Garden retail - supermarkets and garden centres join forces

Supermarkets and garden centres are finding mutual benefits in combining operations to maximise customer footfall and fund growth, Hannah Jordan reports.

Proposals for a Waitrose development at Garden & Leisure's Percy Thrower garden centre are out for public consultation - image: HW
Proposals for a Waitrose development at Garden & Leisure's Percy Thrower garden centre are out for public consultation - image: HW

Prospering UK supermarkets are crying out for new edge-of-town development sites on which to expand their businesses and canny garden centre operators continue to see this as potential for long term growth and investment.

Last week, proposals for another Waitrose development at Garden & Leisure's Percy Thrower Centre in Shrewsbury were put out for public consultation before developer Cranfield submits them for planning approval.

If given the green light, the £40m scheme will see the garden centre demolished and rebuilt alongside a 2,787sq m Waitrose and a parade of seven additional retail units. The newly-built garden centre, anticipated to open in early 2013, will grow by 1,114sq m to 5,574sq m and its currently disjointed glasshouses will be brought under one roof.

Meanwhile, Waitrose has submitted another proposal for a 1,393sq m store on the Garden Centre Group's Northampton Garden Centre site. If approved, the centre in Wootton will be improved and its entrance moved close to the supermarket doors. Completion of the development would be expected by early 2013.

And in December, proposals for a 4,645sq m retail development, including a 3,250sq m Marks & Spencer, on the site of Stephen H Smith Garden Centre were finally given detailed planning consent. Initial plans for the 4ha site at Scunthorpe were to build on the centre's overflow car park and continue to run the garden centre alongside the development. But under the latest proposals, the garden centre would not be rebuilt on the site.

Owner Chris Smith explains that if the current proposals went ahead he may consider selling the whole site to the developer with the option of reinvesting in Stephen H Smith's other centres or potentially looking for a new site to develop.

Demographic check

Garden & Leisure operations director Carol Paris says garden centre owners considering entering similar schemes must look very closely at the demographics involved to ensure that both retailers attract a similar consumer. "Waitrose is very popular and we share a big customer base, so it will benefit both of us," she explains.

One of the major advantages, she continues, will be more frequent customer visits. "People go to supermarkets once a week so we will have a regular footfall, whereas a garden centre customer traditionally shops less often than that."

Under extremely tough market conditions, working in partnership with major retailers makes investing in and improving a garden centre far more achievable in terms of expenditure, says Paris.

By bringing everything under one roof, the Percy Thrower redevelopment will offer a more "ideal customer journey", according to Paris, but garden centres must be careful to avoid losing their image, she warns.

"You have to design some character into the building, the layout and the shop fit, otherwise it just becomes a standard box format. Our customers are very loyal to Percy Thrower and we want to ensure that when they visit it still retains the feel of a traditional garden centre," she maintains.

Malmesbury Garden Centre owner Andrew Nurden says retaining the store's identity has been key to the redevelopment plans for his site with supermarket giant Sainsbury's. "It's very supportive of what we want to achieve," he explains. "It will be a traditional garden centre rather than most of today's ones that are like out-of-town department stores," he says.

Under plans recently submitted to Wiltshire Council, the retailer would develop a store over 1.6ha of the 4ha site while the garden centre would be rebuilt alongside it, increasing in size by 0.3ha. A series of separate units would be occupied by small businesses. Nurden says the investment will help the garden centre improve its offer.

"We pride ourselves on the quality of our plants and the extra space will allow us not only to broaden our varieties but to increase our plant and product stock levels," he explains.

Employment potential

The edge-of-town brownfield site has been allocated by the council for employment purposes. With interest expressed from a wide range of businesses including a veterinary practice, a computer firm and lighting company, Nurden says it has potential to employ up to 350 people, which is a "big tick for the local town strategy".

A hurdle faced by many garden centres considering this kind of redevelopment is successfully changing their retail licence from restricted to unrestricted A1 use, which allows them to sell more than just garden products. To gain full A1 planning permission the developers must prove the site's sustainability and that there are no other alternative sites in or on the edge of the town.

A centre-first planning approach to retail development means that supermarkets are increasingly looking to develop sites on the edge of or within town centres, although the latter are far less common. Garden centres located on green belt out-of-town sites are less likely to obtain alternative use permission.

But owner of out-of-town Mere Park Garden Centre David Brierly says he is confident he will successfully overturn a decision by Telford & Wrekin Council not to grant full A1 use to the site. The appeal was lodged last November and is due to be reviewed by a Government planning inspector on 1 March.

If successful, Brierly wants to convert the 1,858sq m garden centre into a supermarket, bringing a potential 200 jobs to the area, and build a new garden centre on the site. Morrisons and Tesco are understood to be interested.

Planning consultant Malcolm Scott says despite planning issues and an increasingly tough retail climate, interest from supermarkets in these types of developments is increasing. "They are running out of easy sites to buy. If they can find a garden centre with a big footprint, unrestricted planning use, good highway access and good public transport links, they will make a very tempting offer," he says.

Scott intends to hold a series of town planning workshops this year with the HTA to help garden centres maximise their businesses, understand policy and overcome planning objections.

He says it is vital to approach development opportunities with the right guidance and information: "They have to know there is a cost involved in properly researching what they have in terms of planning and it may require representation through the local development framework process.

"They have to be prepared to build a business case and attend meetings with local people. It's not just writing us a cheque and getting planning permission," he explains. Garden centre operators hoping to develop their sites must be transparent and show residents the real local benefits through positive engagement with local communities and "not just PR", says Scott.

Change in attitude

Changes in planning and the economy mean that now is definitely the time for garden centres to be considering this type of move, Scott maintains. "There is definitely a change in attitude towards planning applications - not that they are getting rubber-stamped, but we are having dialogues we couldn't have before on the basis that what we are putting forward is going to maintain and build employment."

Property consultant Mike Gilbert, a partner at Gilbert Evans, agrees now is a good time for garden centres to consider selling their property. "The garden retail sector is trading well relative to the high street and garden centres are appealing to a growing demographic. Supermarkets aren't just going for big out-of-town sites now - they are developing different concepts all the time so they can cater for the more local populations."

Gilbert says garden centres are worth much more than developers would have operators believe so it is important to take advice before negotiating. "Developers are there to buy at the lowest possible price, but garden centres may think that they are being offered a good price. The point is that they should be getting the maximum value for it."

But he warns that prospective partnerships with a supermarket are no quick fix. "Certain deals recently announced have been in the pipeline for 15 or 20 years so people shouldn't think that this is a quick way to earn a bob or two. It is very much a long-term process," he maintains.

Proposed supermarket/garden centre tie-ups
In the pipeline

- Percy Thrower Garden Centre/Waitrose, Shrewsbury.
- Northampton Garden Centre/Waitrose.
- Malmesbury Garden Centre/Sainsbury's, Wiltshire.
- Stephen H Smith Garden Centres/Marks & Spencer, Scunthorpe.

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