Australia no longer a ‘renovator’s delight’

Companies that benefit from renovations are feeling the impact of what is said to be the first major downturn in the $11 billion market in a decade.

The JB Hi Fi-owned The Good Guys, which specialises in the sale of white goods, ovens, and kitchen appliances, has revealed its sales for the three months to 30 June were down 8.1% on the same time last year.

“No doubt people will be reconsidering any renovations, and you know that that will have an impact on the overall category”, said JB Hi-Fi chief executive Terry Smart.

In a similar vein, GWA Group – a major supplier of bathroom and kitchen products – says it expects its renovations segment to remain soft until at least the middle of 2024.

Other companies that are vulnerable to a decline in renovations include Harvey Norman, Beacon Lighting, and Bunnings owner Wesfarmers.

It is not just renovations driving the decline in sales, but also the sharp decline in new housing completions:

Every new home built needs to be supplied with a swathe of white goods, fixtures and fittings.

The slowdown will have a detrimental impact on the financial performance of other ASX-listed companies, including Reece, the bathroom products behemoth with a market value of $13 billion.

Reece is expected to report full-year results on 23 August.