YouGarden director rails against price 'silliness'

"Silliness" on pricing could actually lead to higher prices, eventually, according to YouGarden managing director Peter McDermott. Retailers that sell Christmas trees at £9.99, a "bucketload of plants" for £6-£7 or Groupon deals for 24 lavenders at £7.99 are not doing anyone any favours, he said.

"If you're going to buy one Christmas tree at £9.99 you would probably buy one at £20 because it's still cheaper than the market price. There is a desire to sell cheaper than the market level just to get PR," McDermott added.

"One of the challenges we gave is in a season where the sale of goods is untypical because it is a late season and there is backing up of product in the supply chain in mail-order businesses - a big release of stock quickly, which potentially bucks the price. We could be in one of those seasons."

He pointed out that in Spain many nurseries have gone out of business not just because of the poor Spanish economy but because they have not made any margin selling across Europe.

McDermott said the consumer will have less choice in the end. "We do ourselves no good in devaluing our product. We need to make more of the features and benefits of the product. This feeds back in recruitment of talented people in the sector if not it's profitable."

He added: "Some businesses are hell-bent on racing to the lowest possible price, which is really unhelpful to the industry and devalues the product and the whole industry. The increasing concern I have is around the sector people are selling more cheaply than they need to and below the level consumers are willing to pay.

"Any business that is selling at low or no margin is doing themselves and the industry generally a disservice. In the end there will be fewer nurseries and higher prices. The consumer is king but if they only ever buy cheap stuff when it gets to the last few growers standing prices go up."

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