Roots of success

The recent news story about Homebase opening shop-in-shops within six Next stores has once again brought gardening retail into the headlines.

Could garden centres be extended to high street locations? And could garden centres be an anchor for the town centre of the future?

Garden Centre performance
Even before Covid impacted consumer behaviour and spend, gardening was a significant sector with an estimated annual spend of £12.6bn a year, a greater contribution to GDP than aerospace manufacturing.

The lockdowns during the last year have made many of us spend more time in our gardens and despite eight weeks less trading time garden category sales within garden centres were 3% higher in 2020 than in 2019, and 21% up when comparing December sales performance.

Although overall 2020 sales were down by 10%, this was largely impacted by the restrictions on categories such as catering. Chains such as Dobbies have reported strong sales performance with sales up 51% overall and 6% on a like for like basis. Encouragingly, at a time when the impact of lockdown on retailer profitability is becoming clear, Dobbies also increased its underlying EBITDA by 39%.

Out of town vs town centre
There are already examples of garden centres anchoring wider retail developments. Blue Diamond Group owns garden centres at locations including Bicester Avenue and The Valley, Evesham, both of which have a range of adjacent complementary retailers such as Cotswold Outdoor, Cotton Traders and Lakeland. It also has a centre that forms part of Springfields Outlet while Designer Outlet Cotswolds (due to open in 2022) will be adjacent to a 75,000 ft2 garden centre, which will essentially act as an additional anchor.

There is a precedent for urban garden centre locations. The team behind N1 and W6 garden centres recognised the lack of provision and operate award winning `boutique' garden centres. However, the majority of garden centre locations are out of town locations. Reflecting this opportunity, Dobbies announced last year that it was developing its first small format store, aimed at urban locations. Little Dobbies opened on Raeburn Place in Edinburgh in November, with a second store opening in Clifton, Bristol in March. The stores have a range of convenience gardening products alongside seasonable ranges and a coffee shop. While primarily focused on gardening essentials for city centre residents, it also promotes the wider range available at larger centres and online.

More town centre garden centres?
Homebase has already opened small format high street stores, focused on home improvements. If its shop-in-shop partnership with Next is successful, this could not only be extended to a wider base within the Next portfolio, but could see them follow the example of Dobbies and roll out standalone garden stores. Other garden centre operators will be watching closely to assess whether they should also be adapting their concepts.

While cities with limited provision are likely to be the main focus for such expansion, given the high proportion of vacant space within town and shopping centres there may be wider opportunities. For locations where existing provision is inaccessible apart from by car, garden centres could potentially open satellite stores within town centres, that could also form click and collect hubs for items not available in store.

The demise of Debenhams and announced closures of John Lewis stores means that there are larger format stores that need to be re-purposed. While there are aspects of larger format garden centres that would need to be considered, not least of all the outdoor space needed for plants, an in-town garden centre could be a consideration. With investment, there may be an opportunity to create outdoor space, through the introduction of roof top gardens, which could create an additional point of interest through shoppers with the added benefit of improving the public realm.

Conclusion
Gardens and gardening are likely to remain a key feature of our lives, even as lockdown restrictions are lifted. With a challenging climate for other retail sectors, this could be an ideal time for garden centres to expand and bring much needed vitality to our town centres.

Sam Fox