Discounters capitalizing on consumers' need for green - sales of nursery goods at discount stores

Discount Store News, May 16, 1994

Concerns over the environment, as well as consumer craze for color in their gardens, are driving the sales of green goods, and pulling the sales of related hard line care products along with them.

Retail green goods sales will increase 10% in 1994 to $15.2 billion, predicts Dr. Chuck Greenidge, a consultant to the nursery industry based in Evergreen, Colo. Including government and commercial expenditures, the end-user market for green goods will reach $40.4 billion, the United States Department of Agriculture estimates.

Most mass merchandising chains and garden centers sold out of seasonal color last year and had to scramble to restock during the season, Greenidge noted. The fastest growing category of any horticultural category is bedding and garden plants, he added.

As the sales of green goods increases, the rest of L&G product categories are pulled through the retail channels of distribution.

As a rule of thumb, every $1 in sales of green goods results in the sale of $3 worth of tools, fertilizers and insecticides to care for them, said Bruce Butterfield, research director for the National Gardening Association.

Discounters are improving on the selection and presentation of green goods, Butterfield said.

But it's a challenge to pick up extra sales from green goods. "Many don't have a shaded area to protect plants," he said.

Green goods require more attention and care at the store level to make sure they are kept in perfect condition, he added.

A lot of green goods purchases are made on impulse, Butterfield said. "People aren't buying plants just on price. If they aren't in prime condition, customers won't buy them, no matter how cheap."

Green goods serve as a spotlight to draw customers into stores. Each spring, Wal-Mart erects temporary, plastic greenhouses in its southern stores, and does the same at its County Farms, an experimental farm store in Kirksville, Mo. All new Wal-Mart stores provide space for an extensive selection of live plants.

During the season, the sidewalks in front of Kmart stores explode into instant live plant departments as an adjunct to the existing garden centers. Several hundred newer Kmart stores incorporate a prototype garden center that includes a computerized overhead sprinkling system that comes on each night, as well as a shade screen that keeps the sun from scorching plants.

At the sunbelt stores, Target also operates garden centers for live plants, but doesn't sell them in northern markets, such as Chicago. But every Target includes a special department for house plants, a market that is approaching $1 billion at retail.

Even though green goods are difficult to maintain, mass merchants push for green goods because they get customers into their stores, said James Farland, vice president sales and marketing for Union Tools.

Kmart has raised the quality and size of green goods and is investing in their care, Farland said. Lowe's (along with other major home center chains) is investing in green houses, in effect turning its home centers into nurseries, he added.

Discounters are trying to increase green goods sales by being more sensitive to local purchasing patterns in plants. Kmart, for example, once had a single circular promoting green goods for the entire nation, but now gives L&G department managers some autonomy to "provide local flavor" by purchasing trees and shrubs that are popular in their regions.

Discounters also can increase their green goods spin-off sales by better cross merchandising, Greenidge advised, such as bringing live goods into the store. Discounters need to pull L&G hard lines and green goods together, as home centers are doing, he said.

All too often discounters rigidly adhere to planograms in order "to keep everything in its proper place," instead of in natural associations, such as bulb planters and bulb fertilizer with bulbs, he said.

Retailers should also continue to take environmental concerns into account.

"Environmental awareness continues to be important to consumers," Greenidge wrote in his 1994 forecast for the L&G industry. "They demand improved environments in public and private areas and are creating them."

Environmentalism is changing the way even mainstream companies approach the business.

O.M. Scott, for example, has developed a new line of organic products. This year, the company is introducing its All-Natural Turf Builder, a lawn fertilizer made of manure, feather and bone meals and potash rock. It will sell for at least 20% more than its chemical lawn fertilizers. It will be interesting to see if consumer concerns for the environment outweight their pocketbook considerations.