Retail Viewpoints – Bunnings
Bunnings records an increase in customer transactions.
Following a decline in sales in H1 for DIY specialist Bunnings, the retailer has reported that sales continued to be impacted in its third quarter during the process of converting Homebase to the Bunnings estate. Sales were adversely impacted as it continues the repositioning of its kitchen and bathroom offer. However, the retailer continued to increase l-f-l transactions (2.2%) in the third quarter, which are driving sales in all other areas of the business.
The retailer is attempting to increase customer participation in DIY and gardening through competing on price and improved messaging via an eye-catching media campaign. Homebase announced sales of £183m for the eight weeks to 27 February 2016, and with Easter falling in March last year, we estimate that sales will have fallen by approximately 12% compared to the same period a year ago, without the benefit of the lucrative Easter trading period.
The remainder of the financial year (ending 30 June 2017) is expected to be challenging for Bunnings as the UK enters a period of uncertainty with a snap general election in June and a slowdown in housing transactions dampening demand for home products. Bunnings will need to quickly adapt its approach if it is to be successful in the UK market, with its competitors, Screwfix and Wickes continuing to outperform the market and the general merchandisers gaining share. DIY and gardening consumers are increasingly shopping online, and if Bunnings is to win share from its competitors, it must invest in creating and promoting a compelling multi-channel offer to its shoppers.
Source: GlobalData 27th April 2017