Montgomery Retail Report: New York
Marketing consultant Jerry Montgomery visited 109 retail garden center locations in the New York area around Mother's Day. What impressed Montgomery at the box stores, wholesale clubs, regional grocery chains and Martin Viette Nurseries.
May 18, 2010
Marketing consultant Jerry Montgomery visited 109 retail garden center locations in the New York area around Mother's Day. Below is his New York regional retail report:
The weather was really erratic over the five days touring retailers on Long Island and the boroughs of New York City, Northern New Jersey and suburbs north of New York up to Norwalk, Conn. - making for a very interesting tour. The weather was fairly nice until Mother's Day (May 9) when the wind reached up to 50 miles per hour, but it was surprising how much traffic was in the stores.
There is no doubt the consumer wants to buy green goods, as I witnessed great traffic flow in most retail locations on the 6th (Thursday), 7th (Friday) and 8th (Saturday). Edibles, of course, were one category that stood out, as evidenced by the number of shopping carts containing vegetables and herbs. This has to be a banner year for Bonnie Plants.
Home Depot is clearly the leading retailer of green goods in this area with the largest footprint on Long Island and in New York City and its surrounding suburbs that included two very interesting Manhattan locations. Most impressive is the performance of Ivy Acres, arguably one of the top Home Depot vendors, by providing great-looking bedding plants and far more color than I've seen in most retailers this season.
An interesting program is the Straw Pot 306 program: six 3.5-inch pots made from straw similar to a 306 with a retail of $9.99. It's the equivalent of $29.97 for a 10 x 20 tray. The item seemed to have good sales velocity with many displays picked over by consumers.
Home Depot also had larger-than-expected Proven Winners SKUs, which did not seem to be moving off shelves at the velocity of other brands - particularly Wave petunias. No Calliope Geraniums were available but I was told by several garden center mangers the earlier shipments sold out quickly. There were small amounts of Viva petunias and SunPatiens, and fairly large inventories of Tex-Mex geraniums.
The space allocated to shrubs and trees seemed much greater here, but if you looked at the traffic, 95 percent of the shoppers were in the bedding plant and perennial areas - in my estimation not a good use of space.
Lowe's has a far smaller footprint in this area with seven locations on Long Island versus 21 for Home Depot. In the boroughs of New York City, Lowe's has two stores versus 13 for Home Depot.
The Grow Your Own edibles program was in every store I visited. The big difference from other areas was the addition of a "flat talker" inserted on the end of each tray that made variety recognition far easier. Also in the vegetable category, Bonnie Plants has changed its large POS signs by making them more colorful and eye catching.
All Lowe's stores carried the Proven Winners brand of which many Home Depot vendors assumed they had an exclusive.
In this area, there are very few Super Centers. I visited three stores on Long Island that offered no outdoor green goods. The best marketing program was the 8-inch Confetti petunia retailing for $6.00 with standout packaging.
BJ's Wholesale Club
Clearly the warehouse club leader in this area is BJ's with its overwhelming store density, carrying large inventories of green goods displayed outside on the sidewalks against the store walls. Whether it was the conditions or the plant material, the overall look was not that attractive.
The following items are worth mentioning:
- Ten 4-inch premium annuals retailing at $21.49
- 10-inch geraniums in a colorful tin watering can at $17.99 - a high-impact item
- 12-inch coco fiber hanging baskets retailing at $17.99
- 12-inch patio Clematis trellis retailing at $24.99
- 6-inch orchid ceramic retailing at $17.99 - outstanding
- Full flat 508 (40 plants) basic annuals retailing at $7.99
- 16-inch patio combo retailing at $29.99
- 3-packs of 1-gallon perennials retailing at $12.99
The following items are worth mentioning:
- 12-inch fiber hanging baskets retailing at $17.62
- 10-inch fern hanging baskets retailing at $7.43
- Wishing Well planters retailing at $29.88
- 12-inch tulip ceramic containers retailing at $18.83
Although Kmart has small garden centers, most of the bedding plants are displayed outside on sidewalks with little to no protection form the elements. Its offering was not very appealing and had little of the "wow" factor. The inventory looked aged, possibly a sign of less-than-anticipated sales.
King Kullen (Grocery)
King Kullen had a very small area outside the store that was not well merchandised. Green goods, therefore, did not look appealing. The following items were offered:
- 4.5-inch premium annuals at $2.99
- 10-inch basic hanging baskets retailing at $8.99
- 11-inch premium hanging baskets retailing at $14.99
- Three 6-inch tomatoes retailing at $9.99
- Wave petunia 6-inch retailing at $5.99
- Wave 306 retailing at $3.99
Waldbaum's is another grocery chain trying to sell bedding plants with seemingly little sales volume. The displays are outside in the front of the store and don't seem to get much attention:
- 10-inch hanging basket premiums retailing at $12.99
- 12-inch premium hanging baskets retailing at $19.99
- 6-inch Waves retailing at $4.99
- 4.5-inch premium annuals retailing at $3.99
- 12-inch patio geraniums retailing at $19.99
- 4-inch basic annuals: four for $5
- 306 annuals basic retailing at $4.99
- 10-inch Sun Parasol retailing at $22.99
These guys know how to sell plants and get premium prices exhibiting some of the best merchandising I have seen in a long time. Everything either has a price tag or a corresponding group of price signs that makes shopping easy for the consumer. Hick's also has more informational signs that any other retailer I have visited.
This is where you really see the "wow" factor, displaying large inventories with amazing color that's well merchandised. The employees are all engaged with customers and seem to go out of their way to answer questions and make recommendations.
Martin Viette Nurseries
Martin Viette is an old-line nursery with a huge following of long-time customers that seems to specialize in outdoor living as averse to focusing on bedding plants. It does offer bedding plants, but there is a not a huge emphasis.
A large selection of patio containers and outdoor furniture compliment the green goods offering. Martin Viette is a really high-quality operation with well-trained employees who seem to be very knowledgeable and project a sense of liking their customer's - kind of unusual in today's world.
The demand for outdoor green goods is as good as ever. The X factor continues to be the weather. Edibles are growing in demand, as well as the related hard goods that make edibles the real engine of growth both in green goods and hard goods.
Home Depot is clearly the market leader with a huge footprint on Long Island and New York City metro. Some of the unique programs are Straw Pots, large offerings of Red Star cordyline in sizes up to 10 inches and the Weather Channel accent program - under the brand "Weather Tough." It's a good example of how a program approach brings focus to a generic category. Arguably, this program drives higher sales and increased margins.
In this market, Ivy Acres clearly stands out as a high-performance vendor with its stores showing more of the "wow" effect than others. It has one of the most professional group of merchandisers I have seen anywhere in the country. They bring in unique products like the Solenia begonia that was a standout at retail, the Straw Pots, Red Star cordyline and Knockout roses in Straw Pots - all of which are moving well at retail. I would guess the margins are above average.
One of my pet peeves is the way mixed variety baskets and containers are devalued by recipes that don't provide varieties that all bloom together at retail. It seems as though when it comes to creating combinations the industry disregards the mantra "color sells" in favor of extolling their creative instincts. We see retailers dictating combinations that have little to no appeal at retail, as evidenced by what I saw from the dominant retailer in the area.
Consumers want mixed containers but they want stuff that looks great and will flower together all summer. Currently, we are not delivering the goods. The best combinations we saw both in baskets and pots were both single varieties with masses of color, and those produced from the Confetti liner. Let's give the consumer the same "wow" factor in mixed containers as we do in pots and flats, and they will respond by opening their wallets.