Hardware giant gives vote of faith in Alice

By ERWIN CHLANDA

 

The huge, 12,000 square meter Bunnings hardware store, costing $23m and employing a staff of 75, was officially opened on the North Stuart Highway this morning as a beacon of faith in the future of Alice Springs.

 

The chain’s 212th store in the nation, the third in the NT, promised to revolutionise shopping in The Centre, bringing into town many lines not available locally before, lessening the incentive to buy on-line and providing stiff competition for some existing businesses.

 

They will need to find their niche, says Clive Duncan, Bunnings’ director for merchandising and store development.

 

He doesn’t see the current economic downturn of Alice Springs as a problem: “Our development is based on long term,” says Mr Duncan, who performed the opening not in a pin-striped suit but in the store’s staff uniform – red top and green apron.

 

“All towns go through their ups and downs. We see a lot of potential here. There is the right number of people, and Alice Springs has growth opportunities.

 

“There are still investments in infrastructure. The town’s not going backwards. The housing is there, people are investing, rental is pretty strong. We deal in a lot of areas – commercial builders along with the DIY customers. It always balances out for us, one might be up, the other might be down.”

 

Are the existing hardware stores going to get a hammering a giant like Bunnings?

 

“There is a lot of talk about what Bunnings does to other operators, but there is a lot of room, and many businesses find their position. If they are good operators they survive.

 

“We deal in a lot of different products,” says Mr Duncan. “Much of our business comes from expanded ranges, things you would not normally access in a town like Alice Springs. It’s been interesting to see what customers have been buying in the last few days – things that had not been available here. We are bringing them into the town.”

 

Mr Duncan (pictured) says these goods – including some that would be bought online – would make up “close to half” the store’s stock, including garden decor and playground equipment.

 

He says reservations about “money going out of town” of course applies to the other stores as well. After all “not much product is manufactured here”.

 

The $3m a year in staff wages certainly is staying here, and Mr Duncan is making a big point about support for community groups and the staff’s involvement with them – such as setting up a veggie garden for a school.

 

He says the store was built by locals to the extent possible: “It’s easier and cheaper because you’re not flying people in.”

 

Is there an industry accepted mark-up on goods? How much money do hardware stores make? Mr Duncan says: “We don’t discuss markups.”

 

Profits of Westfarmers will be announced in August. The parent company also owns Coles, Kmart, Target and OfficeWorks.

 

The News interviewed the manager of another hardware local hardware business but he later withdrew his comments.]

 

PICTURED at top is manager Annmarie Beech.

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3 Comments (starting with the most recent)

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  1. Leigh Childs
    Posted June 30, 2013 at 11:47 am

    The article states the 75 people will be employed bringing in 3 million. Could some one do the maths please? So when the two existing hardware stores close how many staff will lose their jobs at what dollar cost to the town? Just asking.

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  2. Interested observer
    Posted June 26, 2013 at 11:08 am

    Good point, and I doubt that Bunnings will reverse the trend to online sales. My buying decision is based on buy local if no more than 20% dearer than online inc postage. So the online cost of my local hobby purchase is $12 inc postage, old hardware store $23 and Bunnings $20.

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  3. Past Resident of Alice
    Posted June 25, 2013 at 9:29 pm

    Now let’s see how the other hardware stores go. From what the eastern states have experienced, Bunnings has significantly reduced the amount of the smaller hardware chains across the board. The most interesting thing to point out is, the “We will beat a competitor by 10%” provides the idea of you assume they are cheaper, but this is not always the case. I mean they (Bunnings) can sometimes be more pricey, so it’s best to shop around first beforehand and get it right otherwise you may find you’re paying more at Bunnings.
    Shop around first and you can get the 10% cheaper cost or better still consider the local guy, don’t drive all the way up the road to Bunnings just to save on costs.
    It may be only another two or three kilometers away from town but eventually the smaller hardware joints will pack up and move on.

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