Bunnings' $350m NZ expansion: New warehouses rising, self-checkout coming

Bunnings New Zealand will spend $350 million here in the next five years, unveil self-service checkouts and soon open its largest new store on Auckland's north-west fringe, its boss says.

Toby Lawrance, NZ general manager, revealed plans for the big-box warehouse-style DIY chain, saying two new stores were under construction, others were planned and being refitted or upgraded and customer experience would soon change with scan-and-go checkouts.

"Aspirations for us in the next two to three years are $175m of work but over five years, another $175m, making it around $350m and creating about 1200 new jobs," Lawrance said.

"We're building new stores at Westgate and Christchurch Airport and hope to start soon in Queenstown," said Lawrance, whose head office shifted this month from Mt Wellington to Central Park, Ellerslie.

"Self-checkouts will be introduced soon for big stores like Manukau and Botany," he said, telling of four initial counters in those stores. "People think it's putting staff out of jobs. But it's around efficiencies and team members can be redeployed, doing something else.

"All new stores will eventually be self-checkout to enhance the customer experience. Then, we would run a retrospective programme in existing stores."

Bunnings NZ has 55 stores: 22 Bunnings Warehouse, 20 smaller-format stores and eight trade centres. Australasian operations made A$6.9b (NZ$7.19b) revenue for the half-year to December 31, 2018, up 5.2 per cent on the previous A$6.5b.

Mitre 10 made $862m revenue in the year to June 30, 2018, up on the previous $818m. Gross profit rose from $71m to $73m but expenses rose so net after-tax profit fell from $4.4m in the 2017 year to $4.3m last year.

Lawrance said the new Bunnings Westgate at 21 Fred Taylor Dr in north-west Auckland had been long-awaited. At 15,544sq m, that will be NZ's biggest Bunnings, with an estimated completion value of $65m-$67m. Construction is underway and 745sq m of retail tenancies are also being built, making this complex 16,290sq m on completion, with 318 car parks. More than 180 staff will work there.

New Zealand's largest Bunnings now is Riccarton at 15,644sq m, Lawrance said.

Construction is underway of a new $33m Bunnings Warehouse at 661 Russley Road, Christchurch Airport. That 14,105sq m store with have 300 car parks and more than 170 staff, Lawrence said.

The first Bunnings at Queenstown is a $33m venture planned for 148-150 Frankton-Ladies Mile Highway, but consents are not yet granted. Plans are for an 8080sq m project with 138 car parks and about 88 staff.

"There were objections," Lawrance said of the scheme where the business appealed a negative planning decision.

Bunnings won in the Environment Court, getting a ruling saying that rival H&J Smith was closely associated with the Mitre 10 Mega operation, disqualifying it from opposing the new development. The Resource Management Act says the act cannot be used to oppose commercial competitors.

Bunnings Whanganui at 131 Ridgeway St is a small store at just 1241sq m and about 24 staff. So it is being replaced by a new $24m 8545sq m store at 185 London St where about 65 staff will work, Lawrance said.

Stores being upgraded include Botany with a $6.5m spend, Manukau and Nelson. Bunnings' Dunedin and Gisborne stores are being expanded and the new Grey Lynn store was "well-received by the local community and contributing to growth in terms of customer numbers".

Around 200 head office staff moved on Monday from 78 Carbine Rd, Mt Wellington to 660 Great South Rd, taking two floors joined by a new internal stairway. The premises are on a nine-year lease with options.

Many interior design items, including light fittings, are from Bunnings' own stores and Lawrance said that kept costs low, even though it appears more than $1m to shift because computer systems were also upgraded.

Meeting rooms have wood garden trellis decorating walls. Bunnings' red and green colours are incorporated in soft furnishings and paint finishes. A new kitchen/dining area is large enough to hold functions, potentially dispensing with the need for Bunnings to hire venues away from its own office.

Lawrance said the Mt Wellington headquarters were outdated and not in good condition so the shift had been widely welcomed by staff. Videoconferencing in a boardroom will mean fewer trips to Australia, saving money and time, he said.