The garden centre market continues to outperform other retail categories in 2025
Market update
According to the HTA, sales growth remained negative throughout the winter months of December, January, and February when measured against the previous year. England then experienced the sunniest March on record, which contributed to a 23% increase in total garden centre sales year-on-year (YoY). This growth continued into April, and more marginally in May, before slowing down in June (-5% YoY) following a strong spring trading period. This is the reverse of 2024, when wet spring weather pushed gardening spend into the summer months, meaning spring 2025 levels of trade were benchmarked against weaker levels for the same period in 2024. Given the increasing impact of climate change, extremes in weather are likely to continue, and operators should ensure robust stock availability between March and June to help facilitate fluctuating demand relative to changing weather patterns in future years.
Despite sales growth in gardening throughout spring, sentiment in the wider retail market remains mixed. Figure 1 highlights how consumer sentiment often tracks alongside house price growth, a potential point of concern given the relatively subdued housing market this year, although there are a number of factors at play also influencing sentiment. The blue line in Figure 1 tracks the gradual improvement of consumer confidence since its lowest level in 2022, with the most recent indexes for 2025 demonstrating consumer confidence plateauing amidst wider global political and economic tensions. In spite of this, the climate for major purchases index has been gradually rising since the start of the year, with July’s figure showing the highest value so far this year at -15.
This wider consumer sentiment has been reflected in retail sales by volume, which have returned to growth this year following a sustained period of decline. This aligns with the growth in YoY spend in the garden centre market as reported by Barclaycard, who noted an average growth in the sector of 9.5% across Q2 2025 – the highest growth of any spend category they report, with the exception of Pharmacy, Health & Beauty.
Several group operators are reporting that the average basket size has remained relatively static and is typically in the £20–30 range. Savills analysis has found a strong correlation between basket size, turnover per sq ft, and affluence. Therefore, tying in product range and utilisation of space, and fit to catchment is key to optimising performance.
As operators continue to consolidate and strengthen their portfolios amidst economic uncertainty, it becomes increasingly important to accurately monitor the performance of individual sites. This enables turnover fluctuations to be properly analysed, helping to determine whether they reflect broader market trends or are driven by more localised factors such as product selection, audience targeting, competition, or management of sites.
Looking ahead, activity from smaller groups and single-site operators may be impacted by the upcoming changes to Inheritance Tax
Ellie Marfleet, Retail Research Associate, Commercial Research
The most notable investment transaction activity in 2025 has derived from Dobbies. Since December 2024, the group has disposed of a total of 24 sites (18 large format stores and six Little Dobbies branches). The group outlined its intention to shut ‘unprofitable’ stores; however, this move is not reflective of reduced demand in the market, with 80% of the large format stores being acquired by other garden centre operators, including Blue Diamond, British Garden Centres, and Squire’s.
Several of the remaining large-format sites have been earmarked for other uses, such as the former Dobbies in Altrincham, which was acquired by Lidl. Additionally, the urban nature of the Little Dobbies units offers an attractive proposition to various retail and café operators, including Gail’s Bakery, which acquired the former Little Dobbies site in Clifton, Bristol.
These acquisitions characterise the robust demand for centres when priced correctly, and it is encouraging that the majority of stores have remained as garden centres. Looking ahead, activity from smaller groups and single-site operators may be impacted by the upcoming changes to Inheritance Tax, a new tax which will be introduced on centres worth over £1 million from April 2026.
Occupational Trends
Operators continue to wrangle with rising costs, which increased further in April 2025 following initiatives introduced in the Autumn Budget. Staffing costs in particular have been subject to more regulatory and legislative burden. Savills analysis within last year’s Market in Minutes revealed that wages typically reflected circa 21% of turnover in 2023, a 3% increase since 2021. There have since been two further increases in the National Living Wage (NLW) and National Minimum Wage (NMW), meaning wages are now consuming closer to 28–33% of turnover. Staffing, therefore, remains the largest cost burden to operators, which will likely be exacerbated by the upcoming changes to zero-hour contracts. This could disproportionately impact the industry due to its seasonal nature. Business rates could also pose a significant pressure point in future if the 40% relief currently applied to retail and hospitality ends, and the wider system is not reformed.
The scale of this issue was encapsulated by the results of Blue Diamond. Although total sales for 2024 were up 7% YoY for the brand, this was not sufficient to maintain the same level of profit as 2023, with profit before tax falling by -9.8%. This will likely be a common theme amongst operators, as despite rising turnovers, profit margins continue to be squeezed alongside rising costs. Historically, higher performing centres have achieved a 20–22% profit-to-turnover ratio, but the new normal is likely to be closer to 18%.
The higher conversion rate may also be a testament to how the experiential nature of independents, coupled with high-quality customer service, increases purchases
Ellie Marfleet, Retail Research Associate, Commercial Research
Independent garden centres typically have a reputation for excellent customer service, which can manifest itself in higher sales as customers feel assured by products, methods, and best growing practices. Savills analysis of data from GlobalData’s How Britain Shops Survey highlights how independent garden centres have the highest conversion rate (the proportion of footfall entering the store who make a purchase) of any of the participating garden centres in the survey, with 88% of consumers entering an independent garden centre making a purchase. It should be noted that this data does not reflect total spend at each operator due to sample size, but does provide an indication of consumer spending habits.
The conversion rate of independent garden centres is significantly above the average for wider retail, out-of-town retail, and grocery, suggesting consumers are purpose-driven when it comes to visiting local garden centres, and typically visit stores to make a purchase rather than browse. The higher conversion rate may also be a testament to how the experiential nature of independents, coupled with high-quality customer service, increases purchases.
Diversification continues to enable centres to increase overall revenue and mitigate cost pressures. The top ten largest concessions by number of sites has remained largely unchanged over the past year, raising the question as to whether the industry is modernising its concession offer in line with changing consumer preferences. The wider retail market continues to develop sensory-rich shopping experiences as a point of difference to other stores and online retail.
Garden centre concessions may need to evolve to offer unique experiences to ensure customers continue to visit and form lasting associations with brands, even when shopping outside of standalone stores.
Role of technology
There are a number of ways in which operators are exploring how they can enhance operational efficiencies and consumer experience with advancing technologies. For instance, data analytics and self-aware artificial intelligence known as agentic AI may help alleviate staffing issues in the future. Such methods are being explored by various retailers and hospitality outlets. These platforms leverage historical centre data to enhance profit and performance, in addition to contributing to operational efficiencies such as staff scheduling (alongside footfall data) and inventory management. Ultimately, this increases sales per workforce hour, increasing margins that are being otherwise thinned. Similarly, staff are able to offload certain functions to automation and technology. This saves time that can be spent focusing on customers, sharing gardening tips, recommendations, and advice – setting them apart from other centres that do not offer the same customer service.
Savills expects the experiential draw of garden centres to evolve in future years to attract new customers. This may be achieved through enhanced in-store capabilities, such as using augmented reality (AR) to visualise garden centre layouts, hosting classes on growing and designing gardens, offering consultations on what plants would thrive in the area the customer has available, and seasonal activities (already seen in some stores) such as flower-arranging and wreath-making. Availability and knowledge surrounding smart gardening tools, such as app-controlled irrigation and soil sensors, will also appeal to data-literate gardeners and younger generations, and offer a competitive edge compared to purchasing such products online.
Applications of consumer data are key to providing operators with detailed insights into visitation and spend. Loyalty data is likely to be a pivotal growth area as seen in the retail sector, where loyalty schemes have evolved to an AI-driven capability offering personalised predictive offers, paid subscription models for additional rewards, and price differentiation. Although some larger groups in the garden centre sector have begun to adopt loyalty schemes, these are still in their infancy compared to those in mainstream retail. Applying such techniques to find smarter ways to both retain and attract new customers and increase average spend may reduce the pressure of thinning margins. Similarly, this may attract the younger generation who have been raised in an era of personalised recommendations and digital rewards, whom the industry has historically struggled to attract. It is important to note, however, that given levels of house price growth, the issue may not be a lack of interest from younger consumers, but rather the economic barrier to buying a house, and therefore, the ability to own a garden is impacting demand in the sector.