The Wesfarmers Ltd (ASX: WES) share price has risen a very impressive 78% over the last five years, as the chart below shows. The success of the retail businesses Bunnings and Kmart has largely driven that performance.
After years of growth and changes, you may be wondering what else they can still do to grow earnings from here.
Last week, Wesfarmers announced its latest plan to expand its product base. If Bunnings gets this right, it could help grow the company's profitability thanks to the scale of the opportunity.
Bunnings battery plan
Bunnings announced that it had launched a new solar energy and battery offering called Zelora, which is 'powered' by digital energy management Intellihub.
It will allow customers to buy and install solar energy and battery packages through an "all-inclusive, simple subscription, without big upfront costs."
Bunnings noted that Climate Council research showed upfront costs remain the biggest hurdle for Australians looking to install home solar and battery systems.
The Bunnings Chief Operating Officer, Ryan Baker, said:
Our new Zelora offer, developed in partnership with Intellihub, gives customers access to a broader range of battery and solar packages – including larger rooftop systems and home batteries – all available through a simple subscription model and supported by an app.
Many customers find home electrification complex and may not be aware of the benefits it can offer. Zelora has been developed to simplify the home battery and solar opportunity for customers in a cost-effective way.
The Zelora offering is available as part of a trial across Newcastle and greater Sydney.
Bunnings noted the launch of Zelora builds on Bunnings' recent launch of an electric vehicle (EV) charging range available in-store and online. It's also trialling EV charging stations at certain store carparks in Victoria, New South Wales, Western Australia and New Zealand.
The federal government has introduced a subsidy to discount the cost of a battery.
According to the reporting by the ABC, head of solar industry research firm SunWiz Warwick Johnston said that the scheme is already supercharging demand. He said:
In 2024, it was 75,000 battery installations in the year. And a couple of days ago, we were hitting 1,000 installations per day. So, that sort of implies we might get to 200,000 at that run rate in 2025.
So, there is significant scope for Wesfarmers and Bunnings to generate sizeable earnings.
Wesfarmers share price snapshot
According to the forecast on Commsec, the Wesfarmers share price is valued at 33x FY26's estimated earnings, so the market is expecting pleasing profit growth from the business.
