Will Bunnings Raise Costs When/if Masters Exits?

Penalty boxer on 21/10/2015 - 11:03

http://www.news.com.au/finance/business/were-all-in-trouble-…
http://www.smh.com.au/business/retail/woolworths-lowes-weigh…

"Woolworths is expected to pull the plug on its $2.2 billion foray into the home-improvement market if joint venture partner Lowe's decides to exercise an option to sell its $1.1 billion stake.
Analysts believe Woolworths is unlikely to continue to run the loss-making Masters chain single-handedly if Lowe's exercises its put option and forces Woolworths to buy its 33 per cent stake for more than $800 million.
"If Lowe's wants out Woolies will want out as well," one analyst said."

What do you guys think? Should we all do a big OzB shop to keep Masters afloat to stop Bunnings jacking up prices? Or does Masters deserve its death as they were never really competitive on pricing to begin with?

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Comments

  • Davo1111 on 21/10/2015 - 11:37
    +20

    Masters are just in inconvenient locations. If I was going to drive directly to a masters, i'd have to drive past 2 bunnings to get there. I reckon masters should hook up with harbor freight and go online only with some pickup only locations.

    • PVA on 21/10/2015 - 21:58
      +2

      not on the coast here. masters is at bundall, really central and better than bunnings for that - but their selection is worse i think.

      • Kozhutki on 21/10/2015 - 23:34

        I feel like Bunnings is more central, one at Southport, Arundel, Nerang and now Burleigh

        • PVA on 22/10/2015 - 08:14
          +3

          Two minutes to masters for me but bunnings is a better hardware store. Masters is trying be be everything and not quite succeeding.

        • mattson on 22/10/2015 - 14:59

          There has always been a bunnings at Burleigh - for easily 11+ years… it only recently moved from one location to the new location on Bermuda Street opposite Treetops shopping centre.

          Interestingly the old bunnings site was earmarked to be another Masters as it was on land owned by Stocklands… that said - the old site remains vacant - likely on account of Woolworths unwilling to pull the trigger on a failing business model.

        • mattson on 22/10/2015 - 15:00

          @mattson:

          Footnote - with the opening of Masters at Bundall, Mitre 10 Bundall has pulled the plug on it's store that's been there for some 15 years too…

        • Kozhutki on 22/10/2015 - 15:13

          @mattson:

          Oh okay my bad, I don't really head out to Burleigh. The new location is really nice though.

        • [Deactivated] on 18/01/2016 - 17:04

          @PVA: I think Bunnings staff don't care (in fact they seem to run in the opposite direction if they see you looking in their direction), Except if there's a Masters nearby, then they at least try. But Masters has beaten them everytime for customer service. I'll be sad to lose them.

          their mistake was locating stores close to Bunnings.

          But looking forward to closing down appliance sales!

      • pegasusx on 25/10/2015 - 22:40

        I went to Masters once to pick up some items I got via Ebay with the $50 coupon deal. Drove for 40mins to Chullora and staff said they dont have it in stock. Said they could refund me… okay thanks. Passed by Greenache store and got what I needed… on Passing Kingsgrove I noticed there is a massive warehouse being built! Good by Masters RIP

    • SlickMick on 22/10/2015 - 09:00
      +3

      I have a masters much closer, and a 2nd one probably still close than bunnings. I think it just depends where you live.

    • Tnetennba on 23/10/2015 - 00:36
      -4

      Masters have some other big issues - I've heard they don't do orders over $10,000… and don't allow tradies to back their vehicles into the dock. No wonder they are losing money, bunnings is getting all of the $200k house materials sales.

      Also it looks like Masters is trying to cram a bunch of everything under one roof, like a weird mix of harvey norman and bunnings. I don't think it's working.

      • Davo1111 on 23/10/2015 - 01:28
        -1

        Who buys 10k of supplies at Bunnings though?

        • Tnetennba on 23/10/2015 - 03:11
          +8

          People doing kitchens, or big house renovations who don't have any other idea of where to go? Tradies? I'm sure there are plenty of customers..

      • JimmyF on 23/10/2015 - 10:32
        +10

        What a load of crap…. Have you even been to a masters store? Heaps of tradies there loading up their utes just like they do at bunnings.

        As for the orders over $10k, more crap. Masters sell kitchens as well, so are they going to say, woah sorry can't sell you your kitchen as its over $10k. Sorry.

        Masters has a trade discount card just like bunnings……

    • MelBourne on 24/10/2015 - 13:05

      Not in Melbourne… At least not across the western suburban region of Melbourne. I've found that Masters have opened up a shop pretty much within a kilometre of each Bunnings. (Except hoppers crossing, where the competing masters is in Williams Landing).

  • spackbace on 21/10/2015 - 11:38
    +6

    I dunno, I preferred 'the shopping experience' at Masters. Also the competition probably really helped keep Bunnings grounded.

    Sorta wonder what would happen with the stores if they shut. Big warehouses, generally placed close to Bunnings stores.

    Click & Collect is like a double edged sword. Can be handy, and certainly find some things online that they don't have on display in store (thus making them actually go looking for it), but it also takes so long for them to go pick the order! I was once in store and saw the stuff I wanted, and I could've picked it myself and saved the staff member the effort, but they wouldn't let me! (Chose C&C option because of discount code etc)

    • djones145 on 21/10/2015 - 12:20
      +10

      I hope Costco buys them all and opens like crazy!

      • DeafMutePretender on 22/10/2015 - 03:14

        Then they'll jack up the prices once they become the new monopoly

        • Rodgort on 23/10/2015 - 17:19
          +1

          Costco is a good company. (in other words, they do things to make money but they don't nickel and dime you)

        • DeafMutePretender on 23/10/2015 - 23:19
          +1

          @Rodgort:

          I'll believe it when I see it

    • OYC on 23/10/2015 - 14:10
      +1

      give them the CC order number and the staff will fix you up. I do this all the time.

      I too, dont like the idea of having to buy online to use the discount codes without the printed coupon. The staff treat you like a robber if you show the coupon on the phone. they claim that I can scan it multiple times. so stupid, because I can print it multiple times and use it too.

      I still go masters when they do their promotions but generally I find they are more expensive than bunnings. only with coupons do most items become cheaper or comparable.

  • plmko on 21/10/2015 - 12:05
    +9

    TBH, I feel Bunnings has jacked up prices regardless of the condition of Masters.

    • subywagon on 22/10/2015 - 21:21

      Yeah I reckon they have too. I do a lot of reno work and I notice recently some items have risen as much as .50c to a dollar such as paint brushes etc… Time to check out my local Becks again to compare prices.

    • JimmyF on 23/10/2015 - 10:35
      +1

      agreed… people forget that before masters bunnings was pretty much the only major hardware chain around. I didn't see any 'drop' in prices when masters appeared.

      ACCC was silly for letting bunnings buy its only major competitor hardware house years ago.

    • Garagesale on 23/10/2015 - 11:11

      yep i bouught a 10c empty pool tester bottle at bunnings a few months ago now its 50c thats 400pc increase!

    • [Deactivated] on 23/10/2015 - 16:45

      they were never cheap, 'home hardware' was cheaper on identical items.
      most likely masters will just turn into home hardware stores anyway

    • gromit on 26/10/2015 - 10:52

      Yep, I did prefer Bunnings, but recently I have swapped to masters as both are about the same distance from me but Masters appears to be a little cheaper with a similar range, plus there seems to be a constant stream of discounts, free gift cards etc as they are desperate to get customers.

  • Kranbone on 21/10/2015 - 12:22
    +2

    My shopping experiences at Masters haven't been ideal but I do feel if they are to leave the market it means less competition for Bunnings and thus higher prices in the end.

  • nubzy on 21/10/2015 - 12:40
    +4

    I like Masters but their locations are very inconvenient. Have to drive at least half an hour to get to the nearest Masters, and less than 5 mins to Bunnings. If they had more locations they would definitely be my first choice though. Bunnings sells too much cheap junk and Masters has a bit more of an upmarket feel to it.

    • JimmyF on 23/10/2015 - 10:35

      Same….

  • rompastompa on 21/10/2015 - 12:48
    +1

    I have three Bunnings within 10 minutesNorth, South West and East of me, with rumours of a fourth opening within 5mins drive. Pretty convenient when I'm going somewhere else.

    Closest Masters is 20minutes, the rest are 30-40mins away.

    I have been to Masters a few times for sale items, but generally it's just not worth the extra time there and back.

  • slow on 21/10/2015 - 12:59
    +22

    I like my local Masters it is always empty with parking close to the entrance, no queues, and heaps of staff wandering about to help.

    Hang on, maybe that is why they are going bust?

    • SlickMick on 22/10/2015 - 09:05
      +1

      Yeah, we had a local Mitre 10 with a person at the door to greet you, one hanging around the isles in case you need assistance and one at the register probably doing paperwork because there was nobody to serve! They didn't last long.

      I don't think people are willing to pay for service these days. (I know I'm not).

      • cheesecactus on 22/10/2015 - 13:13
        +2

        a person at the door to greet you

        Some bunnings have this too

        • SlickMick on 23/10/2015 - 09:44
          +2

          They're actually security, but they do tend to be friendly

        • diddy50 on 25/10/2015 - 14:01

          All bunnings have the girl/guy at the door greeting you, has the little pedestal with brochures a well and red Stamp for kids.

          It's semi security and semi greeter.

    • macrocephalic on 25/10/2015 - 18:49
      +1

      This is why I shop there as well. I don't know that it's actually better than Bunnings, but it's much easier to shop there - so I do.

  • mr626 on 21/10/2015 - 13:07
    +1

    Like some others on here, Bunnings is just closer for me. Plus my local Bunnings is pretty good- the staff are friendly and helpful, and they usually have what I'm after in stock.

    Masters I've only been to a couple of times. Prices seem ok, and I like having the Maccas in store. Too far away for regular visits though.

    • Diji1 on 21/10/2015 - 16:12
      +3

      Bunnings is pretty good- the staff … helpful

      Whoa whoa let's not go overboard …

      • kywst on 21/10/2015 - 19:18
        +1

        Subjective statement. I don't ask the staff anything apart from how much?, when will it be in?, you've got to be f***in kiddin' me right? … Others may be inclined to listen if they have less knowledge/experience with the materials or tools they are looking at.

      • mr626 on 22/10/2015 - 12:39
        +1

        This is at my local Bunnings. Your mileage may vary.

        • h0mbre on 24/10/2015 - 15:01
          +4

          I worked at Bunnings when I was studying and while I was very friendly, most of the advice I gave was made up.
          10 years later, my knowledge has increased tenfold but how are you going to get knowledge for $15 p/h.
          Most kids struggled to remember which aisles things were in and the older blokes in their twilight years who did actually know what they're talking about,had early onset of memory loss.
          http://i.imgur.com/Dhjj8QZ.jpg

  • Forfiet on 21/10/2015 - 13:16

    …I'm in the South in metro SA and we are supposed to get one next year! Don't leave so soon! :)

    • Ughhh on 21/10/2015 - 13:21

      How south? Theres one next to Ikea.

      • Forfiet on 21/10/2015 - 16:01

        Colonnades Shopping center @ Noarlunga
        Edit: An Aldi aswell :)

    • Food on 21/10/2015 - 13:50

      One being built at Parafield right now (along with OW :D _, meant to open early next year!

      • King Bee on 22/10/2015 - 13:34

        I wonder why that Masters store is being built so close to the Bunnings? The new store will be 300m down the road.

        Maybe it's their strategy to catch all the people going to Bunnings that are driving north along Main North Road.

        • serpserpserp on 23/10/2015 - 11:39

          Its more about land availability and traffic access to it.

        • Minotaur on 25/10/2015 - 18:16

          It's far enough away that people aren't going to walk between them to compare prices.

  • inherentchoice on 21/10/2015 - 14:07

    What if some other company/investors buys Masters and it turns around? It's certainly a possibility isn't it?

    Personally I would like to visit a Masters store but the nearest one is some 70km away. Nearest Bunnings is only 6km away.

    • rompastompa on 21/10/2015 - 14:10
      +1

      Like when Anchorage Capital bought Dick Smith off of Woolworths? Oh wait.

      • inherentchoice on 21/10/2015 - 14:14
        +2

        What did you mean? I thought they had a massive win economically. Plus there never used to be so many DSE deals on OzB when it was still owned by Woolies.

        • rompastompa on 21/10/2015 - 14:50

          Check out their stock prices over the last few months.

          They changed their business from an Electronic company to a retail store to compete with the big retailers. They're losing.

          All the 'bargains' are an aggressive advertising technique to get their sales.

        • inherentchoice on 21/10/2015 - 14:52
          +1

          @rompastompa: The recent decline in their stock price has all happened after Anchorage sold it.

        • rompastompa on 21/10/2015 - 14:54

          @inherentchoice: Anchorage still own it.

        • inherentchoice on 21/10/2015 - 14:55
          +1

          @rompastompa:

          Exit

          Following the completion of the turnaround program and the transition to a growth agenda, Anchorage began to explore exit options… Anchorage retained a 20% stake in the listed entity following the IPO, which was subsequently sold down in September 2014.

          Source: http://www.anchoragecapital.com.au/case-study-dick-smith

        • rompastompa on 21/10/2015 - 15:00
          +1

          @inherentchoice: What I meant by the original statement, was that Dick Smith was re-imaged from an Electronic Store to a retail store like HN, GG, JB etc.

          If someone was to buy Masters, they may do the same - and not necessarily be in competition with Bunnings. E.g. If IKEA bought them. All hypotheticals obviously :P

        • Forfiet on 21/10/2015 - 16:04
          +1

          @rompastompa: So Masters electronics or Masters clothing :P /s

        • serpserpserp on 23/10/2015 - 11:43

          @rompastompa:

          They were always an electronics retailer and when you go into a store that is pretty much what you still get. They have just lost their focus and after the excitement of the IPO, the cost reductions on the inventory/value chain were realized, and still no real lift in over sales/margin, the stock price has fallen. The stock price is more about future growth, which is limited, but the business itself isn't in a dire state.

        • Imitation on 24/10/2015 - 15:51

          @rompastompa:

          It also doesn't work personally.. DS is always on sale. And I get totally overexposed to their brand. It's annoying.

        • macrocephalic on 25/10/2015 - 18:51

          @serpserpserp: DSE used to actually be an electronics store like Jaycar is - selling components and things as well as small retail devices. I guess there's not much call for that anymore, or people just order their supplied off the internet.

        • serpserpserp on 25/10/2015 - 19:32
          +2

          @macrocephalic:

          Yeah they use to be that over a decade ago easily. Woolworths changed that when they owned it and did the DSE powerhouse brand and all that. electronics/hobby stuff really died in the mid 90s.

        • Serapis on 26/10/2015 - 01:02
          +1

          @serpserpserp:

          I still have two of them antique DSE electronics DIY instruction books from yonks ago somewhere. Dad got them for me when I was in primary school. Probably parent's house bookshelf.

    • kywst on 21/10/2015 - 19:25

      While the Woolworths group certainly has the necessary buying power they do lack the long standing market presence that Bunnings benefits from. Simply put, Bunnings have been in the game longer and as a result have better contacts, exclusive line options and the standing to reassure suppliers that they are in it for the long haul which makes them a better long term prospect.

  • samfisher5986 on 21/10/2015 - 14:39

    Someone can correct me if I'm wrong, but I feel like Bunnings have been putting out so many insanely cheap "craftright" products because of masters.

    I can't imagine it staying cheap without them.

    • kywst on 21/10/2015 - 19:21

      Straight out of China. You're right though … I picked up a set of chisels dirt cheap at about $10. Great butcher chisels indeed.

      • Arw on 21/10/2015 - 20:17

        And guess where Masters stock comes from? Shipping containers full of cheapness from China!

        • kywst on 21/10/2015 - 20:18

          No argument there but Bunnings does seem to provide a better quality "Chinese product" for less.

        • serpserpserp on 26/10/2015 - 11:56
          +2

          Both Bunnings and Masters are full of Chinese products, what is your point?

    • chumlee on 18/01/2016 - 18:37

      You're correct. Hard to go past the craftright stuff when you just need something for a one off like the 100mm holesaw I needed. It was much cheaper to buy a set of craftright holesaws which had a 100mm holesaw then to buy a single 100mm name brand holesaw.

  • Schezwon on 21/10/2015 - 15:28
    +2

    The store looks better at Masters, but I always find the tools and range are better at Bunnings. I buy from whoever have the best deal and price on the day. 8/10 times Bunnings wins me over and its way closer.

  • eatwell365 on 21/10/2015 - 19:22
    +1

    Hi Woolies CEO, Free advice again. Don't forget to provide discount codes exclusive for oz bargainers.

    Offer $50 voucher for $100 online purchase masters and click and collect from woollies.

    Also, delivery to local area (construction sites) twice a day.

  • ms_caz on 21/10/2015 - 20:47

    Brand sparkling new Masters situated directly next door to tired old Bunnings in Cranbourne (south east Melbourne suburbs.) I'm fairly sure we can only sustain one of them. It will be interesting to see which one.

    • StingyBritches on 22/10/2015 - 07:59

      Brand new Bunnings directly over the road from Masters in Springfield, Queensland also!

  • FirstNameLastName on 21/10/2015 - 21:44
    +10

    The answer to the OP question 'will bunnings raise prices if masters exits' is hidden in plain sight in the bunnings motto: "lowest prices are just the beginning.."

    • Gnostikos on 26/10/2015 - 14:28
      +1

      "lowest prices are just the beginning.."

      Illuminati confirmed.

  • rigby75 on 22/10/2015 - 08:05
    +1

    I'm in Penrith nsw we have 2 bunnings and a master's due to open in the coming weeks,I will be giving master a good try if masters fails it will mean higher prices for all hardware.

  • hazzad on 22/10/2015 - 08:14
    +1

    Dunno about other states but most masters in Vic are located either directly across the road from a bunnings or within a minute or two. Always thought it was an intentional thing for them to open next to each other.

  • FirstNameLastName on 22/10/2015 - 09:17
    +2

    Well apparently we have 49 hardware stores per million people.. 1 and a half times USA saturation.. When you are out-saturating USA you know have gone too far..keanu reeves style

    http://m.smh.com.au/business/retail/bunnings-growth-at-risk-…

  • victorheaven on 22/10/2015 - 12:15

    Bunnings' locations are just much better in Sydney.

    All the masters stores are located in the west and nothing on the eastern side where more wealthy folks are. Maybe it is to do with costs, but I recon it is a poor choice.

    I hope some other companies can take over and open a few stores on the other side of the city.

    • serpserpserp on 23/10/2015 - 11:46

      There is no land for a reasonable price in Eastern Sydney to put a big Masters on. The Bunnings on Clovelly Road isn't much chop because it is too small.

  • IzzyBlues on 22/10/2015 - 12:18
    +2

    I work for Masters as a casual.

    The managers have stressed that they are going nowhere and they are hear to stay, so take from that what you will.

    • SlickMick on 23/10/2015 - 09:48
      +7

      Are you looking for a new job? Just curious what you make of what your managers are saying. I can tell you that they never gives a heads up that you'll be losing your job. They'll say that until the day they tell you something else.

      • IzzyBlues on 25/10/2015 - 19:38

        Yeah I'm keeping an eye out for some jobs. Personally I'm trying to find some full-time work but with graveyard hours so I can continue to study full time during the afternoon.

    • Serapis on 26/10/2015 - 01:05

      I can think of two reasons:
      No. 1. Morale, they can dismiss you without notice so no point letting you know the ship is sinking until it has sunk. Probably directives from above.
      No. 2. They themselves are delusional.

    • [Deactivated] on 19/01/2016 - 17:21

      Like the managers would know. They are only saying that so you guys don't all walk out and leave them with an empty warehouse in the remaining weeks before the company is wrapped up.

      I think what is likely to happen is that Bunnings will buy the Masters that are not in the catchment areas of their own stores, and rebrand them, and the Masters that are directly opposite a Bunnings or in the near vicinity will be shut down and sold off.

  • winterseed on 22/10/2015 - 12:47

    Did anything drastic happen with Bunnings prices when Masters came along? I don't see why anything drastic would happen when they go.

    When I saw that they might shut down all I though was 'closing down prices on everything at Masters'. When Woolies did that huge reduction on their product range 5 or 6 years ago that was a glorious time for bargains. Love me some orange tags. I will miss Masters though.

    • hellbound on 22/10/2015 - 16:55
      +5

      Bunnings did increase the number of floor staff when Masters started making an impact.
      They also have a policy to upgrade a store to have air-con when a Masters opens nearby.

  • roadsign on 22/10/2015 - 13:10
    +4

    I've never even seen a Masters before. Source: Perth.

    • cheesecactus on 22/10/2015 - 13:19
      +2

      Because their locations are pretty average.

      Pretty much nothing until you start going further out of perth

      • ilikeradiohead on 22/10/2015 - 14:03

        I think there are like 8 in the metro area, with the closest to the CBD being Bayswater or Bibra Lake?

  • cheesecactus on 22/10/2015 - 13:15

    Bunnings recently bought a harvey norman.

    Really odd location, but they've made it work. There is even another bunnings store a 5min drive away (which bought a supermarket and a foreign arts store and expanded into those).

    Theyre buying up everything.

  • ilikeradiohead on 22/10/2015 - 14:07

    Like many have said above, I'd have to drive past several Bunnings to get to a Masters. In Perth, the locations are really weird, I don't think any are near a Bunnings either.
    There seem to be a lot of media reports (well fairfax mainly for some reason) that is predicting the death of Masters. Now I don't know what will happen, I think as a whole consumers are better off with two large hardware chains rather than one (though we'd be better off with four or five really), but it is a decision that is up to Woolworths, and the continual losses will be putting them under pressure to turn it around.

  • Karlos101 on 22/10/2015 - 16:44

    i have a bunnings 5 minutes down the road and a stratco even closer if im in a pickle. masters has some cool stuff which i like, but both masters stores in Adelaide are over 30 minutes away from where i live and im still in the main suburbs of Adelaide.

  • cvas on 22/10/2015 - 17:53

    BBC hardwarehouse is way better than bunnings or masters

    • Baysew on 23/10/2015 - 09:36

      That maybe so, but Bunnings is the owner.

  • zealmax on 22/10/2015 - 18:41
    +1

    I like Masters, underdogs appeal to me.

    • dimplex89 on 22/10/2015 - 20:57

      hows that working out for ya ? lol

  • gstfree on 22/10/2015 - 18:42

    I have very bad customer service experience in Masters.
    It refused to exchange faulty LED light 2 weeks after purchase. (She asked me to go for manufacturer to make any claim) When I asked name of the staff for complaint, she told me verbally but refuse to spell. I feel the service was rude.This happened when Masters opened its door a few years ago.

    For my local bunnings, the faces I saw 5 years ago I still see them today.

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