MENU

Dulux strips paint from Woolies’ Masters

Woolworths Limited (ASX: WOW) has suffered a blow to its hardware business after Dulux announced that it was pulling its paint and woodcare products from the stores.

DuluxGroup (ASX: DLX) reported that it was withdrawing its premium paint and woodcare products, including Dulux and Cabot’s, from Woolies’ Masters and Danks corporate stores. The company said that it was in response to competitors increasing their alignment with particular resellers and obtaining greater support from those aligned resellers. In other words, Dulux wasn’t receiving the same deals as its mainly US-based paint competitors, so has canned its paint deal with Woolworths.

Dulux will instead follow the example set and align itself with its key retail paint channel partners, like Bunnings – owned by Wesfarmers Limited (ASX: WES) and Mitre 10 – owned by Metcash Limited (ASX: MTS).

DuluxGroup says the decision is not expected to have a material impact on its performance, with total paint sales to Masters and Danks representing around 1% of total revenues. Managing director Patrick Houlihan said, “Masters and Danks corporate stores remain a valued partner for DuluxGroup’s broader retail hardware business. They will continue to be offered our market leading Selleys and Yates brands, among others.”

In 2011, Bunnings stopped stocking paint from US giant Valspar, including leading Australian brand Wattyl, instead giving over more shelf space to products from rivals Dulux and Taubmans. Valspar is the major supplier of paint to Lowe’s hardware chain in the US, and also supplies paint to Masters in Australia.

For Woolworths, the decision is a blow to its hardware ambitions, with Dulux paints being the market leader.

Foolish takeaway

Woolworths may have snubbed one supplier too many, and Dulux wasn’t going to wear it. Consumers will be hoping the two can brush aside the issue and finish with Dulux paints back in Masters’ stores.

In the market for high yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

The Motley Fool’s purpose is to help the world invest, better.  Click here now  for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Motley Fool writer/analyst Mike King owns shares in Woolworths.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!