Horticultural businesses optimistic but cautious for 2021, says HTA

Photo credit: Markus Spiske

Members wary to make significant business investments

Horticulture

19 November 2020

Business confidence is returning to garden industry after the record crash in confidence in spring, says the Horticultural Trades Association (HTA), as shown by its new Business Confidence Index survey of members and supported by positive garden centre sales in October, with 17% growth on October 2019.

The Business Confidence Index assesses members’ confidence in sales and areas of investment in the business over the next 12 months and will be used to demonstrate the pulse of the industry during these times of uncertainty.

Business outlook crashed in Q1 2020 when the impacts of Covid-19 began to take effect. However, both short- and longer-term business outlook have steadily increased to Q3 2020, albeit remaining at lows not seen since 2013.

The Index reveals that most members are feeling comparatively optimistic about their future sales and many are looking to target new customers. The fragile market environment though is limiting their willingness to make more significant business investments, such as buildings or new premises.

“After an incredibly challenging year, it is encouraging to see some measure of confidence return to horticultural businesses,” said David Denny, futures and sustainability manager, HTA. “There are grounds for optimism, but we know businesses are nervous about planning and future investment.”

October’s positive outlook was driven by exceptional garden/gardening category sales that finished the month 45% up on October of last year. Non-garden/gardening ranges also showed signs of recovery, helping calendar year to end of October comparisons finish -12% down on the same period of 2019.

Average transaction values were up 28% and 54% in the garden store and café/restaurant respectively, compared with October 2019. Catering typically makes up 21% of turnover in November amongst garden centres with a catering offer; so with cafes and restaurants forced to close once again, overall sales are likely to be hit, especially as we move out of the traditional gardening season.

Retailers are advised to continue the hard work to implement a safe trading environment by controlling customer numbers and avoiding Christmas events that cause people to congregate until at least 2 December.