|Compiled by Jo Lidgerwood
Speaking with garden centre operators from all around Australia is a great way to find out just where it's at, in terms of the true situation in national garden centre retailing. I must say the experience has been quite refreshing in terms of the many positive stories I heard despite these obviously difficult times. Clearly water, or the lack of it, is still a challenge in many areas but the gardening public seem to be dealing with it as best they can.
We began our 'Summer Roundup' by asking each of our respondents for a bullet-point appraisal of the retail situation in their state over the six months ended last December. Here's what they told us:
Queensland – tough trading in areas around Toowoomba and Brisbane .
South Australia – mixed results but generally OK.
ACT – on the improve despite dry conditions.
New South Wales – mixed results but some doing quite well.
Victoria – fairly stable with growth in most areas.
WA – a wet spring and early summer capped a pretty good YTD.
Tasmania – trading positive and looking good.
Northern Territory – Very positive, increased more than any other part of Australia.
Four important facts pop up whenever I talk with garden centre people:
1. Costs have been carefully assessed and controlled, therefore profit is better than reduced turnover suggests.
2. Stock control and wastage is being carefully monitored.
3. Garden centres are looking externally and doing well with garden consultancies, planting services, garden maintenance and more.
4. Diversification is important. Gifts, furniture, cafes and more are helping many centres trade profitably.
Overall, the picture is positive but good rainfall makes a huge difference to trading.
To complete the 'big picture' we now bring you information gleaned from interviews conducted with garden centre operators throughout Australia.
Milton Vadoulis, Vadoulis Garden Centre, SA.
The industry is still struggling. People want to garden but not so many want to do it themselves - DIFM is more popular. There has been a shift to cheaper lines, people are more budget-conscious. We are still selling expensive lines but the growth has been in the budget area. Customers are more aggressive in their buying - people have less time and are more stressed. The over 50’s are still our main market but we are seeing a significant number of 25 plus (first home owners). They are less budget-conscious and will buy a whole concept. Groovy kids who are fashion conscious and want funky stuff!
We are expanding our outdoor entertaining area which has been growing at 20% per annum for years – furniture, BBQ’s and outdoor heating. We have increased our range in garden tools which has helped keep sales consistent. We're up by 4%, last year (5%) so average is pretty static. Interestingly, customer numbers are up – they had been declining for years. The average sale is also up by 5%.
Scott Burns, GreenGold Yarralumla, ACT.
Caption: Scott Burns
People are now geared up to living with drought. Hedging plants are selling well – people want to block out the neighbours! Plants account for 75% of our sales. Natives are strong but it it's an urban myth that they are drought-resistant because they are not. (And so say all of us!). Strappy plants and succulent sales have declined. Less inground plants sold – container gardening is big. As a consequence of the ACT fires, advanced tree sales are well up - people replacing losses with 'instant gardens'. People aren't buying expensive water features either, more cheaper lines.
Water restrictions are no longer an issue - they affected us initially but customers are still buying but are more conscious of doing the right thing. Interesting to note, more people brought back dead plants during the drought that had died from over-watering - they just watered whenever they were allowed! Mainstream media let the industry down with an acute lack of authoritative water restriction information.
Overall growth is slow - our average customer spend is $47.
Mark Hay, Allan's Garden Centre, Tas.
Caption: Mark Hay
The industry has performed well over the past 12 months, due mainly to the housing boom (up 50%) and the good spring rains. Customers are seeking complete packages to go with their new homes. We do an on-site analysis, then sub the work out to landscapers. This has been extremely successful for us.
In the first six months customers were very waterwise and restrictions affected us, but that has changed back since the rains. We find there is a trend against courtyards. The new home buyers are mostly young people who extend their loans to incorporate landscape packages. These people want a garden but don't want to maintain it. Lifestyle is more important.
Our sales are up YTD by 12% - no increase through the door but they are buying more due to their landscaping. Average sale is $40 (a small increase). Break up of business sectors – plants 55% (we grow 80% of our own), gifts 20%, furniture and pots 20%, hardwoods 5%.
Everyone in the industry is pretty happy in Tassie.
Barry Teese, The Greenery Vic.
This past spring has been exciting with everything going well for us.
Seedling sales were up 20% over last year. We believe seedlings are a huge drawcard for customers in Southern Victoria and Melbourne. People are buying colour, so we carry a huge range of quality seedlings and don’t worry much about price. Lifestyle products are popular. Our customers are mostly middle-aged. We are in a good area and use lots of signage to attract passing trade.
Christmas plants sold well - lots of gift wrapping plus ‘Gifts on the go’ for busy people who come in and buy a plant 'wrapped and ready to go'. Our customers are not interested in ‘drought-tolerant plants’ and we have never promoted them.
Average sale has continued to grow despite not as many customers through the door but they are spending more.
The garden supply yard has been fantastic - we deliver anywhere. Plants are 50%, gifts 4-5% with the remainder in sundry hardgoods. We have a portable coffee shop and BBQ run by outside operators as a service to our customers.
I see a great future for large independent retailers who can do it well.
Helen Knight, Parkers of Turramurra, NSW.
Business has been steady, given severe water restrictions and the retail downturn, so we are pleased with results which are up on last year. We haven’t made major changes, but we have been importing gifts and tools from overseas. We buy our furniture locally but it is slow moving.
Caption: Helen Knight
Our clientele is mostly professional, two-income families aged between 30 and 60. They want top service but most are not able to visualise a concept so we present it for them. They are time-poor, but want the shopping experience and aren't looking for bargains!
Children’s products such as baby clothing, early-learning, soft toys and educational items have all worked well. We don’t do much promotion – people know us and keep coming back. We have worked with water restrictions but never promoted them. People still want to buy the same plants and haven’t gone for drought-tolerant - our plant sales haven’t dropped one bit. Plants are 50% of our business with gifts 18% and hardgoods the rest. We have a small coffee shop as a customer service.
Importantly, we focus on what we are good at.
Ian Blevin, Frasers Giftware and Garden Centre, WA.
Retail and wholesale are under extreme pressure in WA and some growers have turned to selling direct to the public at wholesale prices, thus undermining the industry. Some have lost contracts to Bunnings and have found it incredibly difficult to retrieve their previous customer base. There is increasing pressure on retailers to survive.
Caption: Ian Blevin
YTD figures are down by 15% in greenstock, but all other areas are on track or just above, but we've had to diversify to achieve this.
We are consistently making changes aimed at becoming a 'destination' garden centre. We've built a café which has enhanced business, and we've added five gazebo areas offering an entire concept. We supply product from irrigation and paving right through to statues, ornaments and fencing.
Landscaping is the big go and we've started our own landscape operation employing six trained permanents. Customers ‘want it now’; they are demanding and quite specific on their requirements.Personalised service has won us trade from the chains, but we have to work hard to satisfy choosy customers. Our customer base is well spread from new home starters, to second home buyers with improvement dollars to spend, through to the knowledge-based over 50’s who want it right. We are a destination garden centre.
Teena Sandford, Darwin Plants, NT.
The NT industry is fantastic with retail up by 15%. The heat causes problems and staff and management alike find it hard to 'keep their cool'.
Alice Springs is improving but water is a major issue. New developments have seen an increase in population and customers. Katherine retail is up by 10% thanks to a slight population increase. Giraween Nursery is now growing seedlings which has worked well for retailers.
The big growth area for retail has been colourful foliage and impulse lines in ornamental gifts. Two Bunnings stores will open this year, but not in areas where they will compete with independent retailers.
Water restrictions have never been an issue despite problems in Alice Springs. It doesn't change anything – they are used to coping with dry conditions.
A big new complex called Finlay's Stone Mason has just opened where the public is invited to ‘Get Stoned with Tom’. Tom Finlay has set up a comprehensive landscaping business and is planning to open a garden centre. All good stuff for our industry.
Wholesale in NT is fantastic and export is looking good too. Many growers are looking further afield with plants moving to other states.
Joe Ziukelis, Ross Evans Garden Centre, Qld.
Business is down 20% over the past six months, not due to the drought but because people just don’t have as much money or are spending it on high fuel prices and the overall cost of owning a home. This is affecting all retail business. It is interesting to note that two of the biggest retail garden centres in Brisbane had a 50% 'across the board' sale during January.
Caption: Joe Ziukelis
We source up to 50% of greenlife from our own production nursery, which gives us better value for money. Our customers mostly range from 30 to 55 and comprise people who have money but are not price-sensitive. Our product must be good!
Growth over the past 12 months has been in the service area - people seeking DIFM service, most notably in our landscape design section.
Last year we exploited TV and will now assess the results before planning 2006 campaigns. Our business ratio is 60% plants, 20% pots, 10% bulk soils, 5% hardware, 5% gifts. Although our café is run separately, it brings in lots of new customers.