Majors force Dahlsens to abandon retail

Intense competition from DIY hardware giants Bunnings and Masters has taken a toll on regional hardware operator Dahlsens' retail businesses.

The family-owned company that has been operating in regional Victoria since 1877 has put its last remaining retail outlet in Ballarat on the market.

Dahlsens recently wound back its retail hardware offering at its Traralgon and Albury sites and finalised the sale of its Sale, Horsham and Warragul outlets to Bunnings in February.

It had decided to reduce its exposure in retail hardware because of growing competition from Masters and Bunnings, the group's chief executive, Geoff Dahlsen, said.

"When you have two very wealthy corporates who are willing to throw around hundreds of millions of dollars, it's very difficult for an independent to compete," he said.

"We would rather focus on the trade where we can succeed and avoid the retail. We don't want to be caught in the crossfire."

Woolworths-owned Masters and Wesfarmers-owned Bunnings were notoriously unsuccessful in the trade side of the business, Mr Dahlsen said.

Dahlsens owns 18 trade stores in Victoria as well as outlets in Queensland, the Northern Territory, NSW and Western Australia. It also has five truss and frame manufacturing plants.

Ballarat is at the centre of intense competition between hardware outlets. Bunnings has an established presence but Masters is completing a new store in Learmonth Road, Wendouree.

Masters is also fighting the Australian Competition and Consumer Commission over its decision to acquire three G. Gay & Co hardware stores in the same city.

"The ACCC is concerned about the removal of a key independent competitor from the market to the detriment of competition and local consumers," ACCC chairman Rod Sims said in October when the commission said it would oppose the merger.

Colliers International's Charles Kennedy, Andrew Lewis and Tom Noonan will sell the Dahlsens store in the Ballarat suburb of Sebastopol.

The hardware outlet, to be sold by expressions of interest closing on May 17, sits on a huge 15,400-square-metre site at 55-63 Albert Street that includes a 5365 sq m building space, 8240 sq m of hardstand and a sealed car park for 125 vehicles.

Mr Kennedy said it was in a key location in a major Ballarat retail precinct. Dahlsens owned the store for seven years. Before that it was a Coltman Mitre Ten, which began life during the gold rush era, he said.

"Bunnings is moving into smaller and smaller towns," Mr Dahlsen said.

"We have made the decision to get out of retail before they can cause any serious damage."

Mr Dahlsen said the ACCC should also focus on the majors' treatment of their suppliers.

"We hear numerous stories where that treatment is just too brutal," he said.

sjohanson@fairfaxmedia.com.au