As we enter the final quarter of the year, the floral industry continues to navigate a complex landscape shaped by environmental challenges, shifting consumer behaviors, and economic uncertainties. The SAF Ultimate Round Table webinar shed light on these key factors, offering valuable insights into what’s ahead for the industry. Here’s a summary of the major points discussed and what they mean for florists as we look to close out the year on a strong note.
A survey conducted in July revealed some downward trends for the floral market in America. Sales in the first and second quarters were lower compared to last year, although 66% of respondents still reported better sales than pre-pandemic levels in 2019. Average order values are rising, driven by higher product prices, but the total number of units sold has decreased. While this paints a mixed picture, there is hope for a rebound as we move into the holiday season.
David Kaplan provided insight into how cooler weather is affecting certain growing regions, while the European floral market is stronger than ever. Auctions in Europe have seen record performance, with particularly high demand for roses. Air cargo prices to Europe are rising, but demand remains robust.
Looking ahead to the holiday season, Kaplan projects an 8% sales growth, noting that trends so far in 2023 have been stronger than anticipated. Supermarkets are also reintroducing promotions to drive floral sales, and demand for fall florals is on the rise. Additionally, August and September were particularly strong months for weddings and events, further boosting optimism.
With 2024 being an election year, economic instability is already making an impact. Consumers are beginning to push back against rising prices, which could pose challenges for floral businesses. However, Rick Canale of Exotic Flowers reported stable sales, thanks in part to the rise of viral holidays like National Girlfriend Day and the First Day of Fall. These events are driving consumers to spend on special occasions, with many still finding the money to celebrate loved ones, even in uncertain times.
Another key trend is the rise of new floral shops, particularly those that excel in daily operations. These businesses are not only surviving but thriving, indicating that strong foundational management is key to success in the current market.
Charlie Hall addressed the broader economic picture, noting that while the stock market is at an all-time high, it doesn’t correlate with overall economic health. Over the last five months, U.S. sales of flowers, seeds, and plants have declined, but income levels continue to rise, providing hope for future consumer spending. The economy is currently more service-oriented than product-driven, which is reflected in these trends.
Hall also emphasized that debt levels remain manageable, and corporate profits are rising, thanks in part to relief programs like PPP. Importantly, Hall reassured the industry that there are no signs of an impending recession, with interest rates expected to drop significantly by mid-next year. He also highlighted the growing mental health crisis and the crucial role the floral industry plays in providing comfort and emotional relief through flowers—a trend that is likely to continue.
His advice to florists: Don’t panic over the negative headlines in the media. The economy, while challenging, is stable, and the floral industry continues to play a vital role in improving mental well-being.
The floral industry has shown resilience despite a complex and evolving economic landscape. Whether it’s adjusting to environmental challenges or capitalizing on strong markets and seasonal demand, there are many opportunities for growth. By staying adaptable, focusing on strong operational management, and keeping an eye on key economic indicators, florists can close out Q4 on a high note and prepare for continued success in 2024.