>
An irate small business owner criticized Bunnings for killing off mom-and-pop stores after the hardware giant announced it was vastly expanding its range of pet products.
Bunnings will expand its range of pet products from a few hundred items, including dog beds and kennels, to 1,000 products across its nationwide network by the end of March.
The move is likely to be a boon for Australian pet owners, as the grocery chain is already popular for its convenience, affordability and its famous Saturday sausages.
However, business owners have accused Bunnings of bankrupting the industry, and experts have warned that big box stores have an unfair legal advantage over small businesses in the “war” for customers.
Emmanuel Devo’s family have owned Junction Pet’s Pantry in Sydney’s Bondi Junction since the 1970s, but it is now due to close in four weeks.
“The problem with all these big companies is that they are reducing the diversity of the industry,” he told Daily Mail Australia.
“We used to have more vendors offering more specialty products.”
Bunnings will expand its range of pet products from a few hundred items, including dog beds and kennels, to 1,000 products across its national network by the end of March (file image)
Bunnings’ latest move is likely to be a boon for Australian pet owners, as the department store chain is already popular for its convenience, affordability and Saturday’s famous sausages.
Emmanuel Devo’s family have owned a pet shop in Sydney’s Bondi Junction since the 1970s, but it will now close in four weeks.
“Now they don’t have enough small stores to sell specialty items, so those products just aren’t available.
‘You have to sell special products, you have to give people a reason to come into your store. Companies like Amazon offer free delivery options, we can’t compete with that.
“They have these systems that scam employees for offers, like free deliveries.
They have the illusion of cheapness.
His cousin Spiros Gial has also seen his small business collapse recently.
Mr. Gial’s family had owned a store in Maroubra since 1952, but the developers have now bought it after a long legal battle.
“These stores used to buy property, now it’s hard to make ends meet,” he said.
Consumer experts also warned that the expansion of so-called big box stores could spell trouble for smaller retailers.
Andrew Terry, Professor of Business Regulation at the University of Sydney Business School, told Daily Mail Australia: ‘When Bunnings comes to town, it’s bad news for local businesses.
Junction Pet’s Pantry has been in Sydney’s Bondi Junction since the 1970s, but will close in a few weeks.
Several consumer experts also warned that the expansion of so-called big box stores could spell trouble for small businesses.
‘Local businesses look to our laws to protect them, but the reality is that they are not there to protect small businesses. They are there to improve consumer welfare and competition, and this allows companies like Bunnings, Coles, and Woolworths to prosper and win more customers.
‘Bunnings has done very well with their Saturday sausages and they are very smart with their market research. They know what to do for their market and brand.
‘It used to be that small businesses would be open longer and have that personal relationship with customers. However, now you have extended business hours and special offers and promotions from the big brands.
‘At the end of the day, the market is war. It’s a war for the customers and they want to win that war. It’s all about competition and by introducing 1000 new lines of pets, Bunnings wants to win.”
His comments were echoed by several other experts, calling on the government to ensure there is more protection for small businesses against sprawling giants like Bunnings.
Sharon Latour, international consumer and marketing consultant, said the Australian market favors larger companies.
“The way the Australian market is structured favors big brands like Bunnings as business expansions are combined with big property investments and sadly means smaller private labels are left out of the market.
“The cost of doing business and the tax scheme for smaller businesses is stifling for all industries in Australia, which is why our manufacturing is dying and our hospitality businesses are closing by the dozens every day.
‘There has to be reform to allow smaller companies to breathe a little and be able to compete, otherwise we will continue to see the Bunnings of the world take over entire sectors.
‘The future of Australia is big business and chains? The number of “for rent” signs in all major cities certainly points to that.
However, some have suggested that the pet industry will adapt and prosper in light of Bunnings’ expansion.
Anthony Ramsey, president of the Australian Pet Industry Association, believes that pet retailers are less threatened than they fear.
While the move is likely to be a boon for Australian pet owners, there are fears it could pit the huge chain against smaller specialty pet stores.
“It is no surprise that Bunnings has decided that he wants a piece of the $13 billion pie that is the Australian pet industry.
“The spread of large corporate companies operating chain stores and online-only pet supply retailers has already seen a significant reduction in the number of independent pet businesses over the past 15 years.
‘Those that have survived have done so because of their points of difference, being their service, advice, range, product quality and the sales experience in the store. Bunnings is highly unlikely to compete with these types of companies that are already so good at what they do.
“I imagine Bunnings will target the consumer who already shops at large chain stores, not independent stores. Independent pet businesses also have the ability to sell pets to families, whether it be a budgie, puppy or kitten, guinea pig, lizard, or fish.
“This is one more bowstring for many independent pet stores and a corporate business that will never be able to compete with specialty pet retailers.
“Overall, while I can appreciate the concerns some companies may have seeing Bunnings enter the pet industry, I truly believe they are much less of a threat to their business than they may think.”
Graeme Samuel, former head of the ACCC, also said pet companies have less to fear than they think.
Bunnings boss Mike Schneider (pictured) said the new direction is in line with the rise in pet ownership over the past three years.
He said: ‘They are all course horses. Small businesses will adapt, they always have. Consumers will have to weigh whether they want to pay a little more for a more personal service or pay less for convenience and ease.
‘There will always be a bakery or a butcher or a grocery store near these chains that will be popular.
That’s the trick with these places. They know that customers who want a more personal touch will come to them, while some people will want the convenience of places like Bunnings.’
This is not the first time Bunnings has been accused of shutting down smaller businesses.
In 2015, a GDC Advisory forecast blamed Bunnings and other big retailers for the collapse in the number of hardware stores in Australia.
The forecast suggested the number of hardware stores in Australia would fall from 20,920 to 14,050 over the next 10 years, with 6,142 independent retailers closing by 2024.
Speaking at the time, GDC Advisory director Geoff Dart said Bunnings, as well as Woolworths and Miter 10, were intensifying competition.
New products to be offered at Bunnings will include dog, cat and bird food and toys that will be housed in a 40 square meter retail space.
Bunnings boss Mike Schneider told Daily Mail Australia that the expansion was not necessarily bad news for small businesses.
“Pets are a really exciting growth category, and we think there’s plenty of room in the market for larger operators and specialty providers,” he said.
“The role of pets is becoming increasingly important to many Australians, and we look forward to joining the range of businesses that cater to pet lovers to offer customers even more choice.”
Schneider said the new direction was in line with the increase in pet ownership over the past three years.
Bunnings has allowed pets in its stores since 2015, as long as they are carried, leashed or in a shopping cart.