Continental connections: What importers of nursery stock are doing to overcome the weakness of the pound

How are suppliers of Continental nursery stock coping with the unfavourable exchange rate? HW asks five importers.

Obtaining stocks on demand: some lines run low so buyers have to look to Europe to get hold of product their customers want. Image: HW
Obtaining stocks on demand: some lines run low so buyers have to look to Europe to get hold of product their customers want. Image: HW

Since September 2007, the pound has been on a downward spiral against a strengthening euro, making European goods now up to 40 per cent more expensive. The situation has had a huge impact on overseas nursery stock suppliers operating in the UK, who have had to quickly adjust prices and operations in a bid to remain competitive players in the market.

Most have sought to streamline their business models and supply chain, many have cut their profit margins, some have altered their stock lines and others have altered logistics operations. One thing is clear, Continental nurseries and plant suppliers are not turning away from the UK market and are battening down the hatches to ride out the worst of the economic storm. HW spoke to importers to see what they are doing to hold their share of the UK market.

Richard van den Laak, director, Laak Plants

"To remain competitive in the UK, we are putting more plants on each trolley, cutting back on costs and working with a tighter profit margin. We have cut back on daily deliveries to the UK to just once or twice a week to make it as cost-efficient as possible. Lorries go out full with a high volume of produce. It means some customers will have to wait longer for items to be delivered but it's a sacrifice that needs to be made in order to keep costs down.

"We are asking for lower prices from our growers while asking our customers for a little bit more money. It's a tough thing to have to do but we justify our prices through our quality of product and quality of service."

Jacob Kolff, director, Kolff Plants

"Our model is to work on big turnover and small margins. Our success in the UK, despite current market and trading conditions, is down to our dedicated UK sales team. Both are Brits, living in England, who knock on doors to keep in touch with customers.

"We are keen to build a strong relationship with our customers, so people buy from us not because we are the best or the cheapest, but because they like us and we have a combination of good quality, price and service - you can't make a living by always being the cheapest, it needs to be a combination of factors.

"We have lowered our prices on most products being sold into the UK and see that the larger the plant, the more difficult it is to sell. People are having to pay more for a lot of product lines than they have in the past, but slowly my customer and the customer of my customer are getting used to the idea that things are more expensive. This can also be good for UK nurseries as they can increase their prices as well.

"The UK remains a strong focus for us, particularly the amenity market, which relies heavily on imported plants to fill orders."

Bart Stolker, director, Stolker Plants

"It's not easy for us at the moment. Since September 2007, the exchange rate has changed 30 to 40 per cent, meaning we are 30 to 40 per cent more expensive for UK buyers than we used to be.

"However, the market is picking up quite well. Certain lines are running low or have sold out in the UK and buyers are having to look into Europe to get the stocks. The UK spring weather is picking up too and the phone is now ringing much more often than it was four months ago. We haven't been able to do much on price - transport is expensive, as is labour in Holland. If it's a very large order, there is some flexibility. There is more confidence from retailers now that the consumers will be spending. I expect things will get better as the year goes on."

Iain Pentney, key account manager, Classiflora Imports

"Our customers have dictated that we move down several pot sizes. We're selling more 10-, 15- and 20-litre stock than we normally would. Traditionally, we would expect to see these sales in 30- to 50-litre options. We've moved down a price point to keep retail prices the same but on a smaller plant.

"I don't believe there is a recession - as soon as the sun came out this year, the business went bananas. We are very busy moving into Easter and what we have on the books for after Easter is more than we expected. If the weather holds, I think customers will be shouting at me for more stock.

"Retailers are saying that consumers aren't prepared to pay the prices for large specimens. In reality, in the past week we have had landscape customers bringing clients on site and they have only been buying the larger 60- to 80-litre trees."

Ian Sadler, UK representative, Diderk Heinje

"The exchange rate since September last year has changed 18 per cent and we've had to cut our prices and costs accordingly.

"We are maintaining regular customers and business by allowing them to have the same or very close to normal prices. It's not just the exchange rate - prices have gone up in general - retail prices too. Very few UK growers have maintained the same production costs in 2009 as in 2008 and they are having to ask for more as a result. This has actually made the increase in European prices have less of an impact than it would have had if UK growers could have kept their prices low. We look to offer the best prices we can and have reduced our profit margins for the interim. You can't sustain that business model over a long term but sometimes it needs to be done in the short term.

"There is a feeling that the exchange rate will improve over the next few months in favour of European growers. We're happier than we thought we would be - UK garden centres are having a good spring and that's being shown through order levels."

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