ShareThisThe sea change sweeping through California's nursery business continues to make waves.
Target is phasing out its garden centers while adding more space for groceries. Meanwhile, Home Depot, the nation's No. 1 nursery retailer, is making more space for vegetable plants and fruit trees, plus succulents and colorful annuals.
On the other end of the scale, small mom-and-pop nurseries have seen business tick upward as they focus on personalized service and expert advice.
"On the growers' side, a lot of companies have gone out of business," said Tim Obert, Home Depot's lawn and garden buyer for the West Coast. "On the consumer side, with the lack of construction, sales of big-ticket landscaping (for new homes) have gone way down. People aren't buying big trees and foundation plants."
During the recession, nurseries have seen their business drop dramatically after 15 years of steady growth. California ranks as the nation's leading nursery and floral crop producer. A study by Hoy Carman, an agriculture expert at the University of California, Davis, found that California floral and nursery sales plunged 17.7 percent in 2008, down from $4 billion to $3.29 billion.
Most of California's nursery crops are grown along the temperate central and south coasts, in areas where land is expensive and population dense.
"With the economy being down, their land was worth more than the nursery product," Obert said. "We've seen companies like (rose giant) Jackson and Perkins go bankrupt. That's quite a big shock and a big name in the rose community.
"Instead of shrubs or ornamentals, customers are gravitating toward color," choosing items such as bedding plants, he added. "It's an easy way to spruce up your home -- or make a foreclosure look good."
At a Target store in Sacramento, the garden center represented a microcosm of current trends: lots of vegetables, succulents, perennials and drought-tolerant plants. But that was not enough.
"The garden centers were no longer profitable for us," said national Target spokeswoman Jenna Reck from the company's Minneapolis headquarters. Out of 1,743 stores nationwide, "we have 262 garden centers, mostly in California and Florida. So it was really a small part of our overall operation. But (the garden centers) will all be closing in September."
Recent trends have shown consumers are returning to independent garden centers while nursery sales at retail chain stores such as Kmart, Rite Aid or Target have sharply declined. Big-box home centers account for 49 percent of total sales, with the independent sector getting 44 percent, according to a recent industry study by Nursery Retailer magazine. Chain stores -- which had 40 percent of the market in the mid-1990s -- have plunged to 7 percent.
"The pendulum is starting to swing back to independent nurseries," said John Adams, owner of Sierra Nursery in Roseville, Calif. "It doesn't really surprise me that big guys like Target are pulling out."
Adams and his wife, Lyn, bought Sierra Nursery almost four years ago, just before the real estate bubble burst. With the recession, they have seen business drop off significantly. No new homes mean no new yards or landscape projects.
"The good news for 2010: For the first time since we bought the business, sales are heading back in the right direction," said John Adams, estimating sales are up about 6 percent this year.
"People are spending more time at home and in their gardens," said Ashley Gill, marketing director for Green Acres, a nursery with locations in Sacramento and Roseville. "... They're going to folks they think will give them the right answers to their questions and sell quality plants."
Edible plant sales continue to boom for the second consecutive summer, with sales up double digits for major retailers, as gardeners branch out from tomatoes and zucchini into blueberries and citrus.
Lower prices through volume buying are where large chains have held a big edge over small independents. A typical Home Depot may see its inventory of bedding and vegetable plants turn over almost daily during spring. The economy also has led growers to consolidate and liquidate stock.
"We've seen a lot of 'wow' buys; crazy, wild deals," Obert said. "We've seen queen palms that were $200 two years ago sell for $20."
But the little guys have started to band together in cooperatives. For example, the Master Nursery Garden Centers, based in Concord, Calif., represent more than 750 independently owned nurseries, including Sierra.
Meanwhile, the countdown at Target continues.
"I was just there and I walked through the nursery, but nothing had changed -- yet," said Amy Salmon, a shopper and mother of eight. "I keep waiting for the big plant sale to begin."
(Contact Sacramento Bee reporter Debbie Arrington at darrington(at)sacbee.com.
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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