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Shopping Centers Today -> October 1999
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Gardening blossoms into year-round category
By Jim McCartney
Smith & Hawken is cashing in on the gardening craze.
Some retailers are getting a boost from sales of gardening products; so much so they’ve turned a seasonal business into year-round success.
The home-improvement retailers, such as The Home Depot, have healthy garden centers, as do the big discounters Target, Kmart and Wal-Mart. The big grocery store chains fill a portion of their parking lots during the early summer with tables and temporary greenhouses. Even strip centers get into the act in the spring by setting up temporary garden centers in their parking lots.
Smith & Hawken is one retailer that has decided to concentrate solely on the garden category. An upscale marketer of outdoor furniture and English gardening tools, Smith & Hawken stores feature such items as California-chic clothing, heirloom vegetable seeds, English gardening tools, organic bug repellent and outdoor furniture. The Mill Valley, Calif.-based chain has 43 stores and plans to open two more over the next six months.
The growth of garden centers reflects the demographics of gardeners themselves - they tend to be middle-aged, highly educated homeowners with impressive household incomes, according to a Gallup poll in February 1999 done on behalf of Bachman’s, a regional garden center store with six locations in the Twin Cities. In fact, many get their start in gardening after buying their first house. People then tend to step up their gardening spending as they buy larger houses.
Baby boomers are trading in their jogging shoes for gardening gloves, as they have found digging in the garden to be an effective way to relieve stress, according to industry observers. A robust economy and a boom in housing starts have given people the means and a reason to spend on garden supplies. What’s more, the rising popularity of gourmet cooking, healthy eating and herbal medicine has spurred interest in homegrown herbs and vegetables.
Overall, U.S. consumers spent $8.5 billion on lawn and garden supplies last year, according to Claritas, an Arlington, Va.-based market research firm.
"Aging baby boomers are spending more time outside, and creating outdoor rooms," said Heather Itzla, a spokeswoman for Smith & Hawken.
The company, which posted $88 million in sales last year, began as a mail-order operation in 1979 and only recently added stores, as well as an e-commerce site (Itzla declined to break down the sales between stores and direct marketing). Earlier this year, Smith & Hawken was bought for $75 million by private investors - Wellesley, Mass.-based DDJ Capital Management and the Wisconsin Investment Board - when CML Group, its parent company, reorganized in federal bankruptcy court.
Smith & Hawken stores regionalize their product mix depending on where the store is located, Itzla said. The stores feature workshops and seminars on such topics as wreath making and composting.
Smith & Hawken prefers upscale neighborhoods for its stores, which are either freestanding or mall-based. For instance, in the Twin Cities, one store is in a retrofitted old building on Grand Avenue in St. Paul, while another is in a 5,500-square-foot space at the upscale Galleria shopping center in Edina.
"Smith & Hawken brings a niche that is new to the Twin Cities - gifts for gardeners,’’ said Dick Herberg, COO of Bachman’s, the Twin Cities’ largest garden and floral center.
It’s no wonder the popular West Coast gardening marketer is interested in the Twin Cities, given the metropolitan area’s above average interest in that pastime. More than 40% of Twin Cities households are engaged in growing flowers and 28% in vegetable gardening, according to a February survey by the Lifestyle Market Analyst, a report issued by Des Plaine, Ill.-based Standard Rate and Data Service, a media and marketing research firm.
Twin Cities residents are 12% more likely than the national average to grow vegetables and 8% more likely to have a flower garden, according to the 1998 Lifestyle Market Analyst. Twin Cities residents, because of the weather, spend relatively little time outside. So when they do have the opportunity, they take it, according to industry observers.
Twin Cities shoppers spent an average of $98.60 per household on nursery and lawn supplies last year, about 17% above the national average, according to Claritas. In fact, the $105 million spent in the Twin Cities on garden supplies last year ranks 12th among all U.S. metropolitan areas, according to Claritas.
The Twin Cities are a good example of an area that has cultivated a profusion of garden centers. Start with the independent garden centers, such as Gerten Greenhouse, Bachman’s Garden Centers, and Linder’s Greenhouse & Garden Center; add the home-improvement chains, such as Menards and Knox Lumber, which sell plants and garden supplies; and don’t forget the 24,000-square-foot garden centers that are a staple of The Home Depot, which has 11 stores in the Twin Cities.
And to top it all off, most major discount stores and supermarkets, such as Kmart, Wal-Mart and Cub Foods, now have portable greenhouses set up in their parking lots. And there are a growing number of mom-and-pop plant sellers, as well as sites selling gardening products on the Internet.Despite the flood of new competitors, many of the garden centers are seeing impressive sales increases. Gerten, which has ramped up its advertising campaign through newspapers and TV and radio during the last few years, has seen double-digit annual growth throughout the ’90s, said Gino Pitera, one of the three partners who owns the large garden center in Inver Grove Heights, Minn.
Linder’s Greenhouse & Garden Center, based in West St. Paul, Minn., has seen sales grow by 25% annually over the last 15 years, said Linder. Much of that is due to its growing Flower Mart business, in which Linder’s builds seasonal garden shops in strip centers, and supermarket chains such as Rainbow and Festival. Most of his 23 Flower Marts had been closed for the season by the end of June, Linder said. He added that there’s been an explosion of perennial sales in recent years, due to some interesting new varieties, as well as the fact that you only have to plant them once.
"The strongest growth for us has been in perennials - 50% a year in recent years,"said Linder.
"People like gardening, but they don’t want to plant a whole new garden every year."
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