Bunnings boss sows the seeds for overseas store expansion

Bunnings boss John Gillam has toyed with the idea of launching the big-box home improvement chain overseas to take advantage of the growth potential outside of its markets of Australia and New Zealand.

Addressing a Hardware Federation of Australia lunch in Melbourne on Wednesday, Mr Gillam said he believed there had been a gradual improving trend in consumer confidence over the past 24 months but refused to be drawn on how he thought Christmas would go for the major retailers.

He also made a veiled dig at rival Masters and its female-friendly store format, saying Bunnings had built its success on not catering to any specific gender but rather all shoppers and especially families.

Wesfarmers-owned Bunnings posted a 7 per cent jump in revenue to $7.661 billion in 2012-13 and a 7.5 per cent rise in pre-tax earnings to $904 million.

Mr Gillam said the promise of strong returns could compel an international expansion one day.

"We have no immediate plans to go into a new geography, we are international now [in New Zealand], and we understand that dynamic," Mr Gillam said.

"But it might be disappointing in a decade's time if we wouldn't have gone into a new geography ... it gets back to whether we see the right returns and see ourselves running the business in a way that can be effective in another geography - that's the challenge."

Bunnings has 210 stores, including 50 in New Zealand. Mr Gillam said there were roughly 85 new Bunnings sites in the pipeline of which 20 were under construction.

He would not be drawn on the impact of the election on consumer sentiment but did say he saw confidence improving.

"What I said in August is we felt trading conditions were better now than a year ago, and when we talked about it a year ago we said it was better than a year before.

"There has been an improvement in underlying conditions, a gentle trend improvement across the last 24 months." Asked about his sourcing policies, Mr Gillam said Bunnings preferred Australian made and the penetration of local products on the hardware chain's shelves would probably increase as the dollar continued to weaken.

"We have got a written policy to try to prefer Aussie made - 40 per cent or thereabouts of the products on the shelves are grown, produced or manufactured in Australia or New Zealand.

"It's a far higher number than people realise, and I think an Aussie dollar that is softer will result in that number going up rather than down."