The hope of a recovery
The decline in inflation that is already underway should reassure French people and prompt them to start consuming again. This would be good news, in the wake of a mediocre 2023.
At the end of 2022, what with Covid, the decline of the euro against the dollar, the explosion in freight costs, supply shortages and the build-up of inventories, brand managers had the impression that they were veering from one crisis to another. 2023 will not have been an easy year. The garden market, worth around €8 billion, experienced a period of contrasts. It stagnated overall in value terms, but fell by 5.5% in volume terms. This confirms the downturn in demand. Inventories are still high, and were acquired at a high price. They must inevitably be sold off, although inflation will this time play a positive role.
There are many reasons for the mixed results in 2023. In spring, the weather did not help sales: a shortfall that proved impossible to recover. In addition, weather conditions in the summer were not conducive to sales, due to the restrictions brought by drought decrees. The autumn, hot and then rainy, was no better. Another striking feature of 2023 was inflation. This rise in prices was compounded by a shift towards more upmarket purchases by a certain proportion of consumers. But the final results are not so bad. Professionals believe that sales figures will stay above those of 2019. The momentum generated during Covid has therefore not disappeared. Garden professionals are also noting the arrival of new players, such as hard discounters, who are gaining market share at a time when consumers are watchful of prices and special offers.
A few winners
Some sectors fared better than others. "Powered gardening had a good year," says Guillaume Mulleret, from the consultants GFK. "The market for lawnmowers grew by more than 2%, while the rest of the powered gardening tool sector, i.e. edgers, hedge trimmers, chainsaws, etc., posted a slight decline of 1%. Garden products (growing media, crop protection products, fertilisers) are also up by almost 2% in value terms, despite a fall in volumes. The seeds sector remains positive, with a 0.3% rise in value. Flower and vegetable seeds compensated for the fall in turf." These figures might turn certain garden sectors green with envy, such as hand tools, down by 10%.
The outlook for 2024 is looking brighter, however, especially as there are no major elections this year. Economists expect inflation to ease. The European Central Bank is expecting prices to rise by 3.2% in 2024 and 2.1% in 2025: resulting in a soft landing. "This should make it possible to rebalance volume and value," says Guillaume Mulleret, "which is important all the same. Next year, we should see a return of specialist channels, if the weather is decent, with a slight increase in volume. But throw caution to the wind: macro-economic factors sometimes have a totally unexpected influence on the garden market. We're in the doing-it-yourself business! I think that demand for consumables should stay steady. However, I still have some concerns with regard to equipment. It's likely to be more difficult in this market: the equipment rate has risen sharply since the crisis. And gardeners don't replace their equipment every 3 years".
A future hanging in the balance
In the end, despite the uncertainties, the economy wobbled, but did not fall down. Conflicts are contained for the time being, but doubts still linger. Professionals are showing a certain amount of confidence, because they are coming up with solutions that meet the expectations of gardeners, particularly with regard to the environment. There is one final consideration. France is still one of the countries in which households are the biggest savers. The coffers of part of the population are full. Savings are money for tomorrow. Provided the economic outlook is reassuring, the French could eat into their savings and start consuming again. Economists also point out that we have had 30 years without inflation: consumers have lost their price bearings, which may explain their reluctance to spend. This psychological barrier and lack of understanding of the right prices are factors that will have to be overcome.
By David Fouillé
