Garden centres group Dobbies said today it will add more food halls to its estate after customers showed a taste for farm and locally-made produce.
The group, which has 18 sites in England and Scotland, announced the plan after selling £1.8m of goods during trial runs at Edinburgh, Ayr, Stirling and Ponteland in Northumberland.
The addition of the food halls and new trading space, coupled with a 13.4% gain from its in-store restaurant business, enabled Dobbies to offset a modest like-for-like sales decline in its traditional garden centre business.
Pre-tax profits for the year to the end of October were 4.4% higher at £5m, even though like-for-like sales of plants fell by 3.5% because of an early Easter and poor weather in April.
Like-for-like sales across the company rose 1.5% but slipped 0.7% in the garden centres.
Income from furniture, including barbecues and outdoor patio sets, grew by over 4%, it added.
Overall sales rose 12.1%, primarily driven by the opening of the new store in Stirling, the redeveloped outlet at Ponteland in Northumberland and a full year contribution from the Ayr branch.
The in-store restaurants were continuing to draw customers into the garden centres, Dobbies said.
The company, which has its head office Lasswade, Midlothian in Scotland, has planning permission to build Garden World outlets at Milton Keynes and Cirencester and has earmarked three more sites for development near Sheffield, Belfast and Dunfermline.
Chief executive James Barnes said the portfolio left Dobbies well placed to secure further growth in sales and profits.
“Our strategy is clear – to establish Dobbies as a leading homes and gardens retailer in the UK,” he said.
Mr Barnes added that though it was “early days” in the fresh food venture – which includes an in-store delicatessen – it had been “particularly successful” so far.
“It’s a concept we intend to invest in further,” he added.
Trading was going well in 2006, the firm said, with like-for-like sales in January up 5.9%.
In the 13 weeks to January 29 sales were down 0.9% on a like-for-like basis though up 12.3% overall.
Dobbies finance director Sharon Brown said the food halls would be built into all new stores while spare space would be exploited where possible in existing outlets.
She added: “We’re trying to get fresh, locally produced food into the shops, be that vegetables, meats or cheeses and provide something a little different to what’s available at the local supermarket.
“It’s a bit like a farmers market and the customers have responded really well to it.”
References: EGi News 07/02/06
