Garden retail - bulk selling

With wages far from keeping up with inflation the public has tightened its purse strings. Many shoppers - 53 per cent according to Mintel's latest Lifestyle Survey - are now choosing retailers based on the cheapest prices.

The trend is forcing businesses, garden centres included, to look for new ways not only of retaining clients, but also of attracting new customers.

Fighting a decline in footfall and a perceived threat from DIY and supermarket ranges, some garden centres are focusing on promotion and discount-led sales strategies. Others are capitalising on the "pile-it-high-and-sell-it-cheap" concept.

That strategy is behind the eight per cent year-on-year growth in sales recorded this year at Planters' Garden King centres, according to the firm's area manager Darren Sanders. Last month the business announced the purchase of Staffordshire-based Bradley Nurseries - the second centre opened under Planters' Garden King brand - and it is considering more acquisitions.

As well as their garden product ranges, the centres stock supplier clearance items in the belief that it fuels footfall and drives up additional spend through impulse buys.

Pile-it-high-and-sell-it-cheap

"We started using this concept with a pallet of solar lamps and, as popularity grew, we got braver and bought bigger quantities, got better deals and started stacking them high. As long as we think it will sell, it's a good price and we promote it well in the paper, it brings people in," maintains Sanders.

Garden-specific products such as packets of lawn food shift in the same way, he adds. Sanders prices stock on perceived value, which is usually higher than the recommended retail price. He tests price points on the same items at the Newhall branch, where he is manager, and the new Bradley store.

"It is a similar concept to B&Q or Homebase in that we have good prices to bring people in and other products marked higher. We compete well with them because our staff have the knowledge to back up the products - it's not just about price."

Sanders says that despite the cheap sale stock, the stores' gardening product range still attracts keen gardeners, although the "bargain" concept means compromising on appearances and ranges.

"We don't have a full A-to-Z range of plants. We tend to concentrate on fast-moving lines. It saves on wastage and it's increased our sales."

The stores' displays are not the "prettiest", he admits, because they will not spend money on fixtures and fittings simply for aesthetics, but bold pallet displays shift stock effectively, he says.

Cherry Lane Garden Centres, owned by umbrella discount retailer QD Stores, follows a similar strategy and group managing director Justin Farrington-Smith says beautiful displays are not what its customers expect.

"We attract slightly different shoppers than you would see in a top-end garden centre. People come to us because they expect to see great value. We put our promotions in strategic locations around the store and they shout price, availability and what a great bargain they are. It's really effective for us."

But he says customer service is as important as discounts and promotions. "You have to have all the ingredients otherwise you will fail as a business."

Service and quality

While the price-slashing and bulk-selling technique is being adopted by a few, it is an approach that the majority of independent garden retailers are unlikely to turn to. So where will the wider market place its focus?

Service and quality are the foundations of London-based centre North One and its recentlyacquired sister store West Six. Owner Beryl Henderson says she would never have products "stacked high with big signs all over them".

"It's a pretty unimaginative sales technique and it's just something we simply would not do, although it works for other retailers," she explains. "For us, the most important thing is our image and we place a huge amount of emphasis on our customer service."

Henderson says that North One customers do not expect bargains, although it does run seasonal promotions, on items such as bird food and manure, which are displayed "discretely" among other non-sale stock.

In Guernsey, Blue Diamond garden centre managing director Alan Roper also says the "discount sign approach" is not for them, but that a lot more emphasis has been placed on value for money this year.

"It doesn't mean we have reduced quality to sell it cheap," he explains. "It just means we are working with the quality we've always had, but expressing value more and making sure we have promotions running effectively in key gardening areas that are active at the time."

Roper has never believed DIY stores pose a serious threat to independent garden centres, but he says with chains such as B&Q making more commitment to gardening, the sector should be aware of the products and prices being offered.

Against this backdrop he believes that Blue Diamond's growth will come from providing service and a wider choice of stock than his competitors. "We are not afraid of higher price points providing the innovation, quality or point of difference is there - not through just piling high and selling cheap. Customers get confused by that - especially if that's not what you used to do," he explains.

Roper says businesses must have a clear understanding of their own identity and know their clientele or they will face problems, particularly in today's uncertain times.

"There is a market for bulk selling on the cheap, but you have to decide which end of the scale you are operating on. You can't be all things to all people. History is littered with examples of retailers, from fashion to food, who damaged their brands when they tried to suit everyone and their customers got confused and left," he says.

Branding key

Garden centre consultant Eve Tigwell echoes the importance of branding. "In our industry there aren't many recognisable brands. For us, the brand is the garden centre rather than the product, but many don't do enough to promote themselves," she maintains.

Tigwell says DIY stores will never be a great threat to well-run independent garden centres as long as the stores are strongly branded, know their market position and maintain customer relationships. "Focusing on existing customers is easier, cheaper and much more effective than trying to bring in new business. Retailers need to put in place marketing schemes that encourage their shoppers to visit more frequently."

Tigwell advocates voucher systems, where shoppers are offered a free gift when they spend a certain amount, to build customer loyalty.

"We've found the most effective gift is a free cup of coffee, but essentially it should be something small that the customer actually wants. It establishes customer loyalty and suppliers will see it as a way of developing their brand."

Product bundles such as two items for £10 on key lines are also very effective for garden centres, according to consultant Neville Stein. But he says nothing will ever beat face-to-face selling.

"I go into countless garden centres and either I don't see many staff around or, if I do, they often don't make any contact. Get more people on the shop floor, train them to greet the customer, engage them in conversation and teach them how to question the customer about their needs," he advises.

Mintel head of UK retail research Neil Mason says that service will become an increasingly important way for independent garden centres to differentiate themselves. "Competition is coming in from the bigger stores and in this economic climate, consumers are becoming a lot more thoughtful about what and who they buy from."

The key, he explains, is to offer a combination of good service, price and quality. "Service and specialist knowledge is what they (independents) can use over supermarkets and DIY outlets."