Bunnings is killing it

Sergio Dionisio/Getty Images

Wesfarmers held its strategy day this week, showcasing its businesses and talking about future plans.

Many parts of the diverse Wesfarmers business are facing challenges. But one is doing just great: Bunnings.

Within the long presentation is this chart showing the annual growth rate for the hardware store network:

It’s quite a growth story.

Wesfarmers says this will continue, with some so-called “megatrends” helping to ensure there will be continued growing demand for all the stuff Bunnings sells.

They’re a lot of the themes that you hear about in general discussions about the future shape of the Australian economy.

Bunnings MD John Gillam says the trends are:

  • Population growth and urbanisation
  • Sustainability and energy efficiency
  • Ageing population and independent living needs
  • Technology: automation and intelligence for homes and gardens
  • Continual innovation across the whole spectrum of the HIOL [home improvement and outdoor living] market, worth about $46 billion.

So, more people living in cities, the rise of energy efficiency, the population ageing and the arrival of the Internet of Things – all of these are forces that Bunnings is watching carefully and positioning for.

Bunnings has 232 stores and plans another 15 to 18 in 2016 and 2017. By 2019, the plan is to have 1.5 million households just a 20 minute drive from a Bunnings store.

Hardware brought in $4.959 billion in revenue for the six months to December, an 11.8% increase, for Wesfarmers.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.