Garden Retail 2012: Observations in Philadelphia

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The weather was cool and overcast in Philadephia on May 5 and 6, 2012, with temperatures ranging from the mid-50s in the mornings and the mid-to-high 60s during the day, with no sun until late afternoon on Sunday. Overall it was a disappointing weekend with consumer traffic far below norm for a May weekend. It seems like the consumers in the Northeast will not garden until they see a warm sunny day.

Home Depot

You will not see any better merchandising at store level than the Bell Nursery team of highly trained professionals that are dedicated to serving Home Depot and the consumers. This group is so interested they never miss a chance to interact with a consumer. The management structure of the merchandising group allows for a lot of support and allows for the field management people to make decisions on replenishment

The other big thing that Bell does is put a lot of WOW on their store shelves with heavy-blooming annuals and perennials; you just don’t see annuals without massive color and it makes for very compelling displays. You will likely never see a national retailer garden center with more WOW than those in Philadelphia.

Home Depot has put a large emphasis on the Proven Winner brand and nowhere is it better executed than the Bell Nursery stores, again with massive color and compelling displays. There is a lot of shelf space devoted to a 6-inch basic SKU in all the Bell stores, resulting in great displays that are well merchandised and always striped for maximum impact. Whether the 6-inch is merchandised on carts or tables, it has a huge visual impact in all the stores because of the amount of flowers per plant. Another standout product is the geranium line, always with more flowers than others. Consequently, these are high-impact displays than translate into higher sales.

Although Bell Nursery puts really good products on the shelves, in my estimation it is their merchandising group that creates so much separation between them and the competition. I had the opportunity to visit four Home Depot stores with Janet Finsen, the regional manager for Bell and was blown away by her knowledge and dedication to Bell, Home Depot and the consumer. Janet understands more about merchandising than many in the industry. She also is well respected by the people that report to her because of her leadership skills and concern for the employees.

Jennifer Steere a District Manager for Bell Nursery was very impressive because of her work ethic and concern for the customer and will do whatever it takes make them happy. I was also really impressed by Brian, a store supervisor at Home Depot #4137 who was hard at work early on Sunday morning directing his crew in preparation for the Sunday traffic after a huge retail day on Saturday. Here is another example of dedication to Bell, Home Depot and the consumer, a real pro hard at work.

Lowe’s

Lowe’s in this market offers outstanding product quality with a real diverse and relevant product mix but comes up a little short on merchandising relative to the competition. In the patio pot group they have a huge array of container types and price points that provides a lot of consumer choices and also makes for an interesting shopping experience.

They have created some really interesting programs that always seem to standout at retail, including Colors of Coleus, Premium Petunias and Colors of Celosia

In the patio pot group some of the more interesting SKUs included:
•    Sunken Treasures 3-quart in a burgundy container $18.98
•    2-gallon Vase, an urn in a dark burgundy container $29.98
•    8-gallon Showcase with a lot of color, a real value at $49.98
In the vegetable category although Bonnie Plants is the primary vendor, Metrolina Greenhouse has created some really nice niche vegetable SKUs:
•    The Color Of The Pot Tells How Hot is a pepper program with four different-colored pots indicating the degree of heat in a 10-inch caged container. At $12.98 this is a really innovative SKU
•    10-inch hanging basket tomatoes using varieties that were actually bred for baskets

All in all, Lowe’s has a good marketing program and very consistent product quality. What they lack in this market is great merchandising. Metrolina does not merchandise these stores and they clearly know things need to be improved. Don’t be surprised if they end up taking over the responsibility.

Walmart

The Better Homes & Gardens program was not highlighted like we observed in other areas, with smaller inventories and very little use of the POS signage. There was a lot of emphasis on the 606 SKU, the 209 and 306 Wave.

The merchandising was not very impressive, as we observed a lot of displays with no price signs, the wrong price signs and tables with mixed products that had not been merchandised for days. The initial product quality was pretty good but because of the lack of care it deteriorated to the point some of it was not salable and should have been discarded.

If you compare these stores to Walmart in Charlotte and Atlanta they are not in the same world.

Costco

In the King of Prussia stores, they only had a 14-inch patio combo at $28.89 and 10-inch Sun Parasol trellis at $24.98 and the 14-inch combo was mostly out of bloom and stretched.

In the North Wales stores they had a three pack of 6-inch campanula, retail $15.98, that was selling like hot cakes because it had a lot of color. It was supplied by Kurt Weiss. All season long I have noticed Costco does not have the WOW annual baskets and patio pots they had several years ago. It seems they have gone back to the same items seen in other big boxes and now have more of an emphasis on trees and shrubs – or maybe they can’t find the right supply of annuals.

Sam’s Club

Willow Grove was the best store with displays on the outside aprons but the product was small and not really impressive. Most of the annuals were from Catoctin Mountain Growers.

Terrain At Styer’s Garden Center

A real traditional garden center with great eclectic displays, Terrain At Styer’s is not nearly as dependent on annual sales as other retailers, with large displays of perennials trees, shrubs and a lot of outdoor living items. This is a really upscale garden center targeting the higher income consumers and exhibited by the opening price points: annual 10-inch hanging baskets $45, 1-gallon perennials $12 and 4.5-inch basic annuals $5.

Produce Junction

Their core business is obviously produce. In some stores they have as much display space dedicated to outdoor garden and indoor flowering pot plants. They also have a large cooler in the middle of each store with large displays of cut flowers, mostly bouquets.

They have the most aggressive prices on annuals I have seen anywhere in the country.

Here are some examples:

Item     Size    Retail
Vinca Vine    4 inch    $1.50
Spikes    4 inch $1.50
Hanging Baskets Basic 10 inch $6.00
Hanging Baskets Premium 10 inch $7.50
Hanging Baskets Ferns 10 inch $8.00
606 flat (36 plants) Flat $9.00
Perennials 10 inch $7.50
Hibiscus braided 10 inch $14.00
Premium Annuals 5 inch 3/$8
Geraniums 6 inch 3/$10
Geraniums 4 inch 3/$5
Patio Geraniums 10 inch $9.00
Vegetables 4 inch $1.00

Summary

This is another area where Bell Nursery stands out, offering the highest quality merchandise backed by beyond outstanding merchandising. One of the elements that sets Bell Nursery apart from others is what we refer to as the Bell WOW. They always seem to put more color on their annuals than other vendors and that creates compelling displays.

If consumer decisions are heavily based on impulse, clearly Bell has created another advantage for themselves and the Home Depot.

Between the Baltimore and Philadelphia markets, Bell stands out as the clear winner. They have made these markets incredibly difficult for the competition.

Jerry Montgomery (mrplug@cfl.rr.com) 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.

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