FEAR & GREED | Business News Kmart's Anko and Bunnings: Wesfarmers' secret sauce
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Jan 14, 2026 Gaurav Sodhi, Deputy Head of Research at Intelligent Investor, shares insights into Wesfarmers, a standout performer on the ASX. He dives into the success of Kmart’s Anko brand, which has outpaced competitors by optimizing supply chains. Gaurav also discusses Bunnings’ near-monopoly status and its effective distribution model. He highlights Wesfarmers' unique management culture and decentralized business structure, while also addressing the valuation challenges and risks that prompted Intelligent Investor to sell their shares. A captivating look into smart strategies in retail!
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How Anko Was Born
- Kmart created Anko by sending reps to copy Walmart's sourcing in China and then improving it.
- Anko now supplies ~20% of Australian clothing and dominates several small categories domestically and internationally.
Standalone Businesses, Shared Culture
- Wesfarmers runs each business as a standalone unit and makes them compete for capital.
- The group's role is mainly capital allocation supported by a common management school and strong culture.
Bunnings' Scale Advantage
- Bunnings has built scale advantages that make it extremely hard to compete with domestically.
- Its buying power, direct supplier deals, and decentralised distribution drive outsized profits versus rivals.