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Wesfarmers Annual Report 2011
Home Improvement: Bunnings
The business
Bunnings is the leading retailer of home
improvement and outdoor living products
in Australia and New Zealand and a major
supplier to project builders, commercial
tradespeople and the housing industry.
Operating from a network of large
warehouse stores, smaller format stores,
trade centres and frame and truss
manufacturing sites, Bunnings caters for
consumer and commercial customers.
Strategy
Bunnings provides its customers with the
widest range of home improvement and
outdoor living products and is committed
to delivering the best service and lowest
prices every day. It sets out to attract high
quality employees and to provide them with
a safe and rewarding working environment.
Bunnings continues to expand and
improve its store network through ongoing
investment in existing outlets, innovative
merchandising initiatives and new store
openings. Bunnings has developed
and continues to expand and enhance
a network of trade centres to service
major commercial customers.
Results
Operating revenue from the Bunnings
home improvement business increased by
5.7 per cent to $6.8 billion for the full year,
with trading revenue increasing by 5.7 per
cent. Earnings before interest and tax grew
10.2 per cent to $802 million.
Total store sales growth in Bunnings of 5.6
per cent was achieved during the year, with
underlying store-on-store sales increasing
by 3.0 per cent. Commercial sales were
5.1 per cent higher than in the comparative
period.
Pleasing results were achieved in all
Australian states and New Zealand, across
all product ranges, driven by good execution
of merchandising and operational strategies.
Year in brief
During the year 27 trading locations were
opened: 11 warehouse stores, eight smaller
format stores and eight trade centres.
At year-end there were 194 warehouses,
59 smaller format stores and 36 trade
centres operating across Australia and
New Zealand. Investment in bringing current
merchandising standards into older parts
of the network continued, together with
category-specifc upgrade work across
the whole network.
Business sustainability
During the year work continued towards
long-term carbon footprint reduction
initiatives to reduce energy usage and waste
and to help educate our customers and
team on sustainable living choices. Our
carbon footprint increased by only 5.0 per
cent, compared to net site growth of 6.0
per cent, with further reductions in carbon
intensity planned. Water consumption
remained a priority, with rainwater tanks
continuing to be rolled out in new warehouse
stores, and hand watering in selected
nurseries. Water consumption remained at
the same level as in the prior year.
Over the year, Bunnings supported more
than 42,000 community activities through
community group sausage sizzles, hands on
do-it-yourself projects and renovations, local
fundraising activities, community workshops
and other activities. Support included in
excess of 104,000 hours of team member
support for activities and projects, product
contributions and fnancial assistance.
This involvement helped raise and contribute
more than $26 million to local, regional
and national charities and community
organisations across Australia and
New Zealand.
Home Improvement
and Offce Supplies
Bunnings and Offceworks are the leading
retailers in home improvement and offce
supplies products in Australia.
Growth strategies
Home Improvement
Proftable sales growth: Key growth drivers
are stronger customer service, enhancing
the offer, investing in and expanding the
network, and further developing a multi-
channel commercial offer
Better stock fow and proftability:
Improving the end-to-end supply chain
Stronger team engagement and
development: Continue strong investments
in product knowledge, investment and safety
Improving productivity and execution:
Reduce the cost of doing business through
systems development and other business
improvement and productivity projects
Sustainability: Ongoing commitment to
store-based community involvement work,
reducing water and energy consumption
and wastage, plus improved affordability
of sustainability projects for customers
Offce Supplies
Improve the customer offer: Develop
new services, categories and ranges; more
merchandising initiatives; and capitalise on
emerging trends and technologies
Improve customer service: Listen to,
learn from and act on customer feedback;
build stronger customer relationships; more
product knowledge training
Team development and engagement:
Continue to focus on improving safety and
delivering team programs that support
and enhance the business strategy and
underlying culture
Reduce costs and complexity: Rebuild
an effcient and cost effective supply chain;
reduce shrinkage; and continue to work on
removing costs, duplication and complexity
Drive sales and proftability: Lift product
range authority; expand and refresh the store
network; improve stock management; and
look after business customers better
John Gillam Managing Director, Home
Improvement and Offce Supplies with team
member Vania Ferreria at the Bunnings
Warehouse in Caroline Springs, Victoria