Atlanta Market A Reason For Optimism
Marketing consultant Jerry Montgomery spent Saturday visiting big box retail garden centers, including two Pike Nurseries stores, in the Atlanta region. All garden centers were crowded, he says, and consumers in the area clearly have a garden fever.
April 21, 2010
Marketing consultant Jerry Montgomery spent Saturday, April 17, visiting big box retail garden centers, including two Pike Nurseries stores, in the Atlanta region. All garden centers were crowded, he says, and consumers in the area clearly have a garden fever.
Talk about a market being on fire: In the Atlanta area, garden centers were packed and in some stores, it was almost impossible to find a parking spot within 500 yards of garden centers. The weather was perfect with night temperatures in the low 50s and days in the upper 70s.
The vegetable displays were extremely busy and many of the Bonnie Plant displays were almost empty by the end of the day Saturday (April 17). Although the average vegetable sale appears to carry a much lower sales value than bedding plants, the add-ons with vegetables as a percentage is much greater.
I would often see a cart leaving the store with four to five vegetable plants along with bagged soil, tomato cages, fertilizer and mulch. The hard goods associated with that sale had more dollar value than the plants. That's why I feel there is little price resistance in the vegetable category; it's more about varieties and brands. It's not uncommon to hear families discussing which varieties to buy in the vegetable category, whereas in bedding plants it's more about impulse.
You will find some of the best Walmart garden centers in the Atlanta market featuring very consistent store-to-store product quality with a nice range of sizes, price points, and variety selection. Walmart does not overwhelm you with a complex selection but focuses on the basics with enough novelties to make it interesting. Inserting items in the mix like the 6-inch gerbera daisy in a colorful tin pot is a way Walmart immediately catches your eye as you enter the garden center.
In this market, Home Depot offered the 10-inch premium Aqualok (email@example.com) basket at $17.97, while in Orlando the same basket retailed for $11.98 in their stores. In some stores, the Viva petunias retailed for $3.97 while in others they were $4.97 and $5.97. One store offered Viva vegetables in a quart at $3.57. It was the first time I have seen Viva vegetables in at least four years.
There was far less emphasis on the Grow Your Own (GYO) program in this market than I observed in others. The price of 1-gallon vegetables was $3.98 versus $5.98 in the Florida market, and there was far less inventory on the shelves.
Lowe's did have a significant inventory of GYO 8-inch berries and packaged roots. Bonnie Plants still occupies some of the prime retailing space whereas the GYO is far less visible. There is also a product mix issue, especially with tomatoes and peppers, with a surprising small number of varieties compared to other programs
Every store offered the Aqualok 10-inch premium hanging basket priced from $14.98 to $16.98, depending on each store visited. In our observations the displays were mostly fully stocked, indicating that Aqualok may not be resonating with the consumer. Still, it's early and it is a new concept.
These stores have improved so much in the last two years, featuring well-organized store layouts, vastly improved POS signage and great merchandising. The inside areas are brighter, cleaner and the lighting has improved. One thing that's even more noticeable is how employees are engaged with the customers. I observed more Pike's personnel on the sales floor advising their customers than any retailer I have visited in the past two years.
Costco offered the following items:
- 12-inch hydrangea with 10 to 15 flowers for $19.99 - a spectacular value
- 3-pack of 1-gallon perennials at $13.99
- 8-pack of 5.5-inch annuals retailing at $11.99 (green, no color)
- 12-inch patio pot at $13.99 - a really good value
- 12-inch coco fiber basket retailing at $16.99
- 3-pack quart berries dormant retailing at $19.99 - great packaging
Sam's Club offered the following items:
- 13-inch patio pots retailing at $17.86
- 12-inch coco fiber baskets retailing at $17.86
- 10-inch premium baskets retailing at $9.42 - a great value
- 1801 annuals for $9.42
- 10-inch tomato caged retailing at $9.42
Sam's featured large displays in the parking lot and was attracting a lot of interested customers.
Clearly, this is turning into a great season in the Atlanta market, with demand for lawn and garden products stronger than ever. All garden centers we visited were crowded and, more importantly, consumers were buying. Vegetables, as expected, were extremely popular, as were annuals and perennials. Two big winners are Scott's, with every cart going out of the stores containing one or more of its brands, and Bonnie Plants, which appears to be having a banner year as the demand for edibles continues to grow.
It was good to see how well the Pike Nurseries group was performing, with upgraded stores and a vast improvement in selection and merchandising. Why is Pike Nursery doing so well in a market that has so many home centers and mass merchants? Most of their annuals, for instance, are produced by growers who also grow for the big boxes.
When visiting Pike Nurseries stores, a number of elements become very apparent:
- You never see carts or other debris blocking aisle ways.
- Seldom do you see personnel watering during the day.
- They do not have a huge focus on bagged goods like the big boxes.
- They do not offer the same plant brands as the big boxes - I saw no Proven Winners or Wave in the stores visited.
- Prices are clearly marked and in the case of hanging baskets, every item has a price tag.
- Pike has the most friendly and helpful personnel, something the big boxes have not duplicated
- Aisles are wide enough for carts to pass going in opposite directions.
- Great use and development of POS materials.
- Pricing strategies that make Pike competitive on the common items but extract value on their unique items
Clearly, Pike Nurseries has made its stores destinations for many consumers, taking over a failing business and revitalizing it into a very successful group of garden centers.
About the author: Jerry Montgomery is a 40-year veteran of the floriculture industry and has worked for distributor companies, breeders and large growers specializing with a focus on sales and marketing. As an industry consultant, he works for large growers, distributors and breeder/producers. His focus is to understand the market dynamics from breeder to consumer through intense retail travel, visiting almost 1,500 stores since January 2008.
Jerry Montgomery is a veteran of the floriculture industry who has worked for distributor companies, breeders and large growers with a focus on sales and marketing. As an industry consultant, Montgomery works for large growers, distributors and breeder/producers. His focus is to understand the market dynamics from breeder to consumer through intense retail travel, visiting about 2,700 stores since 2008. You can eMail him at firstname.lastname@example.org.