In the U.K., we would categorize most nurseries as SMEs (Small and Midsized Enterprises, those with less than 250 employees and a turnover less than $59 million). Like many small businesses, they are inherently resilient, however, optimism regarding the future is wavering due to concerns over high costs, taxation and regulatory uncertainty.
The Horticultural Trades Association (HTA), the U.K.’s leading trade body representing 1,400 enterprises, believes grower confidence is at a critically low ebb due to a “perfect storm” of challenges. Possibly the most significant challenge is that of inconsistent and extreme weather events making traditional growing and buying patterns unworkable, often resulting in a surplus of unsaleable stock or the inability to meet a ‘quick upturn.’ The relationship in this situation between retailer and grower is often tense. The pressure to accept low prices, coupled with the risk of having orders cancelled at the last minute is a massive source of insecurity for growers. But what can growers do to minimise these issues?
Many growers traditionally operating in the B2B market are now exploring D2C channels, which can be as simple as hosting a nursery sales day for the local population, where domestic gardeners get the opportunity to purchase plants at below retail prices. Growers are also reducing risk by supplying independently owned retailers — who tend to be more loyal and secondary wholesalers that act as brokers and distributors. Additionally, collecting accurate sales and production data helps growers forecast demand and understand costs, allowing for precise pricing per unit. This information is valuable when negotiating with retailers, as it clarifies profit margins.
Rising inflation is another factor increasing uncertainty for growers. The current cost-of-living crisis has changed consumer spending on non-essentials like garden plants, another factor along with the weather making it hard for growers to predict sales. But even if growers could predict sales, can they increase production to meet demand? Possibly not, as access to skilled and seasonal labour remains a major hurdle limiting production capacity.
So how is this rising uncertainty impacting on our nursery sector? In the short term there is a reluctance to invest in infrastructure or capital projects, but perhaps more worryingly this insecurity may start causing growers to exit the sector. With low returns, increasingly volatility and additional stress, many growers may cease trading — even if there is not a clear exit strategy for their enterprise such as a trade sale. Growers are downsizing, diversifying out of ornamentals or even closing down. This is seen, by the way, not as a temporary slump, but as a structural crisis threatening the entire U.K. plant supply base. The other significant impact, perhaps more evident in the agricultural sector, is the increase in mental health issues. Staggeringly 9 in 10 farmers say mental health is the biggest hidden problem facing the industry today.
This impact upon the sector is being addressed by the HTA, which actively lobbies the government. The organization states that a lack of supportive policy (e.g., on energy costs, water storage and seasonal workers), directly undermines grower confidence and the sector’s viability. Regarding mental health, thankfully there is a growing awareness amongst nursery owners of its importance, with many supporting staff to train and act as mental health first aiders. The issue of mental health in the workplace is also being championed by Perennial, the U.K. charity for horticulture who are assisting growers to implement mental health first aid training and enabling anyone in horticulture to access their unique apps.
In conclusion, U.K. nurseries, though resilient as SMEs, are confronting a structural crisis fuelled by climatic, economic and regulatory pressures. This perfect storm is eroding business confidence, threatening the sector’s very supply base and taking a significant toll on mental wellbeing. While growers are proactively adapting through new sales channels and data-driven strategies, the call for supportive government policy and continued focus on mental health support remains critical to securing the sector’s future viability. We can only hope that government will listen.
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