Price wars challenge Bunnings model

PERTH, Australia ― A price war in the British DIY market could put a wrench in Bunnings’ intended “everyday low prices” model, The Australian reports. A report by British retail consultants mdj2 suggests a trend toward compressing price margins, leaving less room for differentiation among competitors.  “Homebase generates a major part of its revenues from showroom categories that are notoriously difficult to move to an [everyday low price] approach when customers are used to constant ‘50 per cent off’ promotions,” the report states. Bunnings parent Wesfarmers bought the struggling Homebase chain for $704 million this year and plans to spend up to %1 billion converting its stores to the Bunnings banner.