Retail: Good neighbours

While the high street struggles, garden centres remain attractive sites for other retailers, to the benefit of both

Concessions: garden centres proving popular with other retailers. Image: Garden & Leisure Group
Concessions: garden centres proving popular with other retailers. Image: Garden & Leisure Group

From large, purpose-built retail developments with avenues of carefully selected stores, to the independent garden centre with a local conservatory installer manning a stand in the car park, garden retailers of all shapes and sizes have been able to generate extra revenue — and footfall — by leasing site space to complementary retailers.

This year more than ever, strong sales in garden centres — up 10% for the year to the end of last month — have contrasted with listless performance on the high street, where vacancy rates over the past year have averaged 12% and new store openings have dropped by 50%.

Though figures are hard to come by, anecdotally there seems to be no let-up in the development of concessions, even in these straitened times.

This has given rise to specialist companies acting as intermediaries between garden centres and their prospective tenants, highlighting opportunities, setting rates and resolving legal and planning issues.

Founded in 2004, First Franchise, which describes itself as "the only company to specialise in matching concession retailers with forward-thinking garden centres", now represents around 50 brands, ranging from multinationals like Ben & Jerry's ice cream to specialist decor retailer Nauticalia.

According to operations director Ian Silverton: "We bridge the gap between corporations and garden centres, streamlining and standardising the process."

Silverton estimates that around half of the UK's 2,500 garden centres could take at least one concession. "The high street is suffering at the moment, while sales in garden centres are growing," he says.

"We are getting more and more people coming to us for assistance in getting into garden centres — they are not full yet."

Five years in, many of the original leases set up by First Franchise are coming up for renewal, he says. "But we want to keep our client base to a manageable level — we're not pushing anything on anyone."

The company limits itself to those retailers which fit well with the gardening sector. "They have to complement the garden centre offer, and not contravene planning laws," he says.

"We have to work closely with the local planning authorities. But many of our clients are doing things like aquatics and pet care that garden centres were already doing."

Despite the company's name, there is no particular connection between the franchising format and concessions, he explains. "A few of the companies we represent, such as footwear retailer Moshulu, are franchises, but it's all the same from the garden centre's point of view."

Brokering developments

Specialist real estate firm Hammond Phillips has also helped the trend along, brokering new developments such as the award-winning Bicester Avenue in Oxfordshire, which placed 20 specialist outlets around an anchor Wyevale Garden Centre, one of the largest in the country.

"All the space was pre-let, which is a good way to fund development," says Hammond Phillips director Mike Gilbert.

He believes that concessions have not reached saturation point in garden centres. "The most straightforward space has been developed, but it's likely that garden centres will create more space specifically for concessions," he says.

Once in place, concessions work further to garden centres' advantage by offering a wider range and reducing seasonality and dependence on the weather, he adds. And for concession managers, there is access to key demographics - the ABC1s and the "grey pound".

Sticking to tenants which complement their core offer makes better sense for garden centres, as well as keeping local planning authorities happy, Gilbert says: "It's widened out from pets and aquatics. But most garden centres are very sensible about their tenants - there are no Ann Summers outlets."

Pooling marketing

Well within the traditional bracket is Pets Corner, which has around 20 outlets in garden centres as well as a widespread presence in the high street. Its latest venture is with Stewarts Garden Centre in Christchurch, Dorset, at the end of last month.

"It's been our best new opening ever," says Pets Corner managing director Dean Richmond. "Stewarts has supported us and given us a good position. It's our new number-one store."

The garden centre even pools its marketing effort with the Pets Corner, allowing the two to reinforce each other's presence in the market, while clear roadside signage overcomes one the common gripes heard from concession managers.

Pet care is complementary to garden retail in its demographic profile, as well as being similarly recession-proof, Richmond says. "The garden centre customer is very likely to have a pet, and the core customer is of similar age — they fit well together."

He adds: "The main advantage for us is free parking. The main disadvantage is you don't always get a very good pitch — the garden centre may offer you an area that they've not been able to make work."

Camping and clothing retailer Yeomans Outdoor Leisure, meanwhile, is benefiting from this year's boom in family camping holidays.

Marketing manager Mike Lacey says: "We have 78 stores, of which 14 are in garden centres. That's where most of the company's recent expansion has been, with eight new ones in the past year, and that is likely to continue."

For Yeomans, guaranteed footfall, regardless of the weather, is a big part of the appeal. "Long, dry periods are not good for us on the high street, but in garden centres the footfall varies less," says Lacey.

"A lot of garden centres have turned areas into mini-retail parks, and some get regular coach trips, maybe pensioners calling in at the cafe, who are potential buyers of our waterproofs and fleeces."

The company particularly values the display space that garden centres can offer, he says. "It's hard to sell a tent from a brochure - you want to look around it. With outside areas we can have 20 or 30 tents on display, which we couldn't have in a high-street store."

But like the high street, Lacey says, siting is critical with garden centres: "Customer spend can be high — £1,000 or more — but you need to be on the main treadmill."

Avoiding clashes

Garden Retail Award winner Garden & Leisure Group has benefited from the presence of various concessions at its seven garden centres.

Retail director Carol Paris says: "We are selective. They mustn't clash - it should be something different, a product or service that we couldn't offer ourselves. They should drive footfall to the store, and ideally come with their own marketing."

The group's Cadbury outlet near Bristol also includes more unusual offerings. "A chiropractic clinic suits our customer age group and is also popular with staff," says Paris.

And she says of an angling outlet at the same site: "It covers a very specialist market, and wouldn't work everywhere, so we couldn't include it in our central buying."

Explaining how the arrangements have been brokered, she says: "Some we have arranged through First Franchise; some, such as Cotton Traders, contacted us directly; and some we have pursued ourselves, having seen them in other garden centres."

As well as generating revenue, such deals allow Garden & Leisure Group to concentrate on its core business, she says. "We have people like the Garden Building Company offering a full sheds and greenhouses service, which we are not geared up for. But as a garden centre you need to be able to offer these things — it adds credibility.

"But there's a balance to be had. We're not a shopping centre, and if you add too many, you reduce your core space."

USING EVERY AVAILABLE SPACE

As well as leasing separate bricks-and-mortar premises on their site, many garden centres are also giving space to temporary sales outlets, indoors and out, to catch the eyes of customers and yield extra seasonal revenue.

Lasting anything from a weekend to six months, these are often quite ad-hoc arrangements with local companies. But managers at First Franchise believe there is an opportunity to streamline the process.

In operation since the start of the year, First Franchise Promotions lets potential tenants know of siting opportunities within garden centres via its website.

"They can (range from) health clubs to granite work surfaces for kitchens - anything with the right demographic," says operations director Ian Silverton.

The company has already interested a number of major garden centre retailers, including Wyevale, Klondyke and Garden & Leisure Group. Carol Paris says: "We make room for local-interest things, down to ice cream vans in the car parks in summer. But we don't want customers being harassed with any hard sell."


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