Sunday, 27 October 2013

US gardening industry to see large gains following the recession

US gardening industry to see large gains following the recession

By Mike King
Companiesandmarkets.com

As the economy continues to slowly recover, the US gardening industry has started to once again see large gains following the recession, with some categories returning to their pre-recession sizes.

When the recession took hold in 2008, the industry suffered, facing drastic drops in revenue. A rising number of home foreclosures, escalating unemployment and little spending cash diminished downstream demand.

However, as other areas of the economy, such as housing, fully rebound, the home and garden industry has seen remarkable growth as consumers finally purchase pricier items they had been holding off on.

Weather conditions play an essential role in the cultivation and proliferation of garden products. Cool and moist weather is a bane of any gardener, as it helps promote the growth of troublesome weeds, grass, and insects.

However, hot, dry conditions or even stormy or humid weather is definitely no better. Such kind of climate tends to either slow down the growth process or severely restrict any kind of outdoor activity.

Outdoor power equipment, such as land mowers, occupies a huge market share in the US, while their market share in Japan is very insignificant. This is mainly due to the fact that US gardens are large and allow the use of huge equipment, while at the same time Japanese gardens are smaller in size.

Speciality retailers were particularly affected by the recession, as many of them sell their products at a premium price that consumers could no longer afford. Garden centres lost the majority of their share during and for some time after the recession.

In 2012, however, these channels appear to be slowing down migration and are poised to start regaining lost ground as consumers appear willing to pay for the specialized selection and expert advice these channels offer.

In the coming years, declining unemployment rate will lead to higher disposable incomes, spurring demand for home improvement projects and purchases.

Nevertheless, budget-minded and time-pressed consumers will continue shopping at lower-priced, one-stop-shop retailers like the Home Depot and Walmart, sapping revenue away from nursery and garden stores.

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