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Bunnings … Good Or Bad For Us?

Filed under Editorial

History shows that the arrival of large retailers in the South Burnett usually results in the closure of some smaller local businesses ... but it does not increase unemployment, and it tends to foster long-term population and economic growth (Photo: Wesfarmers)

June 12, 2017

by Dafyd Martindale

The recent announcement that retail chain Bunnings have lodged a development application with the South Burnett Regional Council to build a new store in Kingaroy has provoked a mixed response.

On the one hand, some residents welcome the news that Bunnings would like to open up a South Burnett outlet.

They feel the chain will offer them better hardware prices, and see the announcement as a sign our region is moving forward again after several years in the doldrums.

Against this, some other residents feel the arrival of Bunnings could spell the end of several other “home grown” small businesses that compete in the same market, and lead to an increase in unemployment.

To find out which of these two schools of thought is most likely to be correct, I turned to history.

Here’s what I found:

The last two big retail chains to open up in the South Burnett were Harvey Norman in late 2008, and Aldi in 2009 (yes, it has been awhile, hasn’t it?).

At the time both these stores opened, the population of Kingaroy’s town area was about 9154; but by the end of last year it was 10,125, or about 10.6 per cent bigger.

And while I wasn’t able to dig up unemployment data for 2008-2009, between 2010 and 2012 – the first three years after Harvey Norman and Aldi were both up and running – the South Burnett’s unemployment rate was fairly stable at between 6.5 and 7.5 per cent.

This was despite the 2011 floods, the 2012 drought and the flow-on effects of the 2008 Global Financial Crisis.

What these two sets of data lead me to think is that while it is likely the arrival of both these large retail chains did lead to the closure of some other businesses, the net effect of these closures on overall unemployment was negligible.

Or in other words, any jobs that were lost in the businesses that closed down were made up for by the jobs the new retail entrants created.

The arrival of these businesses also seems to have had no negative effect on our region’s long term growth rate.

If anything, their arrival was a clear sign that smart heads outside our region believe the South Burnett is a market worth investing in for the future, and they’re willing to back that belief with bricks and mortar.

It would be nicer, of course, if we could attract a large retail chain that didn’t compete with any of our existing businesses.

That would create new jobs that really were new, and add things to our retail mix we may currently have to travel outside the region for.

But in the absence of that, the Bunnings announcement is likely to turn out to be more a positive than a negative in the long run.

So we should welcome it, not fear it.


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