What Recession?

What Recession? Why the Tide is Rising for Plants and Landscaping, and What to do about it!

by Sid Raisch

There’s a lot of noise about the economy with a tendency for businesses to join the gloomy predictions - that always follow good times, and often cause gloomy times. It can become a self-fulfilling prophecy. There’s also evidence that even better times are ahead. You probably want to know about it.

There are several MAJOR reasons a recession has not begun, even though economists have been predicting one for over a year now.

First, understand why a recession was predicted. It was because of the government’s response to escalating inflation caused by opportunistic profit-taking in the home improvement and construction and automotive industries. Rather than deal effectively with these companies for violating public trust it was more expeditious to increase FED interest rates which always triggers lenders to increase their rates. The increases are incremental and accumulate until inflation escalation stops and then returns to acceptable levels which appear to be in the 4-6% range. This is what has occurred by observation.

Unfortunately, however, this had no effect on the inflation that had already occurred. We will move forward with higher baseline prices and an acceptable and slower rate of inflation.

Important Notation – Inflation continues in our cost increases but retailers in our industry are not effectively keeping up because of reluctance to take steps necessary to increase retail prices to earn the inflation back.

We’re at a crossroads. Do we continue growth and prosperity or listen to the naysayers of the economy?

Reason One - Demand - Now we’re on that track – the growth track.

A good recession can’t even get off the ground, despite economists' and media’s best efforts. Our industry is winning based on the value the public is placing on us.

Everything about what we do is IN – It’s not just in, it’s in to stay. There are several long-term drivers of demand rooted in trends fueled by the generally accepted desire for sustainability. To what degree this is to avoid Global Warming and Climate Change or to protect Pollinators, or to Improve Mental and Physical Well-being we will never specifically know, and while it all matters it doesn’t matter much where the credit goes as long as we continue to craft messages that reinforce these benefits of our products and services. There are several important subcategories of benefit that are included within these such as:

  1. PAH - Pharm at Home – Essential food security and safety
  2. HPP - Houseplant Parenting – Breathe clean air – Collect them all!
  3. SLFPP - String Light Fire-pit Phenomena – Friends and Fun in Your Backyard
  4. WFH - Work from Home – and Run your business from home. Why not?
  5. WAH - Workout at Home – Safe Health – by Gardening and Yoga
  6. EAH – Staycation and Escape at Home – Mental health and more
  7.  YHO - Younger Home Ownership – This is the return of a trend that started with the earliest homeownership during the return from WWII GI Bill programs. GenZ are buying homes earlier than Millennials did. The driver is rent inflation which has made it less expensive by comparison to buy than to rent.

Reason Two – Population and Spending Rate

Millennials are entering peak spending years, though later than previous generations.

Reason Three - Boomers and GenX are spending from the greatest generational transfer of wealth in history. They’re spending on homes and improvements – those places to gather families and friends (see details here).

Now the IMPORTANT PART – Here’s what to do about it:

  • Build perceived value of our products and services. Then DO NOT DE-VALUE with discounts, coupons, and other price-driven ways to erase what you build. 
  • Do what we do – MUCH MORE PROFITABLY. Get the prices right to get the profit right. All customers buy based on perceived value if allowed. If prices aren’t at the level of perceived value profit is being left on the benches.
  • Invest in the right people and GROW. Buy your way to them with inflated dollars. Stop starving our own future with your grandfather’s “low paying industry” mantra that throttled growth during the 70’s – 2007 boom cycle, and will again. 
  • Meet Customers on the NEW Prospect’s Path. They, and we, are getting what we want digitally. Get them, and keep them digitally to get them in our stores.

Some of us are near enough to our end of time on this earth and can ride this wave out. Others will take action on the opportunity and prepare for the lucky timing break. Choose wisely, then execute. Take action on the opportunity at hand.

Before procrastination or other busyness steals another year from you Text or Call 937-302-0423 or send an email to [email protected] .

Sid Raisch is an advocate for family business leading growth, change, and results throughout US horticulture. Redefining the business future for consumer horticulture by understanding how the end-to-end supply chain needs to be redirected is a skill Sid has honed into an art. He has understanding and insight through inquisitive observations and extensive experience and has served as a trusted advisor helping transform both national and local businesses into more profitable and sustainable businesses. Developing national and international educational programs that create change in culture, community and company provides Sid venues with a front row seat creating effective and innovative business models.

Sid is a Certified Value Builder System Advisor, and currently serves as Chief Strategist and the Swiss Army Knife of Consultants to The Garden Center Group clients. Contact Sid at [email protected] or call or text  937-302-0423.

REMEMBER: Your interaction (by phone and email) with Group Service Providers such as Sid Raisch, Tim Quebedeaux, Jean Seawright, John Kennedy, and of course Danny Summers are included in your retainer!

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