Garden Centres cautious despite good start to year

by | Feb 21, 2024 | Associations, Business, Centre News, Features, News | 0 comments

HTA shows caution for garden retailers

The Horticultural Trades Association (HTA) releases its February monthly market update, which shows that despite the UK economy’s recently announced recession, garden retail continues to show some green shoots to kick off the year. The resilience is a continuity of some positive trends, which included strong plant sales over the last year and a loyal customer base of gardeners that has been retained since the beginning of the COVID-19 pandemic.

Fran Barnes, Chief Executive of the HTA, commented:

“Although the weather was unpredictable in January, with cold temperatures and disruptive storms, some warmer weekends rejuvenated footfall and ignited early gardening activities in anticipation of a better Spring. Coupled with consumer confidence continuing to improve into the start of 2024, this has helped garden centres see overall sales up by 2% by value compared to January 2023, accompanied by a modest 1% uptick in sales volumes. It is worth noting the 14% increase in catering sales and a 19% increase in wild bird care sales, which shows customers searching to treat themselves and keen to support the wildlife in their gardens.

“The positive start does come with some caution on costs and confidence. Businesses continue to struggle with mounting wage bills, with the impending April increases to the National Living Wage set to hit wage bills that currently average at 24% of turnover for retailers (increasing to around 40% in the café/restaurant) and 30% for growers, amplifying financial pressures.

“Compounding these challenges are the soaring shipping costs, as evidenced by the Drewry’s World Container Index, which recorded a staggering 90% increase in container costs compared to the previous year. Shipping routes have been disrupted due to the suspension of the Suez Canal since disturbances in the Red Sea towards the end of last year and January 2024. As a result, ships are being redirected through the Southern tip of Africa to avoid conflict, leading to longer journeys and higher shipping container costs. It remains to be seen how these factors will affect the costs of garden furniture and large garden equipment. Additionally, the EU’s Emissions Trading Scheme will likely add to the cost burdens, necessitating a strategic re-evaluation of operational efficiencies to protect profit margins.

“Despite these challenges, garden retailers remain poised to navigate the recessionary headwind, looking at ways of becoming more efficient to maintain profit margins as we approach Spring and the peak gardening season.”

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