Bunnings Early UK Struggles Are Just The Beginning.

Recent announcements have indicated that Bunnings is struggling with the introduction of its brand and business model into the United Kingdom retail market. Some have taken those announcements as an opportunity to criticise and in the worst cases, call for the premature abandonment of the expansion plans. They point to similar criticism of Woolworths’ disastrous Masters play which they claim they called as a failure from day one – a claim I for one dispute both in the timing of the call and that Masters was destined to be a failure. It was not.

In truth, Bunnings early UK struggles are just the beginning.

They will struggle for some time to refine the model and adjust the formats to that market and the many nuanced sub-regions that are entrenched across Great Britain and Ireland. But it is a struggle worth having. As any good retailer knows, every store is different. Every region is different. Let alone a new country with an established context that takes time to adapt to. A good store manager changes the performance of store, let alone adjustments in range by location and a whole host of the moveable parts we have in retail.

There are two critical reasons why Wesfarmers play with the growth of Bunnings must work for Australian retail.

Firstly, expansion in retail takes time. Something modern markets seem increasingly belligerent about not extending because investment horizons are so short term. The thing that impresses most about the leadership at Wesfarmers is self-determination and strong strategic principles. They don’t get swayed by noise. They prepare well, develop sound strategies and allow tactics to flow and adjust as the business needs. They allow the correct amount of time for the business to evolve to meet their internal objectives. And they don’t panic. You cannot escape the realities of needing time for new business initiatives to mature.

The second critical reason Australian retail needs this play to work is because the future of Australian retail rests on an outward view of the world not an inward one. Our historical viewpoint has been the ‘island mentality’ of seeing retail goods and services being brought to Australia. That has resulted in the biggest retailers in the world increasingly taking market share in our domestic market at the expense of locals as they reach over distributors.

Our future is in building retail product sets and retail models that can take on the world not only here but in their markets globally. World class means you can win anywhere, not just at home and the future of all retail will be dominated by being world class first.

Wesfarmers should be applauded not criticised. They should be seen as the advance guard of a new era of Australian retail businesses building whatever it takes to compete on the world stage because hiding in Australia is no longer an option. The world is now one great big interconnected marketplace whether we like it or not. And it’s about time we took more than our fair share. We have the talent. It’s time to back the right people, with the right thinking, with right capabilities to take on the world. And win – big!