If Australian retailer Wesfarmers closes the deal to buy Homebase, the UK garden and home improvement market will have formidable new competition in short order.

Wesfarmers, whose £340 million offer for Homebase is believed to have blown away rival bidders (including a consortium led by former Garden Centre Group boss Nicholas Marshall) says it will roll out its Bunnings DIY and garden store brand to replace Homebase within five years. 

It could have a big impact on rival DIY chains and larger garden centre groups. The deal is expected to be wrapped up in the first three months of this year provided shareholders of Home Retail Group agree to the purchase.

Bunnings is by far the strongest player in home improvement in Australia, with one analyst suggesting that it controls a 63.9% of turnover in the hardware, home DIY/ plant & garden accessories sector, compared to 8.6% by its closest rival, the Masters group, which has just withdrawn from the hardware market.

Another source said Bunnings had 19% of the total home improvement market – a position secured with a massive marketing investment, including TV, radio and maildrops.

At a supplier meeting last summer, Bunnings was also reported to control 55% of plant sales nationally, with an 80% share in one state.

Leigh Siebler, who runs the Garden Centre Association of Australia, told GTN Xtra this week: “Their Price Match Promise – ‘Lower Prices are just the beginning’ – seems to have won customers over although most know they are not cheap across the board. However, they are well below garden centre pricing in most cases.”

Leigh believes Wesfarmers could find the UK market a tougher proposition, “but don’t under-estimate them”.

The Wesfarmers bid received by Homebase owners Home Retail Group (which is also likely to sell Argos to Sainsbury’s) is believed to be almost double the city’s expectations.

Nicholas Marshall is reported to have said this week the bid was “a knockout blow” for his interest, which had valued Homebase based at around £200m.



Pictures of Bunnings (above): Boyd Douglas-Davies