Spring 2013 was an improved season for most garden centers compared to 2012, even great for a select group — 53% of respondents to our State of the Industry survey said their sales were higher this year than last year.
As always, it can’t be great for all business owners — that would simply go against the rules of business. Some will sail ahead, riding high on a strong local presence, high quality product and loyal following, while others will struggle due to factors both in and out of their control. The circumstances are certainly different than they were even 10 years ago.
This year’s State of the Industry Report shows that, while some stores have closed and others’ futures are uncertain, most independent garden center retailers are figuring out the way to be successful in today’s economy and the specific circumstances they find themselves in. Retailers from across the U.S. as well as Canada responded to our survey, giving us a good sense of the industry’s overall health.
The good news is that things are looking more stable in the independent garden center industry. However, this is not the time to sit back and rest.
Now, more than ever, in order for an IGC to survive, it has to keep up with the times and evolve with its local economy and demographics.
We hope that this report will help you see where you stand and take your business to the next level. Best of luck this Christmas season and next spring!
Read more about the State of the Industry from Randy Roush, CEO of Berry Family of Nurseries in his introduction to the supplement, Great things ahead.
SURVEY SAYS ...
The data on the following pages was collected by Readex Research via an online survey from July 29 to August 2, 2013. The survey was closed for tabulation on August 2 with 461 responses. To best represent the audience of interest, the results in this report were based on the 374 respondents who indicated they own/operate/manage an independent garden center.
The margin of error for percentages based on 374 usable responses is ± 4.9% at the 95% confidence level. That is, 95% of the time we can be confident that percentages in the actual population would not vary by more than this in either direction. The margin of error for percentages based on smaller sample sizes will be larger. —Garden Center Magazine
Positive signs for the industry
When it comes to overall sales, we see supporting evidence that the independent garden center (IGC) industry is more stable this year than last year. In 2012, 63% of respondents reported increased overall sales, and 15% said their sales were about the same. Fast forward a year, and we see those numbers change to 53% and 23%, respectively. Combined, the numbers are about the same, which means that about the same number of IGCs had stable or increased sales. Since 2011 was a very difficult year for many due to the weather and economic conditions, it’s not surprising that we saw a bigger increase in sales from 2011-2012 than from 2012-2013. The takeaway is that this year, 76% of respondents’ sales were either as good or better than last year, and this is a positive sign for the industry.
Selling-season success
Not surprisingly, we didn’t see much of a difference in what retailers felt was the biggest factor in this season’s success as compared to last year. Weather was the most important factor, followed by the economy, but slightly more respondents chose “other,” signifying that we have to continue to look beyond the former two factors when determining how to succeed in the future.
Check out Leslie Finical Halleck’s article “Take a good look in the mirror,” which addresses the current challenges of the independent garden center industry on page 40, or at www.gardencentermagazine.com.
All illustrations: thinkstockphotos.com and dreamstime.com
Biggest increase in sales
Annuals were once again the biggest area of growth, but this year it was by a much larger margin. In 2012, 28% of retailers saw the biggest increase in annuals, closely followed by edibles (27%) and perennials (26%). This year the gap was larger, with annuals garnering 23%, edibles 16% and trees/shrubs edging out perennials for the top 3 by one percent, with 15%. This is good news for the trees/shrubs category, which has shown considerable decreases over the last few years.
Biggest decline in sales
Although the category did better for some retailers, trees/shrubs still topped the list for biggest declines with 18%. However, compared to last year, when nearly half of the respondents said it was their worst category, this is an improvement. Furniture, fountains and statuary sales were the weakest link for about 14% of retailers and some retailers reported that their annuals and perennials sales were down, as well.
Best-selling green good
Adjusting inventory in specific areas such as trees and shrubs was the most common method implemented to maintain or achieve profitability this year. 65% of respondents decreased inventory in certain areas, and 41% increased some areas; about a fourth completely eliminated underperforming departments. As could be expected, as this is the case with most retailers in other sectors, about a third raised prices and cut employee hours to keep their IGC more profitable.
Seasonal workers
When it came to how many seasonal workers retailers employed this season, the numbers were similar to 2012, with 57% employing the same number. 15% reported that they hired more workers this year, as opposed to last year, when just 9% increased their hiring. Even so, 29% reported hiring fewer workers this year, which shows a continued decline.
Check out economist Bill Conerly's predictions for 2014 on page 46 or at www.gardencentermagazine.com.
Marketing
Getting the word out about your garden center is one of the most important considerations for retailers. As Garden Center columnist and small business consultant Barry Moltz says, “if the consumer can’t find the company, it has no chance of being chosen,” and the IGC will not get their sales. Websites, social media outlets and word of mouth advertising topped the list with just over two-thirds of respondents using them. Newspaper ads were used by 64%, while their digital counterparts, eNewsletters/eBlasts, came in at 53%. Most IGCs are still using a combination of digital (websites, email, social media) and traditional (newspaper and radio ads, direct mailings) marketing methods to reach customers. While most numbers stayed consistent, there was a 10% increase in those choosing to host events at their store, from 18% in 2012 to 28% in 2013.
Who's in your IGC?
According to survey respondents, customers are visiting or shopping at their stores about the same as last year. Fewer retailers answered “I don’t know” on this question this year, which is a good sign that they’re paying closer attention to the frequency of their customers’ visits.
Hottest garden trend
What were customers clamoring for in 2013? While edibles/grow your own still reigned supreme in the popularity contest, it wasn’t by nearly as great of a margin as 2012, garnering only 26% of the vote (compared to 50% last year). Container and fairy gardening remained popular options, and organic/sustainable gardening made its mark this year with 11% of the vote. Interestingly, a fifth of retailers reported not seeing any specific trends this year.
Making some green with plants
Most retailers aren’t growing 100% of their own plant material, and are obtaining the green goods from a variety of sources. Respondents to this question were able to check all of the choices that applied to their operation. Almost half reported growing at least some of their own plants in an on-site nursery/greenhouse, and 77% bought some plant material from local growers (that is, within 250 miles of their retail facility). That’s good news for IGCs’ local economies. Some of these IGCs, 41% to be exact, also bought from non-local growers.
Best-selling green good
This year’s best-selling green good was unsurprisingly the same as last year — annuals. However, we saw several shifts in the order. Hanging baskets/combination planters and perennials tied for second place, edging out edibles in 2013. Edibles dropped from second to fourth place, and trees and shrubs took up the fifth and sixth spots, respectively. It’s worth noting that the numbers were fairly evenly spread across the aforementioned categories (except annuals), perhaps indicating an increase in variety in customers’ needs/wants, or waning interest in certain areas.
Want to create a buzz around the new plants in your store? Don’t miss Nikki Weed’s article “Make new work for you” that shares some tips on how to increase green goods sales in your store. Check it out on page 56, or at www.gardencentermagazine.com.
Annuals sales
Annuals are typically the biggest green goods category, and this year was no exception. Sales were relatively consistent with previous years, with slightly fewer retailers reporting increased sales. Overall, the number of retailers who had either flat or increased sales was about the same in 2012 as 2013, with a few more retailers reporting a decline in 2013.
Perennials sales
Perennials sales this spring were comparable to 2012. Slightly more than half of respondents reported increased sales, with 27% reporting flat sales. When it comes to the younger generations, many say that they prefer annuals over perennials because of a few reasons: they’re able to update their garden area’s look every year, many exclusively container garden and don’t want to overwinter plants and some prefer the longer bloom times of annuals.
Trees & Shrubs
In last year’s research, we confirmed what we had already heard whispers of — trees/shrubs sales were way down, in part due to the weak housing market. This year, it looks like that department is doing much better. We see that while in 2012 46% of respondents said that it was the area of biggest decline, compared to 28% this year. 44% said that it was their biggest growth area in 2013, compared to 10% in 2012. Over the past couple of years, we’ve noticed an increase in the popularity of edible trees and shrubs, especially berry plants, smaller or “patio” citrus and other fruit trees for smaller spaces and containers. Our experts also pointed out the use of trees and shrubs, especially evergreens and others with winter foliage, in larger sized containers used in commercial/public settings. Rather than replacing all of the plants in the container, only the annuals need to be replaced, reducing costs, and providing visual appeal throughout the winter as well.
Pre-booking
Another sign of the relative stability of the market this year can be found in the pre-booking numbers. More than half of the retailers surveyed pre-booked the same amount this year as in 2012, up from 34% last year. About the same number pre-booked more than they did in 2012, while the number of retailers who booked less was down slightly, from 32% in 2012 to 25% in 2013.
Edibles
During our travels and conversations with retailers and industry experts, we’ve seen that mixing edibles and ornamentals in containers has been an increasingly popular trend this year. Consumers not only want to be able to eat what they grow, but they want their garden or patio to look good while they do so. Several retailers we spoke to had experienced increased herb sales this year. Edibles sales overall weren’t as strong as last year, according to respondents, with about 10% reporting a decline of more than 10%. However, the trend of growing your own is expected to continue to be significant next year, although possibly not as strong as this year.
More than just plants
The most popular hard goods from 2012 also topped our lists this year. Bagged products and pottery/decorative containers, two product groups that go hand-in-hand, held steady in the first and second spots on the list.
Home Décor/Gifts
Home décor/gifts sales were stable in 2013 with slight positive growth. A little more than a third of retailers showed increases in sales, and slightly fewer (24% vs. 27%) showed declines compared to last year.
Birding/Nature
2013 Sales in the birding/nature category were similar to 2012, with a slight decline. One interesting point is that this is one of the most stable categories. From 2011-2013, between 53-57% of retailers surveyed said that this category stayed about the same. Other hard goods categories tend to be stable as well, but not nearly to this extent.
Photo by Michelle Simakis / Bird house: dreamstime.com
Furniture, fountains and statuary
This high-margin, big-ticket category that includes furniture, fountains and statuary showed improvement this year. While for about 14% of retailers this was the biggest area of decline, we saw a general increase in sales this year, with 30% of retailers reporting increased sales, compared to 18% last year.
Fountain: thinkstockphotos.Com / Statuary: Karen Varga / Furniture: Michelle Simakis
Swim against the current to get ahead
How did your garden center differentiate itself from the competition this year? More than 350 retailers wrote in and told us what they do best, and we’ve ranked the most popular answers together, as well as included some of the responses that stood out from the crowd.
- Better plants, and it’s always about better plants.
- Being open and having a good stock at good prices.
- Community support of the individuals with disabilities for whom we provided jobs.
- Creative displays, dominating product categories such as pond supplies and fairy gardens.
- Custom container growing for clients, better selection of interesting and unique varieties of annuals/perennials and natives.
- Don’t know.
- Friendly & affirmative approach to customers!
- Having experts on staff to answer questions.
- Doing more custom containers and offering more specialty items.
- No sales.
- Knowledge base: fourteen employees have 15 years average in the retail garden center business.
- Longevity — we’ve been around since 1910.
- Marketing program and branding.
- On hot days we offer complimentary ice cold water bottles.
- Our attitude, our clean store, our plant selection, our smiles, our good stories...
- Pet-friendly.
- Service, service, service!
- Stunning display gardens that educate and inspire customers.
- Being able to recognize our regular customers by name.
- Winning local Garden Festival.
Explore the October 2013 Issue
Check out more from this issue and find your next story to read.
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