Kevin Bradshaw: longer deals will be positive for garden industry
By Matthew Appleby Friday, 27 September 2013
Garden Centre Group says changes to supplier relationship include third-party logistics provider to take product to hubs.
The Garden Centre Group (TGCG) chief executive Kevin Bradshaw wants to reassure growers that new three-year deals for suppliers will be stronger than current "notional commitments for the following season".
Grower Orchard Nurseries (Terrington) partly blamed TGCG for it going into liquidation after TGCG would not take an order in 2012 because of the "bad season" (see p6). Bedding growers discarded an estimated 30 million plants this spring after retailers rejected orders because of low sales caused by the cold weather.
At the time, TGCG chairman Stephen Murphy said the 139-centre chain stopped taking stock because it was "pushing back into the supply chain" (HW, 12 April).
Bradshaw would not comment on specific nurseries, but said: "It is our intention to give suppliers the security of a contract over the course of a three-year time frame, which is why it is such a positive move for the industry."
He added: "The way we structure the contracts to our suppliers will be such we will deliver a good level of underlying security for committed suppliers into the future. I'm not saying the contract will be 100 per cent supply into the future because of the (weather) reasons you outlined. Commercially that's very difficult to undertake, but as far as we can we will provide strong and underlying commitments."
Bradshaw said he is working out detail with suppliers. Three-year contracts will enable nurseries to invest "with the security of multi-year orders" and nurseries have received the contracts positively, he added.
He gave support to the NFU's planned extension of the Groceries Supply Code of Practice (HW, 16 August): "Any opportunity to do that (make good strategic partnerships) is a goal."
Suppliers have been asked to cut prices to TGCG by three per cent. Bradshaw said redundancy notices sent to 13 regional managers do not mean the Syon Park-based company lacks concern about losing experienced horticultural staff. "Retaining the best talent is a high priority. Horticultural experience is highly valued within the group. We couldn't achieve quality standards in horticulture without that depth."
TGCG is about to appoint a third-party logistics provider to take product to hubs, believed to be in Cannock and near London. He said this will benefit smaller growers by giving them access to a wider network of sites (see p10).
He said TGCG is committed to keeping smaller centres and growing sites Bridgemere, Woodlands and Old Barn, and wants to carry on buying more centres over the next two years after taking over Garden & Leisure in an £18m deal last week.
The buyout of the seven-centre, £40m-turnover G&L (HW, 3 July) gives TGCG a turnover of £304m. The group now owns 17 of the "Garden Retail Top 100" individual centres by turnover, including nine in the top 40.
Revamps of existing centres will centre on adding concessions, both through First Franchise and an extended internal team. Expanding catering is another focus, as is appealing to a broader range of customers away from the "elderly affluent", said Bradshaw.
Business strategy Broadening the offer
The Garden Centre Group (TGCG) chief executive Kevin Bradshaw has said a main part of his strategy is to "broaden the offer within the leisure side of the business".
He added: "That's why Garden & Leisure was a great acquisition because the large-scale format sites lend themselves to that brand of offer to our customers."
Bradshaw said he never considered not taking G&L's two unprofitable sale and leaseback centres from Belgian owner Louis Delhaize, which also owns Truffaut. G&L's Cadbury and Endsleigh sites were sold to La Salle Investment Management in 2006 for an estimated £30m and leased back.
He said Waitrose's plans to rebuild the garden centre at Shrewsbury are an "exciting opportunity". Terra Firma, which bought TGCG for £264m in 2011, has £100m to spend and plans to expand to 200 centres.
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