Garden Centres Reveal 2024 Expectations

Gardenforum's George Bullivant has interviewed a number of industry figures about their thoughts on garden centre retailing in the coming year.

Most garden centres were satisfied with relatively strong Christmas trading. But there’s concern about 2024 with rising costs and thefts. We gather the views of garden centre leaders.

Contributors

Gardenforum is grateful for contributions from Alan Roper at Blue Diamond, Chris Francis at Hillier, Nick Burrows at Notcutts, Andy Bunker at Alton Garden Centre, Caroline Owen at Scotsdales, David Little at Poplars, Tim Mason at Your Local Garden Centres and others who preferred not to be identified.

Overall December

For most, December trading was good. There was no late rush, it was just busy all the way up to the 23rd.  

Garden centre sales for many were +3% to +5% up on last year including restaurant sales that were anything from +7% to +15% up. The best figures shared were by Hillier at +9% and Scotsdales at +7%.

Christmas successes

The post Covid stock overhang has cleared and all reported lower residual stocks. This should be encouraging for suppliers exhibiting 2024 lines in the coming shows.

Blue Diamond managing director, Alan Roper, reports that having refurbished their Christmas range the category was ‘pretty good’, up +17.5% and with margins improved.

Scotsdales and Your Local Garden centre had a notable success with live Christmas Trees. While Notcutts reported food, clothes and gifts were particularly strong being double digit % ahead.

Poplars also said food was again the winner. David Little reported, “Customers seemed to be looking for alternatives to supermarket products in the food hall. The restaurant was busy and houseplants had a tremendous month. We could have sold hundreds of Venus fly traps – thanks John Lewis!”

2023 overall was challenging

It seems that a garden centre without recent investment will have done well to match last year for sales, excluding restaurants.  The fall in outdoor living sales has hit the headline turnover figure, but perhaps less so margins as plant sales were strong.

Quite typical are the figures from Poplars who describe the year as challenging with encouraging signs for the future. They had overall growth of +1% a figure that will be close to the industry average.

However, David Little says, “If we allow for inflation then it’s not such a positive outcome. Garden Centre sales fell back by -3% but restaurant sales improved by +14%.”   

He continued “Margin has improved as while garden furniture sales fell by £250k, higher margin plant sales improved by £125k and restaurant sales grew by £150k.”

Blue Diamond had a good year for plants but the autumn was not so good. Sales were up +6% in 2023 and volumes up +5%. Profit on sales were up 9% due to increased group margin overall. “Not a bad year when it balanced out,” says Roper. Turnover will have reached £308 million making Blue Diamond the biggest garden centre group by sales, if not number of outlets.

Scotsdales reported some of the strongest results at +8.5% including its restaurants +6.5% without. 

Weak spots for 2023

Notcutts spoke for many saying “Like others in our sector we have faced significant challenges with sales of furniture, pots and garden ornamentation which fell back on last year’s performance.”

Restaurants - the success story of 2023, but costs…

“Over 2023 restaurant sales have continued to be very strong every month and have become a game-changer for the overall business that no longer has any dead ‘out of season’ periods,” explains Tim Mason of Your Local Garden Centre Group.

Two groups have reported sales growth of +28%, in part due to a return to normal post Covid. Blue Diamond had a +18% bounce back, but Alan Roper warns that it won't happen again next year unless the range is refreshed to inspire people.

Costs have also risen. 

Alan Roper cautions that it is a mistake to be talking about sales alone because of the pressure on margins especially with the proposed 10% rise in the minimum wage in April. He estimates the increase will add £2.5m to the Blue Diamond wage bill. It will add a further £2.5m to maintain staff differentials.

He is looking at more flexible cost contracts and working patterns in restaurants to offset cost increases.

Poplars says catering prices will have to rise again and portion sizes will need to reduce.

Alton Garden Centre explained the National Living Wage is hitting very hard and causing a lot of grief with the age level dropping to 21 and over.

Your Local Garden Centre is less concerned saying, “Cost increases have been an issue but generally our customers have accepted fair increases and so our cost increases have generally been matched by sales increases.”

Medium-and-Measured ordering

How are garden centres approaching their ordering for the season?

Andy Bunker says, “My real message is even in the busy periods to adopt a smaller and more often approach on many lines. Why should I sit there in January with enough compost to last me until May?”

In the main Scotsdales will be doing less forward buying. “We are very comfortable with a little bit more than Just-in-Time, but planning for 6 weeks in advance. Less furniture has been bought forward, but we will put more containers on the water if early sales are good.”

Poplars has coined a new phrase. “We are buying slightly ahead of Just-in-Time. Not little and often but rather Medium-and-Measured!”

Looking ahead – the main challenges

As ever the primary influence on trade for the first half of the year is weather.

• As always, it is the weather says Scotsdales. Caroline Owen also cites ‘The unknown. Currently the Suez Canal is a concern, you cannot forecast these world events.’
  
  
• “We need a good gardening March to get both regular and potential new gardeners out gardening says Alton Garden Centre. A relatively early Easter may help. Andy Bunker says, “A trolley full of hardy nursery is more cash in a trolley in March than a trolley full of bedding in April.” 
  
  
• This is echoed by David Little, “Good Friday is the 29th March so I predict strong sales of hardy plants and then a second wave of tender plant purchases in May onwards.”

Generally the mood is cautious

Blue Diamond’s Alan Roper warns that people are wrong to be optimistic. The economy is getting tighter. 

He also underlines that you have to work for growth. In 2024/5 Blue Diamond will be revamping the pot range and garden furniture. “It's the only way you can get growth.” The group is budgeting similar (+6%) growth for 2024, but it will be different winners delivering growth, swings and roundabouts on departments.

Hillier’s Chris Francis said he believed it will be a more difficult year. He’s expecting sales to be on a par with 2023. “However, given the weather in the early months last year I expect the season to start showing growth but probably not match the peak we saw in May.”

Theft is a problem

Shoplifting (why don’t we call it stealing?) is at an all-time high say Poplars. We are going to reduce our offer on small personalised festive decorations that we sell from spinner stands.

Blue Diamond agrees theft is a problem. They have employed a full-time shrinkage advisor who raises awareness through training and visiting centres. They have been successful catching people and prosecuting them.

Staffing - 40-hour, 5 day working week with alternate weekends is no longer fit for purpose.

Andy Bunker says that staffing levels will have to remain very tight, “So in a way we’ll be understaffed in many areas which worries me as independents pride themselves on service and having advice points that are actually manned.”

David Little says staff costs will be the number one challenge. “We need to creatively work our way around this problem.

“The standard 40-hour, 5 day working week with alternate weekends is no longer fit for purpose. We need staff when we are busy and we need to reduce the wage bill in quieter times.”

However, he is very aware of the risks. “Our staff are so very important to us - so we have to make sure we get the balance right and that changes work for them as well as for the business.”

Source : Reproduced with kind permission from George Bullivant at Gardenforum

Image : wavebreakmedia / shutterstock.com (117231496)

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