As Waitrose announces a new gardening range, we look at how the category is performing and whether there’s space for a new entrant.

Throughout the economic downturn, the home sector has had its fair share of ups and downs. There has been good news, such as Kingfisher’s eye-catching international growth, and there has been bad news, as the big-ticket DIY market struggled with consumers cutting spend.

But while the DIY part of the market tends to get more attention, the gardening category has been quietly going from strength to strength throughout the past few years as more consumers pick up their trowels.

This healthy performance looks set to continue. According to Verdict, the gardening market is estimated to grow a whopping 23.5% in the next five years. In 2012 it was worth £3.5bn, and with gardening now reportedlyconsumers’ second most popular hobby after cooking, the category’s future looks bright.

Sowing the seeds

Waitrose certainly thinks the sector is worth investment. Sales of its garden plants were up 25% last year, and its new range will boost the size and profile of its gardening offer.

Waitrose marketing director Rupert Thomas said at the launch: “This will make us a serious player in what is already a hugely successful category for us.”

The grocer has launched a gardening and floristry range in its stores called Waitrose Flower Garden and a website called Waitrosegarden.com, with advice on the site provided by TV gardener Alan Titchmarsh. He has become a regular retail contributor - it is his second industry partnership after he combined forces with B&Q in 2010 in a bid to help improve the DIY retailer’s gardening offer.

The launch is not Waitrose’s first foray into gardening retail either. The grocer says it already has a 6% share of the market and has sold horticulture products through Longstock Park Nursery in Hampshire - part of its Leckford Farm Estate - for more than 10 years.

Waitrose isn’t the only supermarket to have entered the sector. Tesco is probably the most developed of the big four, with its Dobbies Garden Centres group posting a sales rise of 22% and a profit boost of 6% in its year to August 2012. It has also opened some joint Tesco and Dobbies stores.

Tesco’s Dobbies Garden Centre

Tesco’s Dobbies Garden Centre

Major DIY players B&Q and Homebase mop up a large part of the market, although according to Verdict the sector leader is The Garden Centre Group.

In contrast with some other retail categories, gardening also still has a large number of independent retailers.

The sector has been the beneficiary of a collection of happily timed trends over the past couple of years.

Gardening is growing in popularity as a pastime, and the fragile economy is supporting a trend among shoppers for growing fruit and vegetables at home.

But that’s not to say the gardening category is without its problems. Most notable is the exposure to adverse weather conditions, which is more pronounced than for much of the sector. Sunshine will send sales soaring, but if the weather is a resolute washout - as it was in 2012 - sales will suffer.

Garden Centre Association chairman Peter Burks says: “Unfortunately, due to the very unpredictable and unhelpful weather, the sector hasn’t performed brilliantly in the last 12 months.”

Verdict analyst Matthew Walton says sales fell a huge 10.8% last year, as shoppers stayed indoors throughout the wet summer. The expectation is that things will bounce back this year, but it’s a frustrating situation when nothing can be done to turn the sector’s fortunes around in the face of downpours.

Mixed fortunes

“People just don’t want to spend time in their gardens in bad weather,” says Walton. “The market is forecast to grow 10.4% this year, but with the caveat that conditions will be average or good. If conditions are very difficult the
sector is exposed to the weather.”

Paul Walker, director of chilled prepared, bakery and fresh produce at Waitrose, says the grocer’s existing
garden ranges performed well last year despite the weather.

He says: “The horticulture market had a tough year last year, largely because of the poor weather. According to the Horticulture Trades Association, garden centre sales were down 7% in 2012. Waitrose, however, saw strong sales of garden plants - up 25% last year. If the spring and summer weather is more favourable this year, the horticulture market should be in better shape.”

But while the bad weather has certainly left its mark, in other ways it has been a good few years for the gardening category. “It’s a fast-growing segment of the market,” says Neil Saunders, managing director at analyst Conlumino. “It has captured a lot of consumer interest over the past few years.”

Both sub-sectors in the category - gardening tools and green stock, which includes shrubs and bulbs - have grown throughout the economic malaise as more people try gardening.

Walton says: “Gardening has benefited from the downturn because it is seen as a cheap hobby.”

Saunders says there are two reasons for the growth. “We have got an ageing population and older consumers are often more likely to try gardening. Plus, in a recessionary market more people want to try growing their own fruit
and vegetables.”

Not only this, but the rise of ‘staycations’, where people have stayed at home during their time off work instead of heading abroad, has contributed to the trend of spending more time in the garden. “It’s something that has a number of supportive trends underneath it,” Saunders says.

Diversifying offer

With the weather causing problems, garden centres and retailers have also responded to the volatility of the sector by diversifying their offer.

Saunders says many have worked hard to become shopping destinations, offering food and other products. “They have become much more of an experience and a day out, offering a food hall and almost becoming a place for crafts and hobbies,” he says.

Burks says the strategy has worked well. “We have found at many of our member garden centres that non-traditional areas of trade have been doing much better than more traditional categories. For example, catering, gifts, food, and farm shops performed better in 2012 than outdoor plants and seeds and bulbs.”

He adds that garden centres and retailers need to work hard to meet growing customer expectations. “It’s important to consider that gardening is a leisure activity and therefore customers want to shop in comfort and turn a trip to the garden centre into a day out with a meal or tea and cake. They want ideas and inspiration, expert answers to their questions and help with heavy products,” says Burks.

Another strong trend among consumers is a preference for a good, local offer, which has helped support the high number of independents. Saunders says: “Consumers are looking for more convenience, they want products quickly. Fuel costs a lot of money so people are reducing the amount they travel - this supports the localised trend.”

Room to grow?

So how will Waitrose fit into this picture? There might be growth in the sector, weather permitting, but is there enough for another player?

“It’s growing enough,” says Saunders. “It supports all the current different constituents, so for Waitrose to grab a share of the market will be quite easy to do. People shop at a variety of locations for garden products.”

He adds that shoppers will respond well to the convenience of the Waitrose offer, and the ability to pick up impulse buys and smaller products during their food shopping.

Walton points out that the range is far bigger on the website than it will be in store, and says Waitrose will need to do a bit of work on ensuring customers shop across both channels. “A key thing will be driving traffic to the website,” he says. “Shoppers want a good range. The space Waitrose is dedicating to this is not big.”

Independent analyst Nick Bubb says Waitrose customers are likely to respond well to the offer, although he adds: “The website will probably be a slow-burn, but with some decent weather this summer, I’m sure the new range will do well in the stores.”

Waitrose points out that its customers are particularly fond of gardening. Walker says: “Gardening is the second most popular pastime for Waitrose customers [after cooking] and there is room for us to grow in the category.”

Despite the importance of the web in boosting availability, gardening has been less impacted than other sectors by the multichannel revolution.

Saunders says some changes are likely to come eventually, however. “It has been impacted to a degree and I think it will become much more multichannel. But people like to look at and feel the quality of things like plants. It won’t become as penetrated by online as the electronics sector, for instance.”

The UK’s notoriously unpredictable weather means the gardening sector will never be completely problem-free, but it has become one of the retail industry’s quiet heroes, and its popularity among consumers shows no sign of waning.

Walton says: “More people will see their gardens as an extra room, somewhere they want to spend time and maintain it more.”

It helps that gardening centres, while retaining their core offer, are working hard to keep footfall high. Burks says: “Everyone is looking at ways to ensure they still get the desired footfall, whatever the weather, and our members have done a great job of addressing this.”

Gardening has proven to be one of retail’s more robust categories - and as long as the rain keeps away, the sector looks as though it will continue its upward swing.

The new Waitrose flower garden range

Waitrose is launching a gardening and floristry range in its shops, named Waitrose Flower Garden, and a website called Waitrosegarden.com, with advice provided on the site by TV gardener Alan Titchmarsh.

Waitrose Flower Garden will offer the grocer’s customers a range of 850 different flowers, plants, bulbs and seeds, as well as 80 gardening tools and garden care products.

Elements of the range will launch in all core Waitrose shops by mid-April and 41 stores will dedicate at least 120 sq ft of outdoor space to the range.

Some stores will also feature an outdoor gardening shed, selling plants and gardening accessories.

Customers will be able to make gardening purchases outdoors using a cashless mobile till.

Waitrosegarden.com - in association with online garden supplier Crocus, which also works with Tesco -
will sell more than 5,000 horticulture products, including flower pots, gardening tools, plants and seeds.

Alan Titchmarsh, who came on board at Waitrose earlier this month to help raise the profile of British agriculture and horticulture, will provide video-clip demonstrations on the website and a top 50 gardening product list for each season.