Page 35 - HW Sept 2021

global eyes
Moderation ahead after Bunnings’ bumper year
Europeans go small
for the inner-city
Last month B&Q went small to suit a central London suburb, while Leroy Merlin also showed off a new approach for Spain with an inner-city site.
Adeo Group brand Leroy Merlin opened its first Exprés store in the heart of Madrid last month.
Of modest scale compared to the brand’s usual 10,000m2 plus format, the new 750m2 Exprés store holds 4,000 SKUs in stock, with a further 8,000 that can be ordered in-store and delivered within four hours.
The Exprés format of the new Madrid store follows an even smaller (600m2) project in Sao Paulo, Brazil, and replaces one of Leroy Merlin’s AKI home improvement and gardening stores.
The Madrid store also offers assistance with home repairs and delivery using motorcycles and hybrid vehicles.
Following a series of other B&Q small store openings in the UK and under other Kingfisher Group banners across Europe, B&Q has opened a 500m2 high street store in North London’s Wood Green area.
The product range consists of home improvement necessities from paint and paint mixing, decorating and power tools to décor and lighting, gardening products, houseplants, hardware, and electrical and plumbing products.
As well as a limited range of SKUs in-store, customers will also have 20,000 products at their disposal via diy.com, where they can place an order for home delivery or click & collect.
The new store is open seven days
a week and boasts a loading bay at the front which allows easy collection of paint, timber, and all other home improvement essentials.
BUNNINGS ANZ’S STRONG Covid-related FY2021 growth slowed in the second half, while possible further moderation colours its FY2022 outlook.
As indicated at June’s Strategy Briefing Day, with the announcement of its FY2021 results last month, Wesfarmers confirmed some second half softening of its key marketplaces following bumper Covid-related first half growth.
For the year ending 30 June 2021 as
a whole, says the company, demand “remained resilient” even though sales growth in Bunnings, Officeworks and Catch all began to moderate from mid- March “as the businesses cycled the onset of COVID-19 in the prior year”.
For example, Bunnings ANZ’s second half sales were +0.7%, while same store sales were negative 2.1%, compared to +27% in the first half.
Bunnings’ second half online penetration (1.5%) was also down on its Covid-related first half peak of 3.1% (online penetration was 2.3% for the year) thanks to stores re-opening after lockdowns.
For Bunnings ANZ (as usual, figures for the NZ arm were not broken out), the tale of the FY2021 year is as follows:
• RevenueAU$16.9billion(+12.5%on
FY2020)
• EBITAU$2.3billion(+18.4%)
Bunnings’ ANZ year-end same store sales were +11.9% compared to +14.7% in FY2020, but this figure excludes stores in months of temporary closure in Victoria and New Zealand.
Says the company: “Covid-
19 continued to impact Bunnings’
operations and the communities it serves, with Bunnings responding to changes in the external environment by adjusting its operations and working with suppliers
to limit impacts on product availability during the year.”
On the plus side: “Travel restrictions and customers spending more time
at home continued to support sales growth.”
In terms of an outlook, the company says: “While the operating environment remains uncertain, Bunnings’ trading performance in the 2022 financial year
is expected to moderate following the extraordinary growth recorded in the 2021 financial year, which saw Australians and New Zealanders required to spend more time at home due to COVID-19 restrictions.”
Indeed, Bunnings ANZ’s sales for
the 2022 financial year to date were down 4.7%, with “solid growth” from commercial customers offset by a decline in consumer sales.
On a two-year basis however, Bunnings ANZ’s sales for FY2022 to date have remained strong at +24.4%.
The Industrial & Safety division recorded revenue of AU$1.8 billion, +6.3%ontheprioryear.
Although partially offset by weakness inthecoalminingandoilandgas, Blackwoods’ revenue also increased thanks to growth from strategic customers, and in Western Australia and New Zealand, as well as strong first quarter demand for respiratory, cleaning and hygiene products.
www.wesfarmers.com.au
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SEPTEMBER 2021 | NZHJ 33