Bunnings has ranked among the world’s top 250 retailers in a recent study by accounting firm Deloitte.
Bunnings has ranked among the world’s top 250 retailers in a recent study by accounting firm Deloitte.
The findings placed the Wesfarmers Ltd subsidiary as the 15th fastest growing retailer in the world, with an annual growth rate of 25.6 per cent over the past five years, and the 201st in terms of retail sales, with a turnover in 2004 of $US3,065 million.
Only three other Australian retailers placed in the study’s top 250 – Coles Myer Ltd, Woolworths Ltd, and Foodland Associated Limited (FAL).
While the three supermarket retailers have a higher turnover than Bunnings, the Western Australian-based home and hardware store more than doubles the growth rate of the big retailers.
Deloitte partner Gary Dornan said while it was a surprise to see Bunnings so high up on the list, the Bunnings business was perfectly poised to capitalise on a growth market.
“They have a good model, and have it working well; they are flexible and have good customer service,” Mr Dornan said.
“There is room for them to grow, it just depends what they can grow into.”
From a local perspective, Mr Dornan said, WA was the strongest in the nation in terms of retail figures. He said flexibility was the biggest issue facing local smaller retailers.
“There has been a real globalisation of the retail sector and the range of quality of products is starting to flatten out, so product won’t be what differentiates retailers any more,” Mr Dornan said.
“People are moving away from labels because quality is getting relatively flat, and the movement of manufacturing to more cost-effective places has had a huge impact.
“Small retailers need to look at what is happening with those big companies, and be able to com-pete and shift business models; traditional small stores are not necessarily the way of the future because the big suppliers are reluctant to send small volume out.
“The retailers have to be smarter.”
He said some smaller retailers were getting the tail end of major retailers’ orders, and setting up shops on six-month leases before moving on to the next product.
“It’s a very high risk game, but there are some very good players in it,” Mr Dornan said.
The biggest issue in WA is the training of staff, he said, with a lot of competition for good people.
“Consumers still really value service as part of the experience, and they are fickle if they don’t get it,” Mr Dornan said.
