Hardware and Building Supplies Retailing in Australia Industry Market Research Report Now Updated by IBISWorld

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The fallout from the global economic crisis and a constrained housing market continue to put pressure on the industry. For this reason, industry research firm IBISWorld has updated its report on the Hardware and Building Supplies Retailing industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

A constrained housing market has lead to increased home renovations and DIY work.

Hardware retailers have faced ups and downs over the past decade, reflecting the cyclical fluctuations in key economic variables such as household income and consumer sentiment, and trends in home renovation. The Hardware and Building Supplies Retailing industry is expected to grow by 2.2% in 2013-14 to $13.0 billion, stemming from improved spending on home renovation and growth in household construction. However, over the past five years, industry revenue is projected to display subdued growth of an annualised 1.3%. Following the onset of the global financial crisis, uncertain conditions led many consumers to cut back expenditure, especially on costly home renovations and alterations. IBISWorld industry analyst Anthony Kelly states, “Despite constrained growth, the industry has captured a greater share of the total building supplies market by bypassing wholesalers and sourcing products direct from manufacturers and importers, thereby encouraging trade customers to deal directly with retailers.” Popular television shows such as The Block and House Rules have given many Australians an appetite for renovation, with a huge DIY boom underway. According to Kelly, “Uncertainty in the property market has created a disincentive to purchase new dwellings, and therefore many homeowners prefer to renovate in order to improve their quality of living and to boost the value of their home.”

The industry is forecast to record solid growth over the next five years, reflecting the stronger demand conditions in the household renovation market and buoyant trends in household disposable income and consumption. Competitive pressures are expected to weigh on profitability in the short term. The size of the industry should grow steadily as Bunnings spreads its network and Masters attracts customers from other specialist hardware industries.

The Hardware and Building Supplies Retailing industry is characterised by a moderate level of market share concentration. Hardware retail chain Bunnings has significant dominance over the market. However, the industry also consists of a large number of smaller, independent operators. The industry’s major players are Wesfarmers (Bunnings), Woolworths (Masters, Thrifty-Link, Home Hardware) and Metcash (Mitre 10). The competitive landscape of the industry is about to be transformed with Woolworths positioning itself to become a large operator through the rapid expansion of Masters stores. Woolworths plans to open 150 Masters stores by 2014-15 in addition to the existing Thrifty-link and Home Hardware stores. In comparison, Bunnings operates 277 stores and is planning to open a further 18 stores over the next couple of years to protect is position in the market. The rapid rollout of Masters stores and the expansion of Bunnings will result in industry concentration increasing significantly over the next five years. For more information, visit IBISWorld’s Hardware and Building Supplies Retailing report in Australia industry page.

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IBISWorld industry Report Key Topics

Firms in the industry primarily retail hardware and building supplies to households, tradespeople and businesses. These retailers stock a range of goods including hardware, timber, tools and equipment, paint, plumbing supplies and garden tools. The industry excludes garden supplies such as plants, seeds and soil.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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