The hardware market is breaking away from the bulky goods sector following a wave of new warehouse developments. Photo: Paul Jones
STRONG growth in hardware store developments, including the entry of Woolworths' new Masters chain, is seeing hardware emerge as a separate sector of the retail market.
According to research by Colliers International, the hardware market is breaking away from the bulky goods sector following a wave of new warehouse developments across the country.
The Colliers National Retail Forecast and Research Report Q2 2011 shows 80 sites have been secured so far by Woolworths and US partner Lowes for their new chain of Masters hardware stores.
There are 14 Masters stores under construction, with up to 20 stores set to open next year at a cost of about $20 million to $25 million and an average size of 13,500 square metres.
In response, Bunnings plans to open 18 new outlets in New South Wales over the next three years at a cost of about $600 million.
Mitre10, which is testing a combined supermarket and hardware store concept, is planning to open 40 stores in the next few years, primarily in regional areas.
Colliers' retail investment services director, Lachlan MacGillivray, said the entry of Woolworths into the hardware sector was expected to trigger fierce price competition.
''Masters will compete not only with Bunnings and Mitre 10, but also with traditional homewares, appliance and specialist retailers such as Reece, Tradelink and even IKEA.
''Property and land prices may face some upwards pressure … as retailers search for large warehouse-sized blocks.''
Colliers' director of research, Nora Farren, said the hardware warehouse format was becoming a popular retailing concept with consumers and investors.
''The hardware sector appears to be polarising, moving away from independents and buying groups towards big-box stores and specialists.''
According to the report, the hardware, building and garden supplies sector turned over $12.83 billion in the year to April 2011, showing annual growth of 1.9 per cent and contributing 5 per cent to total retail sales.
NATALIE PUCHALSKI
