On the opening day of Glee 2022, Tuesday 28th June, HTA Head of Research, David Denny, shared his thoughts on the opportunity for growth in the current environment.
Even before the pandemic, outdoor living was on an upwards trajectory, but over the last 12-18 months it has accelerated in growth and few would disagree that garden retail has benefitted from this positive trend.
As consumers were forced to spend more time at home, they started to look to their outdoor space (no matter how small) as an extra room for them to enjoy. The question now on the garden industry’s mind is how does it continue to engage with this new consumer group and can this continuous growth be maintained?
As David explained, current economic conditions now dictate that consumer spending power is going down, “especially in the younger and less socially advantaged groups who were the very people to enter gardening during the pandemic. This is less of a problem for the core gardening demographic of affluent pensioners and other better off individuals who already invest in gardens and allotments.
“Consumer confidence overall has plummeted to its lowest level since 1974 and there is also an unprecedented workforce shortfall which is affecting the supply side. The number of unfilled vacancies exceeds the unemployed for the first time since records began. All-in-all these are very unusual and challenging times.
“There is also a cost of doing business crisis, with transport, energy, raw materials, taxes, extended provider responsibility, environmental and other regulatory pressure all contributing”.
Looking at macro trends and factors affecting the garden industry, David acknowledged the tension between in home vs out of home leisure in the competition for precious consumer pounds. “Overall there has been a huge demand for at home leisure and that trend is set to continue, if not necessarily at such a high pace of growth. Since the end of lockdown a huge pent-up demand for out of home leisure has also been released”.
For garden centres there has also been a challenge sourcing staff for cafes and restaurants, where they’re competing with the wider hospitality industry which hast the same issue.
Value maximising: Consumers are weighing up value and making their money work harder for them. Therefore, schemes like the Loyalty Fuel Discount offered by Walmart are very popular. Loyalty schemes which offer discounts and promotions can be extremely useful for garden centres.
Stores are optimising their loyalty databases and other good digital data for more targeted advertising – short and punch offers which go straight to the right people at the right time. Social media advertising also encourages people to grab a bargain and maybe self-treat at the same time – once they are instore or on your website the upselling opportunities also begin.
Whilst there is a strong focus on value, people are also self-treating as much as ever, maybe more. In times where there is a lot of bad news people start seeking happiness and treats are a part of that and needn’t be expensive – colourful flowers and strawberries are perfect as there is an emotional connection as well as that all-important sense of value. Demand for treats is high! Even during the double dip recession the desire for occasional treats was resilient.
Self-sufficiency: Because of the high degree of uncertainty and erosion of consumer confidence, people are seeking self-sufficiency and this is a consumer desire that will strengthen. This gives another big opportunity to garden centres, which are packed with items designed to assist self-sufficiency.
There is also a war on waste, meaning that sustainable products and solutions are in great demand and should be kept front and centre. There is also a heightened sense of social justice along with the big environmental concern that sees government and consumers moving into alignment.
Sustainability is an opportunity to profit.
Stability and authenticity: This is another big plus point for the gardening industry, which is benefiting more than most sectors from this and the other trends. Making memories in the garden will be big in the seasons and years to come, especially now the sun has finally put in an appearance. As ever, the weather is one of the biggest defining factors for the gardening industry and the gauge is currently on hot!
