Garden Center Group members see unprecedented growth

Garden Center Group members see unprecedented growth

The 17th annual P&L report shows increases in net profits, average sales and transaction numbers.

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The Garden Center Group has released results from their 17th Annual P&L Study for 2020. The study, which was first conducted in 2004, has never seen the level of increases reported this year. The results were shared on March 11th during The Group’s GROUPtalk LIVE Series Session during a presentation by Steve Bailey and Tim Quebedeaux of RetailKPI Consulting, The Garden Center Group’s financial programs managers.

Total sales were reported at +25.1% over the previous year. This was a result of both Average Sale increase of +10% and Transaction Counts increase of +14%. The overall gains by all centers reporting resulted in a new higher level of benchmarks. Past years have featured three levels of benchmarks: Total Group, High Achievers (net profit of 5% to 9.9%) and Best Practices (net profits above 10%). The 2020 study resulted in a new higher level of benchmarks with a 4th tier of Best of the Best being added. For instance, Total Sales for the Total Group was +25.1% increase over 2019, while the Best Practices Group reported up +28% and Best of the Best increased +30%. The Best of the Best reported the sales as a result from Average Sale increase at +5% and Transaction Counts increase at +24%.

During the presentation, Bailey and Quebedeaux shared a graph of an average garden center with annual sales of $1 million, illustrating the growth and revenue over 17 years of the study. You can see in the illustration below the effects of the Great Recession (2009 – 2012) as well as the growth that followed, and the quantum leap in 2020. As we all know, this growth in revenues was a result of increased consumer interest in gardening during the pandemic, but interestingly amid a time when most garden centers were operating with unprecedented restrictions, reduced hours and less staff.

The Total Group reported a net profit of 13.6% compared to 5.6% in 2019. The Best of the Best reported a net profit of 21.3% compared to Best Practices at 14.6% in 2019. Overall, the study recognized the largest number ever of centers being awarded Best Practices Awards.

Danny Summers, managing director of The Group said, “We expected the results to be higher than normal, but they have set a new level of benchmarks. Our P&L Study is the longest running and most comprehensive study of its kind in North America. Any center who has participated in past years knows this for a fact. What began as a simple compilation of just a few numbers has continued to develop into a very complex and detailed benchmarking system. The average individual center's report is now 18 pages – that's not just a few numbers!”

Steve Bailey describes the earliest attempts to bring together a few Centers' P&L reports as a difficult task he compares to "herding cats." He, Robert Hendrickson, Sid Raisch and others developed a standardized Chart of Accounts they felt most Centers could report. The results of continual improvement over 17 years, dedication to both refining the processes and comparisons, as well as commitment by Group Centers to participate and share their financial data has brought this Annual P&L Study to its recognized position as an industry exclusive benchmarking program.

But being an industry exclusive benchmarking study isn't the real story. The real story is in the benefits gained by all of The Group centers who participate in the study. There is a real difference in the way they manage their operations and the results achieved.

Summers added, “Our client testimonies tell the story of how they have utilized this unique tool and how it has helped them build more profitable businesses. You can read the many comments on our What Our Clients Say page in The Group's WebSystem. You’ll see key words like PROFIT and SHARING – which is at the very heart of The Group. And you will quickly realize what an impact this unique study has made on their businesses.”

As the 2021 season is now underway, can Garden Centers match or improve upon the results from 2020? Will both Average Sale and Transaction Counts follow patterns of 2020? With proper planning and management, there’s a good chance they can. Time will tell.

The Garden Center Group is North America’s resource for solutions for garden retailing – including benchmarking, budgeting, inventory and margins, marketing, merchandising, brand building, property and site design, human resources, team building, succession, and more. This alliance of garden centers, service providers and vendors work together to create a community of professionals with one goal in mind – helping each other build successful companies. The Group focuses on business solutions designed to help garden centers increase sales, improve operations and retain more profit.

 

For information about The Garden Center Group, The Annual P&L Study, the Weekly Department Review (WDR), The Fall Event 2021, visit thegardencentergroup.com.