Homeowners to Stock Up on Lawn & Garden Equipment
Total U.S. retail sales of the lawn and garden equipment market are at estimated at $10.1 billion for 2012. Hampered by the recession and by weather patterns, the market has declined by a compound annual growth rate (CAGR) of over 1% since posting $10.7 billion in sales in 2008, according to Packaged Facts.
The overall market presents challenges and opportunities for both marketers and retailers. "Lawn and garden equipment is largely a replacement business, with relatively slow growth even during good economic times," according to David Sprinkle, Research Director for Packaged Facts, "and weather can wreak havoc in any given year."
A relatively small number of players account for the majority of sales, making for a highly competitive situation that is particularly difficult for new entrants. Few marketers compete across all categories, and leaders differ by category. Retailing is even more concentrated, with 75% of sales coming from mass retailers, primarily Home Depot, Lowe's, Sears/Kmart, and Walmart.
Consumers also shop the Internet aggressively, mainly for information and pricing on outdoor power equipment. They demand low prices and value, challenging marketers to innovate with products that either cost less or are demonstrably worth a higher price. Zero turn radius lawn mowers and dual-stage snow blowers are examples of products that consumers have been willing to pay more for. They also represent higher-performance but easier-to-use products that have been trending across all categories. This trend is evident in battery powered equipment, ergonomic cutting tools, and automatic rewinding hose reels.
"Lawn and Garden Equipment in the U.S." projects that retail sales in this market will grow by a CAGR of 2.5% to reach $11.4 billion in 2017. The forecast assumes an improving economy, a continued recovery in housing, and an increase in household formations. The existing homeowner base brings pent-up demand for some products, and new homeowners will stock up on a range of products to establish and enjoy their lawns and gardens.[Source: "Lawn and Garden Equipment in the U.S." Packaged Facts. 20 Jun. 2013. Web. 24 Jul. 2013.]