Flowers produce a small percentage of the total sales in supermarkets, so the payroll available for the floral department is often limited. However, flowers can return a higher gross margin contribution than other supermarket categories. This article explores the current floral retail climate, as well as opportunities to increase sales, from custom arranging and upgrading to decorating and delivery.
The sale of floriculture items in all U.S. retail outlets in 2015 was $31.3 billion, according to the U.S. Bureau of Economic Analysis Person Consumption Expenditures. Higher costs, a declining customer base and global economics converged on the floral industry over the past few years creating a challenging business environment and the need to change business as usual.
Today, the floral industry is wrestling with higher freight expenses and increased flower prices. Airline consolidation reduced capacity for transporting flowers from Colombia and Ecuador to Miami. Farm consolidations as well as increased demand for flowers from other parts of the world increased the costs of flowers, according to Harrison (Red) Kennicott, chief executive officer at Kennicott Bros. in Chicago.
The number of retail florists and wholesalers continues to decline in the U.S. In 2014, there were 12,000 retail florists and fewer than 500 wholesalers, according to the Society of American Florists. At the same time, it appears the growth of retail supermarket floral sales is becoming stagnant, according to Kennicott.
Making the transition into a service-oriented operation is not simple; it must be backed up with labor. It is difficult to operate a service-oriented department on anything less at least one full-time employee who is responsible for overseeing the department, and one or more part-time employees who can take care of many of the basics, according to Texas A&M.
Personnel must be knowledgeable and trained not only in handling floral tasks but in how to sell and how to work with customers. They must be readily available during peak sales hours, and visible, working out on the sales floor not in the back room. Becoming a fullservice floral department requires training and experience, and a strong commitment to offer customers something extra. Services can enhance a floral department’s profits and its professional image, according to Texas A&M.
The average rate in 2015 for a florist employed by a retail florist or supermarket was $11.35 per hour, according to payscale.com. This position ensures the maintenance of the current stock of flowers and plants on hand. It requires knowledge of the various plant-care requirements, such as watering needs, recommended climate and expected shelf life. This position also provides customer service to consumers.
Many supermarkets work with national distributors of floral arrangements. In this case, florists must be able to execute the distributors offered designs in a careful, consistent manner. Full-service programs may also include custom designs for events such as weddings, birthdays, anniversaries, graduations and funerals.
Supermarket chains must increase floral budgets to allow for more field supervision and store-level training. Many supermarket floral departments grew and changed dramatically from a bucket shop into a large-volume, full-service floral department over the past several years. This requires retailers to rethink their limited service programs in order to remain competitive.
Ron van der Ploeg is editor at Floraculture International magazine in the Netherlands. He can be contacted at email@example.com. This article contains Produce Marketing and Floraculture International co-sharing content.