Next big food frontier – garden centres

Ever since Tesco surprisingly bought garden centre chain Dobbies way back in 2007 for £155.6 million it has kept rather quiet about the activities at its unlikely off-shoot.

One thing Retailinsider.com did predict (rather predictably) before the deal was completed was that an increase would be seen in the level of food sales at the centres as Tesco would undoubtedly ship in rows of jams, chutneys and other long shelf-life foodstuffs.

What has been surprising is that it is the cafe/restaurants in these outlets that have really been on fire since its acquisition. Retailinsider.com has been informed that although the cafe areas account for only around 10% of the trading space, and that they only cater for lunches and afternoon snacks, they are delivering circa 25% of sales at the centres.

This is illuminating as it shows the power of garden centres to attract grey haired and green fingered leisure consumers who wander around, looks at a few plants, and then retire to the cafe to splash out on cakes and pots of tea.

Dealing with such shoppers in what is effectively a leisure environment must be pretty alien to Tesco. It’s over-riding objective at its supermarkets is to process people as quickly as possible and get them out of the door without any fuss and with a lot less in their wallets. No doubt, in its mind, browsing is for the wimps of the retail sector such as the specialists.

Although many of its stores have cafes I’m not sure Tesco (along with the other major supermarket operators) have ever really gotten their heads around this part of their businesses.

I’ve always felt they could utilise the space much better – to maybe highlight their food propositions and use the area to host promotions and free tastings. Their efforts at cafes have frequently felt rather half-hearted.

But with trading space at such a premium the major grocers should finally bite the bullet and either sweat their cafe space more aggressively or use it for something more productive – like non-food.

Maybe when Tesco gets some experts in from the hospitality industry to advise it on how to better handle and develop the cafes at its Dobbies stores it will then apply this knowledge to the in-store cafes at its supermarkets.

Feeding people out-of-the-home in cafes can be a rather profitable business, even if they have garden centres and supermarkets attached.