After a promising start 2017 lost its sparkle in the snow

After a strong March and April, 2017 growth all but evaporated, according to the latest GCA figures, especially in larger garden centres despite strong plant sales. Growth in catering revenues slowed but remained positive.

December

Snow on the busiest weekend in December, held the month’s sales back to last year’s levels. The two biggest categories, Christmas and Gifts were down -1.3% and -3.25% respectively according to figures released by the Garden Centre Association. 

It was catering revenue that saved the day, being 4.8% up on a year earlier. The other categories showing growth were clothing (+20%) and Houseplants (+4%).

Sales at the largest centres fell -1.7% in the month. Overall sales increased by 0.3%.

Year end figures

The best months in the year were March (+14%) and April (+22%). For the rest of the year sales barely kept pace with 2017, certainly in volume terms.

For 2017 as a whole, the largest GCA garden centres increased sales by 0.6%. On a like for like basis, this probably means a fall. 

The smallest garden centres, those with a turnover below £2m grew faster, increasing sales by 5.7%.

The disproportional growth of smaller garden centres is probably explained by the 4% increase in outdoor plant sales, while gifts, more important in larger garden centres, were down -1.7%.

It appears that the number of visitors were the same or fell slightly as the average basket size increased from £24.61 to £25.17 (+2.3%) which suggests that any growth came from inflation rather than anywhere else.

These figures would support anecdotal evidence that inflation and the uncertainty created by the Brexit negotiations are affecting sales.

Restaurants

Restaurant sales grew by 5%, about half the rate they grew in 2016. The average tray value increased by 1% to £8.14 showing the overall customer numbers are still increasing.

Given the level of investment still taking place in catering and that most months a significant minority of garden centres said revenue had fallen, it suggests catering volumes are growing only slowly on a like for like basis and that most of the growth is driven by investment.

Increased wages costs forced by the introduction of the living wage are likely to mean a reduction in garden centre profits when financial results are filed.