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Wizard's Wand News: July

Updated: Jul 28

July is almost over! Thank God! This month has not lived up to the trends of 2020 and 2021 where the July numbers have been good and, in many cases, GREAT.

We have kind of experienced a perfect storm of events that have people fearful because of a down July for some floral industry participants after a great July in 2020 and an even greater July 2021.

Well, here are the facts that have led to a rather unpleasant July 2022:

  • Prices heated up in June because a scarcity of products mainly contributed to the strike in Ecuador, not due to production reasons

  • Freight stayed high due to June hitting record fuel prices

  • Inflation partly related to high fuel prices and automobile pricing hit 9.1%. We are in a strange time as some consumers are buying just basics while others are buying $4000 designer handbags.

  • Bad month on Wall Street. We entered a Bear Market. People spend more money on flowers when they feel richer due to a larger portfolio.

  • Fear of upcoming possible recession which hopefully will not happen based on low rate of unemployment and high rates of spending

  • An Incredible amount of people did not take vacations in 2020 and 2021 and had a pent-up desire to travel this July. Much of the population has taken a vacation 2 to 3 times as long, as usual, to make up for lost weeks of leisure time in 2020 and 2021. (please see this link)

  • Events are less likely to occur in July when more people are out of town and not able to participate especially when it involves a family function.

  • July has been one of the hottest months worldwide on record with places experiencing triple-digit temperatures. This is certainly not conducive to record sales. Heat interferes with sales and transportation and production.

The Wizard’s Predictions (and Boy do I hope I am right)

  • July is almost over (duh, I don’t have to be the wizard to get that one right)

  • It will get cooler this fall and winter (another easy one for the Wizard)

  • Not as many people will be traveling once School returns

  • Exchange rates are downright bizarre. This will influence where growers ship as well as the Russian-Ukrainian conflict.

  • Gas is coming down in price

  • It is easier now to find a new car for less than the sticker price

  • Freight rates are starting to decline and there seems to be plenty of capacity no matter which mode of transportation you choose

Many Planes that previously were reaping tremendous windfalls flying Chinese goods to the western hemisphere are now relocating back to only flying in the western hemisphere due to more than enough capacity from the far east shippers. (See link to article)

  • Inflation should drop if the freight goes down and fuel prices drop, hopefully resulting in less extreme flower pricing

  • August, September, and October have a huge number of events booked this year to make up for the lack and cancellations of these events during 2020 and 2021

So, in the short run, it looks like being on the high-quality niche side of the business that caters to the more “funded” consumer and higher-end mass markets may be the better end of the business than being the supplier dealing with the deal seekers and price-oriented retailers and mass markets as they say in the Wizard of Oz, we are not back to 2019 yet. Sorry, I think that line was really “Toto, I've got a feeling we're not in Kansas anymore.”

The Wizard

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