Bunnings boss Mike Schneider eyes $100b addressable market amid product expansion push
Bunnings boss Mike Schneider is eyeing a market worth over $100 billion as the hardware giant pushes deeper into the automotive space following the success of its move into pet goods and cleaning products.
The Wesfarmers-owned retailer is threatening the dominance of Autobarn and Supercheap Auto as it adds auto products to its ever-growing category range. Bunnings is also expanding into cleaning, disability and assisted living, as well as electric vehicle charging.
Speaking to investors and analysts during Wesfarmers' strategy day on Thursday, Mr Schneider said Bunnings' addressable market was fragmented and highly competitive across several categories spanning from decor and home furnishings to hardware, gardening, electrical and tools.
'Our model and addressable market continues to support growth and resilience through the cycle,' Mr Schneider told the audience in Sydney.
He said strong fundamentals underpinned the retailer's long-term growth, including population growth, housing availability, home improvements, lifestyle and demographic trends, as well as innovation and technology.
The Bunnings boss also highlighted its strong track record driving sales growth faster than space growth, which relates to store size.
'Over the last decade, Bunnings has grown sales (about) 3.7 times faster than space growth,' Mr Schneider said, adding it was targeting average space growth of about one to 2 per cent each year to the 2029 financial year.
Mr Schneider last month sent a warning to auto brands that baulk at supplying Bunnings for fear of upsetting other big customers like the Super Retail Group-owned Autobarn and Supercheap Auto, saying they could be left out in the cold.
Revenue at Bunnings, Wesfarmers' biggest profit earner, hit just over $10b in the first-half, up 3.2 per cent on the prior year.
Meanwhile, the freshly-minted boss of Kmart Group, Aleks Spaseska, also fronted investors for the first time on Thursday since stepping into the role in April.
Outlining her future strategy, Ms Spaseska said she was focused on strengthening and growing the core product — its highly successful Anko brand — stores and cost structures. She aims to double the business over the long term.
Ms Spaseska, who took over from Ian Bailey, said Kmart Group — which also includes Target — had a large and growing market with a significant opportunity to grow the share of wallet.
It also had an opportunity to broaden its existing product ranges in youth apparel, toys and games, as well as cleaning products.
'Gen Z and Alpha are the fastest growing customer segments and over the next few years, will come to represent a material portion of total consumer spend. Engaging these customers through the evolution of product offer in shopping experience is a strategic priority,' she said.
It comes as Wesfarmers plots more stores under the Anko brand.
The Nightly last year revealed Anko was set to open more stores in the Philippines as part of the group's push into international markets. Anko opened its first pilot store in Manila last November.
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