Will Amazon capitalise on Bunnings debacle?

Reports surfaced last week that one of the world’s largest online retailers could be set to take advantage of the Bunnings UK and Ireland fiasco.

Since Bunnings withdrew from the UK market and sold Homebase for a nominal £1, the new owners – Hilco Capital – unveiled plans to close a quarter of its stores.

Now, according to reports from the likes of The Daily Telegraph, Amazon has made “aggressive” bids for the closing Homebase stores, with a view to using the sites for warehousing.

If the reports are true, then Wesfarmers’ failure to carve a share of the UK DIY sector – one of the top eight DIY global markets in the world and top three in Europe – and its sluggish moves into online retail have paved the way for Amazon to strengthen its position in the UK.

There is evidence that Amazon is squeezing the online shops of DIY chains in a number of markets. The DIY industry trade is largely sceptical about the shift from bricks & mortar to online retail.

Separate to the Homebase rumours, Amazon had planned to open four fulfillment centres in the UK in 2018, in Rugby, Bristol, Bolton and Coventry.

Bunnings bought the Homebase brand in 2016 for £340 million.