Industry News From “Smarty Pontz”Outside Contributor
Lawn & Garden Retail Sales Forecast
We expect core lawn and garden product retailer sales to grow by an average of 4.7% to 5.5% in 2016 with some product categories exceeding a 6% growth over 2015.
This very positive outlook is based on multiple factors including the basics of an overall improvement in the economy , increase in average wages, increased disposable income generated by lower gas prices, growing consumer confidence and greater credit availability . Historically, weather and housing have been the most important driving factors in the sales of lawn & garden products. A mild weather pattern for 2016 compared to just awful winters in 2014 & 2015 as well as a robust housing industry with housing starts expected to increase by over 28% in 2016 will drive sales of lawn and garden products to increases we haven’t seen in years.
Tractor Supply’s net sales for the full fiscal year 2015 increased 9.0% to $6.23 billion from $5.71 billion in fiscal 2014. Comparable store sales for fiscal 2015 increased 3.1% compared to a 3.8% increase in fiscal 2014.
Wal-Mart Stores stated it would close 269 stores – 154 of them in the U.S. including all of its 102 Walmart Express small-format stores. The impacted stores represent less than 1% of Walmart’s 11,600 stores worldwide. The closures are expected to impact 16,000 employees, including 10,000 in the U.S.
San Francisco’s Sloat Garden Center has purchased Navlet’s Garden Centers for an undisclosed amount. Sloat’s has nine San Francisco Bay area locations, reporting $15.3 million in sales to IGC Magazine and Navlet’s four Bay Area stores, estimated at $8 million in sales for the same year.
Lowe’s has acquired Rona, Inc. , a Canadian home improvement retailer and distributor for $2.3 billion. RONA has approximately 500 corporate and independent affiliate stores, in addition to nine distribution centers. Lowe’s Canada operates approximately 40 Lowe’s locations aside from RONA’s network of 500 stores. The move is sure to amplify its position against Home Depot in Canada, which maintains 182 stores in Canada.
The combined company will also have revenues of $5.6 billion in Canadian dollars with the Canadian business being based in Rona’s headquarters of Boucherville, Quebec — moving its current headquarters from Toronto — and RONA will retain its multiple retail store brands, the majority of its current staff and executive team.
New Green Industry Study From University of Florida
According to a new study by the University of Florida Institute of Food and Agricultural Sciences shows the green industry has generated $196 billion in revenues annually, and more than two million jobs in the United States. The rise of large retail chain stores with garden departments has made plants and other horticultural products more readily available to consumers than ever before according to Alan Hodges, extension scientist with the UF/IFAS food and resource economics department and lead author of the study.
According to the sturdy, green industry products include sod, flowers, bedding plants, tropical foliage, trees and shrubs, among other types of plants. The industry also includes many businesses that provide services such as landscape design, installation and maintenance, plus firms — such as lawn and garden stores — for wholesale and retail distribution of horticultural products.
The $196 billion estimate for revenue contributions by the industry includes additional impacts arising through the industry supply chain – for example, fertilizers and chemicals purchased by nursery growers. It also reflects spending of household income by industry employees and tax revenues generated by the industry.
Reproduced with permission from The Lawn & Garden Performance Group LLC. Rick Pontz is President of The Lawn & Garden Performance Group LLC. He is a nationally recognized marketer, author, and consultant on lawn & garden mergers, acquisitions, strategic alliances, marketing rights agreements and the introduction of products to the lawn & garden industry. Contact Rick at 480-840-6023 or 602-549-6752.