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Is Bunnings’ Price Guarantee Misleading? The Reality Behind Home-Brand Products and Market Power

Is Bunnings' Price Guarantee Misleading? The Reality Behind Home-Brand Products and Market Power

Bunnings is one of Australia’s most iconic retailers — its green sheds, sausage sizzles, and catchy low price slogan are part of everyday life. But the company’s much-touted Bunnings price guarantee — a 10 per cent discount on a competitor’s lower price for the same stocked item — has come under scrutiny.

At the heart of the controversy is a growing concern that the promise may not be as straightforward as it appears, especially when it comes to Bunnings home-brand products. A recent investigation by ABC’s Four Corners found that for more than 9,000 products made exclusively for Bunnings, the price guarantee is essentially unclaimable — because these products can’t be found elsewhere.

Bunnings claims it will beat the price if you manage to find these Bunnings buckets being sold for less elsewhere. [Four Corners]

Experts Say the Practice is Misleading

John Dahlsen, a competition lawyer and former Woolworths chairman, called the policy “illusionary” and “misleading.” He argues that while the slogan gives the impression of competitive pricing, it rarely results in actual savings for the consumer on home-brand items — which make up a significant portion of Bunnings’ offering.

Consumer advocacy group Choice has echoed these concerns. Matt Steen from Choice says clearer labelling would help customers understand which products are Bunnings home-brand products and which are available from other retailers.

Branding expert Camey O’Keefe believes the guarantee plays more on consumer psychology than real savings. “What I think it does do is add a layer of reassurance that perhaps subconsciously people are like, ‘Oh, I can trust that Bunnings will offer me the best price in the market for any given product,” she said.

Is Bunnings’ Price Guarantee Misleading? [Bunnings]

What the ACCC Says

The Australian Competition and Consumer Commission (ACCC) has weighed in, stating that while retailers are not legally required to label home-brand items, marketing these products in a way that implies third-party origins could constitute misleading retail practices.

So far, Bunnings has defended its conduct. The retailer told a Senate inquiry it “reduces prices on exclusive products” when similar market items exist, but this is determined subjectively by staff on a case-by-case basis. There is no mention of this in the company’s online pricing policy.

Dominating the Market with Big Margins

Beyond pricing tactics, the bigger issue may be Bunnings’ retail market power. While politicians have targeted Coles and Woolworths for scrutiny over pricing and market control, Bunnings has largely “flown under the radar,” according to Sydney University academic Clinton Free.

That may be changing. Four Corners revealed that while Bunnings claims a modest 17 per cent share of the hardware market, others suggest the number could be closer to 70 per cent — rivaling Coles and Woolworths combined. Market research firm IBISWorld puts Wesfarmers’ (Bunnings’ parent company) market share at 33 per cent.

This retail market power allows its to negotiate aggressively with suppliers and dominate pricing structures across Australia. Unlike the grocery sector, where competition from Aldi, Costco, and IGA exists, its faces few serious rivals in the hardware space.

Are its’ Prices Really Lower?

Four Corners conducted its own price comparison of 95 items across and its competitors. The results showed only a marginal difference:

  • 3% cheaper than Mitre 10
  • 7% cheaper than Total Tools
  • 4% cheaper than Amazon

For all the hype, these savings are minor. As Professor Free put it, “The savings barely cover a snag.” Given  scale and bargaining power, its slight advantage on price does not justify its bold promise of having the lowest prices in the market.

Profit Over Promise?

Perhaps the most revealing figure is profit margin. At 16.8 per cent, it significantly exceeds that of Woolworths (9.9%) and Coles (8.9%). This  profit margin raises questions about just how much value is being passed on to consumers — and how much is being retained by the retailer.

This disparity has led some to argue that Bunnings should be subject to the same level of scrutiny as the supermarkets, especially during a cost-of-living crisis.

The Bottom Line

The issue isn’t that Bunnings doesn’t offer good products or competitive prices — it’s that its marketing, particularly its price guarantee, may be creating unrealistic expectations for consumers. When most of the products eligible for the guarantee are made by and for the promise becomes more about perception than practice.

Transparency, clearer labelling, and a more genuine approach to price competition would go a long way in rebuilding trust — especially for a retailer that holds such a dominant position in the Australian economy.

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