Biz beat: Garden centers hope warm, early spring sparks sales comeback
- Article by: JIM ADAMS
- Star Tribune
- April 6, 2012 - 5:57 PM
Garden centers and nurseries are hoping the balmy spring (light rains at night, please) continues and prompts homeowners to support a budding nation-wide lawn and garden sales rebound.
Several Twin Cities nursery and garden centers say that sales have dropped in recent years, due to poor spring weather and the slow economy. Most garden centers are private businesses that don't release figures.
"In the past few years our independent neighborhood centers have been hit by the recession," said John Horsman, spokesman for the Minnesota Nursery and Landscape Association in Roseville.
Garden centers also have faced price competition from big box stores like Home Depot and big supermarkets that carry flowers. The association's membership has dropped about 30 percent since 2006, to 246 members last year. Horsman estimated Minnesota has lost about five percent of its roughly 400 garden centers since 2006.
"We definitely suffered through the recessionary period," said Dale Bachman, chief executive of Bachman's, the states largest garden center business with locations in Minneapolis and five suburbs. Declining plant and nursery sales were partly caused by less landscaping business due to the slumping housing market, he said. Plummeting home values and sales led some people to postpone investing in their gardens and landscaping, he added.
"The good news is, we felt more shoring up in the housing market at the end of last year ... some confidence building," Bachman said. "As we finished 2011, there were some additional investments being made in landscaping."
That upswing is reflected in annual industry surveys conducted by the National Gardening Association of Burlington, Vt.
"I think we have turned the corner. [Nursery] retail sales were up in 2011," said Bruce Butterfield, research director for the gardening trade group.
Butterfield noted that total household sales to people doing their own gardening and landscaping had dropped more than 20 percent since the end of 2008, whcn the recession hit the garden center industry. Total sales dropped from $36.1 billion in 2008 to $28.4 billion in 2010. But last year, nursery sales edged up to $29.1 billion, according to market surveys. Butterfield said that average lawn and garden spending per household dropped from $444 to $351 from 2008 to last year.
One area that went up during the recession was vegetable garden sales. That category grew from $1.4 billion in 2008 to $1.6 billion last year, Butterfield noted. He said the surveys indicate that most lawn and garden spending is discretionary, which people may skip or postpone in tight times.
Business has been flat the past few years at Pahl's Market and nursery in Apple Valley, partly because of the past two rainy springs, said President Gary Pahl. He said a major share of his business is done on spring weekends from April 20 to June 10. After that, vacation season and cabin trips begin and sales taper off. If those key weekends are sunny, business is fine, he said.
"We are a sunny economy," said Jonathan Pedersen, brand and business development manager at Bailey Nurseries in Newport. "In good weather people think about getting out in their yards."
Bailey is a national wholesaler that grows and sells plants to garden centers and landscapers. Pedersen, who monitors national sales trends, said the recession was especially tough on landscaping businesses hit by the dearth of new homes and commercial structures.
Tight bank credit in recent years has hurt garden centers, he said, because they need large credit lines to buy inventory in the spring. Pedersen surmises the number of garden centers has shrunk nationally in the past decade.
Another factor hurting garden centers and nurseries is the lack of younger customers in the video game era, Pederson said.
"We need to get information to younger consumers that grew up with I-Pads and X-boxes," he said. "There's ways to sell them our products. It's about packaging."
Jim Adams 952-746-3283
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