Florists' profits wilt - by Lema Samandar
Florists profits have wilted in the downturn due to competition from larger retail outlets and internet-based businesses. Business information analysts IBISWorld found that despite revenue for the industry growing around 3.6 per cent per annum over the past five years, profit levels declined from 4.7 per cent in 2004 to 3.1 per cent last financial year. IBISWorld general manager Robert Bryant said retail florists were experiencing rising competitive pressure from service stations, supermarkets and convenience stores. "Since these retailers usually operate at a lower price point, they've been able to gain a significant share of the local cut flower market," Mr Bryant said.
As a result, of the total $1.7 billion retail value of cut flowers this financial year, flower retailers will generate revenue of $837.1 million. "Overall, internet technology is hindering shop-front florists, due to greater competition from non-store internet florists," Mr Bryant said. But in a bid to survive in a changing industry, many florists had diversified into the broader gifts and homewares market.
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