Market reports, business information and market research from Midnight Croquet. AMA Research UK Garden Products Distribution Market Report .

Covering the period 1994-2007, this report examines channels of distribution for garden products, including garden centres, DIY multiples, high street and hardware stores, mail order, supermarkets & Internet suppliers. It reviews recent trends and current developments. It also provides a review of the changing roles of retail channels within the Garden Products market, outlining historical performance and forecasts to 2007, and a comparison of product trends between key channels. Focusing on garden centres their performance is analysed and reviewed in context with other major distribution channels.

The report provides analysis by the following product groups: Plants & Nursery Stock; Lawnmowers & Tools; Bulbs & Seeds; Chemicals; Garden Buildings (inc. Conservatories); Growing Media; Furniture & BBQs; Pots & Planters; Fencing/Netting/Water; and Paving/Propagation/Lighting etc.

Key areas of coverage in the report include:-

THE MARKET

Assessment of Domestic Garden products market - developments over the last decade, review of performance in 2001-2003. Future prospects to 2007.

Factors influencing growth - attitudes to gardening, leisure products, new product developments etc.

Garden Centre Market - size, growth rates, performance compared to total garden products market, factors affecting future developments.

Review of performance 1994-2003/early 2004. Areas of growth/decline. Future trends – buoyant market growth

DISTRIBUTION CHANNELS REVIEW

Market share by channel of Distribution – review of share changes between 1991-2003.

Analysis of key strengths and weaknesses of Garden Centres, DIY Multiples, Supermarkets, Mail Order, Internet, High Street and Hardware Stores in terms of Garden Products distribution.

Analysis of the best performing products in each distribution channel – product mix comparisons for Garden Centres and DIY Multiples.

Detailed review of the competitive advantages held by DIY Multiples and Garden Centres in the context of Garden Products.

Detailed comparison of product share trends between major channels – highlights key products by channel, growing/declining sectors, strengths and weaknesses of different channels etc.

Future prospects of ALL major distribution channels in the Garden Products market.

FOCUS ON GARDEN CENTRES

Structure of Garden Centre Market - fragmented nature, major companies, market shares, industry rationalisation, recent and future developments.

Market and product opportunities for Garden Centres – growth / declining sectors etc.

Garden Centre Sales by Product Group - Horticulture, Buildings, Leisure, Equipment, Chemicals, Decoration (pots/planters, lighting, ponds, paving etc.), and Non-garden products.

Buying processes - factors influencing choice of suppliers.

Detailed review of Garden Centre sales by product group – trends from 1991-2003, comparisons with DIY Multiples.

Role of wholesalers/nurseries, branded/own-branded products.

PRODUCTS/SUPPLIERS

Market size per major product group – review of key market developments since 2001 and future prospects.

Garden Centres and DIY Multiples share of market within each major product group - areas of growth and decline - comparison of Garden Centre and DIY Multiple sales by product 1991-2003

.

Product mix within major product groups.

Garden Centres strengths and weaknesses by product, key competitive channels.

Major suppliers within product groups.

Product trends within major product group - growth sectors etc.

FUTURE PROSPECTS/GENERAL

Age distribution of population, personal disposable income levels, number of households etc.

Future developments within garden product – buoyant market prospects, implications for suppliers.

Changing requirements of consumers - increasing product awareness, value-added products, etc.

General economic influences on the market.

The total UK Garden Products market within our definition is currently valued at an estimated £4.8billion in 2003 and covers 6 broad product categories. Since 1991, the market has more than doubled illustrating the strong growth seen within the sector.

The market has performed favourably in recent years, buoyed by a long hot summer in 2003, which benefited sectors such as the garden leisure market in particular, though 2004 is seeing some slowdown in activity. Gardening and garden design has been subject to a high level of media coverage in recent years, which has helped to increase product sales, while the changing view of the garden now as an extension of the home has also benefited the overall market.

The major channels for garden products are the Garden Centres, with annual sales of around £1.2 billion at RSP, and the DIY Multiples sector with estimated garden product sales of £1.7bn in 2003.

The DIY Multiples have seen significant growth in recent years and have taken increasing share from the Garden centres to become the dominant channel in the distribution sector.

Garden product sales have seen substantial growth through the latter part of the 1990’s and has continued up to 2003, which has stimulated growth in both the DIY multiples and the Garden Centres as well as other channels including Catalogue Stores and Supermarkets in certain product sectors.

Overall, DIY multiples have continued to take share from the Garden Centres. In 1991, Garden Centres accounted for around 33% share of the total domestic Garden Products market, but in 2003 they are estimated to have a share of less than 25%. In contrast to this, the share taken by the DIY multiples has risen from 27% by value in 1991 to approaching 40% in 2003.

Within the Garden Centre market, there has been a shift away from high volume/low margin products to higher value products. There has also been more emphasis placed on non- garden products and turning a visit to the garden centre into an "experience", with many centres now investing heavily in facilities such as restaurants.

The catalogue and mail order channel has also seen growth in recent years and have also seen a move away from lower value goods to a mid to higher priced range in certain products areas such as garden furniture and barbecues. Some catalogue stores have also expanded their product offerings in recent years to include a comprehensive range of garden products, including conservatories and sheds. Product ranges from some of these type of outlets will tend to be more seasonal.

Other channels such as supermarkets have also increased their product ranges in the last few years, with Tesco committing to increasing their range of non-food items whilst some Safeway/Morrison stores have garden centre areas within some of their retail outlets.

Within the more traditional sectors of the market, particularly horticultural products, Garden Centres are still strong, accounting for almost 50% by value. Garden Centres in general are able to offer greater product knowledge for horticultural products and are perceived to provide better services and care & maintenance of stock than other outlets. Garden Centres can also provide a more relaxing outlet, particularly for the older customer, whilst product range in the horticultural sector is generally greater than that offered by other outlets. However, the sale of non-garden related products are becoming increasingly more important for the Garden Centres and in 2003 accounted for over 20% of their revenue.

DIY multiples have a relatively limited share of the horticultural sector although have increased their product range in recent years and are now improving service by providing trained to staff to further aid customers. A policy by some of the multiples to employ "older" members of staff means that, in some cases, more knowledgeable staff are able to specialise in certain areas. DIY multiples are also increasing their offering of higher value products such as furniture and barbecues and have moved up-market in recent years.

There is new competition in the horticultural sector from Grocery Multiples, which although at present do not present a major threat, could increase share in the future. Some supermarkets now offer dedicated garden centre areas whilst others now erect marquees in the store car parks to sell horticultural products throughout the summer months.

Within the Garden Centre market, Wyevale are the clear market leaders with a share of 16%. The market is still fairly fragmented with over 20 companies accounting for a further 25% of the market and the rest of the sector being made up from other "smaller" garden centres.

The DIY multiples market has fairly recently experienced significant change and a number of major acquisitions has left B&Q, Focus/Wickes and Homebase accounting for 96% of the market making it one of the most concentrated markets in Europe.

Future prospects for the Garden Products market are relatively optimistic with underlying growth of over 5% predicted in many product sectors. It is, however, difficult to make any annual forecasts for the Garden Products Market, due to many individual sectors being affected by different weather conditions that can either seriously restrict or bring unprecedented levels of growth. For example, in 2004, several garden centre chains have already revealed poor half-year results as key trading periods have been hit by indifferent weather.

1. INTRODUCTION 6

2. SUMMARY 7

3. ECONOMIC ENVIRONMENT 10

3.1 GDP 10

3.2 INFLATION & INTEREST RATES 11

3.3 UNEMPLOYMENT 12

3.4 HOUSEHOLD CONSUMPTION 13

3.5 HOUSING & CONSTRUCTION 14

3.6 STERLING 14

3.7 POPULATION PROFILE 15

3.8 CONCLUSIONS 17

4. GARDEN PRODUCTS MARKET 18

4.1 DEFINITION 18

4.2 MARKET STRUCTURE 18

4.3 MARKET SIZE 20

5. CHANNELS OF DISTRIBUTION 25

5.1 DISTRIBUTION OF GARDEN PRODUCTS 25

5.2 GARDEN CENTRES 27

5.3 DIY MULTIPLES 40

5.4 HIGH STREET / GROCERY MULTIPLES 51

5.5 CATALOGUE SHOPS / MAIL ORDER 52

5.6 INTERNET SUPPLIERS 53

5.7 OTHERS 54

5.8 FUTURE PROSPECTS 55

6. PRODUCTS 59

6.1 PRODUCT MIX 59

6.2 SHARES BY PRODUCT 61

6.2.1 Horticulture 65

6.2.2 Garden Buildings 78

6.2.3 Garden Leisure 86

6.2.4 Garden Equipment 99

6.2.5 Garden Chemicals 111

6.2.6 Garden Sundries / Other Products 116

7. KEY MARKET INFLUENCES. 134

7.1 THE UK HOUSING MARKET 134

7.2 CONSUMER RETAIL EXPENDITURE 138

8. FUTURE PROSPECTS 140

CHART 1 OVERALL GARDEN PRODUCT, GARDEN CENTRE MARKET AND DIY MULTIPLES GARDEN PRODUCTS MARKET 1991-2003 (£M RSP) 7

CHART 2 INTEREST RATES AND INFLATION (RPI) FROM 1990-2005 12

CHART 3 PDI & SAVINGS RATIO 1980-2005 13

TABLE 4 EXCHANGE RATE FLUCTUATIONS 1997-2004 - DOLLARS, AND THE ECU TO THE POUND STERLING, SPOT RATES 15

CHART 5 AGE DISTRIBUTION OF THE RESIDENT UK POPULATION 2001 ('000) 16

CHART 6 GARDEN PRODUCTS - MAJOR CHANNELS OF DISTRIBUTION 19

TABLE 7 UK GARDEN PRODUCTS MARKET 1994-2007 (£M RSP) 20

CHART 8 DISTRIBUTION OF GARDEN PRODUCTS 2003 BY VALUE 25

TABLE 9 COMPARISON OF DISTRIBUTION CHANNELS SHARES 1991-2003 BY VALUE 26

TABLE 10 UK GARDEN CENTRE MARKET 1994-2007 (£M RSP) 28

TABLE 11 GARDEN CENTRE MARKET SHARES 2003 BY VALUE 34

TABLE 12 DIY MULTIPLES MARKET - 1990-2004 (£M RSP) 41

CHART 13 UK DIY MULTIPLES MARKET FOR GARDEN PRODUCTS 1991-2003 (£M RSP) 43

CHART 14 DIY MULTIPLES GARDEN PRODUCT MARKET 2003 - SHARE BY MULTIPLE 45

TABLE 15 KEY CHANNEL ADVANTAGES 56

TABLE 16 PRODUCT MIX 2003 - % SHARE BY SECTOR, BY CHANNEL 60

TABLE 17 DISTRIBUTION OF GARDEN PRODUCTS BY SECTOR - 2003 BY VALUE 62

TABLE 18 PRODUCT GROUP SHARES IN THE GARDEN CENTRE MARKET 1991-2003 63

TABLE 19 COMPARISON OF GARDEN PRODUCT SALES & SHARE TAKEN BY GARDEN CENTRES 1991-2003 64

TABLE 20 DOMESTIC SALES OF HORTICULTURAL PRODUCTS 1994-2004 (£M RSP) 66

CHART 21 UK MARKET FOR HORTICULTURAL PRODUCTS - 2003 (£M RSP) 67

TABLE 22 UK DOMESTIC NURSERY STOCK SALES (£M RSP) 1988-2004 68

TABLE 23 UK DOMESTIC SALES OF HOUSE AND BEDDING PLANTS (£M RSP) 1988-2004 70

TABLE 24 UK MARKET FOR BULBS (£M RSP) 1994-2004 74

TABLE 25 UK MARKET FOR SEEDS (£M RSP) 1994 - 2004 75

CHART 26 UK HORTICULTURAL MARKET - CHANNELS OF DISTRIBUTION 2003 77

TABLE 27 UK DOMESTIC MARKET FOR CONSERVATORIES, GREENHOUSES AND SHEDS (£M RSP) 1990-2004 79

CHART 28 GARDEN BUILDINGS MARKET - SECTOR SPLIT - 2003 80

TABLE 29 UK DOMESTIC CONSERVATORY MARKET 1990-2003 BY VOLUME 82

TABLE 30 GARDEN BUILDINGS - FRAME MATERIAL USAGE 2003 - % BY VOLUME 83

TABLE 31 CHANNELS OF DISTRIBUTION - GARDEN BUILDINGS 2003 - % BY VOLUME 85

TABLE 32 UK GARDEN LEISURE MARKET 1994-2004 £M RSP 87

TABLE 33 DOMESTIC GARDEN FURNITURE MARKET 1990-2004 (£M RSP) 88

CHART 34 GARDEN FURNITURE MARKET BY TYPE OF MATERIAL 90

CHART 35 GARDEN FURNITURE MARKET - CHANNELS OF DISTRIBUTION 2003 92

TABLE 36 UK BARBECUE MARKET VOLUME & VALUE 1990-2004 £M RSP 93

CHART 37 UK MIX OF BARBECUES - BY VALUE 2003 95

CHART 38 BARBECUES MARKET CHANNELS OF DISTRIBUTION - 2003 SHARE BY VOLUME 98

CHART 39 UK GARDEN EQUIPMENT MARKET 2003 £M RSP 100

TABLE 40 UK GARDEN EQUIPMENT MARKET - SALES BY PRODUCT GROUP 1988-2004 (£M RSP) 101

CHART 41 DISTRIBUTION OF GARDEN MOWERS 2003 BY VALUE 105

TABLE 42 GARDEN POWER TOOLS MARKET 2003 (£M RSP) 107

TABLE 43 GARDEN HAND TOOL MARKET (£M RSP) 2003 109

TABLE 44 SALES OF GARDEN CHEMICALS 1992-2004 (£M RSP) 112

CHART 45 MARKET SHARE OF GARDEN CHEMICALS BY VALUE 2003 £M RSP 113

TABLE 46 CHANNELS OF DISTRIBUTION FOR GARDEN CHEMICALS - % 2003 115

TABLE 47 GARDEN SUNDRIES 1999-2004 (£M RSP) 117

CHART 48 UK MARKET FOR GARDEN SUNDRIES 2003 (£M RSP) 118

TABLE 49 UK FENCING AND WOOD PRODUCTS - % SHARE BY CHANNEL OF DISTRIBUTION 2003 BY VALUE 120

CHART 50 DISTRIBUTION OF WATERING EQUIPMENT 2003 BY VALUE 123

TABLE 51 GARDEN DECORATION MARKET 1999-2003 £M RSP 124

TABLE 52 PRIVATE SECTOR HOUSE BUILDING COMPLETIONS 1995-2007 - GREAT BRITAIN ('000 DWELLINGS) 134

TABLE 53 NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES 1997-2003 ('000) 136

TABLE 54 STOCK OF DWELLINGS GREAT BRITAIN - 1998-2004 137

CHART 55 CONSUMER DURABLE SPENDING AS A % OF ALL CONSUMER EXPENDITURE 138