at a vacant block of land next to a service station located at 168-172 Main St, Kawungan. The application calls for a single storey "industrial building" that will accommodate three different retail shops. One of the tenancies will be occupied by Sydney Tools.

    The 3384sqm DA indicates the outlet will have a "striking facade" in an array of colours and shapes. It will also include warehouse, showroom and storage components. In the Fraser Coast Chronicle, the application said:

    The proposed development has been designed to contribute to a modern and accessible mixed use precinct with services and amenity provided for workers and customers.
    Once construction is completed and the proposed development is operational, the development will support the direct employment of up to 20 full-time employees.

    There will be 59 carparking spaces, including two disability car spaces, with site access on Main Street and Innotech Drive.

    Sydney Tools now has more than 60 stores across Australia.

  • Sources: Fraser Coast Chronicle and The Courier Mail
  • retailers

    Retail update: Reece

    Bathroom planning tool campaign

    Reece Bathrooms has launched a campaign on the back of The Block's latest season, collaborating with Trout Creative Thinking

    Capitalising on The Block's 2022 season, Reece Bathrooms has embarked on a campaign to launch its Imagin3D digital bathroom visualisation tool for homemakers. Both the tool and creative are by Trout Creative Thinking, with support from production company Sherpa to bring the campaign to life.

    Imagin3D gives renovators the ability to create and plan their dream bathroom for free using real products, materials, surfaces and colours. Visualising a bathroom look can give renovators confidence in their choices, before committing to buying products or booking trades, and helps to avoid making expensive style mistakes.

    The launch campaign includes a TV commercial, in-store presence and digital marketing overseen by Trout, in addition to integration into this season of Nine's The Block where contestants use the tool to plan their bathrooms.

    Software company Thoughtworks assisted with developing the digital platform and the tool's functionality is illustrated in the TV commercial using VFX (visual effects) crafted by Soma.


    Imagin3D is proving valuable for home renovators embarking on their bathroom journey; with one in five Imagin3D webpage visitors signing up to use the tool, according to Reece.

    Imagin3D is available via the Reece Bathrooms website, and is being used in Reece Bathrooms showrooms across the country. Trout creative director Anthony Bologna said:

    Launching Imagin3D in the 25th year of our partnership with Reece is a huge accomplishment and Sherpa was the perfect partner to bring this to life. Creative collaboration across agency, client and supplier teams really open doors for businesses to engage customers by creating better brand experiences.

    Sherpa producer Elizabeth Malcher said:

    It was such a pleasure working with the teams at Trout and Reece on our third collaborative campaign this year. We were able to do a creative production deep dive and get to the heart of their messaging.
  • Source: Mumbrella
  • retailers

    Retail update: Mitre 10

    Sunshine Mitre 10 Gympie marks 10 years

    Petrie's Mitre 10 in Dubbo (NSW) has officially opened its new drive through trade centre following a soft launch

    The Mitre 10 store in Gympie (QLD) that is part of the Sunshine Mitre 10 network recently celebrated its tenth birthday. Its team of more than 40 employees had some fun with local customers from the Gympie community.

    Marketing operations manager Nick Brindt said the store's success comes down to several factors. He told Gympie Today:

    It's a culmination of many things to be honest, the quality of our staff and their experience, being invested in helping grow and support not only the Gympie community, but surrounding region whether that be through sponsorships, donations, major local events, school groups or something simple like carrying a heavy product and loading it into a customer's vehicle.

    Over the past decade, there have been some memorable moments and colourful characters. For Mr Brindt, it was the fortitude he witnessed first-hand during the floods. He said:

    The resilience of this great community and banding together of people to recover from multiple flood devastations, and knowing we play a very small part in helping rebuild Gympie and the surrounding region - it's humbling.

    In that time, they also get to know their customers. Mr Brindt said:

    All our customers brighten our day. We have a very loyal trade base of builders who love turning up at 6am in the cold for a barbecue brekkie...
    And we have our regular DIY customers that visit our nursery every week to talk with Glenda our garden expert. We are blessed to have such a genuine and loyal customer base.

    Like many hardware stores, the team at Sunshine Mitre 10 Gympie are generous with the various sponsorships, donations and fundraising events they get involved in in the community. Mr Brindt said:

    To be honest, there are too many groups to list. We do our best to support as many groups throughout the region, and believe that we play an important role in supporting these groups, as these group are the life blood in regional locations.
    We also believe it's so important to develop, support and grow the next generation. And with the recent floods of 2022, we donated $40,000 in building materials between various community groups, and local families.

    At the end of the day, that's what the business is all about, according to Mr Brindt.

    The most enjoyable part is knowing that we play a pivotal role in the Gympie community, and knowing a lot of our customers on a first name basis.
    If you were to ask all our staff, they would say our customers are the best part.

    Petries Mitre 10 Dubbo

    Brad Petrie, manager of Petrie's Mitre 10 Dubbo is keen to know what people are thinking about the new trade facility after the team put a lot of effort into preparing it for opening. He told Dubbo Photo News:

    The shop has been opened all month and it has been going really well.

    Petrie's Mitre 10 Trade Centre Dubbo is located at 62 Fitzroy Street, Dubbo (NSW).

    Mr Petrie and the team also paid tribute to Malcolm Petrie who sadly passed away aged 90 in late August, on the day of the Dubbo trade centre launch. Mitre 10 staff formed guard of honour for their colleague as the hearse passed by Mudgee's Mitre 10, according to the Mudgee Guardian and Gulgong Advertiser.

    There have been ongoing tributes from local and business communities around Mudgee and the Central West for Malcolm since his passing. Malcolm's daughter Annette remembered her father as a kind and generous man. She told the Mudgee Guardian:

    His kindness, strong intellect, love of people, sense of fairness, humor, shone through in whatever he did. He connected with people; he saw the best in people.

    She said the outpouring of love for her father has been overwhelming.

    ...The respect shown from our local community and beyond has been incredible. The beautiful comments on Facebook, the caring, respectful words from people we would meet in the street, the phone calls, the flowers. It has been unbelievable. We knew our father as a wonderful presence in our family and we also knew what a friendly, well-known man he was in our community.
    Dad never sought acknowledgment of who he was or what he did, he was just a good man. The past few weeks and the response to dad's death has shone a light on that fact, that he was a good man, a good friend, a respected member of our community.

    The hardware store carrying his namesake, opened in Mudgee in October 1986. Liam Collier, business development manager at the Independent Hardware Group remembered Malcolm as a titan of the industry and a great bloke. He said:

    Mal had many years serving on Advisory Councils. He quite enjoyed seeing the workings of Mitre 10 and the responsibility of setting direction for the brand. He even represented the brand on TV commercials when Paul Cronin was the Mitre 10 frontman, and was generally recognised as one of the faces of Mitre 10 NSW ... Mal gave his guidance, his mentorship and his cooperation towards other Mitre 10 members and suppliers...
    He will be sadly missed by the Mitre 10 families across Australia, but we are very grateful for the time he gave to our brand, and the amazing family that remains to continue his work.

    Related

    Petrie's Mitre 10 plans to open a trade centre from its Dubbo (NSW) store - HNN Flash #95, May 2022
  • Sources: Gympie Today, Dubbo Photo News and Mudgee Guardian and Gulgong Advertiser
  • retailers

    Retail update: Metcash and Delta Agribusiness

    Metcash provides trading update

    Delta Agribusinses is seeking a new investor who will be able to replace its private equity backer and help fund growth: report

    Metcash recently issued a trading update just prior to its annual general meeting that showed sales are up by 8.9% across the group for the first months of the 2023 financial year.

    It said that sales this year of the hardware business have increased 19.5%. Independent Hardware Group (IHG) posted same-store sales growth so far this year of 7.3%. IHG is also building a network of about 400 Mitre 10 and about 200 Home Hardware stores. Around 20 ThriftyLink/True Value stores have been converted to Home Hardware, and another 30 are planned for 2022-23.

    There is a major focus on DIY categories such as kitchen/laundry/bathroom. The company said it is on track to build a network of about 130 Total Tools stores by 2025, and is targeting more upgrades and adding exclusive brands.

    Hardware now makes up 20% of Metcash sales and 40% of profits. Inflation remained high, particularly in trade, although there were signs of easing as the availability of supply improved, said new chairman Peter Birtles.

    Trade now represents 64% of the sales mix, up from 60% in FY21, with the remainder 36% in DIY.

    Metcash said it wasn't yet clear if inflationary pressures would change shopping behaviours in the near future. Mr Birtles said:

    A higher rate of inflation has also continued into the first half of [financial year 2023], and there is uncertainty over its level going forward and whether it and other cost of living increases will impact consumer behaviour in the retail networks of our pillars.

    Delta Agribusiness

    After expanding its network into South Australia, NSW-based farm services group, Delta Agribusiness, is believed to be seeking fresh financial backing to replace the private equity group, Odyssey, which bought a 24% stake in 2019.

    Sources told the Street Talk in The Australian Financial Review that it is targeting private equity firms, private capital players and bigger retail groups.

    The business is expected to be pitched as the third-biggest rural services supplier, behind Elders and Nutrien (which acquired Ruralco in 2019). It is understood to be making about $800 million a year in revenue and about $60 million in EBITDA.

    The business describes itself as a leading force in rural inputs and advice in regional Australia, offering similar services to the larger Elders. Its five brands include Delta Ag, North West Ag Services, Agrivision Consultants, Aglink David Gray's, Cox Rural and ARH Agquire Rural Holdings.

    Established in 2006, Delta's rural service platform also encompasses merchandise, agricultural chemicals, agronomy and precision agricultural technologies, animal health, seed and fertiliser finance and insurance. It operates grain marketing and farm consultancy services too.

  • Sources: Australian Financial Review, Sydney Morning Herald, The Land, Farm Online and The Australian
  • retailers

    Indie store update

    Zeehan Hardware contributes to TV production

    Filmed in Tasmania and based on the successful overseas format, The Bridge will see a group of strangers work together to build a 330metre long bridge in just 17 days, with $250,000 up for grabs

    Don Edmonston, owner of Zeehan Hardware, played an important role in helping create the set of a new television show, The Bridge that was filmed on the West Coast of Tasmania. (The store is a member of HBT National Buying Group.)

    Mr Edmonston, who is involved with Hydrowood, the company that gave the film crew access to the lake, said he supplied materials for units used by those involved with the show. He told The Examiner:

    My role was to cart material into the site for them to build some units as the site is very remote and inaccessible. The set required materials that looked old, which are hard to obtain.
    We (at the hardware store) cart a lot of our own materials to the West Coast. We are always driving throughout the state picking up our own supplies, so it helps that we know where things are that are needed.

    Mr Edmonston said his knowledge and skill sets have also been used on sets from the ABC show Bay of Fires and another unnamed production that is also being filmed on the West Coast. He said:

    If there was more filming done on the West Coast, it would be good to be involved in but I wouldn't chase it anywhere else in the state.

    Mr Edmonston expected more people to travel to the area once these shows were aired. He said:

    It's good for Tassie and especially for the West Coast - we can do with all publicity we can get down here. A lot of people don't realise how nice it is down here.

    Mr Edmonston was all praise for the production crew of The Bridge, saying they were "unbelievable to work with".

    The Bridge sees 12 strangers meet on the shore of Lake Pieman and together they must to build a 330-metre bridge in 17 days, using just their bare hands and basic tools. If they succeed, only one will claim the cash prize to be faced with the ultimate dilemma - keep the entire money haul for themselves or share with their fellow bridge builders.

    The show is airing exclusively on the Paramount+ streaming service on Fridays.

    (Photo credit: Zeehan Hardware image is from ABC News by Mitch Woolnough)

  • Sources: The Examiner and Mediaweek
  • retailers

    USA update

    Ace Hardware to open 60 stores by the end of 2022

    It also posted second quarter revenues of USD2.5 billion, an increase of 2.7% on top of last year's increase of 8.2%

    Ace Hardware is continuing its brick-and-mortar expansion and opening 60 more stores by the end of the year and plans to open three new warehouses over the next five years.

    So far, the company has opened 105 stores this year.

    The addition of the three warehouses will add 4.4 million square feet of capacity to its distribution network. Over the past four years, the hardware retail chain has added more than 2.5 million square feet of warehouse space for its distribution network.

    The company currently operates more than 5,600 hardware stores across 70 countries, including the US. It has opened more than 840 stores over the past five years.

    Ace Hardware's decision to open more distribution facilities was driven by the need to keep up with the new stores it plans to open, according to the company. It has distribution capabilities in China, Panama and the United Arab Emirates, as well as the US.

    Ace Hardware president and CEO John Venhuizen said in a statement:

    With over 100 new stores already opened for the year, we remain enthusiastically bullish about the continued prospect for new store growth.
    I applaud our local Ace owners for the pace with which they've integrated our digital efforts with our physical assets. Seventy percent of Acehardware.com orders are picked up in store and 20% are delivered to customers by our own red vested heroes, thus further advancing the relevance and necessity of our neighbourhood stores.

    Ace Hardware operates under a retailer-owned cooperative model in which local entrepreneurs own their local store operation and become part of a limited number of shareholders of Ace Hardware Corporation.

    Q2 results

    The hardware retail co-op also reported a record second quarter 2022 revenues of USD2.5 billion, an increase of USD66.1 million, or 2.7%, from the second quarter of 2021.

    Net income was USD124.8 million for the second quarter of 2022, an increase of USD8.8 million from the second quarter of 2021. Included in the results for the second quarter are USD10.8 million in non-recurring charges related to the closure of The Grommet. Mr Venhuizen said:

    Nominal growth continues to be solid. The primary fuel has come from last year's 182 new domestic stores, this year's 88, and the aberrant and stubborn impact of inflation.

    The approximately 3,600 Ace retailers who share daily retail sales data reported a 0.6% increase in US retail same-store-sales during the second quarter of 2022. Estimated retail price inflation of 11.4% helped drive an 8% increase in average ticket. Same-store transactions were down 6.9%.

    Related

    Though Ace Hardware is expanding its physical presence, the company has recently made some cuts. After acquiring a majority stake in e-commerce marketplace The Grommet in 2017, Ace Hardware shuttered the platform in June and laid off 44 employees. Jules Pieri, founder of The Grommet, announced its closure on LinkedIn.

    Ace Hardware shuts down The Grommet marketplace - HNN Flash #101, July 2022
  • Sources: Retail Dive and Ace Hardware Corporation
  • retailers

    Temple & Webster results show boost

    Pure-play online home improvement shows promise

    Temple & Webster, launched in 2011 and ASX-listed in 2015, has successfully expanded into the soft end of home DIY with The Build ecommerce site

    Temple & Webster (T&W), an online home-furnishings retailer that has recently entered the "softer" end of DIY home improvement, demonstrates both the opportunity in the Australia's home improvement market - and the threat established retailers are under if they fail to evolve.

    T&W started up in 2011 with a combination of eBay Australia and Newscorp Digital Australia executives, and launched online the same year. After a series of acquisitions, the company listed on the Australian Stock Exchange in 2015. Currently, the company is Australia's largest pure-play online retailer in the furniture and homewares market. It sells over 200,00 products, sourced from over 500 suppliers. The basic business model combines a drop-shipping model with a line of private label brands.

    T&W's most recent move is to launch The Build (www.thebuild.com.au), which is a shift away from home furnishings and into simple forms of DIY products. The company has identified home improvement as a $26 billion market, with $16 billion relevant to its own retail efforts.

    Results

    Revenue for FY2021/22 was $426.3 million, an increase of 30.6% over the revenue for the previous corresponding period (pcp), which was FY2020/21. Profit before tax was $13.3 million, down by 30.1% on the pcp, and profit after tax was $12.0 million, down by 14.2%.

    The overall approach to presenting its current results has been to focus on the current results as compared to those for FY2019/20, treating the results for FY2020/21 as fortunate, but more of an outlier. So, for example, the company points out that its earnings before interest, taxation, depreciation and amortisation (EBITDA) came in at $16.2 million, which represents a compounded annual growth rate (CAGR) of 55%.

    As is often the case with pure-play online companies, T&W also made available figures which indicate important areas of growth, such as active customers, which improved by 21%, the company states, for FY2021/22 over the pcp.

    This tallies also with revenue growth per active customer, which was up by 6%, according to T&W, over the pcp.

    DIY home improvement

    While those numbers establish the bona-fides of the company, both in terms of market and management acumen, the most relevant part of the business from the perspective of HNN is its new website dedicated to home improvement DIY, launched in May 2022. During the results presentation, this is how the company's co-founder and CEO Mark Coulter outlined strategy for The Build:

    Home improvement is the newest kid on the block, and revenue associated with these categories grew 61% across the year. As a quick refresher, the Australian home improvement market is worth around $26 billion, of which $16 billion is relevant to our business. Currently, this market lags furniture and homewares in terms of online penetration. However, we believe we'll see similar market dynamics to those we're already seeing in furniture and homewares.
    This includes a shift to online shopping as the channel of choice for shoppers who have grown up buying everything online and are now buying, decorating and renovating their homes. To further capitalise on this opportunity, we launched a new online-only store for the home renovator, The Build by Temple & Webster, which is thebuild.com.au.
    This site leverages our core technology platform, our digital marketing expertise and data capabilities. The Build features an initial range of more than 20,000 products across 40 categories. Our goal is for it to become Australia's first-stop shop for all things DIY and home improvement. I'm sure many of you are wondering how The Build is going. Well, it's early days, and we only launched for trading during May. However, we're seeing very encouraging signs. For example, it is growing at a rate significantly faster than Temple & Webster did in its first year. Of course, we know a bit more now than we did 11 years ago.
    While we do not want to get in the habit of putting out guidance specifically for The Build, we have included our estimated first 12-month revenue of $10 million to $15 million to show its initial strong take-up.

    As the company's results presentation states:

    Leveraging our core technology platform, digital marketing and data expertise, The Build features an initial range of more than 20,000 products across 40 categories. Our goal is for it to become Australia's first-stop shop for all things DIY and home improvement.

    Analysis

    There are a number of ways of looking at this development. From one perspective, we could say that T&W's The Build represents some of the money that Wesfarmers has left on the table by not being able to pursue online commerce successfully.

    There has been a temptation to accept the relatively slightly above-average efforts of Wesfarmers with Bunnings, Officeworks, Kmart and Target as being acceptable, when really they are strictly utilitarian websites that succeed due to their association with physical retail. The Build represents a far more intelligent, well thought-out approach to online commerce, and one which is likely to grow into a substantial force in home improvement.

    An additional point here is that there is a tradition for Australian listed companies to be very stingy in terms of the operational data they supply. One reason why T&W has become something of a "darling" for professional investors is that the company supplies US-style data. One reason it can do this is that its strategies do represent something new and difficult for other companies to implement.

    From the point of view of independent hardware retailers, The Build might not represent much of a concern just at the moment, but it has the potential to grow into something far more impactful within two to three years.

    Online at the moment is an area where buying groups and individual retailers have accepted they perform at a mediocre level. That needs to be revisited, and a strategy that will actually work needs to be developed. Treating online as simply a utilitarian way to order stuff a customer already knows they want is going to fail as genuine pure-play online competitors emerge.

    Related

    Temple & Webster launches The Build website for DIyers and home renovators - HNN Flash #93, May 2022
    retailers

    Retail update

    Kmart has new DIY range

    The DIY offering is part of the retailer's August Living collection, and allows shoppers to transform their home or hack a product in an affordable way

    Wesfarmers-owned Kmart has added an all-new DIY range as part of its latest homewares line.

    The DIY collection has been designed to provide simple-to-use and value-driven solutions that change the look of homes. The range means Kmart shoppers can create room transformations both big and small with items such as self-adhesive removable wallpaper designs, floor and wall tiles, curtains and blinds.

    The collection also includes furniture chalk and mineral finish paints that sell for $10 a tin, decor and furniture lacquer (including terrazzo paint chips), door hardware, shelves and more.

    One marketing expert suggests that Kmart's new paint range could be a strategy to attract a wider range of shoppers into its stores.

    Head of marketing at Auckland University business school Bodo Lang said there was an advantage for Kmart in selling many different types of products because it could attract a larger proportion of shoppers. He told Stuff (New Zealand):

    A secondary advantage is that shoppers who are already in store have a greater opportunity to buy other products. This is known as cross-selling.

    If there were lower sales for one type of product, that could be compensated for by sales in other types of products. A retailer with a broad range of products was less exposed to dramatic changes in sales, making sales more predictable, he said.

    But there could also be disadvantages in trying to be a "one-stop shop". Mr Lang said:

    The first is that stores only have a limited amount of shelf space and the more diverse the types of products that a store sells, the less depth there will be in each of those product categories. For example, Kmart may not be able to offer 10 different types of self-adhesive tiles but only two.
    Put simply, having more choice across different types of products means there is likely to be less choice within each of those product categories.

    The DIY collection was inspired and created from a combination of market research, customer feedback and trends on social media, according to Kmart's divisional merchandise manager, Meryn Serong. She said:

    We are thrilled to deliver another new and exciting range of homewares this winter with the bonus of our new DIY range. As cost of living is on the rise, we remain committed to giving our incredible community great value and we are proud to continue to deliver on this with this range...
  • Sources: The Daily Telegraph, 9Now and Stuff (New Zealand)
  • retailers

    Retail update

    Tool Kit Depot opens its doors in Melrose Park (SA)

    A new Mitre 10 Trade Centre in Dubbo (NSW) is making it easier for local tradies to pick up their building supplies

    Tool Kit Depot has announced the opening of its newest store in South Australia which will replace the existing Adelaide Tools store in St Mary's, a suburb of Adelaide.

    The new Tool Kit Depot stores are built to provide everything trade customers need - with more than 10,000 products across tools, safety gear, outdoor power equipment, workwear and much more - all under one big roof.

    The Melrose Park store is more than double the size of the existing St Mary's store, offering an extended range of speciality tools and equipment, and a new layout with hands-on displays that make it easy for customers to find exactly what they're looking for.

    A Battery Bar, tool hire, and a tool servicing and repairs workshop are available in store to keep existing tools in good shape. Customers can access on site tool repairs to keep their business moving, including blade replacements, tool sharpening and test and tag.

    The latest store opening marks the completion of the program to transition all existing Adelaide Tools stores in SA to the Tool Kit Depot trading name. Refits at the Lonsdale, Gawler, Parafield and Mile End stores were completed earlier this year.

    Tool Kit Depot Melrose Park store manager, Luke Helps, said the team is looking forward to welcoming the community to the new store and meeting local tradies and tool lovers in the area.

    We're excited to show customers just how much more we have to offer here at our Melrose Park location. We want this store to be the ultimate one-stop-shop for busy trade professionals who love what they do and need great quality tools and service to do it.
    We've got twelve experienced team with specialist knowledge to help with all jobs big and small, such as Max who is an auto mechanic and experienced welder, Bel who joined us from Bunnings wanting a new challenge and Ethan who is a qualified carpenter.

    Tool Kit Depot's next SA store will be located South of Adelaide in Seaford Meadows, with additional SA stores to be launched as part of the national rollout strategy. Further locations will continue to open in West Australia, before seeking new locations in other states.

    Tool Kit Depot Melrose Park is located at 1031-1037 South Road, Melrose Park SA. It officially celebrated the store opening with the local community and former Adelaide Football Club player Mark Ricciuto.

    Related

    Tool Kit Depot opens in Albany, WA - HNN Flash #101, July 2022

    Mitre 10 Trade Centre

    Petrie's Mitre 10 Trade Centre manager Brad Petrie said its new giant warehouse at the northern end of Fitzroy Street in Dubbo (NSW) recently held a "soft" opening and received rave reviews. He told Dubbo Photo News:

    It was great, we think we probably had anywhere from 80 to 100 people ... We had breakfast on, we had a coffee van and we had a lot of good feedback from the builders relating to the stock, and the accessibility to drive into the yard.

    Originally part of a truck depot, Mr Petrie said there is a lot of space for tradies with trailers, small and medium trucks or even semi-trailers to have ease of access to the stock, with the loading bay able to accommodate many varied vehicles at the one time. So there's little likelihood of getting caught in a traffic jam and wasting time off the tools.

    Mr Petrie also said it is a facility designed for quick load movements.

    It's impressive to have the sheer size of land and the shed. Being a logistics yard, it was designed for trucks to be loaded and unloaded, so when a builder comes in they're able to pull up wherever, we can load them and there's still space for other builders to access it as well. So the original design use of this shed is really going to be a benefit for us.
    We're currently organising the line-markings for our traffic management plan which will consist of a number of parking bays, and we've overserviced regarding space from the get-go so we should be able to get our customers in and out quickly.
    We know from our old site - we didn't have a very good yard - if you pulled one car up no-one else could get past them, so having this ability now, it's premium for Dubbo.

    Related

    New trade centre at Petrie's Mitre 10 Dubbo branch - HNN Flash #95, May 2022
  • Sources: Bunnings Media and Dubbo Photo News
  • retailers

    Retail update: Highgrove Bathrooms

    It is expanding its Gold Coast head office and warehouse

    The bathroom products business generated $140 million in annual revenue in the last financial year

    After starting out as a small outlet in Southport (QLD) in 2004, Highgrove Bathrooms now has 50 stores around Australia.

    Managing director James Sinclair said the company - started by his father Lindsay - had seen some "crazy exponential growth". He told The Courier-Mail:

    Year-on-year we've recorded 20-40% growth and we opened our 50th store in Rockhampton earlier this year.
    One of our biggest challenges is being able to manage that sort of growth year on year and being able to expand the business and the infrastructure that goes with it.

    Mr Sinclair said there were more growth plans with Highgrove building stores in Darwin, Ballina, Bathurst and Tweed Heads. The company is also looking to establish a distribution centre in Sydney within the 12 months.

    At the moment we are waiting to see what happens in the property market, but despite uncertainty sales remain strong. We're still facing cost pressures from incredibly high overseas freight prices, (but they) are slowly subsiding.

    Mr Sinclair said Highgrove had tapped into the homeowner renovator market, including DIYers as well as tradies and new-home builders.

    There are a lot of companies that incorporate bathrooms, but there aren't many national companies that specialise only in bathrooms. That's the big point of difference for us.
    Most of our customers don't renovate often or have never renovated, so we offer personalised service and advise people who come and visit our stores.
    Our ethos hasn't changed over the years. It has always been our goal to offer our customers the best in design at an affordable price point.

    During the pandemic, Highgrove recorded a 30.5% rise in revenue in 2019-20 to $100 million; 30.2% in 2020-21 to $130 million; and 8% to $140 million in 2021-22. Mr Sinclair said while there was a home renovation boom during COVID, a key driver of Highgrove's growth was ensuring its stores and warehouses were well stocked. Mr Sinclair explains:

    When COVID was first disrupting everything we were getting pressure from stakeholders to hold off ordering from overseas as no one knew what was going to happen.
    Not knowing what was going to happen, we kept our normal orders in place with the belief that the risk of being overstocked was easier to deal with than not having stock.
    This proved to be fortunate as stock shortages with competitors helped us to achieve record results, leaving us short on stock anyway. Since then, given the uncertainty in supply chains, we have focused on increasing stock levels nationally both in our stores and distribution centres.

    When Lindsay Sinclair - who remains actively involved in the business - opened Highgrove's first store, it was focused on furniture, but the Sinclairs quickly recognised the opportunity in specialising in bathroom products.

    The company now has 350 staff and a head office and warehouse in Molendinar on the Gold Coast and a distribution centre at Dandenong in Melbourne's outer south eastern suburbs.

    In 2021-22, Highgrove sold about 20,000 baths, 44,000 toilets, 53,000 vanity units and 46,000 basins.

    The company designs products in-house, gets them manufactured mostly in China and Vietnam, and sells their own brands through their stores. Importantly, most of their stores operate under a partnership arrangement with individuals who are part of the local community, which has seen it build relationships with groups such as The Smith Family and Rural Aid.

    Mr Sinclair also said the impact of home renovation television shows on his business could not be understated.

    With the popularity of TV renovation shows, people are looking for a bespoke designer look for their bathrooms.
    People are looking for a far bigger variety of finishes when it comes to baths and we're offering a far bigger range of finishes and textures these days than what we were offering previously.
    Eight years ago it was enough to offer a matte black range, four years ago a range of products in pastels. Today the market is far more discerning and fastidious.

    Buyers now were seeking products such as brushed nickel tapware and accessories, concrete baths and basins, and a range of high-end timber vanities. Mr Sinclair said the company needed to be "flexible" to be unique.

    We're constantly re-engineering ourselves to keep up with an ever-evolving market. Recently one of our main focuses has been on the introduction of interchangeable components, allowing every customer to tailor a bathroom that is totally unique to them.
  • Source: The Courier-Mail
  • retailers

    UK update

    Wickes shoppable videos

    The home improvement retailer has partnered with digital services agency iSite to launch over 130 online shoppable videos

    Wickes has launched a shoppable video player which allows customers to add products directly to their basket, while learning how to complete a variety of DIY tasks.

    There are more than 130 videos available, including buying guides, step-by-step tutorials and design inspiration. Items featured in each video are listed in the sidebar, with the option to "add to basket" without opening a new tab or disrupting the video.

    The digital-first strategy was rolled out in partnership with digital services company iSite and features a range of over 1,300 products.

    The home improvement retailer said the shoppable content is part of its initiative to support mission and project-based shopping. Gary Kibble, Wickes chief marketing and digital officer, said:

    We know that customers shop by project or by mission, whether it's garden maintenance or painting a room. Through our digital channels we've been improving our customer shopping experience with extra tools and functionality to support mission-based purchasing.
    In creating shoppable video content where DIY products can be easily moved to a customer's basket, we're helping the nation feel houseproud by giving them the confidence in their product purchase and ensuring they have everything needed to complete their project.
    Being the first in this space is really exciting for us as it continues to underpin our digitally-led, service enabled business strategy.

    You can view one of the videos here:

    Wickes shoppable video: How to lay a deck

    The move comes as research by software company Brightpearl suggests that video is now becoming a more important role in consumer shopping journeys, with as many as 85% saying that video plays a role in what they buy and 71% being very drawn to interactive video, such as making purchases in videos.

    Wickes is also making efforts to improve its product availability and meet consumer demands.

    Recently, it announced a partnership with RangeMe, a global product sourcing platform which will help to support its customer buying team and enable them to access the most relevant products.

    The partnership will create visibility for more than 200,000 suppliers, allowing them to present their products directly to Wickes buyers, as part of a direct and unified journey. Andrew Cotterill, director of strategic procurement and responsible sourcing at Wickes said:

    Wickes is very excited to begin working with RangeMe to expand our access to new products and innovation and to streamline the procurement process.
  • Source: Internet Retailing
  • retailers

    USA update

    True Value CEO discusses supply chain issues

    The hardware retail group is also contributing to a White House supply chain task force

    In 2019, the Wall Street Journal reported that True Value was overhauling its distribution network to improve how it manages inventory as part of a USD150 million initiative.

    The company was revamping the network to deliver goods along a "hub-and-spoke" model to use inventory more efficiently so that seasonal items like outdoor furniture don't take up space where faster-moving products such as hand tools and plumbing supplies could be stored.

    Instead of stocking each warehouse with every product, True Value placed slower-moving goods in large central locations and pushing inventory that turns over more quickly out to satellite facilities closer to customers. Orders drawing from the hub are sent out to the spokes, where they are matched up on the loading dock with items pulled from those distribution centres.

    More recently, CEO Chris Kempa spoke to HBSDealer about what he sees as the current issues facing the distribution, post-pandemic. He said:

    We just continue on a monthly basis to assess where we're at. The good news is we are in a better place...
    The pandemic drove feet into our customers' stores, and they keep coming back. So the independent hardware retailers, and specifically our hardware stores, know how to manage in their markets. They know how to serve customers. They had a lot of them come back through their doors and they're keeping up.

    Mr Kempa also listed the challenges facing the business of moving products across land or sea including closed ports in China, container shortages, truck availability, driver shortages. On top of it all looms the threat of a strike at ports along the West Coast of the US.

    For True Value, rising to the challenge of supply-chain uncertainty begins with its people. Mr Kempa told HBSDealer:

    We have over the last couple years, built the best-in-class team that really manages the end-to-end supply chain. And so we have gained an advantage based on our team. We are doing everything we can to move and get goods. And from my perspective, our team has done an incredible job.

    That job includes building diverse options into the supply chain, finding dual sources, looking at new countries of origin and preparing for the unexpected. Mr Kempa said:

    Our perspective is easy. Please help me get goods so that I can take care of my customers.
    We're also helping leaders understand all the challenges we go through, to try to make this work better. Now, things are getting better. But better is not normal.

    Mr Kempa also described the labour shortage as the "biggest hangover from the pandemic". The situation demands looking inward at pay scales, benefits, work environments, and assessing all the things that lead to retention and recruitment of employees. He said:

    It makes you examine the basics of just good environments, good leadership and good engagement with your teams. And so we have put a lot of emphasis on that.

    White House task force on supply chain

    Earlier this year, True Value joined a White House task force on supply chain challenges. Mr Kempa was part of a roundtable discussion at the White House with Secretary of Transportation Pete Buttigieg and National Economic Council Director Brian Deese to discuss the launch of Freight Logistics Optimization Works (FLOW), a data-sharing pilot program created to ease supply chain congestion.

    FLOW aims to improve congestion and speed up the movement of goods by establishing a baseline supply chain data infrastructure to significantly improve goods movement coordination.

    True Value is contributing critical data about the supply chain to help give a clearer, real-time picture of the flow of goods and where infrastructure improvements should be focused.

    Related

    True Value is expanding the number of businesses it serves after moving away from its historic roots as a member-owned cooperative through the 2018 sale of a majority stake to private equity firm Acon Investments.

    True Value moves out of retail co-op model - HI News, May 2018
  • Sources: HBSDealer, Wall Street Journal and Hardware Connection
  • retailers

    Retail update

    Tool Kit Depot opens in Albany, WA

    Australia's largest independent electrical retailer, Middy's has taken on PowerPlus stores located in the Riverina region of New South Wales

    Bunnings owned Tool Kit Depot (TKD) has opened its sixth store in Western Australia, located in Albany. Spanning 1,500sqm, this store represents a $3 million investment creating eight new jobs in the local community.

    The new TKD specialist tools stores stock all the gear tradies and serious DIY'er needs, carrying 10,000 products across power tools, outdoor power equipment, hand tools, storage, workwear, welding equipment, construction and safety equipment all under one roof.

    Similar to other TKD outlets, the Albany store has a Battery Bar, tool hire, and a tool servicing and repairs workshop to keep existing tools in good shape. Customers can access on site tool repairs at the store, including blade replacements, tool sharpening as well as test and tag.

    Prior to the opening, TKD store manager Colin Kuiper said the Albany team were looking forward to getting to know local tradies in the area and finding out how they can help them with their next project.

    Our Albany team have been busy ... working flat out to get products on the shelf in preparation for the store opening. It's been a huge effort by all involved and we're really proud of what the team has achieved.

    In addition to products from suppliers such as Festool, Husqvarna, Hard Yakka, Milwaukee and Makita, the TKD range extends to products from AEG, Irwin, Empire, Kango and Full Boar.

    Tool Kit Depot Albany is located at 348 Albany Highway, Albany WA 6330.

    Related

    Tool Kit Depot is part of Bunnings' planned growth.

    Tool Kit Depot to launch additional 60 stores - HNN Flash #97, June 2022

    A new Tool Kit Depot store in Adelaide has replaced an Adelaide Tools store.

    Tool Kit Depot Melrose Park - HNN Flash #87, March 2022

    Middy's expansion

    Middy's has completed its acquisition of the PowerPlus branches in Leeton and Griffith, both in NSW, reports The Rural.

    PowerPlus Griffith opened its doors in April 2004 and was followed by PowerPlus Leeton in March 2009. Both branches were owned and operated by Adam Truscott and Anthony Martinello. They joined the Gemcell Group - Australia's largest group of independent electrical wholesalers - as product members in 2007.

    In late 2021, both PowerPlus branches were bought by Middy's Electrical. They have become important additions to the company's NSW and ACT market presence, which now has a total of sixteen locations across the two regions.

    Like Middy's, PowerPlus was based on local needs and is driven by the desire to offer the best personal service.

    Proudly supporting Australian made where possible, Middy's remain committed to ensuring they are not buying or selling products that don't meet Australian Standards. Middy's customers can also use their accounts at PowerPlus branches, and likewise PowerPlus customers are welcome at Middy's.

    Both PowerPlus branches are currently undergoing a re-brand of both internal and external signage. Once complete, they will soon be easily identified by Middy's trademark pink.

  • Sources: Bunnings Group and The Rural
  • retailers

    USA update

    Ace Hardware shuts down The Grommet marketplace

    The retailer also recorded an increase in first quarter 2022 revenues and added new stores

    The Grommet, a marketplace owned by Ace Hardware and specialising in small brands and quirky products, is shutting down, according to Retail Dive via a LinkedIn post from Grommet founder Jules Pieri. It also notified customers by email of a liquidation sale.

    Ace Hardware acquired a majority stake in the platform in 2017 for an undisclosed amount. At the time, the companies said The Grommet would retain its autonomy and that Ace had no plans to interfere with its strategic direction.

    When Ace took over The Grommet, it seemed like a lucrative opportunity for the marketplace and its sellers. The hardware retailer's scale and well-known brand, plus the two companies' merchandising synergies, seemed like upsides. Their deal gave the platform and its sellers a portal to brick and mortar, and Ace a way to appeal to younger consumers.

    Yet the tie-up may have been The Grommet's downfall, as "Ace's co-op structure meant having to sell each store owner individually on a Grommet program," according to the LinkedIn post from Ms Pieri, who maintained a stake in the marketplace and remained in charge when it was sold but announced in 2020 that she left at Ace's behest.

    Ace Hardware stores with The Grommet displays featured merchandise from small, independent brands, many of them DTC (direct to consumer) - but on a much smaller scale and absent of any coordinated theme.

    The closure of the marketplace also demonstrates more general difficulties often faced by e-commerce companies. While legacy retailers like Walmart, Target and even Ace have developed online and omnichannel capabilities, many pure-play e-retailers have struggled to establish physical footprints.

    That has led many DTC brands to turn to wholesale as a more efficient channel for growth, and that had been Ms Pieri's strategy when Ace came calling, according to her LinkedIn post. "As CEO I decided to commit hard and invested for wholesale success at Ace and beyond," she said, adding that the co-op setup made that time-consuming and expensive.

    Growth slowed and losses mounted. On top of that, customer acquisition via Google and Facebook (without concurrent investments in brand awareness) got impossibly pricey.

    Related:

    Ace buys The Grommet - HI News 3.12, page 87 (November 2017)

    Q1 results

    Ace Hardware also recorded first quarter 2022 revenues of USD2.2 billion, an increase of USD181.8 million, or 8.9%, from the first quarter of 2021. Net income was USD119.8 million for the first quarter of 2022, an increase of USD14.4 million from the first quarter of 2021. John Venhuizen, president and CEO said:

    Our first quarter increases in revenue and income brings our two-year stacked growth to nearly 51% and 205%, respectively. Revenue growth from the 54 new stores we added in the first quarter was real and incremental. The remainder of the first quarter revenue growth, however, was not as it was the result of ongoing inflation.

    Estimated retail price inflation of 9.5% helped drive a 10.0% increase in average ticket. Same-store transactions were down 7.8%.

    The approximately 3,500 Ace retailers who share daily retail sales data reported a 1.4% increase in US retail same-store-sales during the first quarter of 2022.

    Ace added 50 new domestic stores in the first quarter of 2022 and cancelled 11 stores. The retailer's total domestic US store count was 4,790 at the end of the first quarter of 2022 which was an increase of 110 stores from the first quarter of 2021. On a worldwide basis, Ace added 54 stores in the first quarter of 2022 and cancelled 11, bringing the worldwide store count to 5,626 at the end of the first quarter of 2022.

  • Sources: Retail Dive and PR Newswire
  • retailers

    Retail update

    Terang Co-Operative reports bumper results

    TAFCO Rural Supplies is providing $338,000 back to members after a successful trading year

    The Terang and District Co-Operative Society in regional Victoria recently announced at its annual meeting that it recorded a $821,835 profit, according to The Warrnambool Standard.

    The co-op's hardware businesses saw Terang Mitre 10 being a finalist in Hardware Australia's Store of the Year and Camperdown location taking out the award for small format Mitre 10 Store of the Year for Victoria and Tasmania.

    Its annual turnover of $29 million is second only to the 2020-21 results which were influenced by COVID-19 lockdowns.

    The co-op exceeded its pre-COVID 2019-20-year turnover by 18%. The growth was built off strong IGA and liquor sales and consistent sales performance from both Mitre 10 businesses.

    Chairman Geoff Barby said the co-op had worked hard to retain the business and customers gained during COVID-19 travel restrictions and lockdowns. He said the IGA Supermarket continued to thrive on the back of a refurbishment and topped off the year with winning the State IGA Awards of Retail Excellence for the Best Grocery and General Merchandise Department.

    Mr Barby said the before-tax profit result was a great testament to the hard work of staff. He told The Warrnambool Standard:

    Our co-op is only ever as strong as the support we are given from our members and community and we welcomed 189 new members during the year.

    Membership now stands at a record 3239. They accrued $286,513 in rewards during the year while the co-op's total assets grew to almost $12.5 million. Mr Barby said:

    We continue to look towards ensuring a sustainable future for our members and our co-op communities.

    Chief executive Kevin Ford also said the turnover of $29 million was a great result and the co-op captured more gross profit with better controls in place.

    ...Not only do we have a great supermarket, a great trade and retail home improvement store, we have an engaging and exciting community co-op.

    Mr Ford said the co-op continued its sponsorship and donations program.

    In 2021-22, when many organisations were hampered from their normal activities throughout the year, we are pleased and proud to be able to assist the community in such times of need.

    Mr Ford said the co-op was putting considerable focus on improving its business and information systems and planned to develop a total integration of systems.

    The co-op will evolve and change in an ongoing process of continual business improvement into the future.

    Related

    Terang Co-op stores move to Mitre 10 - HNN Flash #13, June 2020

    TAFCO Rural Supplies

    The directors of TAFCO Rural Supplies have issued a 5% dividend on shares and a 5% rebate on members' 12 months trading to March 31, 2022.

    The Myrtleford-based community co-operative will provide just over $338,000 back to members as a credit on their account in June, taking its return to members and the community to more than $4 million since its formation in 1987 to service tobacco and other farmers of the region in Victoria.

    TACFO general manager Rupert Shaw said the co-operative continues to grow with new members joining each year. He told the Myrtleford Times:

    Anyone who trades is eligible to be a member. It's not just the farming community who benefit from membership.
    If you shop at TAFCO for pet food, garden supplies or even just salami making supplies, you should consider joining as a member - it's open to anyone in the community who purchases goods.
    We work on fair competitive pricing and return profits back to members through rebates on trading and dividend on shareholding, with the emphasis on rewarding members on their trade.

    Every purchase made at TAFCO is supporting a locally owned business with 700 shareholder members, employing and training local people and returning profits back to members. TAFCO chairman Lachlan Campbell said:

    TAFCO is about our members and the community, this year we have continued to support Into Our Hands Community Foundation and GROW Myrtleford+ the local philanthropic trust. Members have the opportunity to make a tax deductible donation from their TAFCO rebate/dividend directly to the foundation.

    Related

    Rural supplies co-op diversifies membership base - HNN Flash #37, March 2021
  • Sources: The Warrnambool Standard and Myrtleford Times
  • retailers

    Retail update

    Elders moving into Goldtower Central in Queensland

    Shepparton-based Riverside Gardens Garden Centre has changed hands, locations and products in over 40 years of trading

    Agribusiness Elders has moved into new premises at the Goldtower Central complex in Charters Towers (QLD). The new facility is a 1300sqm building with an all-weather drive-through area.

    Goldtower Central owner Paul McIver said the expansion was a logical next step for the region and the business. He told the Townsville Bulletin:

    Elders is the newest tenant of our commercial development ... Our development has seen six buildings completed with new constructions of Poppet Head Plaza and Treasure Towers now leasing.
    We had a vision of establishing a strong presence in the West. Elders shares our vision and the growth of this national brand into our precinct promotes a strong appeal to do business in regional Queensland.

    Charters Towers mayor Frank Beveridge said the new expansion was a welcome development. He told the Townsville Bulletin:

    We are pleased to see the expansions of the Elders into a larger premise. With the demand for food increasing for the next 25 years, agriculture, especially the beef industry, needs businesses to grow to cater to this pressure. This expansion shows faith in Charters Towers region...

    The new branch will employ three extra staff, bringing the number of the team catering to the Charters Towers community to nine.

    Existing franchises at the location include Hollimans Rural Mitre 10, rural clothing specialist W. Titley & Co and Queensland Rural.

    Related

    Hollimans Group is moving to the Goldtower Central retail precinct in Charters Towers (QLD) - HNN Flash #88, April 2022

    Riverside Gardens Garden Centre

    The Smith family's history with Riverside Gardens Garden Centre in Shepparton (VIC) began in 1982 when Moira and Bob Smith bought the nursery, then located on the banks of the Broken River.

    In the first six months, the nursery was mananged by the Smiths and their son Murray, with another son, Larry, travelling from Melbourne on the weekends to pitch in, according to Shepparton News.

    After Larry left his position at Government House gardens to move his family back to Shepparton, he made the jump into the business - with his brother Rodney not far behind.

    Now, Larry, Murray and Rodney are at the helm, along with the garden centre's popular cocky, Charlie. He told Shepparton News:

    We've quite literally weathered our fair share of storms with the old and new nursery. Both the old and new nursery have been severely damaged in four storms, we've been burnt by a couple of devastating fires, survived more than 10 years of drought and suffered regular minor flooding at the old site.

    He said the 1993 floods affected the business in a devastating way, as they did many others, prompting the move to the Emerald Bank location. Throw in a pandemic, and the nursery has just about seen it all but regardless, the support and generosity from the community has been "heart-warming". Larry said:

    Back then, moving a few kilometres out of town surrounded by cows was a gamble! But it's one that's proved beneficial over the years. We were a lonely tenant for a while but we're grateful to have neighbouring businesses that have made Emerald Bank more of a destination point than we could've thought.

    Across 40 years, Larry said the whole industry had changed. He said:

    Initially it was 'you work for a nursery, you just sell plants' and quite often they were just wrapped up in paper. Now it can't be dirty at all - you can't be dirty coming into a garden centre.

    While it began with simply plants, the store has since become a seller of all sorts. Additions include a coffee shop, gift lines, home and garden decor, and furniture all the way through to clothing and the mini golf course. Larry said:

    To actually grow the nursery from what it was; it was very small and now it's one of the leading nurseries in Victoria.

    The nursery won the Best Medium Garden Centre of Victoria award three years running from 2008. He said:

    ...Yes, a great deal has changed over 40 years, but one thing that will never change is that we are forever appreciative to our customers who have supported us over the years, and we thank them for being a part of our journey.
  • Sources: Townsville Bulletin and Shepparton News
  • retailers

    UK update

    Wickes launched its own store on eBay

    The home improvement retailer has curated a range of over 4,000 products to target eBay's visitors

    Wickes has launched its own store on eBay as it takes its first step into the online marketplace. Its eBay range includes its best selling flooring, internal doors, tiles, paint, ready to fit kitchen and garden products.

    Wickes said the marketplace is the "ideal platform" to acquire and retain new customers and is the start of a six-month trial. Chief marketing and digital officer, Gary Kibble, said in a statement:

    We're customer curious at Wickes and do a great deal of work to understand why and how our customers shop. We know that home improvers are always on the hunt for inspiration in creating a beautiful home and will source products from a wide variety of sellers to create their perfect space.
    By launching with eBay we can introduce even more home improvers to the Wickes brand and help them feel house proud. We believe partnering with eBay underpins our strategy of being a digitally-led, service enabled business. And with DIY products selling every 12 seconds on the site, this is a massive moment for Wickes to attract new customers and delight existing ones.
    The collaboration will help us understand the home improvement customer further and inform more channel opportunities in the future.

    Wickes also recently said it expects to avoid the slump in post-pandemic home improvement trading with customers still returning to stores and trade customer order books at record levels.

    However group sales were down 0.6% for the first 20 weeks of its financial year compared with last year. Like-for-like sales were also down 7.2% for the period.

    DIY sales increased by 30.9% over last year. On a three-year basis, which compares with the pre-COVID period, total group sales were 22.4% ahead. The firm said sales were "significantly ahead of pre-lockdown levels".

    Wickes added it was "mindful" of customers facing huge rises in the cost of living due to inflation. CEO David Wood said:

    Looking ahead, while we remain mindful of the uncertain macroeconomic environment, we continue to be confident of the opportunities for Wickes within the large and growing home improvement market.
  • Sources: Retail Gazette and Evening Standard
  • retailers

    Retail update

    Mitre 10 advertising campaign

    The retailer is repositioning its brand as "The Other Hardware Store" in the latest series of ads

    The most recent Mitre 10 campaign emphasises and promotes its role as "the other hardware store". Karen Fahey, Mitre 10 general manager of marketing said the brand had a significant following of small to medium builders who recognise the value of their relationship with their local Mitre 10. However, many people interested in DIY didn't always think of Mitre 10 when they think about hardware. In Mumbrella, she said:

    The data showed that more than 90% of Australians are on autopilot on where they shop for their DIY needs, and while Mitre 10 is known for service and quality of range amongst existing customers, we are often not considered in the moment of hardware store choice by people not familiar with Mitre 10. They're missing out on the benefits of the knowledge that sits within our network, we can give them solutions to their home improvement challenges on their first trip.

    The campaign includes four 15-second ads that use humour to remind Australians of the care and customer service offered by Mitre 10. It indirectly pokes fun at market leader Bunnings by demonstrating there are other hardware stores that people can go to. Ms Fahey said:

    It's a cheeky reminder that there is an 'other' choice for hardware in Australia while also telling the Mitre 10 brand story of service and expertise, and the unique connection our stores have to their local community.
    We are different, and proud of it. This is an invitation to learn more about the personal experience you get with Mitre 10. Because, for us, the grass isn't just greener on the other side ... it's blue.

    Peter Cerny, chief creative officer at Dig - the creative agency that developed the campaign - said it knew that developing a distinctive and relatable tone was an opportunity for Mitre 10 to stand out in a category that tended to be "bland and impersonal". He said:

    This idea challenges the category by embracing Australians' love of the underdog. The campaign cleverly plays off the salience of the bigger brand, whilst not poking at it.

    In one spot, an older couple sit naked on camp chairs outside of a campaign renovation site, as naked elderly people go about the work behind them. The couple explain that the people at "the other hardware store" suggested some coveralls to help stop the paint getting "everywhere".

    A young boy with his head stuck in staircase spindles features in another ad as his dad casually watches TV. Thankfully his mum pops to the other hardware store "where they really care about your DIY challenges".


    In the third ad, a tradie's unfortunate portaloo experience after a somewhat funky colleague. As he holds his breath upon entry he explains, "If you're like me you'll want to be in and out as quick as possible" - which is exactly why he uses the other hardware store as they "have a dedicated trade team so he's back on site in no time".


    The final of the four ads features an older "cougar" woman with her young "stud" boyfriend who can be seen trying to hang a picture in the background. She soon explains how finding a stud at her age is one thing, but finding one in a wall is something else entirely. The failed hanging attempts result in her having to send him to the other hardware store "where the staff are really helpful".


    In The Australian, Ms Fahey said the hardware retail group prided itself on offering that little extra personalised service and expertise to help customers get the job done right the first time. She said Mitre 10 saw an opportunity to engage with those less familiar with the brand, to stop them in their tracks and let them know what was so special about the "other" store.

    It's disruptive, fun and memorable. We don't take ourselves seriously but we take our customers very seriously and we take immense pride in the particular care and attention we give to our trade and DIY customers - whether that's in-store, online or on site.

    The campaign is being released across TV, outdoor, radio, print and digital channels. The new-look identity and "The Other Hardware Store" tagline will also be seen at store level.

  • Sources: Mumbrella and The Australian
  • retailers

    Indie store update

    Ingram's Home Hardware uses Tesla Powerwalls

    Bowens Timber and Hardware is taking over the former Bunnings site located on June Court in Warragul (VIC)

    Peter Ingram from Ingram's Home Hardware in Kingscote (SA) said the business has just installed two Tesla Powerwall battery systems on both its Home Hardware and Bi-Rite Home Appliances stores. He told The Islander:

    We are now energy neutral.

    The Tesla Powerwall is a rechargeable lithium-ion battery stationary energy storage product manufactured by Tesla Energy. The Powerwall stores electricity for solar self-consumption, time of use load shifting, and backup power.

    This means a business like Ingram's can operate five separate uninterruptible power systems or UPSs in its stores, allowing them to trade during a power outage. Any access power is fed back into the system thanks to a long-term leasing arrangement with the Allstate Solar company, a specialist in battery storage systems.

    Ingram's is also building a large shed for building supplies at the entrance to the town. Mr ingram said construction was going well but one issue still being sorted with the council was drainage and paving of Karatta Terrace, which will be the main access road to the location. The new shed will also eventually be fitted out with a solar and battery system.

    The plan is to move the building supply products into the new shed, which would then free up the existing shed at the back of the store on main street for hardware, he said. This would in turn, free up more space in the front of the shop on Dauncey Street for homewares, fishing, and outdoor products.

    This year, Ingram's Home Hardware will also celebrate its 70th anniversary, after Peter's parents opened its doors for the first time in 1952. This makes Ingram's one of the oldest family-operated hardware stores in South Australia.

    Bowens

    The new Bowens regional outpost in Warrugul (VIC) is expected to open in August. It is part of a $50 million investment in six new stores and refurbishments across Australia by the group this year.

    Bowens director and chief investment officer Andy Bowen said the company has been looking to set up shop in the area for some time. He told the Warragul & Drouin Gazette:

    This is a decision that has been made over four or five years. We've been watching the area grow and we think we've found the perfect site to set ourselves up in."

    Mr Bowen said there was still some work to be done on the site - where the previous Bunnings outlet was located - but believes it is the ideal fit for a Bowens store.

    It is perfect for what we do, we are absolutely focused on professional builders, professional trades. That's what we do.
    The site is fantastic from a logistics perspective. We can move product in and out really quickly.

    Mr Bowen said most of the company's customers are medium to small sized building companies, many of which operate in Warragul and surrounding areas. But anyone can purchase their products.

    We have a really diverse range of timber and building supplies ... we will service whatever needs the market requires. Bowens is more focused now more than ever on other building supplies - not just timber.

    Some staff already living in the local community will be moving down from the established Pakenham store, and the new store will create additional full-time work opportunities. Mr Bowen said:

    Our hope is that within a couple of years we'd have 35 full-time employees there. We are not just there to sell building supplies, we are there to be a fabric of the community and support the community.
    Part of that is hiring local talent and local residents, and that is exactly what we intend to do in that area.

    Related

    Bowens' new site.

    Bowens buys site in outer Melbourne - HNN Flash #93, May 2022

    Expansion plans for Bowens.

    Bowens in expansion mode - HNN Flash #92, April 2022
  • Sources: The Islander and Warragul & Drouin Gazette
  • retailers

    Retail update

    New trade centre at Petrie's Mitre 10 Dubbo branch

    Global paint manufacturer DuluxGroup is expanding its presence in North Queensland with the opening of a large store and facilities in Garbutt

    Petrie's Mitre 10 has had a presence in Dubbo (NSW) since 2020 after taking over Brennan's Mitre 10 which had been serving the area for more than four decades. It plans to open a trade centre in August this year and expects to fill a gap in materials pick-up options for local tradies

    Dubbo branch manager Brad Petrie and his team understand that the pickup function at the store on Macquarie Street is not reflective of what they could achieve because it is a small space. He told Dubbo Photo News:

    We're opening a trade centre to offer a wider range of product and provide more efficiency with easier access for builders to be able to pick up what they need.

    Mr Petrie said it will also have a sales hub for specialised orders and delivery options.

    The main intention is for builders to pull up before they go to work in the mornings, or throughout the day, and pick up the stock they need.
    We know builders need their stocks or products as soon as possible without much preparation or planning, so our role is to be able to supply to multiple builders and get the job done.

    In addition to the Dubbo outlet, the Petrie name is attached to Mitre 10 stores in Orange, Mudgee, Bathurst, Port Macquarie, Young, Coffs Harbour, Taree and Gunnedah.

    Related: The Petrie Group took over Brennan's Mitre 10 store in 2020

    Brennan's rebadged as Petries Mitre 10 Dubbo - HNN Flash #16, July 2020

    DuluxGroup

    The paint company is taking over a over a large showroom in Garbutt (QLD), according to the Townsville Bulletin. It is located next door to Clark Rubber and adjacent to retail premises being established for Nick Scali, on Dalrymple Road.

    DuluxGroup regional sales manager Andrew Pyne said the company would more than double its stocks of paint in Townsville to meet the needs of customers and reduce constraints caused by road closures during natural disasters such as the recent floods in south east Queensland and NSW. He told the Townsville Bulletin:

    We've outgrown our previous site. We needed more space to service our customer needs in Townsville and North Queensland.
    We see the city and region as a growth market. This will be the best paint store in North Queensland.

    Dulux has reconfigured the fully airconditioned property to create a 920sqm showroom and warehouse. A new spray centre will offer sales, hire and service as well as stock a larger range of parts and accessories.

    Mr Pyne said the property had more parking for customers and improved access for deliveries. It will have a business centre for trade customers and be a hub for protective coatings for the industrial and mining sectors.

    Ben Wheeler of Colliers Townsville said the property is located in the retail hub of Garbutt which is attracting large retail businesses.

    Related: DuluxGroup became part of Japan's Nippon Paint Holdings in 2019

    Nippon Paint: The Inside Story - HI News 5.3, August 2019
  • Sources: Dubbo Photo News and Townsville Bulletin
  • retailers

    Retail update: Elders

    Retail expansion continues as independents expected to retire

    Elders chief executive believes generational change in the farm services industry, along with rising wage bills and labour shortages are set to push increasing numbers of independent businesses to sell up

    Agribusiness Elders has made five acquisitions in the first half of this financial year and said it has received approaches from 39 other businesses, reports Stock Journal.

    Recent store acquisitions have included Esperance Rural Supplies in Castletown (WA), Sunfarm in Bundaberg (QLD) and South Australia's YP Ag Services. Its expansion plans are set to gain pace in the next six months with a further 17 active candidates currently on the radar.

    Independent family-owned or regional business groups operate about 620 stock and station agency and farm services businesses around Australia. They compete against national players Elders and Nutrien Ag Solutions, and several smaller groups including NSW-based Delta Agribusiness and members of the AgLink farm supplies network.

    The sector has faced considerable challenges despite the bullish mood in agribusiness and strong seasonal and market prospects.

    Much improved seasons since 2020 have resulted in declining livestock numbers for sale which, in turn, has chewed into livestock agent commissions, while at the same time serious regional labour shortages have left many business owners working harder to service their farmer customers. The coronavirus pandemic has also left fewer staff regularly at work, less reliability in product supply lines and dealing with many social distancing and workplace health precautions. Elders CEO Mark Allison told Stock Journal:

    The rural services industry has had to work very hard to get products on the ground and keep pace with some extraordinary demand during challenging times.

    He believes agriculture is getting "very good value" from its service sector under the circumstances, but it was not easy and had been costly. He said:

    We've already seen some wage inflation happening. There is a lot of competition for staff out there, and not just people with specialist technical skills.
    In regional towns you're just as likely to lose someone to the likes of Bunnings or Woolies if they have any retail experience and they like the offer. Even mum and dad farmers are so busy on their own places these days so there aren't many of them available to fill gaps at our stores either.

    Elders wants to build on its own business momentum, making itself "a company people want to join". The company has also been happy to promote its status as regional Australia's most trusted agribusiness brand, based on the 2021 Roy Morgan industry risk survey.

    Mr Allison said Elders is working hard to invest in innovation and target strategic branch expansion to improve its customer offering, but it also had a keen respect for cost control and generating strong returns on capital investment.

    Acquisitions were invariably made "at low multiples", yet there was still plenty of inquiry from potential new enterprises to recruit to the group.

    Succession plans in many cases independent business owners were near to, or had reached, the point where business succession was top of mind, but their own families were not so inclined to follow in their footsteps. He said:

    The kids have grown up, gone to uni and are choosing careers that don't involve coming back to take over from mum and dad.

    Independent owners were not necessarily looking to retire immediately, but many had taken over or started businesses having previously worked for corporates, and were therefore open to returning to the fold, with Elders at least.

    Around 95% of the strategic acquisitions completed by Elders in recent years had involved the original owners staying on. Elders also gained extra footprint when some members of the Ruralco and the CRT farm supplies group left that network after the Nutrien takeover in 2019.

    Elders has reported a 34% lift in net profit after tax to $91.2 million, and posted earnings before interest and tax of $132.8 million for the six months to 31 March, up 80% on the corresponding 2021 half-year figure.

    Sales revenue for the period was $1.5 billion and is up 38% on the same period last year.

    Elders' retail and wholesale products divisions, as well as its four services divisions - agency, real estate, financial, and feed and processing - have outperformed the previous year's results in all product areas and geographies.

    Sales of rural products is up $312.9 million, or 47%, and wholesale product sales up $46.7 million, or 27%. Elders said growth across the rural products business has been driven by strong demand for fertiliser and crop-protection products following favourable seasonal conditions across key cropping regions.

    Related

    Elders takes on Esperance Rural Supplies.

    Esperance Rural Supplies sold to Elders - HNN Flash #88, April 2022

    Elders said it will exceed analysts' consensus forecasts for the full year to September 30.

    Elders forecasts improved outlook - HNN Flash #86, March 2022
  • Sources: Stock Journal, Elders and Sheep Central
  • retailers

    Indie store update

    Jeays Hardware marks 100 years

    Rural business Tom Grady is expected to expand its footprint further in Gympie (QLD)

    In its 100th year, Jeays Hardware continues to thrive in the coastal suburb of Sandgate, north of Brisbane.

    For the grandsons of the store's founder, Peter, Charlie and Richard, keeping the fourth-generation business in the family name is a matter of pride and testament to good old-fashioned service. Peter Jeays told The Courier-Mail:

    I remember working in the business as a teenager handing out flyers at the front of the shop and being paid 50 cents. I have been in retail more than 40 years and have the busted knees to prove it.

    History

    Charles Joshua Jeays started Jeays Hardware in 1922 when he made the decision to start his own firm after working at Perry Brothers Hardware. He rented a small building and yard with his brothers Joe, Albert and Arthur.

    In 1932, they moved into a larger building with Charlie's son Charles Albert (father of Peter, Charles and Richard) joining a few years later.

    During World War II, the business was relocated to Sandgate, where the Jeays family had lived since the 1870s. In the days before forklifts, they worked hard loading heavy bags of cement, timber and iron onto their delivery truck by hand.

    Charlie Jeays says his great uncles Albert and Arthur had been seriously injured in World War I but still managed to complete a full day of physical labour. He told The Courier-Mail:

    Arthur had a bad limp after being shot in the leg, while Albert lost his leg in Gallipoli. Arthur always wore a suit, tie and hat even when he was driving the delivery truck.

    The younger generation Jeays remember their father's love of Moreton Bay where he enjoyed sailing and fishing when not busy in the hardware business. Peter Jeays said:

    Dad, who served in the Army's small-boat unit in Borneo, came back from the war and built a boat which helped in his recovery.

    Charles Albert Jeays retired in 1985 after 50 years of service, with Charlie Junior taking over the reins as managing director. Peter joined the business in 1987 and became manager of the Jeays Aussie Auto business. Charlie said the biggest change in the hardware business during his time has been the move from bulk product to pre-packaged items.

    In the old days, you would sell nails by weight. Things like kerosene and turps also were in big drums and you would buy a small tin. Now it is all pre-packaged.

    Charlie said his father, who died aged 98 in 2018, was one of the first to join the Mitre 10 cooperative in the 1960s, with Jeays being the last of the original nine Mitre 10 hardware stores in Queensland to survive.

    We would not be here today without being part of Mitre 10 because it helped with buying power and marketing.

    Peter Jeays said the arrival of big box retailers have been a challenge but a loyal customer base and the fact Sandgate has few large development sites have helped to protect the family business.

    We have had customers coming to us for over three generations. People like the fact they can pop into our shop for a can of paint or brush and get away quickly without having to walk 300m across a big car park.

    The family have celebrated the centenary of the business with a number of long-standing staff including Harry Jones, who drove the firm's delivery truck for 60 years, and Carole Green, who was the office manager for 40 years. Charles Junior said:

    We have always believed our staff are the most important people because they make the business. The staff's current total length of service to the business is in excess of 250 years.

    Tom Grady Rural

    Gympie-based Tom Grady has unveiled plans to add to his eponymous rural merchandise store, according to the Gympie Times.

    A new development application includes construction of a new building with an office and drive through service on the 1.5ha block. More parking spaces in a covered area will also be included as part of the expansion.

    If approved it will the latest addition to the rural services offered at the property, which served as a butter factory from 1925 to 1978 until that part of the factory was shut down.

    Mr Grady recently sponsored this year's Gympie and District Show fireworks despite his real estate office not yet reopening after the devastating floods in late February,

    Related:

    Plans to expand Tom Grady Rural Merchandise Store - HNN Flash #79, January 2022

    Tom Grady Rural also expanded its store in 2020.

    Gympie rural store supports local economy through its expansion - HNN Flash #13, June 2020
  • Sources: The Courier-Mail and The Gympie Times
  • retailers

    2022 HBT Conference: the next normal

    Is path-to-purchase the next retail strategy for independents?

    With the pandemic less of a concern, but macro-economic changes looming on the horizon, members at the HBT Conference were looking at the "next normal" - where retail is set to move during FY2022/23.

  • This article can be read as a HNN Briefing PDF. To read the PDF, please download by clicking the image/link below.
  • Download hnn-brief-007

    Annual events held by hardware retail buying groups often feel something like a mix between an exercise bootcamp and several hard days at the information dojo. That is to say, they are a combination of delight, and what feels somewhat like a mild but persistent percussive experience.

    At least, that's when they "work". And the 2022 Conference for the Hardware & Building Traders (HBT), held in early May 2022 at the Gold Coast Conference & Exhibition Centre certainly did work.

    HBT events can end up being like workshops that deal with many issues related to managing effectively as an independent retailer. As a result, what gets workshopped at them can, ultimately, effect the entire industry, spreading beyond HBT to other buying groups.

    It is certainly the case that while other industry groups might have more revenue, more stores, more members (and, certainly, equivalent passion), there is nowhere else in the industry that generates quite as many ideas.

    One consequence of this is that while the organisers of an HBT conference might have a particular direction for a conference in mind, in the end it is the community that attends the conference which really decides what happens, and what the conference is going to actually be about.

    Inside the workshop

    HNN will provide more comprehensive Conference coverage in our next edition of HI News. We wanted, however, to start by taking a closer look at that "about" - which at the 2022 Conference has proved to be complex.

    Some of that complexity is due to purely external reasons. After going through a difficult two years of COVID-19, Australia has, for the moment, put aside much of its pandemic caution - though the infection rates remain high enough to still be of extreme concern.

    Added to that is a high inflation environment, which is bringing on, as a direct result, higher interest rates - set to break through 2.0% in FY2022/23. The big question that looms over hardware retail is whether the next two years - as property markets contract - will see a retreat back to, say, 2018 levels of revenue, or if the 2021 levels of revenue will continue.

    The reality is, at least for the rest of 2022, and likely much of 2023 as well, that the industry faces a period of real uncertainty. It's just impossible to forecast with any real accuracy what happens next.

    The next normal

    One way that retail analysts have of defining this current era is to refer to it as the "next normal" - a play on the earlier concept from 2020 that dealing with COVID-19 as a part of business processes was the "new normal".

    Faced with that uncertainty, it's good to remember that one of the basic principles of retail is that when there is a lack of clear forecasts, the best thing to do is to go back to operational basics.

    For hardware retailers that means reinvesting some of the gains over the past two years in better efficiencies. In management terms, it's all about deploying capital now to increase earnings potential later.

    The beauty of using efficiency as a strategy is that the correct kind of capital investment will continue to increase earnings in both a down market and an up market. That's in sharp contrast to the alternatives, business expansion or business contraction, which depend on accurate forecasts for positive results.

    Which brings up the next question: what does efficiency and best practices really mean in 2022? Because the answer today is likely to be quite different to the answer from 2018.

    The next path

    Outside of factors largely external to the hardware retail industry, there are also factors internal to it as well at work. The past decade for all hardware buying groups has largely been about catching up to the industry behemoth, Bunnings, in terms of both pricing and range.

    Bunnings still does hold a distinct advantage, but that decade of hard work has brought independent hardware retailers close enough that they can bridge the gap through other means. The task has now shifted - partially, at least - to working out how to better utilise the unique features of independent retailers to not just resist the ongoing expansion of Bunnings, but to at least equal it. The prospect of real growth for independents is clearly within reach.

    For HBT - and independents in general - FY2022/23 will see their retailers really coming to grips with what the next part of this struggle is going to look like.

    The difficulty that buying groups now face is one of strategy. The problem in developing that strategy is familiar to many industries. It's often said that military generals tend to fight the current war with the strategies and tactics that won them the previous war - not always to good effect. Businesses often do the same thing, and use prior successful strategies for new tasks to which they are not suited.

    Driven by HBT CEO Greg Benstead and buying group general manager Jody Vella, there were two core strategies that HBT employed to hold its own in the pricing struggle. The first was to regard the whole supply side of hardware retail as a holistic entity, one where it was possible for both retailers and suppliers to win, through new efficiencies, and concentrating on growing the available market.

    The second was to understand that most "wins" were going to be small and incremental. It wasn't necessary to make broad, sweeping deals. If you could piece together just a dozen or 20 smaller "wins", the result would be almost as good.

    As beneficial and smart as that strategy has been, it's possible that other techniques will work better in the next phase of development. In very broad terms, this is because the price breakthrough phase of development was about achieving strategy cohesion in a widely disparate group.

    The coming phase is really about helping individual retailers achieve success by drawing on their unique talents, unique store locations, and unique market positions.

    A different future

    Reviewing everything we were told by both HBT members and the many suppliers at the 2022 Conference, HNN really did find there was a core to what people were discussing, a central issue that was getting workshopped. That central concern, HNN would suggest, is something that has come to be called in recent years the "path-to-purchase".

    Not that path-to-purchase was directly mentioned by anyone, but putting together all the comments and opinions voiced at the conference, this was what emerged.

    For hardware retailers, path-to-purchase has two components. The first is the connection that customers feel to a particular store. The second is the "journey" customers undertake in arriving at the decision to buy a product from a retailer through the utilisation of different information and transactional channels.

    The advantage of thinking about path-to-purchase is that it delineates a really clear objective for independent retailers. That objective is, very simply, to be considered as a reasonable option for any hardware purchase being made - paint, a new deck, kitchen or bathroom renovation, or simply buying batteries for a flashlight.

    Win or lose the sale, independents need to own a part of the path-to-purchase to just remain in contention.

    Path-to-purchase background

    Path-to-purchase has something of a harried history to it. Largely, there has been considerable confusion between what we might regard as over-arching conceptual models, and more specific models, which relate either to product categories or narrow cohorts of customers.

    Conceptual path-to-purchase

    Virtually every management consultancy, from McKinsey to PwC, has its own path-to-purchase diagram - and most of these are, at best, inadequate.

    For example, one of the most common conceptual models is represented by this diagram:

    While this is convenient, and somewhat comforting, it's more of a "hoped-for" model than anything that relates to how consumers buy things today. At its basis, it relies on what marketers refer to as "AIDA", which refers to attention, interest, desire, action, a well-known framework for modelling customer behaviour. The primary problem with AIDA, as many commentators have pointed out, is that it is exceptionally linear - as is the diagrammed model.

    A better conceptual model is provided by UK-based marketing strategist James Hankins, known as the "Hankins Hexagon".

    Commenting on this model, Mr Hankins has this to say:

    So, what does that mean? Well, simply put, a person can make their own way from A to Z any way they choose. In reality there are very few 'fixed' pathways and most are two-way (feedback loops and changes of mind). This model posits that an individual can start wherever and eventually make their own way to purchase, that is if they do buy in the end because not everyone always gets there.

    The core mechanism that's identified is the formation of "long lists" of possibilities, followed by the formation of "short lists" through a process of comparisons. What has largely changed in the modern, information-rich environment is that where in the past short lists were focused on rankings by sets of requirements (price, longevity, suitability to particular purposes), today short lists are often based on sources of recommendations (friends, influencers, Amazon reviews, YouTube reviews, etc.).

    Developing these initial short lists typically leads to the creation of a "meta short list", which doesn't list products, but rather the requirements the consumer has developed for the products. This is then reapplied to the "long list" of potential purchases, resulting in a final short list, and a final decision is made.

    Specific path-to-purchase

    Abstract models are good, but they only fulfil their function when they are combined with less-abstract, research-based insights into consumer behaviour.

    Some of the most outstanding work on path-to-purchase in the hardware-home improvement area was undertaken by Kingfisher in the UK and European Union during the 2010s. One of the areas studied by the retail conglomerate was bathroom renovation, resulting in the following diagram:

    Of the 28 steps, the first eight would seem of primary importance to hardware retailers. However the other 20 steps are also important. That's not only because they contribute to customer satisfaction, and hence ongoing loyalty, but because in making a purchase, the DIY customer needs to be able to conceive of the next 20 steps. The imagined completion of the project is, in other words, a key part of any purchase made.

    Why path-to-purchase is important now

    The surge in hardware retail revenue for independent stores during the two pandemic years has triggered hopes that at least some of this will continue. What actually happened during the pandemic years was less - as many seem to hope - a relocation by consumers, as a "delocation". That is to say that consumers were dislodged from some of the major retailers - such as Bunnings and the supermarket chains - but this doesn't mean they were automatically "re-homed" to smaller, local retailers.

    That is particularly the case as the majority of consumers today start their path-to-purchase by doing research online. The proportions of online-first research various studies have determined range from 53% (Google) up to 81% (MineWhat.com). Conservatively, though, for hardware, it's likely to be around 60% to 65%.

    One really difficult fact to bear about this is that probably 80% of initial or secondary searches made by DIY customers will go through the Bunnings website. That's largely a matter of setting price expectations, as well as checking availability.

    However - fortunately for independent retailers - the Bunnings website is somewhat lacking when it comes to the level of product information presented. This opens up opportunities for independent retailers.

    Not only might independents attract consumer attention with their own information provision, but consumers will be motivated to continue their research in-store. It is possible for independents to participate in post-research path-to-purchase more effectively than in primary research. That does mean making an adjustment for dealing with more informed consumers, further along in making their choices.

    Post pandemic path-to-purchase

    In outlining how that might work, it's best to start with some of the efforts that suppliers are taking. In overview, what each of the suppliers we spoke to managed to do with their products was to really understand how customers approached their products, and how they put them to use in their trade work or DIY tasks.

    These examples illustrate three different techniques: providing depth; convenience and informational diversion; and overcoming the assumed problems.

    Klingspor wire brushes

    When HNN spoke to him at the HBT Conference, managing director of Klingspor Australia, Paul Hoye, reported that the new line of wire brushes the company had released had been doing very well. In fact, Mr Hoye had played a part in encouraging Klingspor to develop the product line, and, as he expected, the Australian market had responded well to the new product.

    This is an example of one of the really important parts of path-to-purchase, because it relates to having a deeper understanding of what customers need. Wire brushes might not seem that exciting as a category, but for metal workers in general, and especially welders, they are really essential. For example, this extract from The Welder magazine illustrates just how complex this product line really is:

    When choosing a power brush, you have several knot styles, wire gauges, and trim length options. By changing one or more of these characteristics, you can fine-tune brush performance for a specific application. For example, stringer bead brushes have narrower knots twisted from base to tip, making them better suited to penetrate tighter spaces like corners, fillets, and root pass welds. Cable-twist brushes are also twisted to the tips but have a wider profile that can quickly cover more surface area for fill passes. Standard twist brushes flare at the end, providing an even wider footprint as well as additional conformability.
    The Welder magazine

    It's not only about answering a direct need of a customer, it's also about providing real differentiation. It looks like such a simple category, but for the target customers it's deep.

    Cowdroy insect screens

    If there is one product on the market that deserves a lot of attention, it is the innovative insect screens released by Cowdroy. It's not only a great product, but it really illustrates the role of path-to-purchase.

    That begins with Cowdroy realising that the "traditional" insect screens of the past were a disregarded, utility category that had a lot of potential to develop into a real feature for houses. As part of that, they also are a classic "upsell", a way to offer something pleasing and unexpected to customers.

    The screens include products that are designed to have as little visual impact as possible, to resist the wear and tear that pets produce, and even to help block out pollen and dust.

    Importantly, though, Cowdroy knew that it needed to "demonstrate" the screens effectively, and so developed a special mobile app to go along with the product line. That app enables customers to preview how the various screens on offer will alter the view through a window.

    In path-to-purchase terms, that's a technique known as "information diversion". It invites a consumer to go down a quite shallow "rabbit hole" of information. After downloading the app, and playing around with the different options that are available, how can they possibly go back to just plain, old ordinary flyscreens?

    The latest innovation that Cowdroy has brought to the line is to introduce packs of flyscreen in pre-cut lengths. HNN would guess that this development is based on customer research. Getting flyscreen cut from a roll can be one of those "difficult" moments in a hardware store - especially with staff shortages. Pre-cut lengths increase the likelihood a customer will complete the purchase immediately at the point of selection.

    That helps the customer make a fast and convenient choice - but it also reduces the real cost of selling the product for retailers, as less staff time is needed. It's perfect.

    Cement Australia Trade Mortar

    In talking with Cement Australia, HNN sometimes imagines the theme from Mission Impossible playing in the background: "Your mission, should you choose to accept it, is to sell a commodified product as something unique, highly valued and reliable."

    Yet the company does keep delivering on that tough task, and its Trade Mortar product is testament to this. Log onto any decent trade site, and you will find a lot of arguments about pre-mix versus self-mix when it comes to mortar. Surprisingly, though, most of those arguments aren't about cost, they are instead about the quality of the pre-mix. The complaints range from pre-mix being poor quality with too much sand, to just the "trowel feel" being wrong - not sticking well.

    Cement Australia targeted those precise complaints, and produced a product that is designed to help really busy tradies "smash out" their walls quickly and conveniently. It's easy to mix, which means apprentices can manage the process, and it provides the kind of consistency needed with colour contrasts.

    What is most significant about the hints of path-to-purchase thinking we see in the product innovations mentioned above is that the suppliers have considered the entire context of the purchase. Klingspor knows how important wire brushes are to welders. Cement Australia knows the problems tradies have experienced with pre-mix because they understand how their products are used to achieve an end result. Similarly, Cowdroy understands the frustrations of homeowners working on a project to refit flyscreens in spring. They've changed a utility purchase into genuine home improvement.

    Path-to-purchase for retailers

    Suppliers can, however, only solve a part of the path-to-purchase puzzle. In general, when it comes to path-to-purchase, suppliers concentrate on removing certain frustrations from the purchasing experience - a lack of different types of wire brushes, a pre-mix you can really rely on, flyscreen you don't have to find a sales associate to cut for you.

    Retailers can go further. That means having a good understanding of where customers are in their journey towards completing a project. And that, of course, means being able to conceive of what that project might be.

    This brings up one of the most long-running tensions in retail, which is how much stores should focus on project-orientation (bathroom/kitchen renovation for example) as opposed to displaying goods purely as categories (flooring and plumbing, etc.).

    For the majority of independent retailers, of course, there really is no option, as their stores are not large enough to support any kind of project display. One way around that, of course, is by providing a "virtual" project space on a website. In the US, this is what The Home Depot does. For example, it presents a range of different room designs, with a "Shop this room" button, which pulls up a list of products needed to achieve the "look" of the interior design photograph.

    While that gets around the problem of space limitations, it introduces other difficulties in terms of online capabilities.

    The virtual path-to-purchase

    When it comes to path-to-purchase for independent hardware retailers, the ultimate goal is to get included in the initial lists that are derived from online research. The best way to do that is to provide an information resource that will deliver a high score in terms of its search ranking through Google and other services.

    It's here that the nature of the next challenge really does come into focus. The difficulty is that no individual store has the resources (let alone the finances) to develop an online presence that could attract the attention needed - plus, of course, as they service a confined geographic area, achieving success across the broader internet is not really efficient.

    What is needed is a central source of information that is detailed and well-designed, and does provide a high level of exposure. That site could then offload site visitors to local independent hardware stores for the transactional part of the interaction.

    At the moment, however, there does not seem to be much possibility of that being achieved in the industry. Yet there are some suppliers who are working hard to step into that gap. Matt Haymes of Haymes Paints was kind enough to take some time during the busy tradeshow at the Conference to chat with HNN. He described how Haymes is working hard to develop an online presence to help consumers choose paints.

    It's clearly directed, he said, at boosting the sales of the independent retailers who stock Haymes. That's what independents have come to expect from Haymes, but it is also exceptionally generous.

    The task ahead

    Twelve years ago the task of catching up to Bunnings on price seemed almost unachievable. That led to some pretty desperate measures in the industry - most notably by Mitre 10, and its launch of the Mega stores in Australia.

    Despite the difficulties, that job did get done. Today we're facing the next very difficult tasks. They also look virtually impossible to achieve. But there is something of a track record there, that can serve to give one a sense of hope.

    What is most required, however, is an additional point of focus, and an understanding that it is time to develop and adopt a new winning approach to the Australian hardware retail market. We know that, as a resource, independent retailers can get to the point where they equal the growth rate of Bunnings. It really is a question of how best to access this pool of talent and potential.

  • This article can be read as a HNN Briefing PDF. To read the PDF, please download by clicking the image/link below.
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    retailers

    Retail update: Temple & Webster

    Temple & Webster launches The Build website

    It wants to be a major digital presence for home renovators to buy products for DIY, renovation, and home improvement

    Online homewares and furniture retailer, Temple & Webster plans to bring its "expertise in e-commerce and the home" and broaden its reach to make The Build the "first-stop shop" for home renovation and home improvement in Australia. This will bring it into direct competition with Bunnings and Mitre 10.

    Chief executive Mark Coulter told the Australian Financial Review (AFR) that after building the largest e-commerce home furnishing player in the country, moving to DIY and home improvement was a logical step.

    Mr Coulter believes there is an opportunity for the online retailer to maximise share of spend in the home and realise synergies with its core furniture and homewares business. The home renovation market will also be counter cyclical to the housing market, namely moving versus renovating. He said:

    I think the home improvement category or renovation category is a natural extension for Temple & Webster, we are already famous for the home and we've built the largest e-commerce business in furnishings and homewares.
    I think moving from the loose furnishings to what is attached to the wall and floor feels like a very natural extension, and we are already seen as a place to come to make your house beautiful so why not do the whole room.
    Bunnings and Mitre 10 are great retailers. Bunnings has done an amazing job to educate Australians about the benefits of DIY, renovating your place or doing design jobs - big or small. The market is very big.
    It's still growing. There's definitely room for an online-only player which has the breadth of what we're planning across multiple categories to really be that first-stop shop, and really provide customers with the convenience and value that the online channel has over stores.

    The Build's initial range will have more than 20,000 products across 39 categories. These include bathroom fixtures such as vanities, toilets, sinks and tapware; kitchen fixtures such as cupboards, sinks and taps; indoor and outdoor lighting fixtures; ceiling fans, blinds and curtains; and wallpaper.

    New categories such as flooring and tiling, outdoor living and landscaping, tools and building-renovation equipment will be added in the coming months.

    Mr Coulter also believes Australian shoppers would begin to gravitate to shopping more online for home renovation and project products, with millennials especially more open to shopping for home improvement on their laptops and smartphones.

    We have already seen that overseas. If you look at the US and UK it is already following a similar adoption curve to furnishings and homewares where people, millennials are growing up and buying homes or renovating homes, they're turning to these channels and as we have always said online offers convenience and value - and that is a compelling proposition.
    I think it is very similar dynamics, in some respects one could argue that dynamics for home improvement may actually be better than furnishings and homewares with the touch and feel for many categories is less important than for example a sofa.
    With more Australians shopping online than ever before, The Build by Temple & Webster meets the needs of today's digital-first shopper who prefers the convenience and ease of renovating online rather than the traditional renovation process of driving from showroom to showroom to source projects.

    The Build has been in the works for about eight months and the company has spent about $2 million getting ready to launch. The company plans to spend $10 million over this financial year and the next establishing The Build. Mr Coulter has not disclosed further ongoing investment costs but said it would be split out in future results. He was not concerned about launching the website despite an apparent shift back to bricks and mortar after two years of higher online spending with the lockdowns. He said:

    That underlying trend of the shift from offline to online is really driven by consumer preferences, which are independent of those macro factors. There may be a period of potential inflation or slowing year-on-year growth. However, that underlying trend of people wanting to shop online, that's not going anywhere.

    Supply chain

    The business runs a drop-shipping model, whereby products are sent directly to customers by suppliers. These ranges are complemented by a private labels sourced directly by Temple & Webster from overseas suppliers.

    Mr Coulter acknowledged it was "hard to know what happens with China" suppliers given the lockdowns and delays in the port of Shanghai, one of the world's busiest. However, he said Temple & Webster and The Build sites sourced from 100 factories in China and shipped from 10 different ports besides Shanghai's congested harbour.

    We're also increasingly diversifying our supplier base outside of China. So places like Malaysia, Vietnam and Philippines. We have such a big range and so many suppliers that if a particular supplier goes out of stock, there is substitution between suppliers and between products.

    Valuation

    Mr Coulter also said he has "stopped trying to understand the market many, many years ago" regarding the group's falling share price, which, along with other online players such as Kogan.com, had suffered steep declines on the sharemarket in recent months.

    Temple & Websters shares have declined in value more than 9% after the group reported a disappointing trading update that implied a large miss of market consensus earnings targets and slowdown in sales, according to The Australian.

    It suggests that shoppers are slowly but surely retreating from online shopping and that boomtime conditions enjoyed through the first two years of COVID-19 are coming to an end.

    The market for online improvement in Australia could be worth around $16 billion and the category was yet to make its mark online, with just 4% of DIY shopping happening online compared to around 25% in the UK, the company said.

    However investors were sceptical, and RBC Capital Markets analyst Wei-Weng Chen said the company's sales were tracking well below estimates. He said while the total addressable home improvement and renovation market is around $26 billion, and margin opportunity and online-penetration for the home improvement category looked attractive in the medium to longer term, the market could approach the launch of The Build with "an element of caution" given the current macro headwinds facing the Australian property market.

    The company will also face a tough job when competing directly against Bunnings which holds around 50% market share for home improvement in Australia.

    Perhaps in recognition of this, Temple & Webster said it doesn't expect The Build to make a material contribution to its overall sales and earnings for the first four years. However, it expects the long-term margins for the business will be better than its furniture and homewares category.

    The expansion into home improvement is a notable deviation for the online furniture retailer, which has established itself as a significant player in Australia's home goods market during the pandemic, thanks to a boom in demand for home office equipment such as desks and office chairs.

    However Mr Coulter sees the move has having enormous potential for the ASX-listed business as Australians are drawn to home improvement projects.

    Australia is a country of home renovators ... and we love making [our homes] more beautiful. We believe our expertise in ecommerce and the home will help make The Build become Australia's first-stop shop when it comes to renovating and redecorating.

    Related: Temple & Webster has been talking about its plan to challenge Bunnings in the home improvement sector for some time

    Online retailer Temple & Webster eyes home improvement - HI News November 2018, page 21
  • Sources: Motley Fool, The Australian, The Age and Australian Financial Review
  • retailers

    Retail update

    Bowens buys site in outer Melbourne

    Not-for-profit organisation Habitat for Humanity has set up a retail outlet in Adelaide to help cut the cost of building materials

    Bowens has purchased a 4.9 hectare block at Cobblebank, a developing suburb in the City of Melton, located around 31km west of Melbourne's CBD, according to realestatesource.com.au.

    There are plans for an outlet and distribution centre to be built on the site to service the north west region, as part of Bowens' expansion in Victoria.

    The hardware and building supplies group is paying $12.32 million for the former Melton City Council controlled parcel at 27-39 Abey Road, near the Ferris Road exit of the Western Freeway. In realestatesource.com.au, Bowens chief investment officer, Andy Bowen said:

    As a market leader in the building supplies industry, Bowens is committed to supplying the best quality products and advice to builders and trades alike especially in areas where it is most need.

    The Cobblebank property is close to the 13ha Melton South site which the state government acquired from the Catholic Church last year with plans to develop the 24-hour Melton Hospital. It is also about 500 metres from the Cobblebank train station, which opened in 2019.

    Related

    Expansion plans for Bowens - HNN Flash #92, April 2022

    ReStore

    Habitat for Humanity has opened a ReStore outlet in Adelaide offering builders and home owners an opportunity to buy materials at lower prices, all donated by building companies, home improvement businesses and individuals.

    The goods, including paving and landscaping materials, tiles, flooring, bathroom fittings, lighting, and door hardware will generally be offered at around half the usual retail price. Slightly used home furniture items will also be available.

    The first of its kind in the state and 15 years in planning, ReStore will be owned and operated by Habitat for Humanity, a not-for-profit organisation that builds homes and apartments for low-income families, disadvantaged communities and homeless youth.

    Habitat for Humanity executive officer Louise Hay said the retail venture would meet a key need for people building, or setting up, a house while being benefitting the environment.

    ReStore will sell building materials that may be left over after a major construction job. These surplus materials, which are brand new, often end up in landfill because builders don't have the time to find another home for them.

    Funds raised through the store will be used to support Habitat for Humanity's projects in South Australia that includes a small-scale home building program, a home maintenance program and disaster recovery work. Volunteers also worked for 18 months cleaning up properties in the Adelaide Hills after the devastating bushfires in 2019-20.

    Habitat for Humanity has already built more than 40 homes and apartments in South Australia for people struggling with shelter or experiencing homelessness.

  • Sources: Realestatesource.com.au, Australian Associated Press and Glam Adelaide
  • retailers

    Retail update

    Bowens in expansion mode

    The site where the Taits Mitre 10 store is situated in the Melbourne suburb of Glen Iris has quietly changed hands

    Hardware and building materials group Bowens said it will spend $50 million on growing its store network in Victoria, according to an exclusive report in The Age and The Sydney Morning Herald.

    Bowens already operates 16 stores in Victoria, and will open three new sites in the state as well as revamp another four in a move that is a direct response to the current post-COVID construction upturn. The company's director and chief investment officer Andy Bowen told The Age and The Sydney Morning Herald:

    If we had three, four, five more stores open right now they would be just as busy as our other 16. We need more stores to meet the demand that's in the market now.
    Now it's not always going to be this busy, it's a perfect storm in terms of government grants and post-COVID recovery that's led us down this path, but we think the demand in housing and construction is going to be pretty consistent for the next 30 to 40 years...
    This word's been used to death, but it really is unprecedented volume. There's massive demand for building materials, and coupled with supply constraints on top of that, it just means our industry is being challenged. It's just so busy, we've never seen it like this before.

    Mr Bowen said the construction industry has been far from exempt from rising prices such as inflation which has risen 5.1% in the past year based on recent data from the Australian Bureau of Statistics.

    He said building supplies have risen consistently by "high single digits" in recent months. This has caused an increase in the cost of new builds - both residential and commercial. Mr Bowen said the cost of building its new store in Hastings (VIC) had increased by around 15% after a delay in construction caused material costs to rise.

    Bowens is targeting Warragul, Cheltenham and Melton for its new sites, with the hardware executive saying the company sometimes takes cues from Bunnings on where the best locations are for new expansion opportunities.

    Bunnings has been making a number of acquisitions and strategic moves in an effort to grow its trade-focused offerings, which is Bowens' bread and butter. However, Mr Bowen said the business has not been approached by the hardware giant with a potential buyout offer, and probably wouldn't be interested anyway.

    We love being a family-owned business and an independent business, and we want Bowens to stay that way.

    In a profile in The Australian, CEO John Bowen said that private ownership is important to the staff.

    There are plenty that have been there for 20 years-plus. I'm fiercely independent. It is a shame how many businesses are being swallowed up by big box players.

    The fourth-generation family-owned Bowens is considered a market leader in supplying quality timber and building supplies throughout Melbourne and regional Victoria. For the past 11 years Bowens has also owned Timbertruss, one of the largest prefabrication timber manufacturers in the country, which employs staff in Victoria and Queensland.

    During the pandemic Bowens continued to invest in its operations, including a new prefabrication plant, showroom and a new timber yard in Geelong. John Bowen told The Australian:

    You've got to keep investing. Independent businesses can't just stand up and say 'We are family-owned and independent so therefore people should walk in and buy from us'.
    We need to keep rebuilding our stores, investing in them and making sure the product that they stock is relevant, rather than just resting on the laurels of 127 years." He said the firm will stick to its knitting, increasing its site footprint with new facilities and innovative products.

    He believes the Timbertruss plant at Geelong - which specialises in producing roof trusses and wall frames - is the most technically advanced in Australia.

    We are doing a few really exciting projects, not just walls, roof trusses or floor systems. We are doing some pre-finished panels for customers. Our version of next stage prefabrication, we're calling it.

    John Bowen also wants more women in what continues to be a male-dominated business. Last year, the company held its first women in trade event at its Port Melbourne showroom.

    Related

    Bowens invests in large scale solar rooftops - HNN Flash #79, January 2022

    Andy Bowen's focus has been establishing an e-commerce function for the business, mainly for the trade, but also increasingly for retail customers.

    Bowens has an ecommerce plan - HNN Flash #60, August 2021

    Mitre 10 real estate

    The site of the Tait Mitre 10 store in Glen Iris (VIC) is understood to have sold for over $30 million, according to a report in The Age. The deal reflects a land price of around $3453 a square metre.

    Buyer and vendor are not keen on any publicity, and agents declined to comment.

    Daylesford Mitre 10 has also been listed as a business for sale recently with advertisements appearing in Melbourne metropolitan and regional newspapers.

    Related

    The site at 15 Weir Street, Glen Iris (VIC) where Mitre 10's Tait store sits is for sale - HNN Flash #81, February 2022
  • Sources: The Age, The Sydney Morning Herald, The Australian and Bendigo Advertiser
  • retailers

    UK update

    Homebase and Hearst UK extend partnership

    Since joining forces in 2020, they have collaborated on ranges across kitchens, furniture, home accessories, lighting, outdoor structures, gardening, tiling, wallpaper and now paint

    The new Country Living and House Beautiful exclusive paint ranges from Homebase are part of the home improvement retailer's three-year partnership with content business, Hearst UK and its magazine brands.

    Country Living is inspired by nature and brings the countryside indoors with soft, delicate neutrals. The paint is made in the UK, and is durable for walls, ceilings, wood and metal with a luxury matte finish. It is air purifying too, created with a special additive to make the paint non-toxic.

    The House Beautiful range embodies a contemporary style, ideal for customers looking for more bold, vibrant pops of colour. The paint is also made in the UK and its washable finish is suitable for walls, wood and metal. Its stain repellent technology means that any liquid touching the painted surface turns to droplets, making it far easier to keep clean.

    Each range has 30 curated shades. Jason Hines, trading director for decorative & home at Homebase, said:

    We're excited to launch two exclusive paint ranges with our partner, Hearst UK. Filled with plenty of beautiful colour and quality finishes, our customers can pair these new ranges with our stylish furniture and home accessories...

    Sharon Douglas, chief brand officer, lifestyle, homes and weeklies at Hearst UK, said:

    We're delighted to build on our Homebase licensing partnership with these brand new paint ranges. Our editors' and stylists' rich expertise in homes and interiors means that the Country Living and House Beautiful audiences regularly come to us for inspiration when in the market for a home upgrade. Collaborating closely with Homebase, our trusted specialists have created a colour palette that is on-trend, versatile and fit for the modern consumer.

    Background

    Homebase and Hearst UK announced they had entered into a brand partnership in late 2020.

    As part of the deal, Homebase is working with three of Hearst UK's magazine brands House Beautiful, Country Living and Good Housekeeping to create household and lifestyle licensed products.

    Together, this partnership would enable customers to be inspired by what they see and read in House Beautiful or Country Living and translate that inspiration into real-life purchases either in one of the 155 Homebase stores or online at Homebase.co.uk.

    A kitchen range under the Country Living and House Beautiful brands was the first to launch in December 2020.

    The partnership sees Hearst UK promoting the new ranges, which are exclusive to Homebase, to its readership, of which the majority are united by their desire to constantly upgrade their homes with the latest trends. At the time, Dave Elliott, commercial director for Homebase, said:

    We're excited to be working with Hearst UK and creating a range of new products for our homes and gardens that help customers recreate the latest style trends in their homes. This partnership will give customers even more options to purchase quality products from Homebase knowing they've been created with the innovation and inspiration from the stylist teams at House Beautiful, Country Living and Good Housekeeping.

    Ms Douglas commented:

    We're thrilled to be working with Homebase on this licensing partnership. We know that our highly engaged audiences across Country Living, House Beautiful and Good Housekeeping turn to us when they want to create or get inspiration for their dream home. They trust our experts when it comes to what to buy, so a partnership with an iconic retailer like Homebase makes complete sense.
  • Source: Retail Times
  • retailers