Bunnings fails miserably to get a foothold in the UK - shops sold off for 1 GBP

[paul.cleary]

Article about how Bunnings bought a "DIY" shop chain in the UK, fired all the senior management and then failed to attract the British shopper.
They had to exit by selling the chain for 1 GBP
See: Homebase sold for £1 as DIY disaster ends for Wesfarmers - BBC News (http://www.bbc.co.uk/news/business-44248409)

[rwbuild]

Just watch the prices go up at all Westfarmers businesses particularly Bunnings and Coles.

[China]

Bunnings in Uk failed because they took over a well liked DIY chain and tried to change it into a "Bunnings" would have bee better to keep the same concept or very
close to it instead buyers were scared off, the Brits don't take to change very well

[rrich]

Something similar happened here in the US. Sears got a CEO that is/was a hedge fund manager. His goal appeared to be stock price increase while customer service went to H*** in a hand basket.

If Sears survives this year it will be a huge surprise. They have already sold off most of their assets and closed about half of their stores.

[Beardy]

Sounds like the same thing as Masters here. It is interesting that both these business models are very successful in their country of origin and yet fail miserably elsewhere.
You wouldn’t think that the markets would be that different but obviously must be.

[Simplicity]

It sounds just like the British empire to me actually.
Or am I just becoming sinicul


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[Spyro]

Bunnings is basically another smart ass business that tries to get the customer to do most of their work for free, and achieve the holy grail of any Australian business: operate a full acre of store with 3 untrained and replaceable employees.
Works really well here because the competition is lame and because we're used to it.
But try to transplant it somewhere else as is? Nah.

[Chris Parks]

Wesfarmers saw Masters fail then thought it would be a good thing to insert Bunnies into a foreign market? I thought the people who run these sort of corporations were supposed to be smart. Our local Coles have very noticeable stock shortages these days so I suppose they have to pay for the stuff up somehow but they lose out by doing that as we now shop elsewhere. The next stockholders meeting should be awesome!

[Spyro]

Wesfarmers saw Masters fail then thought it would be a good thing to insert Bunnies into a foreign market? I thought the people who run these sort of corporations were supposed to be smart.
They probably are, but there are many reasons why a group of smart people can act collectively stupid. Historical reasons, accumulated lies and BS that nobody wants to admit, bad systems and processes that are too expensive to fix, greed, complacency, all sorts of external pressures, shortsighted targets that must be met... welcome to the corporate world.

[Infinitywood76]

I was over in the UK last month and I clearly can see why they failed and no it's not because the POMS couldn't understand the concept of the sausage sizzle. My wife and I helped my mum decorate her bathroom and tidy up the back yard. I found that Bunnings didn't have half the product or their product range was extremely limited. We looked for bathroom paint and only found one brand of paint for bathrooms, it was the same for other stuff. In the end we got everything from Wicks (bathroom) and Homebase (online garden). That's the other issue, the UK uses online shopping loads and Bunnings hasn't realise this.

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[FenceFurniture]

Sounds like the same thing as Masters here. It is interesting that both these business models are very successful in their country of origin and yet fail miserably elsewhere.

I thought the people who run these sort of corporations were supposed to be smart. Masters tripped themselves up from the get-go by hiring a Kenidiot to do the marketing and seasonal stock selection. It takes a very special kind of stupid to try and sell Snow Shovels in September....in Sydney.......or have seedlings on sale for Autumn instead of Spring. And nobody with enough nuts to say "hey dickhead, stick you head out the window and tell me if it looks like snow!"

[Simplicity]

Masters tripped themselves up from the get-go by hiring a Kenidiot to do the marketing and seasonal stock selection. It takes a very special kind of stupid to try and sell Snow Shovels in September....in Sydney.......or have seedlings on sale for Autumn instead of Spring. And nobody with enough nuts to say "hey dickhead, stick you head out the window and tell me if it looks like snow!"

There was masters store in Melbourne next to Toorak(very very rich subarb).
They were selling weatherboards, you don't build a house in Toorak with westhboards you hire a construction company [emoji849].

Cheers Matt

[ian]

Masters tripped themselves up from the get-go by hiring a Kenidiot to do the marketing and seasonal stock selection. It takes a very special kind of stupid to try and sell Snow Shovels in September....in Sydney.......or have seedlings on sale for Autumn instead of Spring. And nobody with enough nuts to say "hey dickhead, stick you head out the window and tell me if it looks like snow!"
But the "Ken idiot" did stick his head out the window -- the problem was that the window was in North Carolina.

For the first year or more "Masters" stores were really "Lowes in Australia" stores. Each store was stocked from the US warehouses, carried the same seasonal specials as stores in the US. Even at the end the select grade timber carried by Masters -- Red Oak and poplar -- was the same as that sold in the US and Canada.

[FenceFurniture]

But the "Ken idiot" did stick his head out the window -- the problem was that the window was in North Carolina. Yeah. Much to our great loss Ian.

There was much to like about their business model and products they stocked. Had it been a bit more convenient I'd have been there all the time, but as a 90 minute round trip (plus store time) and $15 in petrol, it just wasn't feasible unless I was on a big spend (like I was during the closing down period).

[Handyjack]

I ended up driving past Masters to get to Bunnings.
Wasted 30 minutes trying to get a part for a coat rack rail that Masters did not stock. Walked in and out of Bunnings with the item the next day.

Bunnings struggled to sell BBQs in Britain. Perhaps the summer is too short, the winters too cold, and not enough back yards.

Lowest price does not mean much if you do not have what the customer wants in the first place.

[FenceFurniture]

Lowest price does not mean much if you do not have what the customer wants in the first place.Oh yes.

[richmond68]

Bunnings struggled to sell BBQs in Britain. Perhaps the summer is too short, the winters too cold, and not enough back yards.
It's funny, I just watched a clip on YouTube from a guy who migrated from South Africa to the UK, before migrating again to Australia after 3 years. His description of summer in England went like this: one day over 30 degrees. 4 days over 25. 13 days over 22. It rains on those days too. Is it any wonder they don't buy BBQs?

He also described the difficulty of doing business in the UK. An old-world mindset, resistance to change and even entrepreneurship. Wesfarmers should have been aware of this. And a foreign interloper taking over a known local brand, in the midst of the Brexit campaign? Never going to end well was it?

[paul.cleary]

**** warning: gross generalisation based on current holiday in the UK *****
Some more information about Bunning's behaviour in their Homebase stores in the UK.
When they took over, they got rid of the furnishing lines that Homebase was agents for, e.g. Laura Ashley, Habitat.
The key it seems to me from cruising Homebase and B & Q (big DIY rival to Homebase) is that in UK most people don't do serious heavy duty DIY like Australians and New Zealanders - DIYer don't knock down walls, build decks (backyards are v. small or don't exist), etc. Instead their DIY is to refurbish rooms by painting, changing fittings like lights, toilet seats, get IKEA flatpack furniture, add cushions; or make minor landscape changes to tiny backyards, etc.
If they do need major changes to houses, they get in tradesmen (no "tradies" in the UK vernacular) to do this type of work.

So the typical Bunnings style store with lots and lots of tools and building material and looking like an industrial warehouse just doesn't "click" with the locals.
Note that one of the articles I read in the papers had a UK carpenter lamenting the loss of Bunnings because of the wide range of raw materials they had.

[Fuzzie]

If I remember correctly when Bunnings started up here there were a lot more name brands on the shelves. They gradually deleted the name brands and changed over to as many generics at cheaper prices that they could. The lowest price point is the most important thing to a lot of Aus shoppers. But it did take them some years to change both the buyers as well as their stock lines. I can imagine going into a conservative market and immediately ripping out familiar well known brands such as Laura Ashley was never going to work well. It was a heroic attempt, but evolution of the market might have worked better than an instant revolution.

I miss Masters for a similar reason. When they came on the market here they brought back more name brands and new name brands from the US we didn't see before. Problem was they didn't come in below the Bunnings price point to pull in the buyers and the turnovers couldn't pay the bills.

[Fuzzie]

And another thing. There seem to have been plenty of DIY type shows on the TV from the UK shown here. I've watched a few and have wondered how they can renovate a whole terrace house head to toe include a new kitchen for 10k pounds or less. :oo:

Before the WWW my go to reference for all things DIY used to be a set of "The Knack" magazines. I'd say DIY is alive in the UK and it seems they can legally do their own plumbing and electrics!

[Beardy]

In the “good ole days” in Sydney you had a small hardware “chain” calked Traversing Jones of I think it was 4 stores across Sydney but they covered things pretty well, they had knowledgeable staff and a mill at each store
They were bought out by BBC Hardware probably in the early nineties from memory to take advantage of their strategic store placements and added more across the east coast. BBC then rebranded to Hardwarehouse and started the Megastore type concept.
I remember talking to some of their staff about Bunnings on the west coast and how Hardwarehouse were having trouble competing with them and gaining traction over there. I later heard from one of the managers that they were coming to the east coast and some of their staff had been approached to work for them
As a builder I was keen to see another player on the market as Hardwarehouse were not real interested in looking after tradies as they had attracted the weekend warrior brigade as their target audience.
It was disappointing when it played out that Bunnings just bought out Hardwarehouse rather than compete with them as we were still left with a one horse race.
And then Masters arrived, whilst they did have brands that Bunnings did not carry overall I found them pretty disappointing with their disjointed range of product. I tried picking up gear there for jobs but found they did not carry all that you wanted so you would still have to drop in to a Bunnings to get the rest of the gear.....after doing that a couple if times you just don’t bother stopping anymore.

Most of the little privateers were aniliated by the new corporate approach but it is interesting to see there are now a number of small players who have found a niche market suppling and giving good service to tradies, something that Bunnings can’t do.

[truckjohn]

And yet ironically - Aldi and Lidl seem to do very well everywhere.

Seems like there is a big difference in attitude though... Aldi and Lidl seem interested in trying to figure out how to sell what people want to buy in that area... Where places like Lowes and Bunnings (from the sound of it) are more interested in a top-down dictation of what the store shall do....

Like for example - massively bone headed moves like stocking up stores full of snow shovels in Early SUMMER in Australia.... And a store full of spring flowers in Autumn....

Growing up in South Florida - the Department store chains did exactly the same things.... Like fill up all the department stores in November in Miami with woolen pants, flannel shirts, and thick fleece coats - and yet all the snow birds coming down to escape the snow wanted to buy flip flops; swim suits, shorts, and tee-shirts... Yet the Highly Paid Corporate Executive drones could not bring themselves to allow the stores to operate differently..

[FenceFurniture]

massively bone headed moves like stocking up stores full of snow shovels in Early SUMMER in Australia.... And a store full of spring flowers in Autumn.... Well, since European settlement (1788) there have been four occurrences of snow actually settling on the ground in Sydney, so there was some precedent for Mr Bonehead to follow.

The only problem was that all four occurrences were in the same appalling winter of 1836 (http://www.wikiski.com/wiki/index.php/Unusual_snow_events_in_Australia)- fully 176-8 years before his genius got to work.....

To be clear: Sydney is on the same equivalent latitude as Myrtle Beach, SC. Ever snowed there? Like, since the last Ice Age?

Even where I am (90km from the coast west of Sydney, but 1017m up, which is around 3330 feet) we're lucky to get snow once a year, and it might be 4-6" in a heavy year. There is no sign of snow shovels ever being sold here.

[FenceFurniture]

Where places like Lowes and Bunnings (from the sound of it) are more interested in a top-down dictation of what the store shall do...."Yes, we will accept your money for only this range of products (if you really must give us your money), but we will not sell you something you may actually need or want. For satisfaction we advise you to shop somewhere else. Ha, if you can, sucker! (oopsie, did I really say that last bit out loud??)"

[paul.cleary]

More information about why Bunnings failed with Homebase in the UK:
https://www.theguardian.com/lifeandstyle/2018/mar/30/homebase-is-undoubtedly-the-most-disastrous-retail-acquisition-in-the-uk-ever

Bunnings has succeeded in one way in that business schools will hold this up as how not to do an expansion.

[Fuzzie]

The only problem was that all four occurrences were in the same appalling winter of 1836 (http://www.wikiski.com/wiki/index.php/Unusual_snow_events_in_Australia)- fully 176-8 years before his genius got to work.....


I beg to differ. I know for certain it snowed in Sydney in about 1986 (http://forum.weatherzone.com.au/ubbthreads.php/topics/898855/Snow_in_Sydney). I was in Los Angeles waiting to get on a plane home and they were saying it was delayed because it was snowing in Sydney. My reaction was "It never snows in Sydney! It might be snowing in Melbourne, I know from my parents that it snowed there in 1952." but yes it was in fact snowing in Sydney but it didn't settle for long. I think there may have been another snow flurry there in about 2004. Still, certainly no need for snow shovels. :D

[FenceFurniture]

Yeah I guess "settled on the ground" is open to interpretation (like for how long? 10 seconds? 15 mins?)

[Fuzzie]

Yeah, a bit like snow in the Sahara.
https://www.independent.co.uk/news/world/africa/sahara-desert-snow-storm-climate-algeria-ain-sefra-africa-weather-latest-a8149226.html

I was actually there 40 years ago when it 'snowed'. I even have pictures. See those white specks on the tarp? They are what we in Australia might call snow, I think anybody in the northern hemisphere might call them ice pellets. :cool:

No need for snow shovels there either.

[ian]

I beg to differ. I know for certain it snowed in Sydney in about 1986 (http://forum.weatherzone.com.au/ubbthreads.php/topics/898855/Snow_in_Sydney). I was in Los Angeles waiting to get on a plane home and they were saying it was delayed because it was snowing in Sydney. My reaction was "It never snows in Sydney! It might be snowing in Melbourne, I know from my parents that it snowed there in 1952." but yes it was in fact snowing in Sydney but it didn't settle for long. I think there may have been another snow flurry there in about 2004. Still, certainly no need for snow shovels. :DI'm sure the snow report I remember hearing was earlier than 1986. People working on the top floor of Australia Square (at the time one of the tallest office towers in Sydney) reported snow flakes falling past their windows. From memory higher elevations like Epping and Hornsby had snow on the ground. From a weather records perspective, anywhere north of the Harbour, west of Balmain or south of about Newtown is no longer "Sydney".
We occasionally get similar conditions here, and I've experienced it in Cooma -- as the flakes fall past your eyes it is definitely snow, not ice crystals, but they melt as they hit the ground.

But if you want weird, try snow crystals or flakes falling from a clear sky.

[rwbuild]

It was 19 November 1986. I was working out of an office at St Marys and it settled on the ground for about 1/2 an hr.
Couldnt get to see a couple of jobs up the mountains, GWH was closed at Bullabarra. Had to wait 2 days for it to clear to get to them.

[woodPixel]

The only thing these big businesses will need shovels for is digging themselves out from the stupendous mountains of debt they are buried under.

[truckjohn]

To turn this towards a more positive note - I wish these corporate executives would see the opportunity to take advantage of economies of scale and purchasing power to do things which small companies simply couldn't do....... But.... Why can't they do these things in good and useful ways - not dumb ways....

So instead of sending snow shovels to Sydney and Miami florida.... Hiw about using your purchasing and marketing power to and market high quality domestically made tools.. Because of their reach - Bunnings could probably sell Australian made chisels like the old Titans.... And people would buy them.... Same for the US companies like Lowes and Home Depot - why not use your purchasing power to get quality American made tools back into the market.... Or make some quality, useful woodworking tools available...

But no... It's a stack of snow shovels in Myrtle Beach/Sydney and "Up North Grass" type seed in Miami....

[FenceFurniture]

That would be a good plan but it takes a privately owned company to be able to do that. A publicly listed company board of directors has a first responsibility to make a profit for the shareholders. Projects that could be a bit lossy for a while (like re-starting Titans) would go down like a lead balloon with the accountants.

[Spyro]

That would be a good plan but it takes a privately owned company to be able to do that. A publicly listed company board of directors has a first responsibility to make a profit for the shareholders. Projects that could be a bit lossy for a while (like re-starting Titans) would go down like a lead balloon with the accountants.As an accountant who shoots down ambitious plans for a living I must admit that you have a point :D

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[ian]

As an accountant who shoots down ambitious plans for a living I must admit that you have a point :D

Guilty as charged ?? :D

[crowie]

Just a side issue..
Westfarmers have both DIY/building and industrial markets in there pocket.
Westfarmers owns Blackwoods who have devastated/dissolved the industrial market of competition the same as they've done with Bunnings...

[rrich]

Just a minor point here.

The job of the Board of Directors is to raise the price of the stock so that the current shareholders can sell their shares and take their profits. After the shares are sold the former shareholders don't give a hoot about the company.