Garden Center Retail Spring 2013 Analysis

Spring Fling 2013: Maybe Things are Starting to Change?

Apr 5, 2013 8 Comments

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!”

Enjoy!

(photo credit: taken at Round Rock Gardens, TX)

Terri Mitchell
Apr 6, 2013 at 12:52 pm
We feel optimistic also. We just had our big Spring Sale, and it looks good. Nothing to shout home about, but encouraging. We had similar results last year, but the cold streak in May and June took it all away. The one bright spot is that customer counts are slightly better than last year. Seems like we had alot of new customers. The newer ones tend to be young families in their 30’s and 40’s. Now we have to work on increasing the average sale. Ours were down about $6 per customer for the Spring Sale compared to last year. We’ve also been making personnel changes, and the crew is right on board. Hang in there, I think people are tired of depriving themselves, but they are watching their pocket books carefully. I agree that the “grow your own” is still going strong. People are also hungry for knowledge from someone they can trust. That’s where we have the chance to shine. Respectfully, Terri Mitchell
1. Keith Faarrand
  Apr 6, 2013 at 2:31 pm
  Terri,
  Thanks for your input too. After reviewing Ian’s discussion, I was thinking if you all were well on your way as well. We are still waiting…………………….Keith
Tina Bemis
Apr 6, 2013 at 2:46 pm
I sure hopw so. Still pretty frozen in the tundra of new England. Some GC’s not even open yet.
Maureen Murphy
Apr 6, 2013 at 3:47 pm
Feeling very optimistic here in the upper Pacific Northwest. Our Spring Fling day was up by 100% from last years Spring Fling event…yes, we did twice the sales with both days being good weather. We are up comfortably YTD and things just feel so much better. House construction is also definitely back as we are seeing contractors in the nursery doing big buying for new home projects. Hope the trend continues.
Thanks for the great article, Ian.
Frank F
Apr 7, 2013 at 5:36 am
Sales are still a bit sluggish here in northern Jersey but the weather seems to be starting to turn this week. So far we are seeing some encouragement in early spending. For retailers in the Northeast challenges and opportunities lie in the effects of Hurricane Sandy. There was so many thousands of trees down in New Jersey, especially in the older communities of the northern part of the state, that customers yards have radically changed. What was shade is now full sun and what was a private retreat is now in full view of the neighbors. So far we have had increased interest in trees and privacy hedges. Insurance money is starting to come through and people are stepping outside and realizing that their pools and decks are no longer isolated. The shore damage will keep some people closer to home this year because most areas are still rebuilding and many people that own homes that were damaged are still waiting for the flood maps to be redrawn before the invest. A concern is that a large amount of residents in our area own shore houses and are facing monumental rebuilding tasks that will tie up a lot of discretionary income. Either way this is proving to be an interesting start to the season. Thanks for the good insights Ian.
Ian Baldwin
Apr 8, 2013 at 8:56 am
Ah, good to see our GCU flock responding, thanks everyone, look for signs of behavior change and be there for them. Good analysis of the NJ situation Frank, just think what you can do with all that sunny ground and all those now-exposed homeowners (at least you will less get less demands for Impatiens!)

Have a great week and keep the faith, there are 115 million households and they are not all broke!
Jeff
Apr 19, 2013 at 6:39 am
“No matter what changes on the inside, it really still has to do with the outside”
So send us some Ca. sunshine and warmer weather! Good article Ian.
Robort
Nov 13, 2013 at 2:47 pm
Wow! I’m extremely impressed, Well done!