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All you believe… may be ALL WRONG – Belief #1

Misconception #1 – Garden Centers Should be Open Year-Round – Oh Really?

(Read time: approximately 3 minutes.)

Hot NOW!

Are Krispy Kreme's Hot NOW?

(Garden centers may be violating the Scarcity Principle)

A correct statement would be closer to this:

Belief #1 “In certain conditions garden centers should be open year-round, and in other conditions they should not be.”

The conditions for being open fall primarily into three categories.

  1. The market the garden center is located in is year round. I recognize there are some markets that are year-round and this post may not apply to those situations.
  2. The garden center has a particularly strong product niche and is located where there is sufficient daily store traffic to support a profitable sales level. There are a few garden centers that are in high traffic locations and have successfully integrated non-core product lines to be profitable nearly every day they are open.
  3. The garden center has incurred financial burdens including operating expenses and personnel obligations that require it to be open although contribution to profits are at, marginally near or below the point of diminishing return. Still, even in dire financial conditions the best approach is almost always to generate more revenue when the business is in peak demand and lower expenses all the time – especially when the demand is diminished.

In my experience a large majority of garden centers fall into the third category. However, there are two major misconceptions related to being open year-round that often add justification to this mistaken precept of running a garden center.

  • “We’ll lose ground because our customers will forget about us while we’re closed.” I’m not going to tie up space here going through the entire litany of excuses and justification related to this here. The reality is that if you become less relevant to your customers lives they will begin to forget about you. Being open doesn’t mean you’re relevant and you can measure that with store traffic, sales dollars, and profit from those sales.
  • “We’ll lose our experienced staff of knowledgeable professionals.” In my experience garden centers that have taken the step to close during the winter season have been able to retain associates to the satisfaction of the owner and the customers. This does not mean that every associate is retained. Some embrace the closed period, others accept it, and in certain circumstances owners find ways to compensate employ mission-critical associates even though the business is closed.

My point is that making these assumptions and not considering the possibility of being closed when your customers aren’t voting with their pocketbooks that you should be open is not wise. Explore the possibilities and consider making a decision to close when the return is not there.

Once a company has expanded and incurred obligations it is very difficult to dig out of such a hole. While the effort of remaining open year-round is futile, it may feed necessary financial obligations. However, do not blindly accept being open when you don’t absolutely need to be.

It may not be a coincidence that the peak sales and profit generating time of year for a garden center is when its consumers suffer “Spring Fever”. Consider the situation of Krispy Kreme Doughnuts Inc. While the company that makes these famous doughnuts has suffered many and varied problems I submit that one of those is the ubiquitous availability of them.

Krispy Kreme's Famous Sign

Krispy Kreme's Famous Sign

Krispy Kreme violated the “Scarcity Principle”, a principle that drives consumption, traffic, and brands in our business as well when expanded their wholesale business rapidly and allowed their famous HOT NOW sign to appear in the windows of convenience stores.

Most garden centers do not use the scarcity principle to their best advantage, or even attempt to do so, or are willing to think about it. But there is one good example I know if that I would like to bring to your attention. I will not give their name because I don’t want to tip off their local competition to what they’re up to. This company I speak of was seeking advice on expanding to offer more products and services. Upon learning about their business I discovered that they open about April 15 each year in a Zone 4 market and sell primarily annuals and perennials that they grow along with some fertilizers, soils, containers, and a few decorative garden accessories directly related to growing the plants they sell (such as trellis). Then they sell down the product until time to close at July 4th. Yes, remaining inventory is discounted the last week they are open. They re-open late in August when their mums begin to peek color, and close again on the day their mums sell out. They re-open when the Poinsettia reach sufficient color, and close again when the last one is sold. I asked this company to consider how profitable they were compared to other retail growers, and how great their lifestyle was compared to others. After thinking on this they agreed that they should not go where they were thinking of going. Instead, we have begun working on expanding their core business by making improvements to their capacity to serve when demand (and profitability) are highest.

I said all of this to say this, the Scarcity Principle may be your friend. Think about it.

Belief #1 – “In certain conditions garden centers should be open year-round, and in other conditions they should not be.”

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14 Responses

  1. This is a great debate. We are (I think) choosing to close the month of January and into February. We need to figure out what we could do for the winter months. We have a mix around here. There are 3 full-service garden centers that come to mind in our area – within 30 miles (excluding our garden center). All 3 players have made major expansions in the last 3 years. Each of them have opened up new facilities and have a deeper debt load. Each of them are now open year round. Then on the other side of the coin are the hoop houses/annuals sellers. Most of them grow and sell for a season, close up shop until next year.

    I am looking forward to the break and to be able to regroup, get upgrades & projects completed plus get new ideas going. We don’t have any employees impacted by the closure. The landscaping company operates year round.

    So, what do you think?
    -Lynne.

  2. Thanks for commenting Lynne. I just don’t know enough about your situation to give you advice here. My first thought is that you should concern yourself first with how you can generate more business during your busiest times before worrying much about what to do in the winter. Be prepared to pick up the slack if one or more of your competitors has “done themselves in” with increased debt and personnel obligations.

  3. We too are closing in Jan. and part of Feb. This, of course is going back to what was our life previous to 1992.
    The only reason we have stayed open was to keep employees on the payroll during those months. Now with the economy, our people all understand that the fastest way out of a whole…

  4. Denni,
    Didn’t someone recently famous recently say something about not wasting a good recession? I really don’t mean to make light of the situation but what should have been done long ago still should be done.
    Thanks for commenting.
    Sid

  5. Hey Sid, you could have been talking about us in your article because we now have the same thing going on at our garden center other than we dropped poinsettias totally. Spring season open, close for a month from mid-July to late August, reopen to sell mums, pansies, grass seed and lawn fertilizer and then close again until March 1st. We are zone 5. Work continues to happen while closed up so don’t think it is a total vacation!

  6. Thanks for your comment Tim. I agree that there is still work to be done and many people say they might as well be open since they have work to do anyway. As someone who has made the transition could you reply again to let us know what the results are for you? Did your fears about doing it come true, or have you benefited by closing? Did your customers forget about you? Did they all go to your competitor to shop since you weren’t open even though they didn’t shop with you during the slow times anyway? While its not saying your results would be the same as anyone else there is still comfort in knowing others have gone before. Sid

  7. Oh, Sid — how you DO always make us think!
    I appreciate the challenging comments, and agree with you wholeheartedly in many, many ways — for many businesses.

    But for *some* (and it should be more) businesses, I would challenge that your ‘close in off months’ suggesion is only ONE answer (and the easy, less-creative one) to the question, “What does it take to be profitable in a month (or close my doors)”?

    Putting on my “Suzy Shopper” hat, I say to Garden Centers: “Be genuine. Be passionate. Be creative and flexible. Sell me LIFE, and I will respond.”

    e.g., if you have a business where I enjoy spending time and money, an environment where I appreciate the personal service of your employees and I am inspired, a place where I (and my children, hopefully!) can learn something when I engage with your staff, then I would love to have a series of reasons to spend MORE time with you rather than less…. particularly if you have a green, warm, interactive environment when my own backyard is cold and white. I have to believe that by employing CREATIVITY and PASSIONATE COMMUNITY CONNECTION, and expanding your vision of yourself beyond “selling plants” that you CAN continue to be profitable even when we’re well past first or second or third frost….

    This isn’t the easy path and won’t be the answer for every business, I acknowledge. But in many places there CAN BE a market there for those who are willing and eager to embrace it.

    But it will take personality, energy, and a smart product mix that appropriately (and profitably!) pushes beyond seasonality — that’s not an approach for everyone. It takes a commitment to becoming a regular part of your customers’ lives – weekly, monthly — -not “yearly”.

    If we’re selling commodity (plants), then BINGO – sell them in their peak season and go on vacation otherwise. Heck, we’ve earned it.

    If we’re selling community, connection, “an experience”, atmosphere, comfort, inspiration, LIFE, etc. … that’s a year-round potential, at LEAST monthly.

    Scarcity DOES create demand and profit, that’s proven. So does creating passionate communities of ‘raving fans.’ They’re fundamentally different approaches — If garden centers just ‘sell plants,’ then your suggested approach here is certainly an easier pill to consider swallowing, and vacation for the other months… !

    For me, I put myself heartily on the “We Sell Life” bandwagon. And LIFE doesn’t shut down — not even here in Zone 4 – for 3-4-5-6 months a year.

  8. I have two friends in the business that are only open in the spring in other communities. I read an article several years ago in the Ohio Florist newsletter about a garden center in Indiana who was only open in the springtime. So those folks gave me the courage to try it. My main competitors are two grocery stores and two box stores in my community along with a hardware store. Another greenhouse in our community is also open only during the spring.

    After comparing sales figures and expense figures over a 15 year time frame we slowly started backing off some our off-season projects, example poinsettias. We slowly started to let go of wholesale customers and only kept retail. Then we sold our flower shop (seperate store) keeping only retail for us and the flower shop wholesale. Then we dropped that this past year.

    No fears of trying something different. We tell our help we hire, it is a spring and early summer job and then it is over. We tried everything possible to increase sales over the years in the off-season and never was particularly successful.

    When we do close in the summer for that one month period of time. We took two different week vacations. Yes, we lose customers but my 15-20 year analysis of the sales during that time frame if we paid help to be there was a wash or lost money.

    Better to lock up instead of not gaining anything and be open only if I am in town and need to be there.

    Fall is good for us although I quit growing garden mums in the summer and buy them. That allowed us to take a summer vacation.

    By not growing poinsettias last fall for the first time in 30 years my family took a week vacation for the first time in the fall ever.

    My thought is work like mad when you have to and try to capture more during those times if possible. The rest of the year we decided not to get to worked up about missing a few customers.

  9. Thanks for commenting Kellee, and for representing “Susy Shopper”. I have found that in the pursuit of providing all the intrinsic benefits to shoppers many garden centers who have tried their best to create this type of shopping Utopia have found that their bottom line has not been enhanced. Worse yet, in most cases their equity has been eroded and a mountain of debt has been built up. When the noble attempt to entertain shoppers gets in the way of making money the number one reason the customer valued the garden center in the first place (a place to buy plants) is in serious risk of going away. Remember that the origin of most garden centers was those humble boring ‘just plants’ places and their raving fans. Our goal should be to keep plants from becoming commodities rather than pushing them aside to sell everything else Susy Shopper could buy even if no money is made on the other stuff in most garden centers. Do not get me wrong. I am not against selling non-plant merchandise of any kind. Just make sure the core business is healthy and add on to that where you can profitably do so.

    It is no secret that the garden center business is in trouble the same as other retail business and I do not wish to gloss over that fact. The economy is not causing our problems as much as it is revealing them. The first step to identifying them is to find out where garden centers make money and where they do not. Going back to the core of the business is often (but not always) the best solution to turning around a bleak future. The point of pointing out to my readers that it is an OPTION to be open or not to be open is that many of them have put their futures in serious risk by trying to satisfy those who tell them to do it all and as a result have placed their own financial well-being in jeopardy. I will stand by Belief #1 – “In certain conditions garden centers should be open year-round, and in other conditions they should not be.” There are five more mistaken beliefs coming. Stay tuned.

  10. Thank you again Tim McGonagle for commenting and adding this. In our industry we do not hear or read enough about the humble garden center that makes money selling mostly plants.

  11. Hey, Sid … I very much agree with you with respect to finding the places where a garden center can be profitable, and appreciate your challenging the assumption that “every garden center needs to be open year round”… you’re right, and I love to see people like Tim really rethinking the ‘status quo’.

    — based on your response, I think you MAY have misinterpreted some of my comments… (more likely I didn’t do a good job of articulating them!!) I think I was trying to promote the concept of doing more with your core products to inspire customers to visit more than once or twice a year — buying what is in season each time. Too much of retail is ‘transactional’ – I was trying to promote a view of truly ‘relationship based” retail. (Which STILL has to be profitable!), I think this is an area where many garden centers COULD be quite exceptional. (And we both know some that really are!)

    I have seen firsthand some core categories that some garden centers have actually lost sight of in ‘off seasons’ — tropicals & houseplants are a good example. If it’s a commodity, someone can get it elsewhere for less — if shopping with you builds my community and is an EXPERIENCE (because your staff has built a relationship with me – which FAR too retailers of any category really know how to do these days), then I have a reason to make more return visits, not just get my flats from you once a year.

    My opinion is that the SOUL of good retailing is taking your core (profitable) products and creating truly sticky customer relationships out of them. In today’s impersonal world, I think one on one retail experiences can be even MORE special. I also firmly believe that garden centers don’t need to take on major capital improvements or debt load to create fantastic and interactive customer experiences — the Sunnyside Pumpkin Derby is a great example!

    All that being said — I believe the ideal balance is where both our perspectives coexist on this one … that a great local garden retailer can be profitable by selling plants and creating sticky, experiential customer relationships with *multiple return visits* annually — AND also be closed a few months out of the year, during which me (Suzy Shopper) is antsy for your next re-opening, because I miss shopping with you!

  12. We’re on the same page Kellee. Hope you get a chance to Meet up with Mike and catch the Sunnyside Gardens Sunny Bus in the spring! It’s cool. I love this forum that allows us to discuss and sort through these things. And while it isn’t for everyone I also love those garden centers that are able to make money year round.

  13. I have been in business here on the Texas Gulf coast for 37 years and realized 30 years back that it was not practical to be open all year long. I am out 35 miles from the Houston, Texas Metroplex “in the country” on a back road and once it starts to get hot in early Summer sales always plummetted so I began to shut down earlier and earlier after Spring sales. I now open up for 8 weeks in Spring and for 2 weeks during poinsettia sales and am closed the rest of the year from the public. Since all crops are propagated and grown out at my location I am working most of the year but keeping full greenhouses 12 months out of the year was just a waste of time for me. I now shut down some of the greenhouses after Spring, cut the electricity off to save on overhead, and go about my business of propagating the next crop. This past Spring we hit our first 100F day in May and sales were already slowing down. Our weather in Winter is generally very moderate and some Spring sales skyrocket the last week in February or first week in March. Staying open all the time meant 14-16 hour work days, 7 days a week, with few customers to meet overhead. Seasonal sales work the best in my sitaution….

  14. Thanks for adding your experience to this Michael. It is all about the individual situation, but the main point I see is that your spring customers still support you and you do not make less money and you also have a more enviable lifestyle.

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