Horticulture Week recently published an article asking could this be the year to buy a garden centre, and as Savills are starting 2022 with two new opportunities to do so, the answer to the question could come soon.
Understandably there were few transactions over 2020 and 2021. Garden centre businesses have had a lot to deal with recently - operational issues around Covid restrictions, staff shortages and uncertainties over future lockdowns. The chain operators have also been focussing on integrating their newly purchased former Wyevale locations into their portfolios. With the worst of the Covid hopefully behind us we expect more activity in the market this year.
The industry has come out of the pandemic in great shape as we’ve all been into gardening, spending more time outside and at home. Sales at garden centres have been phenomenal, with 2021 being the best year yet for most. Restaurant income in 2021 may be down due to restrictions, but this has been more than made up by selling more house plants, garden furniture, and other bits to improve gardens and, with the strong residential market, the new house!
Chain operators have been improving their garden centres, the old draughty glasshouses are being revamped or replaced, and the internal presentation improved to provide a more modern environment attracting younger customers. Where centres have done this, Blue Diamond and Notcutts being good examples, the footfall, income, and profits have increased significantly. Showing a promising improvement on historic trading performance.
One of the latest interior trends is to have green inside our houses, and it turns out plants are good at cleaning the air in our homes too. Garden centres have spotted an opportunity to sell us more house plants and other goodies by opening up urban stores and there are more and more mini garden centres popping up on the high street utilising the empty shops that are regularly appearing on our shopping streets.
What could be in store for garden centres in the future? We expect to see moves to attract younger customers. This will come through changing the presentation of centres, diversifying concessions to include those which attract the millennial crowd, introducing more environmentally conscious product ranges with a bigger focus on brands, and perhaps we’ll see a move to include second hand/ vintage concessions. We could see pop up street food offerings, more activities for children, dog grooming outlets, dog agility fields, and a focus on events and experiences to bring people back regularly.
Unsurprisingly, the increase in income and profits for the centres feeds into value. There is an expectation that we are going to keep spending. Inflationary pressures, plant importation costs and interest rates haven’t yet had a noticeable effect on consumer demand and all of this means there is demand in the market place to buy garden centres. With little offered on the market, limited new build opportunities and strong demand you could get a good price. We are expecting values to hold, if not increase this year.
If you have a garden centre, and you are considering retiring, or turning your hand to something else, we’d recommend having a chat with us about your options and if now is a good time to sell.
If you are in the market for one keep an eye on our website follow us on linkedin, or join our mailing list and we’ll send you further details.
Want to learn more about the market? check out our UK Garden Centre Spotlight publication, which published late last year.
