Hardware chain Mitre 10 is concerned that the entry of Woolworths Ltd
(ASX:WOW) in the hardware sector will create a duopoly between the grocery retail giant and hardware giant Bunnings.
According to a report in The Australian Financial Review, CEO Mark Burrowes is urging the Australian Competition and Consumer Commission to consider the potential ramifications for the industry if a duopoly between Woolies and Bunnings emerges.
The paper reports Mr Burrowes saying that there is an abundance of examples where a duopoly has occurred in an industry and its not good for the consumer, saying that what looks good today may not look so good in two of three years when a duopoly is in place.
The ACCC is investigating the impact of Woolworths and joint venture partner Lowe’s takeover of hardware chain Danks Holdings.
According to the Fin Review both Lowes and Woolies believe there is room for another major big box retailer in Australia and the hardware sector, saying that about 60 per cent of the market is made up of independents.
Woolworths reported a profit of $1.8 billion in 2009.
