Bunnings does heavy lifting for Wesfarmers as hardware giant’s CEO Michael Schneider flags exit

Wesfarmers boss Rob Scott is doubling down on a promise to keep prices low at the retail giant as consumers face higher fuel prices and the threat of another interest rate hike following stronger-than-expected inflation figures.

The head of Australia’s biggest conglomerate — which owns brands Kmart, Target, Bunnings and Officeworks, as well as fertiliser and chemicals business WesCEF — said uncertainty around inflation, interest rates and tax settings continued to weigh on consumer sentiment.

Higher operating costs were also affecting business investment, Mr Scott said.

Asked if he had seen any signs of consumer recovery, Mr Scott said it was a continuation of what the business had seen in the past.

“I wouldn’t say things have got worse, I wouldn’t say things have got better,” he told The West Australian as he delivered a 3.4 per cent lift in Wesfarmers’ revenue to $47.3 billion in the 2026 financial year.

“I think it’s an opportunity for us as a business to just continue to double down on value.

“There are some retailers that do very much rely on promotions and specials to try and deliver value, whereas businesses like Bunnings, Kmart, Officeworks are really focused on everyday low prices.”

Mr Rob’s comments came a day after the latest data revealed annual inflation slowed from 3.8 per cent to 3.5 per cent in July. But the Reserve Bank’s preferred trimmed mean measure failed to move from the previous month’s 3.6 per cent.

Both figures were above what markets expected.

“Inflation is the key economic challenge that we’re facing in Australia and what is causing the inflationary problem is the lack of productivity,” Mr Scott said.

“It’s pleasing to see at the moment there seems to be an increased awareness that productivity is the problem impacting inflation, and there are many things that we can do, whether it’s reducing regulation, whether it’s reducing some of the capacity constraints that exist.

“The fact that housing is not accessible and is not affordable is simply a supply side issue. There’s just not enough housing, so that’s . . . causing inflationary pressure.”

Mr Scott pointed to Wesfarmers’ Built Living joint venture, which aims to deliver residential apartments at scale, faster and cheaper than traditional methods.

Wesfarmers full-year results on Thursday revealed hardware giant Bunnings did the heavy lifting for the group — bringing in $20.4b of total revenue, up 4.1 per cent from a year earlier as demand across home improvement, repairs and maintenance lifted sales.

The health divisions — which includes Priceline Pharmacy, Australian Pharmaceutical Industries, Clear Skincare and The Silk Group — is proving its earning potential, with revenue soaring 9.1 per cent, up from $5.93b the previous year to $6.5b.

Priceline Pharmacy’s headline network sales increased 12.7 per cent, including dispensary sales

Kmart, which grew 2.8 per cent to bring in $11.7b, Officeworks and its chemicals division also reported solid growth.

Full-year net profit excluding significant items came in at $2.9b, up 8.3 per cent. With those added back in, profit slipped 1.8 per cent to $2.87b.

The board declared a 9¢ rise in the final dividend to $1.20.

Wesfarmers also announced Bunnings boss Michael Schneider would retire in February. He will be succeeded by the retailer’s chief customer officer Rachael McVitty.

Ms McVitty has been with Wesfarmers for more than 17 years and has held several senior executive roles across the group, including as chief executive of Blackwoods and chief financial officer of Wesfarmers’ industrials division.

Mr Scott thanked Mr Schneider for his “exceptional” contributions to Bunnings and the broader group over many years.

“Mike has been an outstanding leader of Bunnings, leading the business across a decade of consistent growth in sales and earnings while strengthening Bunnings’ strong culture and trust with the community,” Mr Scott said.

“He has overseen significant transformation of Bunnings’ customer offer and digital ecosystem, which has set the business up for future success while also creating value for Wesfarmers shareholders.

“Mike retires as managing director with Bunnings in excellent shape.”