The Wesfarmers Board Visits Germany

The board of Wesfarmers is understood to have been touring the DIY stores of Germany,  reportedly to observe innovation and trends in the market.

Wesfarmers CEO Rob Scott and Bunnings MD Mike Schneider were among the group which visited chains including Bauhaus, Hornbach and Obi, according to the Australian Financial Review. 

Wesfarmers is unlikely to be shopping for a new acquisition in Germany, having pulled out of the UK and Ireland just over a year ago, following after a disastrous attempt at transplanting its Bunnings DIY business into Homebase. 

The group is believed to be looking for ways to grow its market share in Australia, as the country's housing market slows off the back of a more than ten-year housing boom.

Bunnings currently represents almost half of the Wesfarmers' sales and 59% of group earnings, following the demerger of the Coles chain last year.  In two years, Bunnings is expected to be contributing around 64% of the group's profits.

Wesfarmers acknowledged that trading was becoming tougher at last month's strategy day but believes there is an opportunity expand into new categories, including smart homes, assisted living, commercial cleaning, petcare, soft furnishings and storage.  Furthermore, Bunnings is looking to extend its trade and commercial reach.

From an e-commerce perspective, Bunnings lags a long way behind its European peers and has only recently begun to invest more into digital technology.  Despite having one of the most visited shopping websites in Australia, Bunnings only introduced online ordering in June 2018, and even then only on select items in certain geographical areas. A fully transactional website is expected to be available by Christmas.

Source : Insight DIY Team

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