Landscaping adds luster to DIY biz

In terms of overall growth, 2006 wasn’t a good year for the home improvement industry. Yet despite sagging home sales that dragged down business for most retailers, some areas like lawn and garden managed to fared relatively well.

Total sales for the L&G sector came in at $34.1 billion, a respectable total though down slightly from $35.2 billion in 2005. The 3% decrease was spread uniformly across most major categories covered by the National Gardening Association but there were a few exceptions, such as the landscaping category which increased nearly 20% to $10.9 billion last year compared to $9.1 billion in 2005. NGA research director Bruce Butterfield attributed the surge in sales to fluctuations in the housing market.

“When people buy a home, they spend the first year or two working on indoor projects like kitchens,” said Butterfield. “Then they start to focus on the outside with things like new trees and shrubs so there’s typically a two- or three-year lag between an increase in home sales and an increase in landscaping sales.”

Sales of lawn care products were down about 10% to $8.6 billion compared to $9.7 billion in 2005 but those numbers didn’t reflect the growing market for organic fertilizers and pesticides.

“It’s an area that accounts for about 5% of the business today but executives at Scotts say it will represent 20% of their sales five years from now,” said Butterfield. “They [Scotts] want to be the gold standard for organic lawn products.” To that end, Scotts is putting marketing muscle behind its new Organic Choice brand of products that include Organic Choice garden soil, potting mix and plant food.

One analyst contends that lawn and garden sales have remained steady because most of the products aren’t that expensive. “When you look at lawn and garden compared to other segments of home improvement, most products are pretty affordable,” said Mark Delaney, an analyst with The NPD Group. “So if you’re on the fence about selling your home, you won’t spend money on a major kitchen remodel but you will go out and buy a new lawn mower.”

Delaney says that sales are also being driven by a new dynamic that wasn’t a big factor in past years: female shoppers. Once the domain of contractors and the weekend home improvement buffs, places like The Home Depot and Lowe’s are now attracting more women.

“If you look at the information, the split between male and female shoppers has narrowed to the point where it’s almost a 50/50 split on sales products like barbecue grills.” Even sales of walk-behind lawnmowers, a category that would seem to be male-dominated, now have women making 37% of purchases, according to NPD research.

That trend is being driven by a number of things. Mass merchants like Wal-Mart and Target are opening more supercenters with large lawn and garden sections that attract more female shoppers than specialty stores. And even the major players like Home Depot and Lowe’s are making an effort to be more female friendly.

“A big part of it is big-box retailers softening their image,” said Delaney. “It used to be that some retailers like Home Depot had no problem driving forklifts down the aisles during store hours. And while that was great for projecting a macho image, it didn’t do much for a mother shopping with a couple of small kids.”

While the growing presence of mass merchants in nearly every segment of home improvement is good for industry sales overall, it could be bad for some longtime suppliers who rely on a trusted brand name to drive sales. Delaney notes that products like walk-behind mowers are now priced so low at places like Wal-Mart that they’re almost considered “disposable.”

“You have some mowers priced around $99 and that’s a price point where people will make a purchase even if they are going to use it for just one year,” said Delaney. “That has to make it hard for suppliers like John Deere to convince consumers that it’s worth spending $300 to $400 for the same product.”

The same thing holds for power tools, where trusted brand names may not hold the same cachet in a mass retailer where consumers may not be as brand-conscious. “People who aren’t really knowledgeable will look at a power tool and buy the cheaper one,” said Delaney. “And that has to be hard for brands that are known for their high-quality products.”

One product area where nearly every supplier is thriving is charcoal and gas grills. The NPD Group says grill ownership hit a 20-year high in 2006, with research showing that 56% of consumers surveyed own a gas grill and that 30% own a charcoal grill. The Hearth, Patio and Barbecue Association estimates that suppliers shipped 17 million grills to retailers in 2006, a 15.2% increase from 2005.

“As an industry, we experienced our most successful year and posted our biggest gains ever,” said HPBA spokes-woman Leslie Wheeler. “With state-of-the-art grills, the latest technology and must-have accessories, manufacturers are bringing a whole new meaning to grilling.”