Woolworths has accused Bunnings of a dirty tricks campaign against its Masters Home Improvement chain through a report published yesterday by a retail consultancy firm.
The report by Madison Cross warned Woolworths may lose as much as $151 million this year on Masters because it is using a model geared towards female buyers when women aren't usually the ones who make purchases in hardware stores.
But Woolworths has slammed the report and says Masters is providing "much-needed competition" in the home improvement sector against Bunnings, which it says holds "a market-dominant position".
"A Madison Cross report being circulated to brokers and media by a consultant associated with Bunnings is further evidence of a dirty tricks campaign being waged against the Masters Home Improvement business," a Woolworths spokesperson said in a statement.
The spokesperson said Masters has created healthy competition, is winning market share and enjoying strong customer support.
"It appears this report is designed to generate negative, ill‐informed commentary about Masters," the spokesperson said.
"This report is incorrect in its assumptions and its projections, and can only be viewed as an attempt to damage the credibility of the Masters' business strategy."
The spokesperson said the "unreasonable nature" of the assumptions makes the Madison Cross report "misleading" and Woolworths will refer it to the Australian Competition and Consumer Commission.
Geoff Dart, the partner at Madison Cross who wrote the report, told SmartCompany that Woolworths' response was "an absolute joke".
"They have never revealed how bad it is and Woolworths is looking to anyway it can deflect the attention," he says.
Dart says he has done consulting work for Bunnings in the past but that finished "early on this year" and he points out he has also worked for Mitre 10, HPT, Trade Link, NAB Build and a host of other retail groups.
He says Woolworths' claim of a dirty tricks campaign is "a desperate plot to devalue the actual findings from the research".
"I've been independent for 25 years, in terms of consulting we don't toe the line for anyone," Dart says.
"I don't have a vested interest in saying anything for anybody, when you are a researcher you have to be independent, you form a view and you can't write or put a view forward just because it suits somebody."