Published: 5th June 2020
As well as seeing a return of their usual customers, garden centres can also expect to welcome a new group of budding gardeners making use of their additional free time and the warm weather to venture out into their gardens. These changing customer demographics have opened up a whole new and potentially lucrative market which can be capitalised on going forwards.
Social distancing restrictions
While there are positives garden centres can take from this situation, the future may not be entirely so rosy. While the sales of plants, compost, and decking may be on the up, most garden centres are more than what their name suggests; they are home and leisure centres with cafés, restaurants, soft play areas, and even aquariums.
So, while income from the traditional aspects of a garden centre are likely to flourish, post-lockdown restrictions are likely to impinge on these additional offerings which have become important income streams for these types of businesses. As social distancing is likely to limit the number of people who can be inside an enclosed space for the foreseeable future, footfall will be down, undoubtedly affecting revenue. The future viability of soft play centres and seated café areas in these types of establishments is yet to be seen.
Social distancing is also likely to impact buying behaviours. Rather than being seen as a retail experience, a trip to the garden centre is likely to now involve less browsing and a shift to going in armed with a list of necessities and getting out as quickly as possible. Many customers will move to online ordering and click and collect options instead, and while this will still generate much-needed revenue, this type of shopping does limit impulse purchases. In short, they will become more akin to how customers approach their grocery shop.
Making up for lost time
While the re-opening of garden centres is a positive step for those in the industry, this is not a panacea to their cash flow worries and many will be trying to make up for lost time. Having to close doors during the traditionally busy Easter period and the early May bank holiday has had a devastating impact on footfall, income streams and cash flows in the short-term, and there are fears this financial hangover could last well into the remainder of the year.
There are also concerns about what the long-term impact of Covid-19 will have on older shoppers in particular. With a typically higher disposable income they are an important demographic not only for garden centres, but for retailers as a whole. Lockdown restrictions have negatively impacted consumer confidence across the board, and with fears of a second wave of the virus, those deemed more vulnerable to the health risks posed by coronavirus may remain fragile for some time.
Preparing for the ‘new normal’
While many garden centres are hopefully in a good position to be able to thrive going forwards, an element of restructuring may be required to ensure the business is structured in a way which is appropriate to conducting business as our ‘new normal’ world begins to unfold.
It is not only changing consumer behaviour that businesses need to be prepared for; there are also resourcing and staffing concerns which may need to be addressed. Garden centres typically have an older workforce, this type of work being particularly attractive to those who have retired from their primary career and seeking alternative employment on a part-time basis. With vulnerable individuals encouraged to self-isolate for the foreseeable future, there are question marks over if and when these individuals will be returning to work and the challenges this may pose to resourcing going forwards.
At Begbies Traynor, our business restructuring experts can assess your current operational and financial structures, ensuring they are set up in a way which allows you to maintain healthy cash flow levels until trade returns to pre-Covid levels. Improving operation efficiency levels now not only gives your business the best chance of survival now, but it also puts you in the best position possible for what could be a challenging and uncertain time ahead.