Wesfarmers amps up Bunnings UK tilt
Wesfarmers has stepped up its tilt at the hardware market overseas, yesterday announcing Bunnings UK and Ireland (BUKI) will expand its pilot program to have 20 stores by the end of 2017 – twice as many as previously expected.
The announcement coincides with the opening of the fourth Bunnings Warehouse in Milton Keynes, Buckinghamshire; the largest in the UK and Ireland to date. The store, on the site of a former Homebase, occupies over 90,000 square feet.
Wesfarmers said the increase in the number of Bunnings Warehouse pilot stores is a major step in developing the format in the UK’s £38 billion-a-year home improvement and garden market and follows a positive response from customers to its first pilot stores in St Albans and Hemel Hempstead.
“Our decision to extend the pilot programme reflects the positive reaction we’ve seen from customers to the stores we’ve opened so far,” said PJ Davis, BUKI managing director.
“Increasing the number of pilot stores to 20 will give us the opportunity to test the concept in new geographies, with different demographics, across a range of store sizes.
“We are determined to combine the best of Bunnings Warehouse with what UK consumers want. The success of the pilots still remains a precursor to additional investment.”
Bunnings also recently announced two new additions to its UK and Ireland senior leadership team. Damian McGloughlin, chief operating officer, and David Haydon, general manager bring with them over 55 years’ industry experience.
The next store to open after Milton Keynes will be in Folkestone, Kent in July. Following that, the Homebase stores in Thanet (Broadstairs), Sittingbourne, Kent and Basildon Vange, Essex will be the next to be redeveloped.
Bunnings, part of Australia’s Wesfarmers Group, plans to invest up to £500 million rolling out the Bunnings Warehouse format in the UK and Ireland over the next three to five years.
Wesfarmers continues to battle negative sentiment from some investment analysts about its foray into the home improvement market in the United Kingdom.
After the Brexit vote last year, one analyst went as far as to say Bunnings’ $705 million acquisition of Homebase was virtually worthless, while other analysts are yet to be convinced that the purchase won’t prove a drag on earnings for the business.