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The ‘Warehouse Stores’ and Gardening

There’s no doubt that the ‘warehouses’ (Bunnings etc) have had a major impact on the hardware industry since they set up and on the nursery & garden industry too. Our interest in this article is clearly garden-related. Many suppliers will tell you that the ‘warehouses’ are great for them and indeed they have substantial business locked away but at what cost. Sure the ‘warehouses’ sell large volumes and in theory are easier to distribute to but they are constantly looking for better margins and service from suppliers.

Most independent retailers look at what the ‘warehouses’ do and the smart ones then focus on their perceived weaknesses and concentrate on their own strengths. There are more hardware stores with a garden department now than ever. We spoke with some of the hardware-focused stores, not just ‘warehouses’, with garden outlet/department and asked for their thoughts. Part of the discussion centred on the impending launch of the new Woolies/Lowes hardware stores in 2011. We also sought comment from the garden centre marketing groups.

NGINA President Jeff Cooke gives us his thoughts on the ‘warehouse stores’ and independents on page 25. He does sum up the situation rather well. However, I still say there is room for all in this industry. The entry of Bunnings into the garden market has given growers sales volumes that they may or may not ever have had with independent garden centres. There are many who say that Bunnings have introduced a new generation of gardeners to gardening. This is undoubtedly correct as we are constantly told that many consumers find garden centres intimidating, particularly those who confuse customers with botanical names and pest treatments. The answer seems to be, keep it simple. Garden centres need to inspire and help their customers to be successful so that they return many more times.

Bunnings

Sales for Greenlife YTD are up on last year despite the varying weather conditions across the country. Gift lines sales throughout December were pleasing with a wide range of products available in all states for our customers. It was very pleasing to see the positive attitude of customers who are making the most of the cooler summer and rainfall across the East Coast. On the West Coast, with the hot dry conditions, the focus is on drought tolerant gardens, wetting agents and mulches, doing whatever they can to keep their gardens going.

Bunnings will continue to monitor all competitors in the market place to ensure that we deliver the widest range, lowest prices and best service. Our aim is to offer our customers the best range that we can source, from opening price point products through to premium lines.

David Hardie National Buyer- Greenlife

Bunnings Group Limited

Dahlsen’s Hardware Stores

Fabrice Boucherat, Dahlsen’s Marketing Manager told us: We are a family-owned business and don’t see ourselves as ‘warehouse’ stores. Our stores in Melbourne are all trade centres and don’t have a garden offering. Our regional centres are quite different and many of them have a strong focus on garden. Our greenlife sales for the six months to December 2010 were good; we believe that we have the best quality plants available at the best price. Plants are now all sourced from local growers although we did grow some of our own for a time. We do have a ‘Price Match’ offer across our range.

Our new Outdoor Centre in Bairnsdale is working very well and we’ll be assessing that for the future. We are also looking to increase our sales locally in the landscape area. Bunnings have a different offer to us and so will Woolies/Lowes. We feel the Woolies/Lowes launch will put downwards pressure on price and hence lower profits but being smaller we can work around that. Woolies/Lowes probably won’t compete directly with us in most of the regional areas for two or more years. Mitre 10 by comparison does have outlets in regional areas. They are mainly smaller and convenience based. They are a competitor for us but we believe that we offer better range, quality and price.

The company is always on the look-out for good buys; this company is in full growth mode. Like everyone else, Fabrice told us that Outdoor is a key category but the 2010 weather meant lower sales.” Dahlsen’s have five stores in Melbourne and twenty eight in regional Victoria and NSW.

The Garden Centre Groups

About the Garden

About the Garden is a marketing group for independent gardening outlets in Australia. Currently the group has 110 members in Queensland, New South Wales, Victoria and South Australia. The group promotes their members via a highly popular consumer garden magazine titled ‘About the Garden’ which contains relevant gardening information, new releases and ‘how to’ topics for all the climatic zones. The Group has been going for fourteen years and provides a valuable support service to members. The strategy focus of the group is to deliver various marketing options to members including catalogues, calendars, signage and advertising assistance, help promote their businesses and services and drive sales and margins without compromising their own unique identities. The About the Garden group has gained popularity by encouraging member stores to build on their own business brand and use the About the Garden marketing components to build consumer loyalty and sales. With varying levels of participation, About the Garden is an ideal group for independent gardening outlets of all sizes in all locations.

Jason Searle, J.C & A.T Searle Pty Ltd

GrowMaster

Grow Master Garden Centres are found in Country Victoria, New South Wales, South Australia and Tasmania. They are independently operated and controlled. Currently they are looking to expand their membership around Australia. Russell Phillips, Grow Master Ararat told me: “Television advertising in regional has been our point of difference for some time but we have shifted our focus to web marketing and E News. We send a generic E News to our full data base every month and each member is able to send a tailored one to their own data base if they wish. We are selling gift vouchers over the web site www.growmaster.com.au Colour and flowers are back, grasses are slow and native sales are still strong.

Clearly our points of difference to the majors are:

  • Knowledge

  • Advice

  • Service”

    Plants Australia Garden Centres

    We are told the future of retail is online. Without sounding complacent, I do not think a trade as tactile, nurturing and environmentally aware as horticulture will ever truly be replaced by a computer screen any more than hairdressing or auto repairs will be, as it is more about touch and smell and experience as price and sight.

    We also offer friendly, qualified, experienced service. Tell me where you can find that in a box store? Plants Australia catalogues are second to none in the trade and it is a sure winner for our members. Rapid evolution and impending competition of the “Box stores” has seen Plants Australia ensure that stock shortages in both the near and distant future will not become an issue either.

    Lisa Matchan Business Development Officer

    GreenGold

    Richard Muller told me: “If you have survived the drought, Bunnings and the GFC then you will survive and thrive despite competition. Do what you do even better than before and make steady improvement. GreenGold is still focusing on catalogues fro promotion but with an emphasis on garden tips and information. The Garden Pharmacy concept has now been introduced and is looking good.”

    “I believe that ‘Woolies’ will have some different offers to Bunnings and it may include an in-store landscaping service.” Garden Centres of Australia (GCA) GCA is not a buying or marketing group. It offers industry communication via E News, an international link, a cost-effective Mystery Shopper program and a confidential monthly benchmarking. www.gardencentresaust.com.au

    The Independents

    One of the biggest challenges facing independent garden centres could be getting the plants and product they want. The ‘warehouses’ and others have enormous buying power and the ability to commit to large batches of stock leaving nothing for others. We will probably end up with certain suppliers dealing with the majors and others dealing with independents. We have that now of course but it may become more pronounced. Whatever happens, it seems to me that suppliers ideally need a balance of business with both independents and ‘warehouses’. We are constantly seeing rationalization of suppliers so it will indeed be a balancing act. Suppliers may need to be acrobatic to succeed!

    In Conclusion

    Regrettably and probably naturally enough, the majors were reluctant to say very much, in fact practically nothing. However, the ‘Warehouses’ are here to stay and will continue to grow their sales in the garden department. We are told that ‘Woolies’ will open their first store in June 2011, probably in Victoria, and are aiming at six more this year and around twenty four by June 2012. My feeling is that when ‘Woolies’ stores start then we’ll see a massive price war particularly in the hardware arena but regrettably the nursery and garden industry will probably get caught up in it too. The experts tell independents to keep away from price wars and that is good advice. Instead work with your strengths and use smart marketing to grow your sales.

    Yes, ‘Interruption Marketing’ (a specific sale or special offer) is certainly an option as are other marketing ideas such as catalogues and more. Maybe it’s time to utilize Social Media in your business. Debra Templar has been on about Facebook for ages now and it has to worth a try. At deadline we were unable to source official comments from Mitre 10, Plants Plus and Woolies/Lowes.

    Leigh Siebler, Editor

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