Ian Baldwin: 2017 is Off to a Strong Start For Plant Retailers

Ian Baldwin
Ian Baldwin

Note: The following is the latest blog posting by garden retail industry consultant Ian Baldwin. It was originally posted on Feb. 15, 2017.

I took a few months off the blogging trail, so we didn’t distract our massive readership from the 2016 election! Then I waited a few more weeks to see what the election had done to the retail garden business and voilà, here we are now well into 2017.

It’s Been a Happy New Year So Far

I do believe it will be a happy 2017 for the retail garden business and the supply chain that supports it. The business signs are quite positive, always allowing for the usual weather challenges and a (mild) cyclical recession predicted for 2018. The fourth quarter of 2016 ended very well once the consumer’s attention was refocused after the election. Garden center teams or independent garden retailers I spoke to after Christmas said the last two months had been very strong in sales and the consumer’s attitude to spending. Average sale per customer was well up over the last few years and all operators I spoke to focused on the same observations (albeit anecdotally).

Simply put, the biggest, most expensive end of the range of almost everything sold out first.

It didn’t matter whether it was wreaths for the front door, everlasting Christmas trees, or swag for the mantle, the most expensive selection sold out first. The $2000 everlasting tree sold before the $800 one, the new clever lighting set sold before the cheaper one designed five years ago, and the biggest table-runners went first. Even the sadly “footballed” Poinsettias were elevated for a few weeks, with the bigger pots and higher priced specimens selling out early.

It’s been at least eight years since garden retailers told me that they sold out of cut trees by Dec 18 and no consumer seemed to want a plain, decorate-it-yourself wreath. They wanted them fully decorated and ready to shine. So the end of a dominant election, a record-high stock market and finally, rising household income, do seem to have combined to loosen the purse strings.

Spending Can Be Fun!

From the “Do It For Me” side of the aisle, we saw a strong and increased ticket demand for Christmas porch pots, outdoor lighting, tree installation, and interior decoration. All signs of a more relaxed consumer.

So, does this mean a fabulous year ahead as consumers spend like fools? I am not sure about that. Remember that the media giveth and the media taketh away, but the signs are very good. Garden retailers can bet on a consumer who is much more open to persuasion than even two or three years ago.

Another factor in the mix is the national conversation about the increase in minimum wage either by legislation or just through simple market forces. What this means is that most customers know someone in their circle of family or friends who is getting a raise, so they should not be shocked to see prices increase as a consequence.

As one garden center owner said, “For the first time in years, my customers are expecting me to raise my prices, so I am not going to disappoint them!”

What’s Your Price Rise Strategy?

In the spirit of “sharing is caring,” who among you has added 4%, 8%, 10%, or more to some lines (and which lines?) you will be carrying? Let’s hear what you are looking for in your price increases this year. Who’s going to start the bidding?

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