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In the November 2005 issue, I asked what type of holiday business you wanted in place for 2006. I suggested a planning process that revolved around a simplified profit and loss statement. The P&L measures the true financial value of this sixth season.

Quite a few centers got back to me with their findings. Some results shocked them into making fairly drastic decisions about how they would approach a season that's always pretty, but often not profitable.

A quick review

Here's a quick review of what we learned after analyzing their reports and discussing how centers operate during what I gently describe as "the season when most garden centers work twice as hard for half as much and still think they're making money."

Sales volume is never a direct link to profit. If you're hoping to reach a magical plateau where economy of scale suddenly produces a profit, it's not likely. In most cases, the higher the sales in departments like gift and decor and the faster the growth, the less likely a company was able to create true profit. Increased operating expenses and shrinking margins almost always override potential profits.

Well-attended events or compliments from customers are not profit measurements. A recent trade article promised to explain how one garden center makes sure their holiday business stays in the black. Nowhere in the article was any mention of financial results, just the usual process of buying trips, special events and a beautifully decorated store. There's a risky tendency to equate customer response to events and well-meaning comments to success. A season's only true measure of success is an accurate evaluation of profit. To borrow a catchphrase from a different industry with financial concerns of its own: Show me the money. Pretty may make good press, but profit pays the bills.

Getting a true measure on the holiday season is close to impossible. When asked if they track and assign all holiday-related labor costs (including holiday-specific trade show expenses) against the true cost of operating this department, the most common garden center response was essentially: "If I did that, I know I'd never make any money."

Hiding any season's true operating cost doesn't make it go away. It just paints an unrealistic picture of what's happening.

Success stories

When done properly, there are victories to be won during the elusive holiday season. Here are a few stories from Group centers:

* New Garden Nursery in Greensboro, N.C., invited its top Garden Gold members to a wine and cheese party in late November. The average sale was more than $90. On Friday, the rest of the loyalty cardholders were invited to a preview event. More than 450 shoppers tallied sales in three hours equal to a full day on Saturday.

* Countryside Garden Center in Crystal Lake, Ill., held a similar event the same night with more than 300 attendees. Sales beat last year's event with less discounting on early-season products.

* Delhi Flower & Garden Center in Cincinnati reduced its coupon offer and food choices at its preview, yet had more people attend and almost twice the sales volume as last year.

* L.A. Reynolds Garden Showcase in Winston-Salem, N.C., reported that its best-selling artificial tree sold for $1,000 each. It would take more than 100 cut trees to match the same gross margin.

* Dambly's Garden Center in Berlin, N.J., moved products and pricing up the food chain, resulting in a 20-percent sales increase in November and much better margins. One success is full-price fresh greens centerpieces put together by a part-time floral designer. Next year, two gondolas of gift-type items will be replaced with display benches full of arrangements. You don't have to be a florist to offer florist-quality products.

* Adams Nurseries in Lancaster, N.Y., said that very careful car-top loading of the more than 8,000 cut trees it sells is just as important to customers as the price of the tree. It also has an account with a cemetery for wreaths and greens to resell to visiting families. (You might want to check this out in your market.)

* We've been suggesting holiday porch pots of fresh greens and decor to Group centers since the early '90s. Swanson's in Seattle said next year its average price is going from $60 to more than $90.

* More than 70 percent of the cut trees at Stringer's Garden Centers & Landscape Co. in Memphis are sold the first two weeks of December; 80 percent have a delivery and setup price attached.

* Countryside Garden Center in Crystal Lake, Ill., has a similar program adding $80 to every cut tree that's delivered and set up.

* Of the more than 600 made-from-scratch, evergreen wreaths sold at Clark Farms Garden Center in Wakefield, R.I., the best sellers are custom decorated starting at $50, with most selling closer to $200.

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© 2006 Branch-Smith Publishing