Wal-mart challenges for K mart's L&G lead

Discount Store News, Dec 14, 1987

Wal-Mart Challenges for K mart's L&G Lead

Despite its record for innovation, such as pioneering full-line lawn and garden centers, K mart has fallen behind Johnny-comelately Wal-Mart in terms of merchandising.

At least that appears to be the consensus among consultants, vendors and garden center competitors.

Some even give Target, which withdrew from the garden center fray in the 1970's, better marks than K mart for merchandising its remaining lawn and garden lines.

What makes it difficult to achieve uniform results around the country is the regionalized nature of garden center operations. Of K mart's more than 2,200 stores, about 2,000 operate garden centers, year-round in the Sunbelt and seasonally elsewhere.

Buying is split regionally in attempts to meet regional needs. Regional managers-- and even store managers-- get a degree of autonomy that is unheard of in other store departments.

Difficulties in Geography

At an industry conference in May, Joe Hatfield, senior vice president, general merchandise manager for Wal-Mart, indicated the difficulties that geography presents for garden center operators. "We're in Minnesota to Florida and have to become very specialized in what we carry for each market."

Store results for lawn and garden vary radically, compared to other departments, said a consultant to the garden industry, who asked to remain nameless. "I've seen some very good K marts and Wal-Marts, and I've seen some rotten ones."

The stores that do the best are ones that have managers who are committed to the department or managers who take a personal interest in gardening, he said.

Among discounters, K mart pioneered in establishing full-line L&G departments and such innovations as developing a private label program for L&G, promoting UPC bar coded tags for green goods, testing trained horticulturists as department managers and experimenting with shipping live plants in pallet-sized cartons to reduce damage and shipping costs.

Target was the second discounter to start full-line L&G departments but scrapped them in the 70's in favor of its push for soft lines. In most of its 318 stores, Target devotes only limited space to a narrow line of hand and power tools, chemicals, fertilizers, potting soils, pots, patio furniture and gas grills. With the exception of 80 stores in California and Arizona, no Target stores carry woody green goods, (trees and shrubs), but some do stock bedding plants, such as in Milwaukee, and indoor house plants, such as in Dallas.

In a Target stronghold, California --where discounters simply have to get into gardening --it does very well with full-line L&G departments, said a California store manager. When Target took over about 50 Gemco stores, it increased L&G space by about 30 percent, he said.

At the new Target store in Sacramento, an outdoor garden area, about 30 feet wide, roofed and fenced in, runs the depth of the building. Its in-door L&G section, close to the front entrance, includes a display of healthy-looking house plants. A Los Angeles Target during the week of Nov. 9 was holding a tree and shrub clearance sale to make room for live Christmas trees.

Dr. Chuck Greenidge, owner of Greenidge & Associates, an Evergreen, Colo.-based consulting firm to the gardening industry, said "Talk is that it is planning to expand. Growers are looking for Target growth."

In terms of L&G space and dollar volume, Wal-Mart still is the one doing the catching up to K mart.

In its annual survey of green goods volume, the trade publication, Nursery Business Retailer, estimated that K mart took in $700 million in revenues (including fertilizers and chemicals, but excluding power and hand tools) in 1986, when it operated 2,180 stores.

For the survey, Wal-Mart reported 1986 L&G volume of $295.5 million from 980 stores, said Nursery Business publisher Dick Morey. Because of its limited involvement with green goods, Target wasn't included in the survey, Morey said, but he added that Target is "getting big in California."

Discounters have thrown down a challenge to independent garden centers, said Ian Baldwin, owner of Nursery Business consultants, Elk Grove, Calif. "They sell to people who don't go to garden centers. They have tapped only a small part of a huge potential market," Baldwin said.

In its 1986-87 National Gardening Survey, the National Gardening Association determined that 22 million, 32 percent, of 69 million gardening households shopped at a mass merchandiser or discount store last year, each spending an average of $261.

A Leo J. Shapiro and Associates consumer survey conducted for DSN this fall reflects the differing L&G emphasis of the Big Three.

Of those who shopped at a Target over the past year, 5.1 percent said they went there mainly to buy garden supplies. In sharp contrast, 10.6 percent of K mart shoppers said they mainly spent their money there on L&G supplies. Of Wal-Mart customers, the Shapiro survey found that 8.6 percent mainly shopped there for garden supplies.

In terms of customer satisfaction with the L&G department, K mart also ranked first, with a rating of 6.86 on a scale of 1 to 9, with nine equalling "outstanding." Wal-Mart's score on L&G customer satisfaction was 6.45, while Target trailed with a rating of 6.24.