Garden Centers & Farm Supply Stores Industry Profile

The US garden center and farm supply store industry includes about 16,000 stores with combined annual revenue of about $30 billion. Major companies include Tractor Supply Company and Southern States Cooperative. The industry is highly fragmented: the top 50 companies generate about 25 percent of revenue.

The industry generally excludes nurseries, outdoor power equipment stores, farm equipment distributors, and farm cooperatives.

COMPETITIVE LANDSCAPE

Consumer income, home sales, and leisure activity trends drive demand in garden centers; the general health of the farming sector, which is tied to crop and livestock prices and consumer consumption patterns, drives demand in farm supply stores. The profitability of individual companies depends on effective merchandising and marketing, competitive pricing, and the ability to secure convenient locations. Large companies have advantages in purchasing, distribution, finance, and marketing and can better serve large customers. Small companies can compete effectively by offering specialty products, providing superior customer service, or serving a local market. The industry is capital-intensive: average annual revenue per worker is more than $300,000.

Competition includes home centers, hardware stores, mass merchandisers, and Internet and catalog retailers. Farm supply stores also compete with farm cooperatives, which allow small farms to combine purchasing power and enjoy volume discounts.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products sold include farm supplies (25 percent), soil treatments (20 percent); and outdoor nursery stock (15 percent). Farm supplies include grain and animal feed. Soil treatments include fertilizers, lime, and ...