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Taking Stock of Your Inventory
How to manage the backroom |
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Written by Rebecca Schwarz
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How to manage the backroom
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Florists across Canada tell us how they plan to keep product stocked and moving in a slow economy.
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In today’s slow economic climate, consumers have pulled back on their spending and are now evaluating their wants and needs before making those impulse purchases. This means that you as retailers have to take a close look at your stock and analyze what you are buying for your shop.
We talked with florists across Canada to see how the current economy is affecting their inventory. We wanted to know, are retailers scaling back on their purchasing? Have they changed their inventory to better serve customers and how do they evaluate how much product they need to buy? We also asked florists to share any tips they had on the topic of inventory control. Here’s what Canadian florists had to say:
Paul Van Der Kooy, owner of Brown’s Flower in Toronto, eschews giftware in favour of fresh products. “It [stock] turns over so quickly we sort of play it month by month. The vast majority is fresh material – we don’t do much giftware. If you look at it, it’s only about ten per cent of sales.”
Any leftover fresh material goes in the garbage or home with staff. As for orders, Van Der Kooy doesn’t plan too far ahead. And the dreaded “recession” word is nothing new to him. “In the early ’90s, we had quite a big drop. We are fortunate enough to own our premises, and we’re family-run. Our overhead isn’t like in a mall. We’re fairly recession-proof.”
Van Der Kooy recommends not skimping on quality or variety even in a recession, and keeping a watch on overhead expenses. “Don’t go crazy,” he says. “If you’re paying big rents, large wages, and your sales go down, you’ll be in big trouble.”
At Expressions in Flowers in Mississauga, Ont., owner Frances Berry has already cut some products from her orders. “We pre-determined that we were going to cut back on what we ordered from the year before and buy what we needed. We cut on pine, winter greens, standard carnations, based on what we ordered the previous year,” she says. “We decided to cut back because of the economy, and what we were hearing from our suppliers regarding potential shortages, supply problems.”
What advice does she have for florists dealing with a recession? “Just overall be more careful, more attentive to spending. You can’t assume with fresh product you are going to have constant business. Take care of your commercial accounts, your weddings. Keep track, follow trends, do a monthly sales analysis. We keep track every year of what we purchase, we always track our categories of fresh and artificial, giftware – everything – so if we see a decline in anything, we adjust.”
Leftover inventory doesn’t concern her too much. “It’s good to have a little leftover, to have some in your cooler.” But Berry did notice a major decline in corporate orders. “The party work wasn’t there from the corporate parties. A couple of companies that we work for didn’t have Christmas parties,” she says. Another trend? While fresh sales were consistent, this year sales of artificial flowers declined at her shop, so she plans to cut back on those, too.
Theresa Chalus, owner of Nipawin Florists, Inc., in Nipawin, Sask., says her Christmas sales were merry. So is Chalus, at least relatively. “I’m not in business to be fearful,” she says. “I don’t think you can be in business and be afraid, otherwise you’re not in the right place.”
However, Chalus is not immune to concern. “Now I’m coming to a point in the year where I can look at the whole picture, with more perspective. I’ll probably be a little more cautious with my purchasing. On my big ticket items, like home décor, I’ll be more cautious.”
Chalus does believe that panicky business owners lead to panicky consumers. “Just the talk of recession affects people’s mindset. Fear attracts more fear, so if you give off that fear to customers and suppliers, everybody starts to feel it. Don’t buy into it, or they won’t buy. If you cut back on inventory, your customers see it, and they keep their money in their pockets.”
She admits that she’s never owned a business during a recession so this will be her first. Chalus believes that certain regions of the country are better equipped than others to handle an economic downturn. “Most florists here are happy with how Christmas went. I don’t want to seem like things are perfectly fine, but we’ve been buffered from it – maybe more than others – in Saskatchewan. We’re better prepared. If you look at Alberta it’s scary
for them.”
Dan Garneau, owner of Garneau Florists, Inc, in Edmonton, Alta., would probably agree. “This was the worst Christmas,” he notes. “We didn’t get much walk-in because of the weather, and because people are afraid to spend. They overemphasize the doom and gloom.” As a result, he was forced to deal with leftover inventory. “It costs so much to return it you may as well keep it and mark it down. It’s a tough industry – it’s a perishable product. We can’t put stuff outside here in Edmonton, and sell it at half-price. You can’t get around a perishable product.”
While trying to plan ahead, Garneau acknowledges that in the floral industry, the future can be hard to foresee. “You pre-book two-thirds based on what you did last year, but you can’t predict. A lot of times it’s reactionary, you sit at night and calculate.”
He anticipates that like the Christmas holidays, Valentine’s Day will result in lower sales. Despite this, he still plans to order sufficient product. Perhaps he speaks for us all, at least when it comes to inventory, when he says “we don’t want to get caught with our pants down.”
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