Wesfarmers Limited (ASX: WES) and Woolworths Limited (ASX: WOW) are preparing for the expected increase in demand for home improvement items.

Both retailers are investing in acquiring new land in order to set up new stores across the country. Wesfarmers will be spending more than $600 million to build 18 new Bunnings stores in New South Wales alone in the next three years; while Woolworths will be securing 150 new sites before the end of 2015.

The hardware sections rake in approximately $36 billion in annual sales. Bunnings remains as the largest operator for hardware items since it has a 16 percent share of the market.

According to Bunnings managing director John Gillam, three new Bunnings stores at Seven Hills, Port Stephens. and Chatswood have been set up, while 12 sites in Alexandria, Balgowlah, Batemans Bay, Castle Hill, West Gosford, Greenacre, Rouse Hill, Tamworth, and Marsden Park have been secured.

Wesfarmers could have shelled out more than $10 million to buy the former Pilkington 2.6-hectare site in Alexandria, Sydney. Plans are also underway to open trade centres at St, Peters and Cromer.

Likewise, Woolworths submitted planning applications to Victorian Planning Minister Justin Madden in April. The construction of new stores in South Oakleigh, Coolaroo, and Hawthorn East will begin in the next few months.