Bunnings Warehouse has long been the go-to destination for tradies, DIY enthusiasts and gardeners across Australia. With 310 big-box outlets nationwide, the retailer’s aggressive expansion strategy has delivered phenomenal sales growth and enviable brand recognition. Yet behind the scenes, evidence is emerging that Bunnings uses its market power not only to capture customers—but to block would-be competitors from setting up shop nearby. Exclusive lease clauses, supplier rebate demands and outright acquisition of key sites have left smaller hardware retailers struggling to survive.
Bunnings routinely negotiates “exclusivity” provisions into the leases of retail precincts where it already has a store. These clauses prevent other hardware or tool-specialist operators from leasing space in the same centre, effectively granting Bunnings monopoly control over large swathes of the market. While supermarket chains Coles and Woolworths were forced to phase out similar restrictive covenants under an ACCC enforceable undertaking in 2010, Bunnings remains outside the same regulatory regime—despite many analysts arguing it wields greater market power than the supermarket duopoly.
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Exclusive Lease Clauses: A Barrier to Entry
Leasing agents across New South Wales, Queensland and Victoria have told independent retailers that, “Bunnings have exclusivity in the centre for tools,” or that “all tool operators” are barred from a new Homemaker Centre because of existing agreements with the hardware giant. Four Corners obtained emails showing at least three separate locations—on the Central Coast, the Gold Coast and in Melbourne—where prospective competitors were quoted clauses in Bunnings’ contracts lasting up to 10 years.
Hardware industry commentators argue that these leases go far beyond simply protecting Bunnings’ investment. “In practice, they lock out any serious rival from setting up in the same trade-focused precinct,” says retail expert Professor Clinton Free of the University of Sydney Business School. “The net effect is that independent stores can’t reach the same catchment of trade and DIY customers who expect to find everything under one roof—in Bunnings.”
Case Study: David Woodman’s Mitre 10 vs. Bunnings Warehouse
No one knows this dynamic better than Brisbane-area hardware store owner David Woodman. His family has run Mitre 10 stores for 90 years; in 2019, Bunnings purchased the vacant block directly adjacent to his Jimboomba outlet and won planning approval for an eight-times-larger warehouse. “They really want to put us out of business,” Woodman says. “I can only imagine that’s their plan.”
With three existing Bunnings stores within 30 kilometres—and another opening next year—Woodman estimates he’ll lose so much trade that his independent store becomes unprofitable. He has briefed competition lawyers about a potential “misuse of market power” suit, but legal experts warn such cases are complex and expensive. For now, Woodman is preparing for what he fears may be inevitable closure.
Supplier Squeeze: The Worm Farmers’ Story
It’s not only rivals on the retail floor who feel the pinch. Suppliers too have been buffeted by Bunnings’ dominance. George and Katherine Mingin ran a live-composting-worm business in regional Queensland for eight years, selling over $1.3 million worth of product annually to Bunnings. But as COVID-related cost pressures mounted, their margins evaporated. When they requested a price increase, Bunnings put their contract out to public tender.
Despite the Mingins charging Bunnings just $29.94 per packet (sold in-store for $49.90), they were saddled with volume rebates of up to 22 percent on top of the already low wholesale price. Within days of losing the re-tender, they were forced to wind up deliveries—and received a final $5,000 rebate bill from Bunnings. “It was highway robbery,” George says. “We lost three-quarters of our business overnight.”
The Supermarket Precedent and Regulatory Gap
In 2010, the ACCC forced Coles and Woolworths to surrender their restrictive lease covenants—banning them from preventing rivals from entering retail precincts. Yet similar protections on Bunnings remain untouched, even though many argue the hardware sector is just as concentrated. Market research firm IBISWorld estimates Wesfarmers’ share of the hardware retail sector at 33 percent, dwarfing any single supermarket chain.
Treasurer Jim Chalmers has hinted that the new Competition Act, set to take effect next year, could empower the ACCC to review not only mergers and acquisitions but also the impact of lease agreements and large land purchases on competition. “Our primary focus has been supermarkets,” Chalmers said, “but we have given the ACCC the resources to recommend if a broader code of conduct is warranted.”
From Rapid Expansion to Appetite for Acquisition
Bunnings did not always dominate. A decade ago, the group had just 47 stores and $1.4 billion in revenue. Through acquisitions of McEwans (1993), BBC Hardware (2001) and various specialist chains (tiles, trusses, tool hire), it has built a national footprint and adjacent New Zealand presence. Today, Bunnings Group turns over more than $18 billion annually and is responsible for creating nearly 5,000 jobs each year.
When approached, Bunnings said exclusivity agreements are used “only on select occasions” and typically last for no more than a decade to safeguard its sizeable capital investments. The company insists each new store increases local competition—citing lower prices, extended opening hours and local job creation. “We engage with the ACCC on all major developments,” a spokesperson said.
Smaller Players Face an Uphill Battle
Independent hardware retailers complain that even where Bunnings does not directly block them through a lease clause, the chain’s scale allows it to undercut prices on key lines, leverage large-volume rebates from suppliers, and cross-subsidize loss-leading categories. “They beat it by 10 percent or more on everything from paint to power tools,” says one former Tradesman at a collapsing store.
Home improvement precinct owners say they are caught in the middle. Leasing agents acknowledge that Bunnings exclusivity demands are often non-negotiable: a single “no” from Bunnings can jeopardize an entire centre’s viability, since Bunnings drives foot traffic for peripheral businesses.
What’s Next? Competition Code and ACCC Oversight
When the new competition laws kick in, the ACCC will gain explicit power to examine large retail leases and land acquisitions for their impact on competition. Industry sources expect Bunnings’ expansion plans will face greater scrutiny, particularly in hotly contested growth corridors.
Professor Free argues that the ACCC should extend the supermarket code of conduct to cover any dominant retailer with a market share above, say, 25 percent. “Whether it’s groceries or hardware, the principle is the same: consumers and smaller businesses deserve a level playing field,” he says.
David Woodman hopes regulators will act before it’s too late. “If Bunnings continues like this, Australians will have no choice but to shop there—and service and local knowledge will vanish,” he says. “Competition isn’t just about price; it’s about choice, quality and community.”
As Bunnings prepares to open its Jimboomba megastore next year, the hardware world—and the regulator—will be watching closely to see if Australia’s most trusted retail brand can maintain its growth without trampling on competition and consumer choice.
