Rosy Outlook

Rosy Outlook

Supermarket floral departments face the budding economy with growing sales and innovative consumer outreach

As the country inches out of the recession, supermarket floral sales are starting to increase, and many floral departments are breathing a collective sigh of relief.

In fact, 63% of the retailers who responded to the most recent Produce Marketing Association's Holiday Floral Market Watch reported sales had increased for Thanksgiving 2010. The year before only 48% of retailers reported increased Thanksgiving sales.

The increase in sales has made retailers and suppliers less concerned about the economy. This Thanksgiving, fewer than 50% of retailers and only 5% of suppliers thought the economy affected their sales, according the Market Watch report.

Shawn Oliver, floral buyer/merchandiser at Tops Friendly Markets [2] based in Williamsville N.Y., agreed floral sales are slowly starting to pick up. “Floral might be a little bit slower [than other departments], but we're definitely seeing upswing.

“The weather has a lot to do with what's going on now though — so you might want to keep [it] in mind that we're affected negatively when it's storming and frigid cold outside. Other than that, I think we'd be doing even better vs. last year right now.”

Tom Lavagetto, president of the Spokane, Wash.-based Floral Consulting Group, said one of the reasons the cold weather is digging into floral sales is because of the risk of damage to floral products through the supply chain, as they travel from growers to warehouses to stores, and finally, to consumers' homes.

But, floral sales are holding up despite the weather, and bad weather now might actually make for better spring sales. Lavagetto said the severe winter is creating pent-up consumer demand.

“When the weather breaks, it's going to be a very good spring. … People are going to buy much more product because they're tired of the snow and the ice and the darkness and all that stuff,” he said.

When people were concerned about feeding their families and keeping their jobs during the recession, flowers were a tough sell for supermarkets.

Sandy Hering, owner of Floral Marketing Innovation, Mattapoisett, Mass., called the recession's impact “a rude awakening” for supermarket floral departments.

“It really caught people by surprise. Retailers started quickly adjusting their merchandise mix and figuring out how to market in a recession,” she said.

The economy's improvement has certainly contributed to the increased floral sales, but during the recession, many floral departments also reevaluated their approach and found new ways to appeal to cash-strapped shoppers.

“It didn't just happen by accident. It took a lot of changes and different types of strategies than retailers were using pre-recession,” said Hering, who also prepares the PMA Holiday Market Watch reports.

Lavagetto agreed. “The recession like this makes you run a better business. It really does. The bad experience has to happen to make you do that. But in these kinds of times, the good who run a good business get better. The ones that don't run a very good business either get better or get gone.”

He advocates retailers carefully research and examine the role of their floral departments in order to make changes based on logical business assessments instead of reactive decisions.

Some of the good changes floral departments made appeal to customers who are still cautious of how they spend their money.

Oliver said one way Tops Friendly Markets has reached out to customers is through aggressive promoting. She noted the success of flowering plants sold in multiples or doubles to customers looking to buy gifts or to decorate their homes with spring colors.

“It's not only doing the hot pricing, but it's the in-your-face merchandising and just making sure that we're front-of-store,” she said. With Tops' aggressive floral pricing, she added, shoppers may spend a few dollars they may not have a year ago.

Even retailers not known for budget-conscious prices are reaching out to consumers seeking value. Whole Foods Market [3]'s New York Union Square location offers competitively priced floral, including 10-stem tulips for $6.99, and mixed bouquets from $9.99 to $15.99. The floral products are prominently placed in the entrance of the store, attracting shoppers who may not have come in the store looking to buy floral.

At Food Circus Super Markets, the floral departments managed to maintain sales even during the recession by merchandising and creating themed displays to attract customers' attention, said Robyn Macrina, floral supervisor for the Middletown, N.J.-based retailer.

“Unfortunately, a lot of customers don't have flowers on their shopping lists so we have to really push for those impulse sales,” she said.

Food Circus' floral department uses fabric, balloons and other materials based around colorful themes such as “smiley” where flowers and plants were put in festive smiley-faced planters and sleeves, and surrounded by balloons and mugs.

“I told my people about two years ago, ‘The day of putting bouquets by the register and hoping they sell are over.’ We have to sell it,” said Macrina.

Macrina encourages her stores to be creative with their display resources. “We can do a lot with material. One yard of material goes a long way and can really change the look of a display. So, I'll have them break out their orange material and black from Halloween and turn it into a ‘Burning Love’ for Valentine's Day.”

“Burning Love,” is a theme that worked out well last year for Food Circus. It incorporates items such as devil balloons, bouquet sleeves decorated with flames, red and orange roses, and orange Gerber daisies.

Macrina said the recession gave supermarket floral departments an opportunity to prove themselves and gain long-term business.

“I think we also picked up a little bit of the florists' business. If people were going to send flowers or bring flowers, they may have taken a chance on the supermarkets. And it was our opportunity to shine and say, ‘Hey, you can buy the same quality in a supermarket that you can in a florist,’” she said.

Since consumers are starting to have a little more money to spend, floral departments are eager to differentiate themselves. This February, Safeway [4] introduced a unique partnership with Debi Lilly, a celebrity entertaining and design expert, who counts Oprah as a client. On Twitter, Safeway promoted these arrangements — tightly packed roses in attractive glass vases — as an affordable way for people to experience designer floral.

Taking a different approach, Sandi Probst, floral manager and events coordinator at Lin's Marketplace in St. George, Utah, likes to communicate with customers and makes sure she's aware of what's affordable.

Prompted by people's desire to save money by growing gardens, Lin's offers a variety of vegetable plants in their outdoor nursery, which opens around Valentine's Day. Probst said that vegetable gardens especially appeal to people in her community because they tend to have large families. The store holds customer appreciation days in the nursery with free food.

Lin's sources some of its supplies from local vendors and from local high school agriculture classes, which provide popular weather-climatized tomatoes, as well as other vegetables. Last year, the school used the profits from Lin's for Future Farmers of America scholarships.

“It's just been wonderful. Absolutely wonderful. I love it, and the kids are so enthusiastic about it,” said Probst.

Probst keeps consumer budgets in mind when it comes to her Valentine's Day promotions, setting up a table in front of the store to make fresh arrangements according to the amount the shopper would like to spend, which is often less than $20.

“It worked really well last year. We actually sold out of everything,” she said, adding they sold more smaller-sized arrangements than in the past, “so you had to work twice as hard.”

Probst said it's also important to keep detailed records of what sold and didn't sell. She's changed prices and arrangements based on these records.

Like Food Circus, Lin's Marketplace draws customers in with creative display themes, like this year's Valentine's theme of “Phantom of the Opera” complete with balloons, red satin curtains, masks and Probst's own television playing the movie as customers walked in.

Alternatively, K-VA-T Food Stores [5]' Food City creates buzz around its floral promotions with sweepstakes. In a recent Valentine's Day sweepstakes, customers could text for the opportunity to win a Valentine's theme cake and a dozen roses. In another mobile sweepstakes, customers can win “fuel bucks” for discounted gas.

With customers still interested in spending conservatively, wedding floral may also provide great opportunity for retailers. Some bridal blogs promote supermarket floral as a way to save money on wedding expenses.

Wedding floral has been “one of the bright spots in the retail floral business because people are still getting married. They may be spending less on their flowers, but they're still using flowers. So I think smart retailers are trying to say, ‘How can I make my store or my shop or my department stand out?’” said Hering.

Lavagetto called wedding floral “a legitimate source of income for a flower shop in the supermarket,” but cautioned retailers to make sure they have the resources and the talent to handle the high-pressure event before taking it on.

Tops offers wedding flowers through its hub-store program, and Oliver said the two wedding floral shows they attended this year went very well. She said sales are growing a little because of word of mouth.

Steven Wright, produce and floral director for Tops, said the word of mouth is driven by individual stores' entrepreneurial spirit. Some stores make sure to keep community event calendars around for opportunities to promote floral at school dances and graduations.

Metropolitan Market in Seattle caters to thrifty brides with do-it-yourself floral wedding classes on how to create bouquets, table decorations and floral arrangements. For $40, students get a three-hour class and a sample to take home.

Despite the popularity of value prices coming out of the recession, both Lavagetto and Hering emphasized the importance of quality floral products.

The Floral Marketing Research Fund released a consumer report in November that found that flower/bloom quality is the most important to consumers, even topping price concerns.

“So yes, we've been talking about how smart retailers, during the recession, made sure they had the right price points, and merchandised assortments to … attract a consumer that was trying to keep his money in his pocket instead of spending it. But what people really want, recession or in better economic times, is they want quality,” said Hering.