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Bunnings slams the kitchen door on rival Woolies

HARDWARE giant Bunnings is opening a new front in the battle for the home improvement dollar, denying incoming competitor Woolworths the opportunity to exploit a gap in the market.

The Wesfarmers-owned chain has begun stocking ovens, cooktops and rangehoods to complement the kitchen range it introduced in 2007.

Bunnings managing director John Gillam said he hoped to capture 14 per cent of the kitchen appliance market, in line with Bunnings' stake in the overall " home improvement and outdoor living" sector.

With Australia's annual sales of kitchens and associated appliances estimated at $4.6 billion, such a market share would translate into about $640 million in annual revenue for Bunnings, where sales in 2008-09 amounted to $5.8bn.

The new range marks a continued expansion into the home improvement category for hardware chain, which has also added floor coverings, landscaping and pool fencing to its product offering in the past five years.

In broadening its product range, Bunnings has reduced the scope for Woolworths and joint venture partner Lowe's to lure shoppers to their new big-box hardware chain, scheduled to open its first store in late 2011.

Woolworths hardware boss Don Stallings said last month that his new chain would satisfy unmet needs in the Australian home improvement market, but declined to specify where these gaps might be found.

Woolworths has also hinted that its hardware chain may seek to lure new customers by having a more female-friendly atmosphere than existing competitors, but the size of the market opportunity might not be as great as they had hoped, with Mr Gillam saying yesterday that more than half of Bunnings' customers were female.

Mr Gillam said he did not expect that Bunnings would have greater difficulty in finding appropriate locations for new stores, despite Woolworths' stated intention to secure 150 sites within five years.

"It's always been pretty competitive ... there's lots of people who fight over good sites -- it's never a binary issue," he said.

Mr Gillam said Bunnings had recorded a 15 per cent rise in retail sales during the first two months of the new financial year, excluding the benefit of new store openings.

But he warned the strength of the company's performance was exaggerated by comparison with relatively weak sales for the same period a year earlier, and sales growth for the full year was expected to be more modest at between 5 and 9 per cent, excluding new store openings.

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