Words of Encouragement
With my November editorial, I had hoped to end my campaign against the big box store's treatment of growers, but developments since last month — in the form of additional policies from the boxes, their effects on growers of all sizes and a continuing cry from the industry — compel me to give another update.
Let's start with the worst news. In addition to therecent Florida closings of Suncoast Greenhouses and Fernlea, I have heard ofclosings from California to Michigan to Iowa to Georgia. These are operationsfrom the very smallest mom-and-pop types of less than 25,000 sq. ft. to solid,mid-size growers of 250,000 sq. ft. to the largest growers 1 million sq. ft. ormore.
Upon hearing about the demise of a competitor, any smartbusiness owner has to take a look at their own affairs. When announcing theirclose of business a few months ago, David Wadsworth of Suncoast namedconsolidation and "big box pressures" among their troubles andadvised the industry to "take careful stock of where we are at and wherewe are headed," adding, "please check your own pulsecarefully." I know lots of greenhouse owners have been taking a hard lookat themselves after hearing of the unexpected close of this 18-year-oldbusiness, and those that didn't can't help but do so with thelatest closing announcements.
I was recently with a group of industry professionalstalking about these latest developments when a very frightening prediction wasput on the table, and yes, the source is a very well-respected member of theindustry who will mercifully remain nameless (you can thank me later). Thisgentleman predicted that we would see a 75-percent decrease in the number oflarge growing operations over the next five years due to consolidation andbankruptcy.
Let's pretend that your profits have been squeezed bythe box stores; that you have lost a crop because one of your heaters failed,necessitating a heater replacement; and that your production costs have risenfor the third year in a row because you are using more patented material. Soundfamiliar? It should; these are the everyday problems of owning a wholesalegreenhouse business. But let's add one more dimension: Imagine that yourvendors have decided not to pay your invoice for two, four, even six months.Could your business take a hit like that — on top of shrinking profitsand heater failures and crop loss?
Well, you might not have an option. Sources, both growersand allied industries, have told me about new policies at Home Depot and Kmartthat delay payment from 30-60 days, the reported Home Depot figures Ñabout which Home Depot was unable comment for this article — and 120-180days, the reported Kmart figures. There is one bright spot in HomeDepot's offer: Growers, and presumably all other suppliers, will receivea 2-percent discount — a small return for running a 60-day credit.
A Silver Lining
It's very hard for me to come to you all with bad newsjust for the sake of reporting the news, so here's my best attempt at asilver lining:
I'm giving you this news in the hopes that we will alltake Dave Wadsworth's advice and check our pulses. I hope five years fromnow I find that my industry friend, the one who predicted 75-percent shrink inthe big boys, will be proven wrong, and this warning about things yet to come andabout the demise of some of your competitors is my very small contribution toseeing that he is wrong.