(Australian Associated Press)
Old houses in Britain and Ireland are a key reason home improvement giant Bunnings expects its UK expansion to be a success.
Bunnings UK and Ireland managing director PJ Davis said 56 per cent of England’s homes are more than 50 years old, presenting a big opportunity for the company as owners look to renovate.
“What really attracted us to the market is not only the Brits’ love of gardening but particularly the housing stock being so old,” he told an investor briefing.
“And getting a decent understanding of how the Brits and Irish go about renovating their homes was something that led us to see it as a very good market.”
While Australians like to spend on swimming pools, pergolas and decks, it is all about “inside living” in the UK, and upgrading bathrooms, kitchens, floors and lighting, Mr Davis said.
Wesfarmers, which owns Bunnings and supermarket giant Coles, bought the UK’s second largest DIY chain Homebase for STG340 million ($A549 million) just over a year ago, and has so far converted one store into a Bunnings warehouse.
It plans to improve its Homebase stores over the next three to five years while gradually converting them to the Bunnings format.
Mr Davis said the UK’s STG38 billion ($A61 billion) home improvement and gardening market was largely fragmented, with the top two players accounting for less than 15 per cent of the market.
Competitors include discount retailers and non-specialists, including IKEA, Asda and Poundland, which are offering more home and garden products.
Bunnings UK will differ to its Australian counterpart by also offering an online store.
The company’s UK venture made a loss of STG28m ($A45 million) in the six months to December, and generated revenue of STG612m ($A994 million).