Bunnings wants to own hardware for DIY'ers and pro's
Are the Kings of DIY looking to level up on professional hardware?
What's the key learning?
- Industry consolidation is when companies buy some of its competitors to gain more market share
- Consolidation usually occurs when the industry is mature - like the professional tools market
- People are more invested than ever in their homes (thanks to lockdowns)
- Bunnings hopes to earn more revenue from the acquisitions, whilst smaller, family-owned tool companies get the opportunity for a sweet sweet pay out
WHAT ARE BUNNINGS DOING?
Bunnings Warehouse has announced plans to build a new network of professional tool stores... and it will buy existing tool companies to gain market share quickly.
Bunnings has announced plans to buy, borrow or steal (note: probs not steal TBH) in order to reach its target of 75 trade tool stores in Australia and NZ over the next few years.
They're keeping their naming options open by trademarking Benchmark Tools, Project Tools, Dontas Tools or our fav... Onya Tools.
I mean, who wouldn't want to shop at Onya Tools?
So, what's the key learning?
Bunnings is taking the industry consolidation route.
This is when companies look to buy other companies in their industry to gain a larger portion of overall market share.
Industry consolidation generally takes place when an industry is mature - like the professional tools market.
Throw in a once-in-a-lifetime global pandemic, where home-owners are investing in their kitchens, bathrooms and studies - and you have the perfect formula for the tool-industry consolidation.
For Bunnings, they get the chance to grow their revenue by buying new businesses. For family-owned tool businesses, they have the chance to cash out for a juicy pile of dollars.