The value in Coles is related to the location of the network of...

The value in Coles is related to the location of the network of stores. Typically when a new store is built on the best site in a new area it may not be very profitable for the first few years but eventually it becomes profitable as the area grows. As this process is repeated decade after decade by Coles and Woolworths they end up with an effective duopoloy on the best supermarket sites in the country. So it is naive to think that any third player (such as a bunnings hybrid model) would ever have been able to compete with coles and WOW.

The interesting thing is really only how long it takes for coles to catch up to WOW, because its only a 2 horse race and probably only ever will be.