Woolworths and the hardware sector
The retail market for hardware in Australia was fundamentally altered by the introduction of Bunnings in 1994. The entry of this company, with its ambition to provide customers with the widest range of home improvement products at the lowest price, signalled the demise of the local, privately-owned hardware store. Bunnings, now owned by the Wesfarmers Group, has been a phenomenal success. In 2007–08, sales reached over $5.3 billion. Bunnings employs over 26 000 employees, working in over 230 warehouses and stores.
At the same time, Woolworth's senior management has been searching for a possible avenue of growth in the retail sector in Australia. For some time, there has been discussion about the possibility of Woolworth's entering the retail hardware market. In August, 2009, Woolworths announced its intention to enter the retail hardware market in Australia. Woolworths will enter into a joint venture with the American hardware powerhouse, Lowes, to compete against rival stores in the $20 billion retail hardware market. The joint venture company will also look to acquire existing hardware retail chains, such as Danks.