STILL COMING BACK AFTER PEAK IN 2005
Americans love to care for their lawns and gardens and this is the time of year for such outdoor activities to get into full swing. But the economy and weather haven’t been very cooperative for marketers in recent years, according to a new report, Lawn and Garden Equipment in the U.S., 11th Edition, from the research company Packaged Facts. L&G equipment sales peaked at the height of the housing boom in 2005, and have been declining and trying to recover since. The mature market is highly dependent on the economy, housing, household formation, weather, and seasonality.
Packaged Facts says the market stabilized somewhat between 2010 and 2014 with sales declining by a compound annual growth rate (CAGR) of 0.2%. This is an improvement over 2008 to 2012, when sales declined by a CAGR of more than 1%. Total retail sales of the L&G equipment market, consisting of outdoor power equipment (OPE), tools and implements (T/I), and watering/spraying equipment (W/S), were $10.2 billion in 2014. Overall growth has been driven by segments of OPE, which accounted for 68% or $7 billion of total sales. Riding/tractor lawn mowers and zero-turn models in particular have become increasingly popular with consumers. So have electric products, particularly lithium ion battery-powered models that have been expanding from hand-held tools like trimmers and leaf blowers to bigger machines such as lawn mowers and snow throwers. The battery-powered segment is expected to continue growing as battery technology is improving rapidly to deliver power and performance equal to gas-powered products.
Leading players are relatively few in this market. Few marketers compete across all categories, and leaders differ by category. Husqvarna (WeedEater, McCulloch & etc.) and MTD Products (Troy-Bilt, Cub Cadet & etc.), each with multiple brands, remain the largest marketers of OPE. TTI and Black & Decker are leaders in electric OPE (corded and battery.) Ames, through multiple brand offerings, is the leader by a wide margin in T/I, and is a major player in some W/S products.
Retailing is even more concentrated than marketing in this market. Home Depot and Lowe’s, plus Walmart and Sears/Kmart dominate sales of L&G equipment in the U.S. They along with other mass retailers control 75% of total market sales and at least 80% of OPE sales. Private label brands play a big role for Lowe’s and Home Depot, plus Sears has its own Craftsman brand. Packaged Facts notes that consumers also shop the Internet aggressively, mainly for information and pricing on OPE.