Nurseries, Garden Centers & Farm Supply

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 9,800 nurseries, garden centers, and farm supply stores in the US sell lawn and garden products and farm supplies. Major product categories include grain and animal feed; fertilizer, lime, chemicals, and other soil treatments; outdoor nursery stock; pet supplies; and hardware, tools, and plumbing and electrical supplies. Companies may also sell fuel (oil, LP gas, wood, charcoal), automotive products and supplies, lawn and garden tools, and indoor plants. Services include equipment rental and repair and consulting services (landscape design, agronomy). Companies may offer delivery services for large orders (fertilizer, sod, dirt).

Competition from Alternative Sources

Nurseries, garden centers, and farm supply stores compete with a variety of alternative retailers, including home improvement and hardware stores and general merchandise retailers.

Highly Seasonal Sales

Sales for farm supply retailers are highly seasonal, with peaks during the spring and fall to support crop schedules.

Industry size & Structure

The average nursery, garden center, or farm supply retailer operates out of a single location, employs 13 workers, and generates $3-4 million annually.

    • The nursery, garden center, and farm supply retailing industry consists of about 9,800 companies operating 13,500 stores that employ about 131,000 workers and generate about $35 billion annually.
    • The industry is highly fragmented; the top 50 firms account for about 41% of industry sales.
    • Tractor Supply is the largest farm supply retailer in the US with over 1,940 stores. Large nursery and garden centers, such as Armstrong Garden Centers and Stein Garden Centers, have multiple locations but typically operate in one or two states. Most companies are small, independent operations.
                                  Industry Forecast
                                  Nurseries, Garden Centers & Farm Supply Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Mar 20, 2023 - Sales Flat for Garden Supply Stores
                                  • Sales for garden supply and building materials stores increased 0.7% unadjusted year over year but fell by 0.1% month over month seasonally adjusted in February 2023, according to data released by the National Retail Federation. Overall retail sales were up 5.4% in February 2023 over a year ago but down 0.4% from January 2023, according to the US Census Bureau. NRF’s retail sales calculation, which excludes car dealers, gas stations, and restaurants, showed an increase of 6.5% unadjusted year over year and 0.5% month over month in February 2023. According to NRF Chief Economist Jack Kleinhenz, “Sales growth has slowed in recent months, but consumers’ economic health still looks good. February is typically the slowest month of the year, so monthly fluctuations are expected. Sales are higher than last year and that’s due in large part to the strong labor market, which means more income and spending.”
                                  • Consumer confidence levels declined in February 2023 for the second consecutive month, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 102.9 in February 2023 from 106 in January 2023, as high prices and rising interest rates affected consumers’ willingness to spend. According to Ataman Ozyildirim, a senior director of economics at The Conference Board, “Consumer confidence declined again in February. The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more.” Plans to purchase homes, vehicles, and appliances have cooled, in addition to a drop in vacation intentions, per Ozyildirim.
                                  • Nearly 60% of small business owners reported hiring or trying to hire staff in January 2023, up two points from the previous month, according to the monthly jobs report from the National Federation of Independent Businesses (NFIB). Of those companies hiring or trying to hire, 91% of owners reported few or no qualified applicants for the positions they were trying to fill. About 24% of owners reported labor quality as their top business operating problem, and 10% reported labor costs as a top concern. According to NFIB Chief Economist Bill Dunkelberg, “The labor shortage continues to be a major concern for small businesses in the New Year as nearly all owners trying to hire are reporting no or few qualified applicants. Small businesses’ sales opportunities are limited because of the staffing shortage but owners continue to make changes in business operations to compensate.”
                                  • Despite inflationary pressures, gardeners are feeling optimistic about 2023 and plan to continue spending on their hobby, according to Axiom’s 2023 Gardening Insights Survey reported in Garden Center Magazine. New gardeners, in particular, don’t have any plans to cut back on their spending. Both first-time gardeners (about 75%) and gardeners with two to four years of experience (85%) are planning to spend the same or more this year. According to Kathleen Hennessy, chief marketing officer at Axiom, “One part of the survey we’re really excited about is it seems like those people that have started gardening during the pandemic seem like they’re hooked. That’s what the data is telling us — that they’re spending more money and they’re feeling successful too, which I think is pretty exciting.” The survey also found that more men (44%) than women (33%) expect to increase their spending on gardening in 2023.
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