Westfield Shopping centres in Australia have realised that London is a place where people spend lots of money, and as such, they are in the process of building the biggest shopping centre in England in Shepherd’s Bush (just down the road from where I hope to be living). Damned good investment, in my humble opinion. I think it will be a rip roaring success in both winter (where it’s so damned cold to shop in London) and summer (where the place will have air con).
Now I think there are two more Australian chains who should seriously consider branching out to the gateway to Europe: Dan Murphy’s and Bunnings Warehouse. Now this isn’t just selfish. Yes, of course I would like them both down the road. But there is actually a gap in the market for both retailers here, too.
The only really big chain of alcohol-selling shops in London is OddBins. They are a bit more like Vintage Cellars in Australia, as they tend to have small stores and stock boutique wines as well as cheapies, and they even have their own kind of cleanskin. But there are no real alcohol supermarkets in London. Granted, most people buy their wine at Tesco or Sainsbury’s (something we can’t do in Australia due to licensing laws) but as a result the British palate is relatively … shall we say… ‘immature’. But given the volume of Europeans in London now, and the immense growth rate in alcohol consumption, I think there’s a real opportunity here for Dan Murphy’s to consider expansion of their business in to Europe. Not only would it help the distribution of quality Australian wines, but it would enable Dan’s to carry some reasonably priced European stock both within London and back to Oz. And this is relevant because Australian wines are losing favour here and in Europe as cheaper local product begins to challenge the generally low-priced Australian wine market. In particular, Australia’s generally reasonable discount sparkling wines are bottoming out as the Spanish traditional method ‘Cava’ (a sparkling wine) eclipses them for both quality and price (average bottle of Cava is just £4.50 and can go as low as £3, where even a Jacobs Creek Pinot Noir sparkling cuvee is about £7). Until there is a channel for Australian wines and a venue for both education and competition in the wine market of London, I think Australia’s exports may begin to drop off, no matter how good the quality may be. Dan’s could establish itself here both as an educator about wine quality and as a substantive competitor in the wine marketplace – as it has done at home – through sheer buying power and through offering competition to the shoddy product available at supermarkets and corner stores in the UK.
The other huge gap in the marketplace is for Bunnings Warehouse. Yes alright, I love the store. But it’s not just that. London has only one chain of hardware stores – Robert Dyas – and a whole range of crappy tool and homeware shops that tend to have ill-informed staff and very tiny ranges of products, so you generally can’t learn anything about the marketplace.
Now. Come on. London is *obsessed* with DIY and renovation programs on TV, and there isn’t a facility to support the trend. This is an enormous opportunity for a company like Bunnings to come in and fill a massive gap in the marketplace. Even a single warehouse store would make Londoner renovators salivate. There could be the usual Bunnings DIY training sessions and even the usual sausage sizzle on a Sunday to entertain the masses. But more importantly, all those wood, tool, painting and homeware products would move faster than a speeding bullet out of a London Bunnings store. Plus if there are links established with the local building community, the trade market would also be boosted. Again, I see this as a huge opportunity in London and one which the giant Bunnings chain could afford. A single warehouse even as far out of town as Hounslow or Willesden would be a serious winner in the UK.
There are several more Australian companies I think that would do well here, but I suspect the usual Australian cultural cringe and poor business confidence has blinded organisations from considering London as a business location. We keep focusing on Asia, and not on market weaknesses as influencing our decisions on global expansion. But both Bunnings and Dan’s could afford to invest here, and there is a market for their products. Time to look outside the pacific region for new business, guys. Come here. They’ll love you.