The industry must work hard to overcome rising foreign competition
London, United Kingdom (PRWEB) July 08, 2012
The Flower & Plant Growing industry has been affected by a significant degree of volatility since the global credit crisis, caused by rising international competition and the increasing power wielded by leading supermarkets. Significant swings in revenue and increasing industry consolidation were the result. Overall, IBISWorld expects that industry revenue will grow at an annualised 2.0% over the five years through 2012-13. However, revenue is forecast to decline by 3.7% over 2012-13, to total £1.01 billion.
The industry suffered an initial loss in revenue at the onset of the financial crisis, but rebounded rapidly as gardening emerged as a cost-effective and rewarding diversion to the financial unrest. However, rising foreign competition within the UK market and the growing influence of supermarkets heavily affected the performance and profitability of growers. According to IBISWorld industry analyst Kiera Outlaw, “downstream market conditions have been transformed by the growing influence of supermarkets, which account for the majority of industry sales and have been forcing industry operators to meet stringent supply contracts”. This has accelerated industry consolidation, as smaller and less-profitable growers have struggled to meet such quotas. Growers must also contend with fierce foreign competition in the domestic market, which is especially attractive to foreign growers due to the high incomes and above-average spending on flowers compared with the rest of the European Union. However, the rise in foreign competition has significantly increased price competition, causing the domestic market to shrink and operate with falling profitability. These trends and continued industry consolidation are expected to grow over the next five years.
Over the next five years, the industry is expected to face more challenges as a result of stagnant disposable income growth, fluctuating employment and low levels of consumer sentiment as the United Kingdom continues to battle the lingering effects of the global economic downturn. Outlaw adds, “on a brighter note, industry players will be able to capitalise on several growth opportunities as conditions improve, including the development of premium niche markets, such as those for organic produce”. Growers are also likely to benefit from continued advances in industry technology, such as hydroponics and micropropagation. IBISWorld expects industry revenue to contract slightly over the five years through 2017-18.
The UK Flower & Plant Growing industry is highly fragmented and is characterised by small, family-run farms with no major players operating. Therefore it has a low level of market share concentration.
For more information on the Flower & Plant Growing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry involves businesses that grow and propagate plants to be planted into gardens and bulbs. Industry players supply retail and wholesale businesses, landscapers, councils and other horticulture businesses such as fruit and vegetable growers. The industry also includes the growing of turf, flowers and foliage for cutting and displaying, and seed collection.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.