Published in the Aug. 20th, 2005 Edition of Flower News
( Distributed at the 2005 Society Of American Florists National Convention )
U.S. Retail Florist Sales Growth in a Recovering Economy
Drs. Tom & Tim Prince, Prince & Prince, Inc., Columbus, Ohio
NOTE: Updated retail florist market information is available in the Prince & Prince U.S. Retail Florist Tracking Survey, now available as a one-day, on-site, comprehensive seminar, with Q&A session, or as a "Seminar on CD". Click on "SEMINARS" from the P&P Home Page.
Special Note: We sincerely thank those 1,048 randomly-selected retail florists nationwide who have generously responded to our 2005 US Florist Tracking Survey. In an effort to benefit the floral industry, we present a national overview of florist sales growth trends from the survey. We also invite your e-mail comments on this reporting.
With the US economy rebounding from the past recession, questions are being raised throughout the floral industry as to the current health of retail florists. Prince & Prince, an industry leader in US floral market research, again is able to provide accurate and timely market information about retail florists to the floral industry through its 2005 US Florist Tracking Research (see About the Florist Tracking Research). In late Summer/Fall of 2005, Prince & Prince will begin offering seminars to interested parties encompassing the complete US Florist Tracking Research. In this reporting, we detail a small part of the research, year over year florist sales growth for our 2005 study, and we make growth trend comparisons with our earlier studies (2003 and 1998). We then segment these overall sales growth trends by key florist characteristics (e.g. sales level, ten US regions, age of shop owner, etc.) to identify the salient florist market segments that are leading or trailing the national sales-growth trends. Overall, our survey results show that US florists have made small gains in sales growth since 2003, but a few key florist segments are bucking the benign trend with substantially higher levels of growth.
2005 US Florist Sales Growth
In our US Florist Tracking Survey, florists indicate their level of sales growth (or decline) over the prior year. Note that our survey comprises only those florist shops that are currently in business, and does not measure florists that have recently gone out of business. Table 1 shows the florist percentage distributions for the sales growth categories for our 2005 study (1,048 florists reporting on the 2004 season), as well as comparisons to our 2003 and 1998 studies (1,012 and 1,007 florists, respectively). In 2005, about 42% of florists reported stable sales, while 27% reported declining sales, and 31% reported sales growth. Compared to our 2003 study, an additional small percentage of florist shops now register sales growth, but the largest gains came at the higher growth percentages. On average, florist shops nationwide registered 1% sales growth for our 2005 study, compared to nearly zero sales growth for 2003, and a healthy 5.5% sales growth back in 1998 (Table 2).
The national sales growth trends reveal that while florist shops have recently made small gains in sales growth, the florist industry, as a whole, is far from the level of growth registered near the end of the past decade. To gain a fuller understanding of the florist segments leading the industry growth trends, we segmented the survey findings by several key florist characteristics.
Florist Sales Growth by Level of Sales
For our 2005 study, larger-sized florist shops attained higher levels of growth, on average, compared to smaller-sized shops (Table 3). Those florists with annual sales over $500,000 achieved nearly a 4% level of sales growth, and those with sales of $500,000-$1 million rebounded strongly from 2003, when sales growth was flat. However, the recent gains in sales growth for these larger-sized florists are still only about half of that attained in the late 1990ís, when these large-sized florists attained about 7% to 8% sales growth, on average.
Florist Sales Growth by Urbanization of Market Served
In our Florist Tracking Survey, florists describe the "primary market area" that they serve by indicating one of five urbanization categories. Table 4 shows the florist sales growth trends segmented by our urbanization measure.
For the 2005 study, florists serving rural/country markets continued to experience sales declines (as they had in 2003), while florists in other urbanization groups generally attained small, yet positive sales growth, on average. Florists serving suburbs of metro areas showed the highest relative growth for 2005. Florists serving central cities of metro areas witnessed the strongest rebound in sales growth from 2003, when sales were in decline in excess of 2%, on average.
Florist Sales Growth by Ten US Regions
To gain insight on regional florist growth, we segmented the growth trends by ten US regions (Table 5). The states that comprise the ten regions are provided at the end of this article. Florists in the Lower South Atlantic, Mountain, and Pacific regions of the US experienced the relative highest levels of sales growth, on average, for the 2005 study. Florists in the Middle Atlantic and Upper South Atlantic registered the relative lowest levels of growth, by registering sales declines of 0.8% and 0.5%, respectively for our 2005 study. Of all ten regions, the Pacific region attained the largest growth rebound from 2003, moving from sales declines (on average) for 2003, to sales growth of 2.3% (on average) for 2005.
Florist Sales Growth by Age of Florist Owner
In 2003, we began measuring the age of the florist owner in our US Florist Tracking Research. This metric was added to our study after we successfully completed floral market research in Europe. The measure was suggested by our European clients as a key variable that would likely differentiate florist behavior (and the Europeans were right!). The florist growth trends segmented by age of florist shop owner are shown in Table 6.
For our 2005 study, florist shops with owners under the age of 55 witnessed sales growth, on average, whereas florist shops with owners aged 55 and older witnessed sales declines. Florist shops with owners over the age of 65 continue the sales declines from our 2003 reporting, but the losses are less severe, on average. In our 2003 study, the youngest-aged florist shop owner had the relative highest sales growth; now those aged 35-44 have the relative highest growth. Although our florist survey does not track the individual identity of each shop over time (the surveys are anonymous), the growth trends suggests that perhaps some of the younger high growth florists in 2003 have matured to the next age category in our 2005 reporting.
This report has provided an accurate profile of sales growth trends for US retail florists, and has highlighted the key florist segments leading and trailing the sales growth trends. In general, larger-sized florists with sales over $500,000, those serving suburbs of metro areas, those located in the Lower South Atlantic, Mountain, or Pacific regions, and those shops with owners aged 35-44 are the key segments leading the florist industry sales growth trends. Florist shops and floral suppliers may use this industry sales growth information to benchmark with their own operations, and/or to identify market opportunities for growth. Prince & Prince provides this market information to the floral industry as a "Thank You" for the completion of their market surveys of the industry.
About the P&P US Florist Tracking Research. This floral marketing research, being provided in 2005 in a Power-Point Seminar format, is a marketing resource for the entire floral industry. The Prince & Prince US Florist Tracking Seminar provides current market information and trends on over 200 metrics including the following: 1) US Retail Florist Operations, 2) Types of Sales (e.g. in-store, wire, Internet, weddings/parties, sympathy, commercial), 3) Product Mix (cut flower mix, cut form mix, potted plant mix , silk and drieds, and hardgoods/gift shop items), 4 Florist Service Offerings (14 measures), 5) Recent Resource Allocations (20 measures), 6) Direct Buying Activity and Reasons for Direct Buying, and 7) Demand "Momentum" Trends for 5 rose classes, 6 rose sources (country of origin), 8 basic cut flowers, 32 novelty cut flowers, 12 filler cut flowers, 12 tropical cut flowers, 20 potted flowering/green plants, and demand trends on more than 30 hardgood/gift shop items. The seminar is based on survey responses from 1,048 randomly-selected retail florists throughout the US in 2005, and extensive trend comparisons are made with the 2003 and 1998 P&P US Florist Tracking Research. All information in the seminar is segmented by ten US regions, urbanization level of the florist market served, age of florist shop owner, and size of the florist business to identify florist segments leading or trailing the trends. For more information about the 2005 US Retail Florist Tracking Seminar, visit the Prince & Prince web site: http://www.floralmarketresearch.com/seminars1.htm , or call Prince & Prince at 614-299-4050 to schedule the US Florist Tracking Seminar at your business location beginning in the late Summer/Fall of 2005.
Regional Definition: The ten regions of the US, and the states that comprise each region are defined as the following: New England (CT, MA, ME, NH, RI, VT), Middle Atlantic (NJ, NY, PA), East North Central (IL, IN, MI, OH, WI), West North Central (IA, KS, MN, MO, NE, ND, SD), Upper South Atlantic (DC, DE, MD, NC, VA, WV), Lower South Atlantic (FL, GA, SC,), East South Central (AL, KY, MS, TN), West South Central (AR, LA, OK, TX), Mountain (AZ, CO, ID, MT, NM, NV, UT, WY), and Pacific (AK, CA, HI, OR, WA).
Significance Tests. In the data tables of this report, a statistical test called "Analysis of Variance" (ANOVA) with Duncan's Multiple Range test was used to qualify the significance of mean differences in the trend measures across florists' business characteristics (segmentation groups). ANOVA with planned single degree-of-freedom F tests was used to test differences across the 2003 and 2005 study years. In some data tables involving frequency distributions, a chi-square test was used to qualify significance. Our tests were conducted with an alpha level of 0.10, which in common terminology means that when we indicate a significant difference, we are right nine out of ten times, on average. In many of the data tables, we indicate significance across segmentation groups with a single asterisk (*), and significance across the 2003 and 2005 study years with a double asterisk (**). These markings can assist the reader in identifying the statistically significant sales growth trends in the data tables of this report.
About the Authors. Drs. Tom and Tim Prince, formerly of The Ohio State University, are brothers and co-founders of Prince & Prince, Inc., a leading marketing research specialist in the floral and green plant industries. Prince & Prince has completed more than 50 major marketing research reports for the floral and floral-related industries in the US, and has also conducted floral marketing research in Canada, the United Kingdom, Holland, Germany, and most recently in Spain. They conceptualize, design, and implement market studies and product tests for floral and green-plant suppliers, floral importers, wholesale florists, retail florists, and floral-industry associations. For more information about their specialized marketing research, please contact Prince & Prince, Inc.
Prince & Prince, Inc. PO Box 2465, Columbus, OH 43216-2465 phone: 614-299-4050;
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