The BIG Squeeze of 2022

by Danny Summers

If you were with us last Thursday for our March edition of the GROUPtalk LIVE Series, you experienced Tim Quebedeaux revealing the results from The Group's 2022 Annual P&L Study. We had a large crowd assembled for the presentation and Group Centers can see the details in the recording, now available on the 2023 GROUPtalk LIVE Series Resource page from their landing page following login.

As Tim presented each area of this year's study, I was amazed. We knew from the Weekly Department Review (WDR) that sales were down in 2022 compared to the previous year. The BIG question in most of our minds was... how much would this affect profit?

History of the P&L Study - Part 4

by Tim Quebedeaux

Last time we finished talking about Average Inventory and how it is key to inventory management which is graded by two KPI’s: Turns and GMROIIs.  Historically The Group has not done well with these two metrics.

History of the P&L Study - Part 3

by Tim Quebedeaux

Last time we left off with the premise that we can avoid the wearing of the red if we manage our inventory better. Inventory management can be “graded” by two important KPI’s: Turns and GMROII (Gross Margin Return on Inventory Management). Those two KPI’s are driven by three metrics, COGS, Margin Dollars, and Average Inventory. Average Inventory is a key component when analyzing these KPI’s.

Let’s start with reviewing what happened with Cost of Goods Sold and how that is related to Margin.

Commitment!

by Danny Summers

Commitment... It's a word that depicts The Garden Center Group experience in a number of ways. At the foundation of The Group, every Center joins with a commitment to sharing at some level. In the beginning, there may be some hesitation to jump right in but as they see others sharing they quickly see the benefits of having such an open-sharing platform. Certainly, the level of sincere helpful sharing that exists in The Group is a unique experience.

While there are a number of ways a commitment to sharing is exemplified in The Group, one of the strongest levels of commitment is sharing through our Weekly Department Review (WDR). And the Centers that receive our 100% Club Awards annually have made a firm commitment to share. This year, there are 115 Centers participating in the WDR Program, and 58 of these centers reported EVERY WEEK and received our 100% Club Award. Now that is Commitment!

History of the P&L Study - Part 2

by Tim Quebedeaux

Last time we left off, seeing that it took 5 years to go from 0.7% profitability to 5.3%, high achiever status, while in one year we went from 5.3% to an amazing 14.9%.  Let’s dig into the three KPI’s in the Simple Income Statement to try to gain clarity on how we accomplished both feats.

The smallest piece of the pie is Operating Expenses.  These expenses can be described as the other expenses section of the P&L Statement.  Any expenses that are spent on things OTHER than people (W&WB) and product (COGS).  This section is the lowest as a percentage of revenues, but the largest listing of accounts.  Let’s look at the historical trend of our target centers in the P&L Study.

History of the P&L Study - Part 1

by Tim Quebedeaux... and a little help from Steve Bailey!

The Annual Profit & Loss Study has been an industry exclusive since 2004 and is the most comprehensive P&L study of its kind.  It started with 40 centers reporting in 2004 and has grown to a high of 78 centers in 2018 and 2021.  The Study made a big step in 2006 when it started measuring Average Inventory, allowing us to measure Turns and Gross Margin Return On Inventory Investment (GMROII).  After only 9 centers started reporting the new metrics in 2006, it quickly gained in popularity as it ramped up to 40 centers in 2009 and increased to 60 by 2021!

Annual P&L Study 2021 – Being the Best!

by Tim Quebedeaux

From Raising the Bar to Pushing the Boundaries!  In the 2019 P&L Study the top line comparison was changed from the High Achiever and Best Practices group, to only the Best Practices Group.  Well, that changed in 2020, in creating the Best of the Best Group, which in 2021’s P&L Study, took the place of the Best Practices group as the lop line in the Study to compare against.

Like in marksmanship, we want everyone to aim small, miss small. This small group of Best of the Best (BOTB) had 9 of the 10 Garden Centers repeat in 2021.  We wanted to show a standard above what had been presented in the past. Not only did this give everyone a higher standard to aim for, it gives the Best Practices Group (largest number ever at 48) a chance to raise their own standards.

Annual P&L Study 2021 - Part 4

by Tim Quebedeaux

To unlock the door to profitability, two Key Performance Indicators are needed to hit their goals, Inventory Turns and GMROII.  The largest Best Practices group in the P&L Study history (with 44 Garden Centers in 2020) was surpassed in 2021 with 47! Below is a list of 37 of these Centers with the remaining 10 (Best of the Best) to follow.

2021 P&L Study Best Practices Group

Annual P&L Study - Part 3

by Tim Quebedeaux

Today we will reveal who is in the High Achievers Group defined as attaining between 5% & 10% Adjusted Profit in 2021. Eighteen Garden Centers were able to navigate through all the challenges of last year to achieve an average of 8% profitability. 

The High Achievers of the 2021 P&L Study:

Annual P&L Study 2021 - Part 2

by Tim Quebedeaux

For the second year in a row, the Best of the Best group is needed for comparisons for this year’s P&L Study.  The difference this year is that they replaced Best Practices in the far-right column as the top numbers for comparison.  Remember, they are the top ten in profitability among those who filled out all 5 parts of the P&L Study.  This year they increased profitability from 18-25% to 19-31%.  Nine of the ten Garden Centers in 2020 repeated this level of profitability in 2021… Perennially Profitable Garden Centers!

In 2021 we had 78 Garden Centers report to the study, and 47 filled in all 5 parts.  If you didn’t fill in all parts, please reach out to us, we can help you improve your accountability to be able to report to all 5 parts of this remarkable Study.

The Gold Standard - Gold, Hallmark & GMROII

by Danny Summers

Gold has been a highly-valued precious metal throughout recorded history. Gold hallmarks originated to show the purity of gold in a piece of gold jewelry and included the mark of the certifying office that guaranteed the purity as well as the fineness or caratage of the gold. Later, trademarks that showed which goldsmith had manufactured the product were added.

Hallmarking gold jewelry was Europe's earliest form of consumer protection, dating back to King Louis IX of France and Edward I of England in the 1200s. As craft guilds sprung up in these two dominant markets during the Middle Ages in Europe, state-appointed assayers examined precious metal goods. Their prescribed mark, and subsequently marks for individual goldsmiths and production dates, became a pre-requisite for gold items offered for public sale.

Annual P&L Study 2021 - It's Beyond WOW!

by Tim Quebedeaux

P&L Study 2021, after the WOW year of 2020, we were prepared… and the results showed it.  But how did the pandemic and the eventual supply chain issues eventually affect our readiness for 2022? The numbers show the story.

Let’s start with the number of High Achievers (5-10% Adjusted Profit) and Best Practices (10% plus Adjusted Profit).  Both of those percentages are adjusted if you are a Retail Grower based on the amount of grown product sold.  With a record-tying 78 participating garden centers, the total number of High Achievers and Best Practices also set a new record, with a total of 65, outreaching 61 in 2020.  And even more Best Practices – 47 in 2021, three more than 2020.

Growing Numbers

by Danny Summers

We are in a world of Growing Numbers. This beautiful spring photo from Longwood Gardens exemplifies where we are in Garden Retailing today. Each beautiful flower in this photo could easily represent your guests (customers). If we take a minute to think back over the last two years it will reveal this title.

In 2020 Group Centers recorded their largest single-year gains in Total Sales with over +20%, created by a 60/40 split of Transaction Counts and Average Sale. Centers reported seeing upwards of +25% new guests with many or most being young, first-timers to gardening. Overall, the 2020 Annual P&L Study results posted new levels of performance in almost all areas of benchmarking since the P&L Study began in 2004.

How Will You Measure Up - The 2021 P&L Study is Coming!

by Danny Summers

You may have first seen this image last year as I shared some expectations of the Annual P&L Study from 2020 only a week away at the time. If you were there for the March GROUPtalk LIVE session when Steve Bailey and Tim Quebedeaux shared the results, you know the numbers from 2020 P&L Study were pretty incredible and set a new bar for our total Group as well as our Best Practices Centers.

Success... by the Trailer Load!

by Danny Summers

For everyone who has attended The Fall Event, you know one thing you can count on is recognizing the most successful performing Garden Centers from our two financial sharing programs, the Weekly Department Review (WDR) and the Annual P&L Study. During the first day of The Fall Event 2021, we did just that. In fact, this year we handed out more awards than ever before!

When Steve and Tim sent me the reports for both the WDR and the P&L Study, I knew there would be a lot of awards this year. But it was when I picked up all of the plaques at our trophy supplier that it really hit me just how many more there were this year. In fact, we had to rent a U-Haul trailer for the trip to Wilmington – for the first time ever!

Annual P&L Study 2020: Best of the Best Awards

by Tim Quebedeaux

Raising the bar… In the 2019 P&L study the top line comparison was changed from the High Achievers and Best Practices Group to only the Best Practices Group.  We wanted to show a standard above what had been presented in the past.  Not only did this give everyone a higher standard to aim for, it gave those who were profitable, but wanted more, a chance to raise their own standards.

Well, 2020 blew that out of the water!  We had more than half of the reporting centers achieve Best Practices and a whopping 82% report above High Achievers status. Once again, the need to keep raising the bar arose thus, The Best of the Best Group was born.  In looking into this group, we will find out what it takes to capitalize on the opportunity in 2020.  What did the KPI’s tell us about how they realized the highest level of profitability (18% to 25%)?  As we crunch those numbers, we will compile a new report that allows those who reported to compare their performance to this group.  This will be available during The Fall Event 2021 in Wilmington, DE.

Annual P&L Study 2020 - Best Practices

by Tim Quebedeaux

Inventory turns, GMROII and the Best Practices Group all go together like rice and Gumbo!  You hit your goals for those first two, you are almost always in the last one.  The largest Best Practices group in the P&L Study history with 44 Garden Centers increased their Inventory Turns and GMROII, but was it what we thought it would be? We will visit this topic during The Fall Event 2021 in Wilmington!

Annual P&L Study 2020 - High Achievers

by Tim Quebedeaux

Today we will reveal who is in the High Achievers Group defined as attaining between 5% & 10% Adjusted Profit in 2020. A slightly smaller group this year, going from 18 to 16. They were able to navigate through all the challenges of last year to achieve an average of 8.3% profitability.

Annual P&L Study 2020 - Best of the Best

by Tim Quebedeaux

The Best of the Best group from this year’s P&L Study really stood out.  Who are they… you will find out, but first what defines Best of the Best?  They are the top ten in profitability from those who filled out all 5 parts of the P&L Study.  They performed to the tune of 18-25% Profitability… WOW!

Annual P&L Study 2020 - It was a WOW Year!

by Tim Quebedeaux

For the P&L Study 2020, one word is being used to describe it… WOW! Even with our expectations of a great year, we were still amazed at what was reported.

Let’s start with how revenues increased year over year. The previous year revenues increased 2019 over 2018 at 2.2% compared to 25.1% increase for 2019 over 2020. Amazing! This graphic below illustrates how the 5 year trend of a typical Center with $1 million in sales has grown over the period and the dramatic affects of the 2020 year results.