Business in 2023 was okay or good for most floral businesses compared to 2022, according to the Society of American Florists’ biannual economic outlook survey of retailers, growers, and wholesalers, importers and suppliers, conducted last month.

Almost half (46.5%) of businesses reported business was okay, while almost a third (31%) reported business was good. Business was poor for about 12% and excellent for 9%.

The survey also found that almost 44% of respondents feel uncertain about sales in 2024; nearly 31% feel optimistic; 15% feel pessimistic; and 10% feel very optimistic. Inflation and other economic factors, as well as the upcoming election, were mentioned as factors contributing to uncertainty.

“Business is very unpredictable right now,” says Michael Kusuda, of Jimmy’s Flower Shop in Ogden, Utah, who indicated he feels uncertain about 2024. “It seems like changes occur more quickly than in the past. hard to determine if it is a trend or just a cycle.”

Economic Outlook

SAF Chief Economist Charlie Hall, Ph.D., the Ellison Chair of Floriculture at Texas A&M University, points to several factors that should help the floral industry feel optimistic about sales — even in an election year.

The first factor is that consumer spending hasn’t slowed. Data from the U.S. Bureau of Economic Analysis shows sales for flowers, seeds and potted plants for 2023 are up over 2022; and the Real Personal Consumption Expenditures Index — adjusted for inflation — shows spending reached a record high of $15.6 billion in December, up 3.2% from the year before. Another strong measure of spending is the GDP (gross domestic product), which increased at an annual rate of 3.3% in the fourth quarter of 2024.

“People are still spending,” Hall says.

Another reason for optimism: The Federal Reserve didn’t raise interest rates; in fact, its chair, Jerome Powell, has said the Fed is on track to begin cutting interest rates this year. Hall believes the Fed may achieve the goal of slowing inflation without sending the economy into a recession.

“I don’t know that a full-blown recession would be necessary at this point to achieve their dual mandate of reducing price pressures and maximizing employment,” Hall says.

What about the impact election year dynamics have on consumer spending? Don’t fret, says Hall.

“In an election year, we know that any policies passed in a lame duck year like this are generally moderate,” he says. “So, it takes something that has broad bipartisan support during an election year, which reduces the likelihood of bad policy being enacted.”

Gross Sales

The survey also found that gross sales were down for 53% compared to 2022, up for almost 37% and flat for nearly 20%.

Of those who saw losses, nearly 46% reported decreases between 1% and 10%. They blamed inflation, which they said caused customers to pull back on spending.

“Customers are reluctant to spend money due to the poor economy,” says Joseph Sibley, of Jake’s On the Avenue in Denham Springs, Louisiana.

Of those whose sales were up, 25% reported sales gains between 1% and 10% and attributed it to pricing appropriately, increased corporate sales, more event work, heavy marketing — especially online — and providing superior customer service and designs.

“ are continuing to work on our sales training over the phone and keep our website fresh with new arrangements and custom photos,” says Mark Jones of Saville Flowers in Evanston, Illinois.

Net Profits

Net profits compared to 2022 were down for nearly 47% of respondents, flat for almost 38%, and up for 16.5%.

Of those whose net profits were down, 32% reported losses between 1% and 10%. Costs of goods and other increasing expenses, including credit card swipe fees, are draining profits, respondents said.

“Inflation continues to hurt because of the rising costs of supplies and labor while pricing is unable to keep up because of weaker demand,” says David Register of FernTrust, a cooperative of foliage growers in Florida.

Of those whose net profits were up, nearly 21% reported gains between 1% and 10%

“ more on top of our e-commerce site with up front pricing and add ons, and in the shop or over the phone, giving great customer service and listening to what the customer wants, and then doing it,” says Michele Peters of Ambiance Florals & Events in Albany, New York.

Amanda Jedlinsky is the managing editor of SAF News Now.