Garden centre chain sees profits drop as it targets footfall and market share
PUBLISHED: 09:00 14 November 2018
Notcutts Garden Centres Ltd
A Suffolk-based garden centre chain's profits were halved last year after it was hit by unfavourable exchange rates and increased costs.
Notcutts, based at Woodbridge, recorded a healthy rise in sales, up 4.8% to £74.7m, after adopting a strategy to increase footfall, but it also saw a 51.5% drop in operating profits to £1m, while its gross profit margin was shaved by 1% to 46.9%.
Chief executive Nick Burrows said the company was pleased to see footfall grow strongly during the year, with conversion rates improving across its 18 garden centres, and customer and staff satisfaction on the rise.
“Like others in the sector we experienced pressure on margins and increased costs associated with transportation, business rates and the national living wage,” he admitted. “In such an economy we opted not to pass cost increases directly onto customers. Our approach was therefore very much on driving increased footfall and gaining market share as a solid foundation for new growth for when the post Brexit economy stabilises.”
A programme of developments and refurbishment works is continuing as part of a five-year plan.
Chairman Nicky Dulieu said works at Cranleigh, St. Albans, Peterborough, Victoria (Pontefract) and Solihull were all completed, significantly improving the environment for customers. “Upgraded colleague facilities were also completed in a number of our garden centres,” she added.
Notcutts has also just opened two major redevelopment projects with new format restaurants in Rivendell (Widnes) and Woodford Park (Stockport). Planning permissions have also been secured for future developments in Woodbridge, Garden Pride (Ditchling), Solihull, Wheatcroft (Nottingham) and Booker.
By the end of 2018 the roll out of the new Notcutts brand across all 18 centres will be completed, and an online store will be launched early in 2019. Show gardens now feature at 10 of its outlets and are proving a ‘real point of difference’ and customer draw, the chain said.
Vice chairman Caroline Notcutt said: “I am so proud to see these superb show gardens being built in our garden centres.
“They really play to our horticultural expertise and support our goal of bringing an ever wider experience for our customers.”
New menus have also been introduced in its restaurants.