Despite half-term holidays falling in the last week of October with above average sunshine, this did little to increase garden centre sales. According to the HTA’s latest market update, overall sales were down -8% on October 2021.
Meanwhile the actual quantity of goods sold was -8% too, indicating that the cost-of-living crisis is taking its toll on consumers’ disposable incomes as they cut back.
More positively, catering has begun to show signs of recovery as catering sales were up +10% on October 2021, with volumes up on last year indicating growth. However, consumers eating out decisions are likely no longer influenced on the pandemic but rather by the economic situation, as 41% indicate they will spend less on eating out next year. This is reflecting in the catering Average Transaction Value (excl. VAT) that was down -18% on October 2021.
Consumers’ minds are strongly focused on the economy with one in two consumers expressing this as a concern to them in the Ipsos Mori index likely due to CPIH (a measure of inflation) reaching the highest level in 41 years to 9.6%.
Another threat to horticultural businesses is the availability of water supplies - after a long, hot, dry summer, rainfall significantly above average is required throughout the winter to replenish reservoirs and water storage to avoid drought conditions in the spring. With 14% of British adults concerned over pollution/climate change/the environment this would be an ideal time to highlight how sustainable gardening is and educate consumers on how to use less water for garden maintenance and care.
Shipping costs have decreased to pre-pandemic levels as demand levels off. However, this reduced expense has been counteracted by the weakened pound, higher fuel and energy bills for businesses.
In addition, with the cost-of-living crisis many workers are expecting higher wages with the average wage increase at 6% putting further pressures on businesses with higher overheads to cover. Retaining staff may also be a challenge if businesses cannot afford to increase wages, as vacancies are high leading to increased competition for staff.
After another month of bleak financial news and outlook on sales, Christmas may be the saviour for a dull period for businesses and consumers alike.
For the full HTA market update click here