Xmas tree shortage plus crunch will squeeze margins

Garden centres may run short of Christmas trees this December, says Needlefresh managing director Christopher Hood.

And Nordmanns, which make up 70% of the market, are in short supply, say growers.

Wholesale prices have shot up 25% this year but some retailers are worried the credit crunch may stop that price rise being passed on to customers.

Hood said: “There’s definitely a shortage of trees in terms of stock available to serve the market. Any late wholesale buyers of trees may be disappointed. To my certain knowledge there are suppliers still searching for stock to fill orders taken.

“Retail prices are going up fairly substantially to reflect that and we’re not seeing resistance from retailers yet, though things are moving so quickly in the money markets we may yet see a reaction.”

Prices are up because of increased fuel, fertiliser and labour costs and the fall the pound against the euro and krone.

Hood added: “Growers suffered for many years with poor prices because there were too many trees. Now we’re looking for an improvement of 10% in base prices but that 10% has gone through to 25% because of commodity rises.

"It’s a problem for the whole European market-UK, Denmark, Belgium and France.

"We’ve covered our orders but we’ve been careful not to take additional orders this year.”

British Christmas Tree Growers Association secretary Roger Hay said: “We’re getting demand from garden centres looking for trees, which suggests growers are doing alright. And we’re not getting as many growers as normal looking for homes for their trees.

“Those growers who top up sales with imports will see higher price rises than those who grow all their own. We’re looking at 10% rises on average, which is the same as other farming products this year from wheat to pigs because of the greater inputs going in.”

A six foot Nordmann wholesales at £15-£20. Eight million trees will sell this year, up around 400,000 on 2007. The European market is 33 million trees.

Scotsdales garden centre director Caroline Owen said although wholesale prices were going up, she intended to hold retail prices at last year’s levels. They rose £5 to £45 for a six foot Nordmann in 2007.

Garden Group director Tony Rash said Christmas trees would cost 10-15% more this year, adding that wholesale price rises meant “you have no choice” to pass cost on the customers.

Jadecliff managing director Sadie Lynes said buyers may have to resort to needle-dropping trees such as Norway Spruce rather than Nordmanns:

“There may not be the species available people hope to buy. We’re running out of some trees and there may not be the tree you want.

"Prices will be more expensive this year. It will get to the point where people will have to buy something else if they want trees.”

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