Tools at 10 paces: duel between Bunnings and Masters bloodies the bottom line
Having smacked myself in the face with a shifting spanner, I went searching for some new tools. A deep purple bruise darkened my right eye as I drove to the nearest "home improvement and hardware" superstore.
These mega-sized warehouses sit on blocks bigger than several football fields, selling everything you need or never knew you did, such as thigh-support stabilisation kneepads and bags of rags.
They are built on the basis that biggest is best, from tape measures 30 metres long to 15-kilogram boxes of frangipani-scented detergent and tarpaulins large enough to birthday wrap a tractor.
Home improvement is big business: the Australian market is worth $45 billion annually and growing. And the biggest players are the "big box" stores, backed by behemoths Wesfarmers (which owns Bunnings and Coles) and Woolworths (Masters and Home Timber & Hardware).
Just how hot the once-humble DIY industry has become was clear this week when a bruising battle with Bunnings forced Woolworths to announce it had dumped a pledge the Masters chain would break even by next year.
Woolworths opened its first Masters in 2011 – at Braybrook, in north-west Melbourne – and had dreams of opening up to 90 stores by 2016. Now it has slowed its aggressive expansion and will focus on filling gaps in metropolitan NSW and Queensland.
To work out why home improvement has become such a battleground, I visit its newest Sydney store, way out west of the city. Masters Hoxton Park opened in June 2014 on 13,000 square metres of old cow pastures. The Masters logo reminds me of the sails of the Sydney Opera House, some 48 kilometres away.
The car park is all but empty. Stacked out front are wheelbarrows and $5 sacks of manure. Inside are wide aisles filled with bamboo torches and bunting flags and gloves built to withstand welding or nuclear strike.
On the sound system is Nick Cave & The Bad Seeds singing Dig!!! Lazarus Dig!!! (I can hear my mother wailing and a whole lot of scraping of chairs). Staff are exceedingly helpful, in part because they outnumber customers.
Among the shoppers is Julie Hickey, who spends $30 on two pillows and some under-bed storage bags. "I like the big stores because I can get everything I need," she says. Do you need more cushions? I ask. “Probably not,” she says.
The success of the big-box stores is built, in part, on their sheer range of products in every possible category. Customers arrive wanting power tools and walk away with a screwdriver set ($20), "scatter cushions" ($24.95) and a "majestic three-tier water feature" ($279.72).
"You can browse around and dream about a new kitchen or new bathroom," Hickey says.
Is no one happy with their home anymore? The hardware and building supplies market is growing at about 4 per cent a year, fuelled by spending on DIY renovations and home improvement projects, according to IBISWorld.
The success of reality TV shows such as The Block has helped drive DIY. So, too, an undersupply of affordable housing and soaring house prices, which has forced people to settle for improving their homes rather than upgrade to
bigger and better properties, IBISWorld says.
I am no handyman, yet felt inspired to erect a children’s cubbyhouse in the backyard, until the shifting spanner slipped from my grip and ricocheted into my eye. Bumblers like me helped sales at Masters rise 42 per cent to $752 million in 2013-14.
But even that result was below expectations, which Woolworths blamed on the competitive market and the federal budget’s impact on consumer confidence.
Masters, a joint venture between Woolworths and US hardware chain Lowe's, has 49 stores – including 10 in NSW and 17 in Victoria – and now plans to open another 10 to 15 stores a year over the next few years.
In the Hoxton Park car park is swimming pool builder Dave Thompson, who needed earth wire for a job nearby.
"Look at it, it's phenomenal," he says, pointing at the store. "I used to go to a hardware store 10 years ago and there was one guy behind the counter, who you knew, and now there are 300 staff working here. It's crazy."
But it's nothing on Bunnings, which opened its first warehouse 20 years ago. The Wesfarmers chain with the interminably cheery greeting now has 288 warehouses, smaller stores and trade centres, including 81 in NSW and 58 in Victoria.
The home-improvement market remains dominated by smaller and specialist retailers. But there's an inexorable creep towards big business: Bunnings, which releases its full-year results on August 20, says it controls 17 per cent of the market; Woolworths says it has 2 to 3 per cent.
A mere four kilometres from Masters Hoxton Park, past fast food chains and brick homes with faded Australian flags hanging from their gutters, is another Bunnings Warehouse.
On the facade of its Hoxton Park building – which opened in 2008 and covers some 8500 square metres – are notices for workshops on clothes line installation and drill-bit sharpening. It's busier here, perhaps because of the McDonald's nearby.
In the car park are Paul Meyer and Deborah Manns, loading an air compressor onto their back seat. Meyer is unemployed and likes to tinker on cars and motorbikes.
"I have been sick for a while, so I keep myself busy," he says.
Inside, Shania Twain is singing You're Still The One. A voice comes over the loudspeaker: "Lifestyle, you have a call on 303. Lifestyle."
I am reminded of Masters while walking along the long and tall aisles. In truth, there is little to separate them. Each store has a cafe, empty children's playground and weekend sausage sizzles. My thoroughly unscientific survey reveals some paintbrushes are slightly cheaper at Masters, but then both chains have a best-price guarantee.
Each store is built on dreams: of lawn mowers that start every time, of perfectly coiled hoses and of backyard decks. But Bunnings seems more solid somehow, if only because of its bigger focus on DIY and hardware – Woolworths announced this week it planned to expand the hardware range at Masters.
Big shelves of DIY pamphlets at Bunnings teach customers to hang a door and grow "culinary herbs". Build a toolbox. Build a cork memo board. Build a better life. An information booklet on possum-proofing your home has a picture of the scariest marsupial I have seen.
I walk in planning to buy a spanner and instead come away with a "superswish" mop ($32.22).
"I bet that hurt," says the woman at the check-out counter, pointing to my eye. I mumble something about my mishap.
"Well, at least you had a go," she says.