The Hardware and Building Supplies Retailing Industry in Australia has experienced moderate growth in the past 5 years. The trend is expected to continue at a rate of 2.7% through 2019, reaching an estimated $21.6 Billion. IBISWorld market research reports that significant changes in large big-box operations entering and leaving the industry as major players has caused structural changes to the industry. Competition has involved to promoting hardware and building supplies.
With the slowdown in the real estate sector, homeowners are turning in greater numbers opting for do-it-yourself projects rather the purchasing new homes. Individual owners tend to enjoy online sales and have sparked online sales causing an explosion of online sales and DIY projects. Industry leaders have turned to promoting these highly profitable trending projects. Sales have skyrocketed for tools, supplies and materials. Companies like Ambler Direct are one of many Australian companies working to earn your business, meeting your needs with the highest quality customer care. They service all areas of the industry, including DIY projects.
According to the Australian Government business sector, businesses in this industry sell hardware, timber and building products, including tools, bathroom and kitchen accessories, paint and garden supplies. Statistics show that the average cost per item sold is 88%. Product cost is an average of 62%, labor costs of 14%, 6% for property rent or acquisition with the balance for transportation, advertising and other costs. Smaller business pay slightly more on average with larger big box stores trying to use their purchase strength to reduce costs slightly.
Experts report that owner households undertaking new DIY home improvement renovations and repairs have benefited the industry but predict this trend will cause a further slowdown in new building projects affecting the industry bottom line. Higher competition among wholesalers and retailers is likely to further lower profitability. Lower profitability will affect government tax coffers causing officials to seek methods to increase profitability of this industry overall in the future.
The advent of the rising number of DIY improvement projects is expected to increase labor costs and capital improvement costs for retailers. The need for more shelving for individual customers compared to supplying larger contractors will require more expenditure for physical shelving and space expansion plus increases in the number of carts and baskets, these may appear insignificant expenses but can add up to 10¢ increase in costs per item. More shoppers at already labor-intensive supply stores increases the need for more employees. The retail hardware industry is labor intensive requiring pointing customers to products and having knowledgeable employees to explain products and their operation. Online sales require more pickers, packers, shippers and the cost of packaging materials.
Growth in sales of hardware, tools and equipment, power tools, plumbing supplies, paint and paint supplies, lighting fixtures, bathroom and kitchen remodeling, flooring, window and door replacements, garden and outdoor products, tapes and adhesives, lumber and building materials and countless other inventory must be diligently tracked and replaced timely. Non-moving items need to be sold and popular items need to be advertised to bring customers away from the competition. Not an easy task for this competitive industry.