Note: The following is the latest blog posting by garden retail industry consultant Ian Baldwin. It was originally posted on Sept. 21, 2017.
It’s been a busy summer of travel, conferences, and clients, which makes now the perfect time to ask: “How was the garden retail business for you in 2017?”
I was guilty as charged in being distinctly bullish about prospects for a banner year this year. The economy is firing better for most (though not all) people than it has done for years. We see a soaring stock market, rising household income, and talk of a $1,000 cell phone. Landscapers and housing contractors are sold out for months (years in Utah, so I am told), while there is just enough inflation around to encourage some much-needed price raises.
It should have been a banner year, just like 2016 should have been, too. But neither year reached the expectations of retailers that I know. I see reports that one of the home centers is up 6% in sales across the board, but much of that was contractor-driven. Meanwhile, plant and hard goods suppliers I know say it was just so-so.
Two Steps Up, Two or More Back
Most independent garden grower-retailers saw a modest 2% to 5% rise in sales, but a smaller or flat traffic count with a compensating rise in average sale, just like the last 15 years. But rises in sales were largely due to the price rises that I (and others) urged retailers to adopt. Given the ever-rising costs of business, some might even say they went backwards despite an increase in the top line sales. Yes, it was a poor weather year for many, but there has always been weather — this is something else.
So I am officially declaring that for the first time in my lifetime, the do-it-yourself (DIY) garden business hasn’t surged after a recession — and it’s not going to under the current model. There has been such a fundamental change in the consumer’s lifestyle and demographics since 1983, 1990, or 1999 that history is not a good guide here. What worked for the last 45 years isn’t working.
Let’s Analyze Before We Strategize
Before we deconstruct, let’s hear what happened from the trenches — your trenches. I have good data that shows the DIY sales leaders this year were such categories as indoor plants, (green and/or blooming), succulents, edibles, pottery, personal (think purses, jewelry, apparel, etc.), and self-indulgences (everything from big blousy hydrangeas to Yeti coolers). Meanwhile, normal-sized color was flat and woodies were down significantly in DIY business (unless you have lots of new homes locally).
In other words, consumers decorated a lot — but didn’t dig much.
So, how was it for you? What were your category winners and losers? Did you see decorating as a major revenue stream and invest in it, or were your buyers still buying like it’s 1997?
I look forward to hearing from you as we re-construct the garden retail business together.
Go to Ian’s blog page to weigh in with your thoughts.