Power equipment helps drive '95 lawn & garden biz

Discount Store News, July 17, 1995 by Richard Halverson

NATIONWIDE DSN REPORT - With only a few Spots of rainy weather in certain regions, sales of outdoor power equipment this spring nevertheless were fairly spry, and retail should see overall sales gal of about 6% for the '95 season.

St. Louis was one of those spots with "crummy spring weather," said Scott Hickox, L&G garden buyer for Grandpa's, which operates 13 stores in that market. "Much of April and May were lost" he said. Grandpa's has made up lost ground, however, and expects a 10% sales gain for the season, he added.

"Considering some of the horror stories I've heard, 10% will be a good year," Hickox said.

The Midwest and the Rock Mountain region were particularly affected this year by a wet spring.

One of the saving graces for GrandPa's was that it made a major effort to expand its trimmer and blower offerings, and that helped business, Hickox said.

With a price conscious customer, electric string trimmer sales are concentrated in the $19-99 to $29.99 range, he said.

GrandPa's also expanded its riding mower offerings, taking on a Murray 42-in. cut, 16-hp model at $1,000.

GrandPa's stocks seven models of Murray walk-behind models and this year added an upscale model, a Lawn Boy 41/2-hp convertible mulcher at $250.

"That price was a stretch for us," Hickox said, and sales were "only okay."

Projections of manufacturer shipments indicate gains ranging from 4.6% for walk-behind mowers to as high as 12.7% for garden tractors.

The only category to show a decline is rear-engine riding mowers, which is steadily slumping toward niche market status as its prices approach those of front-engine riding mowers.

Manufacturers expect to ship 1.58 million riding mowers of all three types this year, a 9% gain on actual shipments last year of 1.45 million.

Manufacturers will ship 363,529 power tillers this year, a 15.4% increase over last year and a sharp about face from the 8.2% slump in '94, preceded by flat shipments in '93.

The figures are from the Outdoor Power Equipment Institute, Alexandria, Va., which holds its annual outdoor equipment show from July 28 through Aug. 1 at the Kentucky State Fair Grounds, Louisville, Ky.

At retail, dollar volume of Outdoor Power Equipment will gain 6.2% in '95 to $8.3 billion from $7.8 billion in the '94 model year, projected Dr. Chuck Greenidge, a lawn & garden consult in Evergreen, Colo. That compared with a 2.6% gain last year from $7.6 billion in '93.

By class of trade, discount, stores, warehouse clubs and mass marketers including Sears and Montgomery Ward, will snare a 40.1% market share of all L&G sales, including green goods, chemicals and hand tools, as well as power equipment, Greenidge predicted. The mass market class of trade thus will ease out L&G centers, nurseries and farm stores, which he expects to garner a 39.1% share.

That leaves hardware stores, home centers and hardware/home improvement warehouses with a 20.8% share of a total market that Greenidge pegs at $62.8 billion for '95, including nursery landscaping.

For the typical discount store, Greenidge estimates average sales of about $2 million per year.

Based on Industrial Market Research panel groups, discount stores increased their market share for power equipment to 26% '94 from 22% in '93, said Kelly Tritz, manager marketing reseach for Toro.

Sears and Montgomery Ward between them are holding steady at about 30% of market, Tritz said. But the big gainers are the home centers, doubling their share to 12% from 6%, Tritz said.

"Consumers are willing to shop for bargains," he said, and the rapid expansion of home center chains, especially The Home Depot, "have changed the playing field."

Although 70% of the mower market is at $250 or less, consumers are willing to move to the mid-range, he said.

Accordingly, Toro has found placement for its Lawn Boy mowers at regions chains, including Caldor, Bradlees and Venture. Sales have been successful in the $259 to $269 range for a push mower and the $319 to $329 range for self-propelled mowers, Tritz said.

Traditional dealer brands, such as Snapper and Honda are testing sales at home centers, including The Home Depot, and John Deere may join them, Tritz added.

Sales of rear-engine riders, a Toro specialty, have fallen by half over the past several years and never will come back, Tritz said. Lower volume has resulted in higher production costs, he said, and that means that prices of rear-engine riders have gotten close to those of front-engine riders.

But rear-engine riders will always find a niche market for those who prefer them Tritz added.

Murray also is seeing a step-up trend, said Joe Cunningham, project development manager.

Aging Baby Boomers are moving up to mid-price equipment and pushing the horsepower ratings, he said.

For push mowers, the midlevel level market now accounts for about 40% of total unit sales and 50% of dollar volume, he estimated.

Despite the shift toward mid-level models, retail prices have remained fairly stable for the past several years. "You can still get a $799 promotional riding mower anywhere," where," Cunningham said, with a 38-in. cut and 12-hp engine.