Garden centre design and business consultant Paul Pleydell argues that to thrive going forward, garden centres may have to diversify their offer even further
Whether you love it or hate it, the internet won?t go away – and more importantly, neither will online retailing.? The upshot is that as competition grows, trading online won?t get any easier ? and neither will running a garden centre. The question is, what?s the way forward?
I?ve helped in the strategic development of numerous garden centres, and each time I follow a simple process. This involves ascertaining where the business is now, where does it need to be, and how is it going to get there???Or putting it another way, ?What does success look like?.
The starting point for this is to understand how a garden centre is currently performing. Not from an operational view point but it terms of financial return for your efforts. This is done by assessing the physical area allocated to each different product department, identifying the turnover achieved by each product department and then doing some simple maths to see how much turnover each square metre of floor area delivers. We call this the sales performance. This is measured in turnover per metre squared (?/m2).
This is followed by the ?so what? question. Knowing your houseplant area delivers ?680/m2 doesn?t really help unless you know what others are doing and what the industry trends are. Knowing this allows you to assess opportunity for growth from the existing set up and allows changes to be made to the product area and retail detail to improve performance.
Into the stratosphere
Over recent years trends in sales performance have revealed some interesting patterns and one particular trend. Starting with the lowest turnover, outdoor plants/landscape materials are usually around ?250/m2, while moving up slightly, we get to indoor gardening products which are mostly between ?500/m2?and ?1000/m2.
Heading further into the stratosphere, we get to giftware and cafe areas, which are typically between ?1000 and ?2000/m2, and then pets and pet supplies. Reaching the very top meanwhile, at ?3000/m2?we are greeted by food halls and farm shops, while at ?6000/m2?we find butchers.
Interestingly these figures follow strong national trends with only limited regional variations. We maintain and constantly update our data to enable us to benchmark businesses against good practice.
Although the fitting out of different departments can vary, if we work on the premise that a garden centre costs a fixed amount to build, why would you stock anything other than food?
But this must be considered as a careful balancing act, making sure each department occupies the right space, in the right location, with the right product mix, all built around a carefully planned customer flow which will lead customers through or by all of the major product departments.
But what about margin?, I hear you ask – surely margin is more important than turnover.? And you would be correct. However, the difference in the sales performance between – for example – seeds and bulbs and giftware, is so large that even with a difference in margin, the return for every square metre of floor area is still better.
Over recent years our industry has been squeezed by the state of the global economy, and also by a series of poor trading seasons, resulting from the unpredictable nature of the British climate. This has put pressure on all garden centres and made us all look closely at what we sell and how we sell.
Common sense has led many garden centres to develop their product mix, either through the introduction of new departments or by changing the balance of their existing departments. Not surprisingly, we are seeing more giftware, more food halls and farm shops and more recently, more butchers. The retail mix is adjusting to optimise the financial return. I call this ?following the money?.
Alongside this trend in changing the product mix, as a company, we also see – and encourage – the trend for ?new faces.? Or in other words, persuading people who maybe don?t necessarily see themselves as gardeners (or garden centre customers) to visit garden centres for different reasons. This is partly fuelled by the changing product emphasis in many garden centres, but also by the additions of new facilities.
Our current designs include vets practices, indoor play barns, hair and beauty salons, dog grooming, event spaces, as well as a much wider variety of cafe and restaurant offers.? To take just one example, one of the best of these is play barns. While they must be handled with extreme care, they are capable of delivering good turnover, and, if well managed, a very high net trading profit, well in excess of figures we see for both catering and retail. (They?re invariably busy on wet days as well as at weekdays, and if positioned correctly can significantly uplift ?off peak? sales in garden centres).
Play barns selling meat?
So, is my prediction for the future a play barn selling meat?? Certainly not – and this is where the tricky part comes in.? If you?re not careful, ?following the money? can certainly increase your turnover, while at the same time eroding – or perhaps more accurately ?sidelining? – your gardening offer.
That said, it is clearly no longer enough to be just a garden centre. Rather, it is time to know what?type?of garden centre and ensure this pervades all aspects of the business. We are fortunate that our industry is made up of small chains and independent businesses, as this allows us to be light on our feet and makes us able to change quickly and respond to the markets we operate in and the needs of our customers.
About the author
Paul Pleydell is director of Pleydell Smithyman, a specialist design and business consultancy, whose team provide advice on business strategy, retail concepts, site layout, retail, restaurant and indoor design, architecture and planning to clients across the UK.