Garden Centres - What's next?

We have seen the impact of higher inflation on the population over the past year - just everything is costing more in all aspects of life but particularly rising fuel and mortgage costs, means that households have less to spend. There is a general sentiment that people are adjusting their spending patterns to their income, which is causing the UK economy to stagnate. To some extent government assistance on energy bills, and the growth of relatively inexpensive fixed rate mortgages, has slowed the impact but there is no doubt that, as a whole, the population will be slightly worse off in the future.

How has this affected garden centres? Financial results for the year end of 2022 are generally reported across the industry as not as strong as 2021 – which does not come as a surprise when we consider that 2021 included the bumper post-lockdown surge in garden expenditure – and are much closer to those of 2019. Budgets for 2023 are cautious with little growth forecasted from 2022.

The sector faces the same challenges as the rest of the economy - finding staff is difficult and wages offered are increasing to attract applicants, stock is more expensive, and energy costs and rates will typically see significant rises. All of this will feed through to higher prices at a time when the public is feeling the pinch.

However, we have been here before - spending at garden centres has continued to increase through every recession since the 1970s - so as we become used to life being a little bit more expensive it remains reasonable to expect customers to continue to shop at garden centres and maintain their profit levels over 2023 and beyond.

That said, now could be a useful time for garden centre operators to stand back and have a look at their business. Between 50% and 62% of 30 to 44 year olds own a home. These millennials are now considered the biggest spending and consuming group in the population. Finding ways to attract them to garden centres is a route to business longevity. Now could be a good time to check in and see whether some adjustments could keep the centre ahead of the market and satisfy the demands of younger consumers, particularly in stock range, concession choices and appearance.

Millennials interests and spending patterns differ from those of the older generations. Novelty and experiences are strong drivers, their food preferences can vary from what is served in a traditional garden centre café, and they are very brand focussed. Garden centres which seek to brand themselves strongly, and offer well-known brands at their centres are likely to attract this market group, as will introducing more experiential offers such as events and theme weekends to supplement the Christmas, Easter and Halloween focus.

The younger generation is also interested in sustainability and the environment and will avoid centres where little effort is on show to reduce waste and pollution. They wish to see renewable energy, reduced use of pesticides, peat free growing, local sourcing of products to reduce product miles, serious efforts to reduce waste, and better promotion of what the centre is doing to reduce their carbon footprint.

Upgrading the centre to make it more modern in appearance and energy efficient, offering dishes from around the world and healthier food options, and having themed open days to entice new visitors could be some ideas to bring younger visitors to gardening.