Woolworths’ home improvement plan a setback for small business

A spate of Woolworths home improvement stores opening across Victoria will have dire consequences for the small business sector, according to small business lobbyist Peter Strong.

Strong, executive director of Council of Small Business of Australia, says hardware businesses will have to up the ante if they are to compete with Woolworths and Bunnings.

Earlier this week, Woolworths announced its plan to establish 10 Victoria-based home improvement stores within the next 12 months, generating 1300 jobs.

The store sites are Coolaroo, Burnside, Preston, Hawthorn East, Oakleigh South, South Morang, Mornington, Wendouree, Knoxfield, and Carrum Downs.

The move has the support of the State Government, with treasurer John Lenders saying the new stores will help ensure Victoria remains the “economic engine room of the nation”.

But Strong says the development will come at a cost to small business, trades people and consumers.

“The ABS released some figures last week showing there’s been a decline in the number of businesses in Australia,” Strong says.

“The impact of Coles and Woolworths over the last two decades [and] the very poor management of our competition policy by government and the ACCC has resulted in that decline.”

“If there’s a decline in the number of businesses, then there’s a decline in choice. If [Woolworths] drives out other competition, then [their] prices go up.”

Strong says Woolworths’ one-stop shop concept will lead to a parking issue, particularly for trades people who often purchase supplies on the run.

“If you’ve got to go into a large car park, it’s going to add at least 20 minutes to your day. Time’s money.”

He says if independent hardware stores are to survive, they will have to invest in a good venue and provide a specialist service.

“The light at the end of the tunnel is if people can specialise and be sensible with the advice they give; tradesmen and the cluey home renovator will continue to go to those [stores], providing they can get parking and the salesperson has good knowledge,” he says.