This year Americans will spend $2.1 billion on flowers for Valentine’s Day alone. But the battle for holiday-related spending is getting fiercer than ever as small business florists face increasing competition from e-commerce players and big box retailers.
While overall spending on flowers has remained stable, smaller florists have seen sales slide nearly 40 percent in the past few years to $5.9 billion in 2014 from $9.4 billion in 2006, according to IBISWorld, a global research firm. Large e-commerce players have been in the space for years, including FTD, 1-800-Flowers and ProFlowers. Now supermarkets and big retailers are getting in on the flower action, says James Chartier, an analyst at Monness, Crespi, Hardt & Co., a boutique equity research firm in New York City.
“Over the last few years, the entry and expansion of big box retailers like Wal-Mart and supermarkets has likely had a much bigger impact on smaller florists,” said Chartier in an email to CNBC. “The shift of floral sales from florist shops to online is mostly complete so online florists are only growing at a slightly faster rate than the overall market.”