Last year in this space, I pointed out a few trends that are happening in the entire store and how they can affect floral holiday sales in supermarkets. Those points were:
• Customers are looking mostly for value today,
• Customers want to be connected today, and
• Customers are making fewer trips but buying more each trip.
I believe that each of these predictions was on target, and that if supermarket floral departments focused on action plans related to these trends, they had a good chance for growth in 2012.
We can hope that by the time you read this, our leaders in government will have marched us away from the “fiscal cliff” and come to agreement and compromise on hard choices that need to be made for the current and future fiscal vitality of our country.
In 2013, we may be facing a “floral cliff” instead. Since 1992, retail inflation has increased by around 50 percent. I have been in the floral business for these two decades, and have not seen much floral retail inflation at all. Our producers have worked tirelessly to reduce cost, increase freshness and improve the cold chain to be able to keep flowers priced at everyday prices instead of luxury levels.
Fortunately for the good citizens of Colombia, incomes have increased as well as the level of lifestyle for many of them. Unfortunately, this growth has caused the cost of labor, supplies and transportation to skyrocket there. A further effect has been that the peso increased in value compared to the dollar by 50 percent since 2004. These same factors have caused many small farms to go out of business, reducing the overall supply of flowers.
So you can clearly see the floral cliff ahead. What can you do? It is more important than ever to ally yourself with the best-quality and most reliable floral growers available. Create long-term programs so that the farms can plan out their growing and labor schedules. Promote quality and up-sell so that you can provide better and longer-lasting bouquets and arrangements to your end customers.
By working closely with your suppliers, you may be able to increase volume to keep your costs and retails where you need them to be for success. A partnership with your suppliers is not a one-way street. Creating a win-win situation enables you to be confident you will have the best products at key holiday times, and that your partner will join you in promotions to move products during the slow months of the year.
Pick up the phone today if you need to cement any shaky relationships and think about how you can win together each time you meet to plan with your trade partners. That’s one way to avoid the “floral cliff.”
Jon Strom is vice president of new business development at Price Chopper Supermarkets in Schenectady, NY. He can be reached at 518/379-1226 or JonStrom@pricechopper.com.