Spring Fling 2013: Maybe Things are Starting to Change?
Oh I know this industry is full of perennial (ha ha) optimists but I just begin to wonder… are things starting to improve? (Though to be fair, if I lived in the part of the USA where the weather was back to a normal March seeing my sales numbers plummet compared to last year’s perfect March, maybe I wouldn’t even be writing this.)
But in California where the prior four springs have been down, flat, flat and down, there are some signs, trends and tea leaves that suggest things might be picking up ever so slightly. And the early spring here in the West is showing indicators the rest of the country might want to watch closely.
First, a business read: the wonderful warm, dry weather for the last few weeks brought April numbers in March for most L&G retailers with sales increases for the comparative stores during the comparative period of +25% to +50%. Some are posting their biggest March ever, even bigger than the last big cash-fest in 2007. (OK so we had 5 Saturdays and perfect weather in March but there’s more to it: Weather drives customer count, attitude drives customer spend – and that’s where we might be seeing some good news, finally.)
The Nitty Gritty Data
Looking at POS data and shopping carts suggests that there has been an increase in the bigger sized items where there was a choice; bigger pottery, statuary, fountains, 5 gal shrubs, 2 gal perennials and so on. Although trees are still stalled, there has been a welcome uptick in shrub sales this year, especially flowering ones that can be used as decorative color or basic landscaping. It’s nothing like 2002 – 2007, but it is a start. We even hear of the basic shrub shortages that the growers were predicting 3 years ago. Classes or seminars on DIY landscaping, sprucing up the greenery or “curb appeal” that were empty just 2-3 years ago are oversubscribed everywhere, while the landscaper’s phones are starting to ring again. Meanwhile the home-grown food theme is still a traffic driver, as is decorating and self-indulgence.
A smart retailer I know from an earlier-Springing part of the state pointed out that this new-found optimism is very recent – since December actually. He said even the Christmas customer was not this enthusiastic about spending money. In fact, several retailers told me they were caught napping by the big demand increase for plants, pottery, seeds and bag goods. Fall season consumer behavior did not predict such a quick turn-around in attitude. So what’s going on?
It’s the economy
The stock market is on a logic-defying climb to all time new highs, which matters a lot in the California economy where taxes and government budgets depend heavily on capital gains and unemployment is still falling. Since February the news media have begun to talk positively about the housing market, hedge-fund managers are snapping up investment properties creating a demand. That drives up prices, turn rates and homeowners’ interest in spiffing up hundreds of thousands of properties that have been ignored for 4 years.
All this, I think, has resulted in a slight loosening of the purse strings … even though some areas are still struggling and the city of Stockton down the road just went bust. The warm weather drove April traffic in March but the customers’ self-confidence pushed up the average sale in the garden center by anything from $3 to over $6 – a huge jump in a recession.
Can it be sustained? Is it predictive?
Our first April week lived up to its showery reputation so we will see if this has legs in another few weeks. We optimists are always looking for light at the end of the tunnel. No one is ordering a new Ferrari, but for now the message from warmer climate L&G operators to their cooler climate brothers is:
“Make sure you have big volume ready to go and backup when that sells out. If your weather is even just “normal” this spring, business is going to break BIG for you!”
(photo credit: taken at Round Rock Gardens, TX)