The Horticultural Trades Association (HTA) has unveiled its February monthly market update, revealing that, in contrast to the recently announced recession in the UK economy, garden retail is displaying signs of resilience as it ushers in the new year. This robust performance builds upon positive trends observed over the past year, marked by strong plant sales and the retention of a steadfast customer base of garden enthusiasts since the onset of the COVID-19 pandemic.
Fran Barnes, Chief Executive of the HTA, noted, “Despite the unpredictable weather in January, characterized by cold temperatures and disruptive storms, warmer weekends reinvigorated footfall and sparked early gardening activities in anticipation of a more promising Spring. With consumer confidence on the rise in the early months of 2024, garden centers have witnessed a 2% increase in overall sales by value compared to January 2023, accompanied by a modest 1% uptick in sales volumes. Particularly noteworthy are the 14% surge in catering sales and a 19% increase in wild bird care sales, indicating customers’ desire for indulgence and support for wildlife in their gardens.
“While this positive start is encouraging, it is not without caution regarding costs and confidence. Businesses are grappling with escalating wage bills, exacerbated by the imminent April increases to the National Living Wage. These increases are expected to impact wage bills, which currently average at 24% of turnover for retailers (rising to approximately 40% in the café/restaurant sector) and 30% for growers, intensifying financial pressures.
“Further complicating matters are the soaring shipping costs, evidenced by the Drewry’s World Container Index, which reported a staggering 90% increase in container costs compared to the previous year. Disruptions in shipping routes, stemming from the suspension of the Suez Canal due to disturbances in the Red Sea towards the end of last year and January 2024, have forced ships to reroute through the Southern tip of Africa to avoid conflict. This has led to longer journeys and increased shipping container costs. The impact of these factors on the costs of garden furniture and large garden equipment remains uncertain. Additionally, the EU’s Emissions Trading Scheme is poised to add to cost burdens, necessitating a strategic reassessment of operational efficiencies to safeguard profit margins.
“Despite these challenges, garden retailers are prepared to navigate the recessionary headwinds, exploring avenues to enhance efficiency as we approach Spring and the peak gardening season.”