June 2012: Despite the poor weather over the main trading season, the garden centre sector remains cautiously optimistic that 2012 will present opportunities for further growth. According to the Horticultural Trades Association (HTA), 2011 saw garden centre sales increase by 7% compared with 2010. Other sources suggest growth of nearer 10%. Last year’s sales not only held up but also outpaced inflation – a refreshing comparison to the continuing sluggish, at worst terminal, high street sales performance.
2012 started well for the sector with reports that like-for- like garden centre sales for the 12 months to the end of March 2012 were up 7%….but by the end of the wettest ever April on record and hosepipe restrictions in some areas, sales were down by at least 15% for the year to date – but that should be tempered by the fact that at the end of April 2011 garden centre sales were 25% up on the previous year. The industry is confident of continuing consumer demand – but there are mixed views as to whether the Diamond Jubilee, the London 2012 Olympic and Paralympic Games will help to drive sales.
Garden centres are affected by the weather but the underlying trend is one of rising turnover and profitability. It is therefore unsurprising that garden centre values have been holding up and even with the ongoing economic turbulence, strong demand for garden centres remains. Freehold sites remain the preferred option from independent operators but leasehold is still in demand.
Our garden centre team continues to keep its finger on the garden centre pulse as the sector’s leading property advisor, handling more deals than anybody else. Gilbert Evans has advised on the two largest garden centre transactions of the last 12 months – in the second half of 2011 we advised on the largest garden centre transaction of the year when Shoots Garden Centres sold its group to Squire’s Garden Centres. We also sold Fryers Garden Centre. This year we acted on behalf of Grosvenor Estate when it sold one of the UK’s leading garden centres, the £6 million Grosvenor Garden Centre, to the UK’s third largest garden centre operator with a turnover of £62 million, the Blue Diamond Group. Our most recent transaction was handling the acquisition on behalf of the Garden Store Group when it took over the Burford Garden Company’s 10 ha centre in Tenbury, Wiltshire.
Demand for garden centres continues to be healthy throughout the country and there is no doubt that from a property perspective, the garden centre sector continues to offer healthy returns for well-run businesses.