As IGCs adapt and grow with the changes COVID-19 has made to the retail world, sales are booming and business is better than ever.
This has certainly been a year like no other. What started off as another normal spring quickly turned into the strangest season many of us have ever seen. Between increasing sales, social distancing, mask mandates and a whole host of new issues to deal with, the industry is one of few that’s weathering the storm well.
In fact, more than three-quarters of respondents said quarantine measures and the coronavirus had the biggest positive impact on sales this year. Despite the challenges it brought, COVID-19 has definitely been good for business.
Edibles were on the rise as unemployment rose and parents looked for activities to do with their kids. New hobby gardeners entered IGCs for the first time and delivery, online ordering and curbside pickup became the new normal for many.
Read on for more insights into the current state of the industry and the changes that came with this year.
—Responding to the increased consumers’ interest in growing their own food, IGCs are growing more veggie and herb plants. Beating out annuals and bedding color for the No. 2 spot for the first time since we started asking this question two years ago. While edible plants jumped up 6 percentage points, indoor foliage plants also saw significant growth, rising 7 percentage points.The houseplant market just keeps getting hotter. Even more IGCs than last year are operating a houseplant or tropicals division, driving the number up by 13 percentage points. And IGCs continue to diversify. Growing operations, landscape design and custom container creation, cafe and patio furniture all grew by about 5 percentage points.
SALES, PROFITS AND PRICES
Despite the uncertainty and lost sales when the COVID-19 first hit in early spring, garden centers have rebounded, making it look like this year will be the most profitable one in years. While about as many IGCs are projecting total profit or loss, the profits are much higher. The number of garden centers projecting a profit or higher skyrocketed this year, up 18 percentage points. Spring sales jumped up by leaps and bounds for most IGCs, which comes as no surprise.With the resurgence of victory gardening in the midst of the coronavirus pandemic and high unemployment rates, edibles saw the biggest growth this year, beating out annuals for the first time since 2012, as you can see in the chart to the right. Fountains and statuary are losing momentum, as are apparel, birding and nature products, and water gardening, which fell off the list this year when no survey respondents said those divisions grew in their stores. The fairy gardening craze topped the list of growing divisions in 2016 when nearly half of garden centers reported increasing sales but since then, it has dropped significantly last year and fell off the list this year. One of the biggest changes this year is in the number of IGCs responding that they didn’t see a decrease in sales in any division, which went up by 20 percentage points.
IMPACT OF CORONAVIRUS
When we first asked IGC owners and operators how the coronavirus was affecting their businesses in March, their outlooks were drastically different from what they are today. Back in March, less than a quarter of IGCs were reporting an increase in sales, but now nearly 90% have seen an uptick. We also asked how readers think COVID-19 will impact the industry in the future. Read what they had to say on the next page. (Responses have been edited for clarity and length.)
The quarantine era led to a renewed interest in gardening and planting. I hope to keep those new customers involved and interested.
It takes more people to run the store due to the need to disinfect carts, monitor entry to the yard, so labor costs are higher.
For now, business is booming. I fear a shortage of quality plant material and plant material of any size next year.
I think over the next couple of years, people might still be sticking closer to home and therefore still work in their gardens/yards. After that, perhaps IGCs will slow down slightly as people travel more again.
The short-term impact has been positive. However, it will be interesting to see if there is a “bubble” months down the road where things slow. However, most customers interacting with the business means more opportunity to put your business/product on display to a consumer. If they have a positive experience, it can only mean good things for business in the future.
This coronavirus experience taught us the value in having a well-groomed online store. We are happy with our online presence, but need to do better and invest more into it.
We found out we don’t have to be open seven days a week to make profit. We will have to come up with plan in 2021 to solve customer count allowed to shop because of COVID-19 protocols. We have a five-year average of 650-750 per day in May and June but because of size of store area we could only process 350-400 per day.
The lack of digital content freely available is preventing our move to e-commerce and will continue to negatively impact our business until the horticultural supply industry changes their ways and offer a centralized website that all digital content is updated by the suppliers and is available to the IGCs free of digital copyright encumbrances.
Like many others we wanted to start an online store for years but never did it until we had to. We plan on continuing it but need to integrate with our POS inventory.