Horticulture on the High Street - is it a growing market?

Discount horticulture sellers 'on the high street' are flourishing after B&M opened its 118th in-store 'garden centre' and research showed market share is expected to grow 46% in the sector.

Analysts GlobalData's new report ‘UK Discounters 2017-2022’ reveals discount retailers could gain an extra £9bn slice of the total retail market to make their portion £32.5bn by 2022. Aldi, Lidl and B&M Bargains share 70% of the discount retail market. DIY & gardening, health & beauty and homewares are expected to deliver the strongest category growth.

GlobalData’s research shows that 89.4% of the UK population have shopped at a discounter in the last 12 months.

Food & grocery is the sector with the highest market value, worth £15.7bn in 2017. GlobalData expects this to grow to £21.8bn by 2022.

DIY & gardening is forecast to grow 46.6% between 2017-2022.

Analyst Molly Johnson-Jones said: "The discounters have expanded their range in the DIY & gardening market at a time when consumers are seeking reduced cost solutions for doing up their homes and gardens – B&M will particularly outperform in this area as it adds garden centres to its retail estate over the next few years."

Discount retailers work off figures showing garden centres take circa one-third of the UK market and DIYs about a quarter.

But what are the threats/opportunities to traditional garden retail sales outlets and to the supply side?

B&M

The latest new B&M Home store opened in Thorne, South Yorkshire last month, complete with a 5,842sq ft garden centre.

B&M is set to open another six new stores in August and September, two of which will have garden centre attachments – in Port Talbot and Frome. B&M operates 118 garden centres within its outlets nationwide.

B&M sales grew by 17.8% at B&M's UK stores to £598.4m, with like-for-like sales jumping by 7.3% for the 26 March 2017 to 24 June 2017 period. B&M plans to open between 40 and 50 new shops this year as part of its plan to meet its target of having at 950.

Horticulture buyer is Nigel Press, formerly a buyer at Focus. His former former Focus colleague, Gez Smith, is now senior buyer at JTF, which operates 12 mega discount warehouses across the North and the Midlands and turns over £73m, with a focus on home, garden and seasonal.

In September, at Four Oaks and Glee, he will be catching up with suppliers he has not spoken to for a while and speaking to new suppliers who he feels he can add value to and who can add value to JTF.

He says: "Where non-garden centre retailers can offer either a unique selling point or a keenly priced product, there is an obvious opportunity to grow sales. We think our supply base gives us the opportunity to do both."

At JTF Mega Discount Warehouse, plant sales are up strongly once again this year. Top sellers were £1.99 bedding, hanging baskets and added value planted arrangements made by West Yorkshire-based Priory Nursery, which drives JTF Mega Discount Warehouse’s whole plant offer.

Smith adds: "For us, gardening is a highly significant part of our business, arguably the biggest growth channel. We’re always looking for new opportunities, products and ideas. Glee is bursting with innovation, inspiration and excitement, I’m spending three days there this year to ensure we’re stocked with the best garden products next year."

He says price and quality are equally as important: "JTF Mega Discount Warehouse is dedicated to delivering outstanding quality at the best price across all its products."

The whole non-garden centre and DIY ‘high street’ garden sales market continues to grow, he says because mainstream retail looks at gardening as recession-proof.

Mdj2 Associates director Andy Newman said: "Garden centres should never be complacent about competition, wherever it comes from, but the growth in the value sector should not pose a significant threat to most centres. It's worth remembering that competition from mainstream retailers is not new - it has been present for the last 30 years - don't forget Woolworths with it's 880 stores had a very significant garden business back in the mid-90s.  

"Wilko's was arguably plugging the gap left by Woolies demise until the rapid growth of new value retailers in the last 5 years such as B&M and The Range. While these value retailers deliver very competitive pricing, range choice is limited, and they do not offer the same shopping experience as garden centres. Garden centres must always offer competitive pricing, but if at the same time they continue to strengthen their overall shopping experience, including great restaurants, the threat posed from High St/value retailers should be minimal."

Discounters are leaner and have fewer staff than garden centres, and inevitably, are cheaper, but have less time to look after plants. High footfall discount supermarkets such as Aldi and Lidl do well with plants because they sell through quickly, while M&S has a good reputation and Morrisons is regarded as the best plant seller among its peers. JTF, at 12 stores, is smaller enough to be able to micro-manage plants and has managers who have discounting flexibility so they can avoid plant wastage.

Supermarkets sell fresh food so have experience of looking after ambient product, but that may not be the case with some discounters and their plants, which are often retailed on Danish trolleys at the front of stores giving a bright first impression of the business in spring and summer.

While supermarkets have been selling cut flowers for 30 years, and making a good job of it, selling plants outside the mainstream garden retail arena is a "learning curve" for some retailers, says MorePeople's Guy Moreton, who believes a bunch of cut flowers at £5 is an accepted purchase but a plant at £3 is not yet so.

He adds: "It's a good thing if these stores are taking plants seriously and making sure staff are adequately trained to be able to handle products that need care and attention."

But he says there is a paradox: "The more people selling plants the merrier – get plants in front of people. But if they buy something that has not been treated well and dies quickly they may have a negative impression of our industry and we will lose potential sales."

Retail consultant Neville Stein said: "We have seen the discounters 'do' gardening for a while with both Aldi and Lidl now featuring regular 'spot' promotions outside their stores in the Spring months. The challenge for all these discounters including B&M, The Range etc is to maintain the plants in a saleable condition. However one only has to visit these stores on a frequent basis to realise that the plants are not often maintained, and look poor and uninviting, so this of course is an opportunity for the traditional garden centre to showcase plans that are fresh, healthy, well maintained. Likewise then an opportunity still exists for independents to provide the customer with advice, something one would not get at a discounter. 

"On the other hand, typically the offer at a discounter is a value offer, now if this encourages someone to get into gardening for the first time, one hopes that these customers will get the gardening bug and realise that they need to make a visit to their local independent garden centre to get some quality plants with sound advice on offer."
In Mintel's 2017 gardening report, analysts Jane Westgarth said this year "promises to be a year of significant change for garden retailing. Bunnings, B&M and Wilko will emphasise everyday low prices, while B&Q will play to its strengths as a place where novice gardeners can get something to cheer up their plots easily. Meanwhile the garden centres will continue to raise their game as leisure destinations, while maintaining a specialist presence as a destination for good choice and quality. The popularity of garden leisure will continue to encourage home and general retailers to intensify competition for market share of furniture, barbecues and garden décor goods."

Non garden centre/DIY bricks and mortar garden retailers:

  • JTF Mega Discount Warehouse
  • B&M
  • Aldi
  • Lidl
  • Poundland/pound shops
  • Dunelm
  • The Range
  • Countrywide Farmers
  • Waitrose/supermarkets
  • Robert Dyas
  • Wilko

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