Good day from the Wizard,
Here we are together again at the beginning of summer. Only this year are we going back in time to a universe that seems far, far away. Sorry for the digression; we have probably landed back on sales numbers from 2019. A lot is the same and a lot is different than in the pre pandemic days. Sales may be similar, but inflation has changed our lives.
We have gone back to having normal availability and very few shortages. Logistics are no longer spread thin but rather readily available, and some companies are even willing to negotiate rates.
Ocean containers in many lanes are even lower than in 2019. Space on airlines is easy to get. Trucking companies have plenty of capacity and are running an on-time schedule, if not ahead of schedule.
Hard goods on most items are readily available, as are plants and nursery materials. In most markets, labor has become much more available, and companies can and will, in many cases, upgrade their staff.
So, what is the item that is different now in our new world order? The most notable item is one word—INFLATION!
This has changed all of us. It influences everything we do.
Many of us no longer have enough disposable income to enjoy our style of life as it was in 2019.
It is hard to think of what has not gone up in the last few years.
The big problem is that we need to eat but do not necessarily need to buy flowers. Florists have been sharing that June was not as strong as expected. This was partly because there were fewer weddings than expected, and some did have cutbacks on flowers.
Everything else needed for weddings has become more expensive, which has limited some budgets for flower expenditures. This may take 2 or 3 years to get back to normal levels. Check out this CNN report on sales of engagement rings: Engagement ring sales are down sharply, according to America’s biggest jeweler
Every coin has two sides, and in the flower business, we have seen a trend where Flower sales continue to grow at mass market and Big Box stores. Volumes continue to be strong at these outlets. Prices are much more affordable, and many flower lovers do much of their shopping here. Most supermarkets know where their magic price points must be, and due to their buying power, they are able to procure the items at their needed price. Finding rose dozens almost year-round at $9.99- $12.99 is not unusual.
Many florists no longer work from Brick-and-mortar locations and have specialized in becoming event florists. We know this from some e-commerce wholesalers that do mostly FedEx and UPS, and that their percentage of residential deliveries is rapidly approaching 40%+! Without locations, more and more consumers are impulsively buying while doing their grocery shopping.
What does the Wizard recommend in this market? Prices will drop, but we will probably never see 2019 levels again, or at least not for a long time. Labor costs and many other factors have increased too much to see those kinds of reductions.
What can be done to fight inflation?
Most industries have changed due to many reasons, like FedEx raising interest rates, etc. Check out car prices, building costs, restaurant prices, and even McDonald’s. We are not in Kansas anymore. Everything is higher. Being a desirable client and a smart buyer is key, as that will contribute to your overall success!
Think of the positive, as the American Market is subject to much less negativity than many foreign markets, especially Europe, where inflation is quite high!
Have a great summer and thank you for tuning in,
The Flower Wizard