With the bloom off the rose for floral departments since the heady growth of the 1990s leveled off, supermarkets find themselves looking for ways to prime the pump for more growth in a category that once brimmed with opportunity.
For some retailers, the quest is leading into promising, but possibly uncharted merchandising waters that may prove a challenge to navigate. Still, given the broad operational challenges retailers are facing, the lure of getting a category with such growth potential back on track may prove too enticing to pass up.
One floral category that's getting more attention is bedding plants, along with expanded offerings of other outdoor plants and related lawn and garden supplies. To take advantage of growing consumer spending on such products, some grocers are expanding their floral presence to include areas outside the store.
At Ukrop's Super Markets, a 29-store chain based in Richmond, Va., a bedding plant and gardening products business set up outside the store several years ago has found new life of late. The reason: An outside vendor has been handed more responsibility to ensure the products get the attention they demand.
"It's really blossomed since a local guy who used to sell us some of our inside products has started taking care of it all," said floral category manager Donna Shultz. "Initially, we had pulled away from him as we started to buy more of our traditional floral needs direct from growers. But we ended up giving him the outside portion of our business on a consignment basis. The bottom-line result has been better-quality products and sales."
Instead of saddling store employees with the responsibility of watering, rotating and otherwise caring for the outside products, the responsibility is in the vendor's hands. The decision to essentially outsource oversight made perfect sense, since proper care of such products is necessary to limit costly shrink and communicate a consistent quality image, Shultz said.
"One of the keys to success in the category is committing the people necessary to take care of it," she said. "Bedding plants have emerged as a real focus for our company, but it had been hard to dedicate the staff necessary to make it work. Without that commitment, it defeats the purpose of getting into that business."
Despite the new consignment arrangement that allows the vendor to take a cut of the profits in return for more oversight, Shultz said the store hasn't totally divorced itself from responsibility. Inside floral department employees are reminded that the outside business, which has been growing to include companion products such as an organic plant care line, is still a part of floral. To that end, inside employees are given limited responsibility for monitoring the outside business as well.
Ukrop's experience is indicative of the challenge facing supermarkets looking to get a piece of the broad lawn and garden products category. With more retailers of all kinds getting into that market, from traditional garden centers to mass marketers to drug stores, the appeal to enter it is strong. But the category can be fraught with difficulty unless grocers understand the level of care and commitment required.
Floral retailing consultant Tom Lavagetto, president of Floral Consulting Group, Spokane, Wash., was quick to point out the pitfalls that await unsuspecting retailers. So far, despite the obvious attraction of finding a new source of floral department sales and profits, only a handful of supermarkets have been able to devote the resources necessary to build a solid outside business, Lavagetto said.
"There are profits to be made, but it's tough because the margins are less than in traditional floral products," he noted. "The gross dollar opportunity is attractive, though, and handling the category provides yet another reason for the consumer to shop your store. But the problem is that most stores don't have the personnel to handle this. The smart retailers recognize their capabilities in the area and know how far they can go with it. Most need the help of an outside vendor to make it happen."
Another drawback to handling annuals, perennials, shrubs and even trees, is that the business is highly seasonal. The length of the prime selling period is regionally dependent, but Lavagetto said a four- to six-week window is about the best an average retailer can hope to squeeze from the bedding plant business.
Nevertheless, some retailers who've devoted more resources to their outside business enjoy extended selling periods. In its sixth year of operating an outside business based in front of the store, Clemens Family Markets, a 21-store chain in Kulpsville, Pa., now generates sales from early March through October. Having expanded into everything from perennials and soil to mulch and garden ornaments, the chain has seen its business steadily grow, said floral director Rose Clayton.
"With the statistics telling us that we're seeing some flattening in floral, we have to keep looking for new growth avenues, because at some point any department will hit a plateau," Clayton said. "We're trying to stay ahead of the game by being aware of trends in this area."
Lavagetto said other complicating factors include adequate space to properly handle the products; securing the variety and quality needed to entice consumers to trust the grocer over other vendors; and, of course, the need to devote real attention to proper care and handling to products considerably more temperamental than traditional floral products. Even related non-perishable products can be challenging, Lavagetto added.
"You even have to be careful with products like mulch and soil," he said. "You really have to be able to get your arms around it. Otherwise, you can end up sitting on pallets of the stuff. So many retailers carry the stuff, that they've become football items."
Another growth avenue some supermarkets are pursuing is expanded service. While relatively few have extended the full-service concept to include supplying floral products for special events, there's evidence that more see it as a natural extension of the business.
At Chesterfield, Mo.-based Dierbergs Supermarkets, the event business has steadily grown as customers have come to see the retailer as every bit the equal of that of standard full-service florists. The chain, which likes to tout its Dierbergs Florists and Gifts business as "the florist with the supermarket attached," does most of its major event/catering business out of a central design facility whose staff of 95 is responsible for readying products for shipments to stores and handling the chain's delivery business. In recent years, though, individual store floral departments have taken on more responsibility for supplying flowers for events.
"They're not in a position to take on anything that's very large, but they are working to do more small weddings, receptions, parties and balls," said Keith Parris, floral supervisor/merchandiser for the chain. "Staffing remains the real issue; we can only take on a certain number each week. We don't want to be in the business of overpromising or overbooking."
By contrast, Ukrop's has not extended its floral department capabilities into that realm. While Shultz said the chain has seen some occasional floral business stem from its catering business, there's no push to develop a larger presence in the business of supplying flowers for outside events.
While more supermarkets appear to be looking outside the store for opportunities to beef up floral sales, there's no shortage of ideas floating around for how to improve the well-established, but languishing, inside business.
Retailers also are looking to add more non-perishable items to floral departments. Balloons remain one of the more successful examples of such products. Balloons are attractive for any number of reasons, from the obvious lack of perishability to high margins, Lavagetto said. In addition, interior decor items are becoming a bigger part of some supermarket florist department mixes. Shultz said Ukrop's departments are handling floral display and design products, as well as gardening tools. Likewise, more stores are trying to use vases as ways to suggestively sell flowers.
For all the focus on reigniting the growth of floral via a broadened and expanded product and service line, some say supermarket floral managers should keep their eye on the most important ball: making sure that standard floral offerings remain a good value.
With recent statistics showing that only about 1% of supermarket shoppers leave the store with flowers in their hands, there's ample opportunity for building sales in the tried-and-true fare of supermarket floral departments.
"Until every customer walks out the door with floral we haven't tapped all that's possible in floral," said Clayton of Clemens Markets.