Understanding the landscape

The garden center industry has been through some significant changes since we started our annual State of the Industry Report a decade ago. While annuals and perennials remain the bread and butter for most IGCs across the U.S. and Canada, other divisions are starting to see significant growth as new customers make new demands.

Houseplants are continuing their upward trend, with more IGCs than ever operating a houseplant or tropicals division. Indoor plants are also the second-fastest-growing product area at garden centers this year, just barely dropping out of its No. 1 position last year.

Over the past 10 years, more garden centers have been raising their prices than ever before, and at much higher rates. Increasing supply and growing costs, coupled with inflation are driving a larger majority than ever to raise prices. More than 90% of IGCs raised prices this year vs. 71% five years ago. Finding quality staff and managing high labor costs continue to be the biggest hurdle for independent garden centers this year, topping the list of biggest challenges for the fifth year in a row. This could be in part due to higher staffing levels at garden centers than have been reported in past years.

More and more IGCs are growing at least some of their own plant material, following a trend that started back in 2012 and continues today. Businesses are increasing and diversifying their growing operations as well with 48% reporting more diversity of plant material grown this year on top of 58% reporting an increase last year.
— Kate Spirgen, editor, Garden Center magazine

Landscapers across the country again reported growing revenue, profitability and expectations for more growth into 2023. One area that our survey showed a gigantic leap was the median revenue of landscaping companies. In last year’s report, [business owners] reported median revenue of $273,000. That jumped to a whopping $604,000 for 2021 revenue. This could have been caused by a number of factors, one being that a decent number of companies with less than $500,000 in revenue didn’t take the survey compared to last year. Was that because they were too busy to take the survey, or just not in business anymore either because they closed or were acquired? We’ll have to see how it plays out over the next few years. As far as confidence, owners aren’t as sure as they were last year that their business or the industry will grow.

Ten percent weren’t confident at all in business growth, compared to 8% last year, while 8% are not at all confident in industry growth compared to 3% last year. On a positive note, 85% said they turned a profit compared to 79% in last year’s report.
— Brian Horn, editor, Lawn & Landscape