National recognition for Biloela HTH
After 32 years in the industry, Tim Kessler and Kent Hutton have seen their share of ups and downs, but the pinnacle for their business came last month when their remote Queensland store was awarded ‘2020 Home Timber & Hardware National Store of the Year’ at the IHG Virtual Expo. The accolade follows years of investment and sheer hard work by the duo, to position the business as the ‘Best Store in Town’ for their local community.
Business: Home Timber & Hardware Biloela
Owners: Tim Kessler and Kent Hutton
Location: Biloela, QLD
Buying Group: Independent Hardware Group (IHG)
Both Tim and Kent admit to not being ones to shy away from a challenge, which perhaps explains why the business underwent a significant refresh amidst the peak of COVID lockdowns in 2020. The revamp has not only helped lift the store’s standards to a new level, but the local community has responded positively to the changes as well, with sales growth evident across both the retail and trade departments.
The Biloela Home Timber & Hardware story is one of staying true to its roots, while also reinvesting for long-term growth.
“The revamp was instigated towards the back end of 2019 and capital signed off in the early part of 2020. Then in the midst of COVID and Zoom meetings, the refresh was finalised in July last year. Thankfully I had fair bit of encouragement from IHG’s Queensland state team to make this happen. The IHG group also generously contributed to the revamp, which is part of their co-investment strategy into independent businesses. They were great and financially supported us through the process 100 per cent,” Tim said.
As a founding member of the Home Timber & Hardware group, the business was established in 1993, and prior to this, traded under the Home Saver banner. Incredibly, the store has a long and proud history in the town dating back to the 1940s.
“One of the original owners’ wives, Gwen Banks, is now aged 103 and we have tried to chat to her about the business and when it was started. The best we could decipher was the business was established by her husband Kev Banks, and her husband’s brother, Ted Banks around 1947.”
“Initially it was a plumbing supply business which progressed through to hardware and this site was also a saw mill back in the early days. The initial store was in a different location and then the original owners took over the saw mill. Eventually it became a trade store only, that included timber supplies and a small amount of hardware.”
“I actually celebrated 32 years in the business last week. I initially came on the scene in 1987 and helped build the Home Saver store as I was a carpenter by trade. I was here for about 12 months then left in 1988. I visited the store in 1989 and the owner spotted me and asked me if I wanted my job back and I said ‘yea righto’. I have been here ever since. I came on as a part owner in 1998 and slowly bought shares. I then bought out my original partner’s 55 per cent share in 2016. At the same time Kent came on board as a part owner and he now owns 45 per cent of the business,” Tim said.
Award winning qualities
Boasting a retail area of 1000 square metres and a land size of 7000 square metres, Biloela Home Timber & Hardware is located in a small country town with a population of 6,000 – however Tim pointed out that there is another 7,000 people located in the outer lying areas, with the district’s economy predominantly driven by farming and mining. The town is located 120 kilometres inland from the port city of Gladstone, approximately 550 kilometres north west of Brisbane.
Tim said he has built up the businesses’ range by listening to the needs of local customers.
“One of my former business partners once said to me ‘if you have not got it, you can’t sell it’. Obviously, we do not have everything in stock because you physically cannot do this, but we definitely have progressed. What we do is try and adapt. If something is not in stock, we try to order it and do our darndest to get it here in the quickest time as possible. This also comes back to customer service which is something that has been reiterated to me from day one – customers are number one.”
Today, the store remains somewhat trade heavy due to the business initially being built up from a trade base.
“This is a trade business that has diversified over time with a retail arm. Having said that, a lot of our traditional trade customers probably do not like some of the things we have instilled, including the nursery we implemented in 2003. It caused some of our trade customers some confusion as to whether we were still a hardware store,” he said.
“We also do not go to the other extreme by implementing homewares because our main focus is remaining a traditional trade store. The sales ratio is now about 60 per cent trade and 40 per cent DIY.”
“Over the years I have noticed stores struggle when they have remained wholly DIY retail. This is the same for when trade stores focus primarily on trade, because you do not have the balance of the high profit from retail. If you are just a straight DIY retailer and there is not a lot happening but trade at a certain time, you will feel it. The two seem to go together,” Tim said.
Local demographics & customer demand
While the town of Biloela has a strong rural base, there is also a small coalmine near the town that services the power station and supplies industrial businesses in Gladstone.
“We also have a meat works in town so we do have quite a diverse economy.”
“While we would love to see the rural industry up and going again, unfortunately due to drought the farmers are struggling. Despite this, we still have a good irrigation base which keeps the rural and cattle industries ticking along,” he said.
“There is also quite a bit renovating going on at the moment that is being pushed by farmer’s wives who want to treat themselves with a house upgrade. Surprisingly the rural sector is probably the main driver of the economy around here currently,” Tim said.
While competition in town is from a co-existing Mitre 10 store, Tim said that because the two independent stores are part of a small community, they always work together to help each other out.
“While we do recognise we are in competition with one another, we still maintain a good relationship. If a customer comes to our store looking for something that we may have run out of stock, we will often ring up the Mitre 10 and go and grab it for them. This works both ways and helps to support a lot of local businesses in the area,” he said.
While Bunnings has stores in the towns of Gladstone and Rockhampton just over 100 kilometres away, there are no other independent hardware stores from Gladstone to Bundaberg currently.
“We are the only true independents that are going to be left in the local area I think. The benefits of being an independent store is that we can adapt quickly. If a customer wants something we do not have, we can work to get it and we have grown our inventory based on consumer demands. We also try to be adaptive to new technologies to ensure our staff’s time is used more efficiently by focusing on the customer,” he said.
During the 2020 COVID lockdowns, Tim said the sales uplift was one of the craziest times he has ever experienced during his 32 years in hardware retail.
“Prior to COVID we were actually tracking quite well. At the end of February 2020 we were already up 10 per cent on the year. When we look at our year-on-year sales to the end of January this year, we are 20 per cent up. I think people just wanted to paint and garden during the lockdowns,” he said.
“Garden was the biggest performer during this time and paint came a pretty close second which I believe was industry wide. Timber was also a big seller because we do landscape blocks and sleepers for garden edging and we just could not get enough of this stuff into the yard. It was just going out quicker than we could get it in.”
“It has settled down a bit but we still have issues with timber supply. This was an issue just after COVID hit with the demand outstripping supply so rapidly and it was very frustrating. This is still a challenge with products like power tools where we just cannot get enough stock,” Tim said.
Reinvesting for long-term growth remains a key focus for Tim and Kent with plans already in full swing to complete a major internal revamp, according to Tim.
“The internal revamp was supposed to be done at the same time as the external refresh but we could not complete it due to COVID restrictions. This has, however, given us time to work out the best way to introduce some more square meterage in our selling space. We expect this will be completed in the next 12 months,” he said.
“Looking into the year ahead, I believe that until the vaccine rolls out and people can travel overseas, the hardware industry will sail along. Australians have an insatiable appetite to spend money and if they cannot spend it going overseas, they will spend it on something else and people’s homes seem to be the place where much of this spare cash is going.”
For now, Tim said he will continue maintaining his focus on exceptional customer service and treating all staff and customers as family.
“Customer service remains the most important criteria of our business. Throughout 2021 we plan to continually deliver on customer service, while completing our exciting revamp to the store in the near future,” Tim said.