Horticultural businesses optimistic but cautious for 2021, says HTA’s new Business Confidence Index
Published: 24 November 2020 - Neil Mead
Business confidence is returning to UK garden industry after the record crash in confidence in spring, says the Horticultural Trades Association (HTA), as shown by its new Business Confidence Index survey of members and supported by positive garden centre sales in October, with 17% growth on October 2019.
The Business Confidence Index assesses members’ confidence in sales and areas of investment in the business over the next 12 months and will be used to demonstrate the pulse of the industry during these times of uncertainty.
Business outlook crashed in Q1 2020 when the impacts of COVID-19 began to take effect. However, both short- and longer-term business outlook have steadily increased to Q3 2020, albeit remaining at lows not seen since 2013.
The Index reveals that most members are feeling comparatively optimistic about their future sales and many are looking to target new customers. The fragile market environment though is limiting their willingness to make more significant business investments, such as buildings or new premises.
David Denny, HTA Futures and Sustainability Manager, comments: “The Business Confidence Index is a barometer of industry opinion and potential actions. After an incredibly challenging year, it is encouraging to see some measure of confidence return to horticultural businesses. There are grounds for optimism, but we know businesses are nervous about planning and future investment.”
James Clark, HTA Director of Policy and Communications, said: "The horticulture sector has an important role to play in the economic recovery after Covid but to realise this in 2021 we need Government support. Commitment to the sector through tax breaks and incentives to invest and bring on new staff is essential, as is policy change that recognises the huge importance of seasonal labour to horticulture businesses. This will ensure we can make the significant contribution to the UK economy we're capable of.”
October’s positive outlook was driven by exceptional garden/gardening category sales that finished the month 45% up on October of last year. Non-garden/gardening ranges also showed signs of recovery, helping calendar year to end of October comparisons finish -12% down on the same period of 2019.
Average transaction values were up 28% and 54% in the garden store and café/restaurant respectively, compared with October 2019. Catering typically makes up 21% of turnover in November amongst garden centres with a catering offer; so with cafes and restaurants forced to close once again, overall sales are likely to be hit, especially as we move out of the traditional gardening season.
Retailers are advised to continue the hard work to implement a safe trading environment by controlling customer numbers and avoiding Christmas events that cause people to congregate until at least Wednesday 2 December.
HTA Market Update is available free for members to download from the HTA website, by logging in and visiting the Market Update page. The Business Confidence Index will be reported on a quarterly basis via HTA Market Update.