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Consumer Spending is High Now but is Cautioned for 2021


During AmericanHort’s recent State of the Industry address during CultivateVirtual in July 2020, the leading national association for the green industry covered many topics not surprisingly related to COVID-19. One obvious and positive highlight focused on consumer spending and the “record year” the industry is having as a result.

Through June 21 (week 25), the Garden Center Group reported (when compared with last year) that YTD sales were up a whopping 30.4%. Additionally, the average sale is up 14% and transaction counts up 15.3% YTD.

While the unprecedented consumer spending is a welcomed surprise in 2020, the industry understands that such incredible growth is often indicative of other circumstances in the market.

From AmericanHort: “There is little-to-no spending on childcare, gasoline, eating out, routine health care, haircuts, clothes, sporting events, travel and big-ticket items – they were all affected by the shutdown.”

In this case, normal family expenses for durable goods are considerably down, which allows for more flexible consumer spending in other places where money is often funneled away from.

With more and more people still working from home (and schooling from home), family behaviors are changing. Before, there was little time at the end of the day to enjoy or maintain one’s property beyond mowing the grass from one week to the next.

But as many remain isolated to their homes, families are heading outdoors to enjoy the natural world right outside their back door. In turn, they’re using this time (and money) to make improvements based on the lack of curb appeal they see.

AmericanHort does question the sustainability of consumer spending in the industry saying, “The “work from home” and “residential cocooning” phenomena will likely continue for many in our economy, but children back in school, landscapes redone and a return to “normal” family and social activities may affect the time allocated to yard and garden projects.”

For now, garden centers and nurseries will continue to be the happy beneficiaries of this consumer spending metamorphosis. But AmericanHort cautions that consumer spending for 2021 may tell a very different story.

“Recent consumer demand has been driven by psychology as much as economics. While we will likely see some consumers establish new consumption patterns with horticulture products and services, don’t expect to see 25% growth next year – and we will likely trend back toward 2019 numbers +/- 10%.”

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