2011/2012 was dominated by an unseasonably mild Winter with some areas of the country experiencing their mildest Winter in over 20 years. This impacted heavily on sales of all home heating products resulting in an 9.7% annual revenue decline. Despite the growth in the horticulture category, this did not compensate for the weather-induced reduction in fuels sales. As a result, combined total sales of €171.6 million resulted in a year on year decline of 5.9%.
Consumer Behaviour and Disposable Income
The business was also affected by the decline in disposable income and a shift in consumer purchasing behaviour for home heating products. Consumers focused on value fuel options, including briquettes, coal, privately harvested turf and timber, in place of oil. 2011 also saw a bumper harvest in privately cut turf which competes directly with our coal and briquette products. In the multiple retail market, new private label products were introduced during the season, consistent with the general trend of major retailers providing consumers with a value offering.
The horticulture business is largely concentrated outside Ireland, where the year’s principal challenges were the contraction in freight availability and the significant increases in freight costs resulting from a reduction in UK inbound freight volume into Ireland.
As a result of the continued drive towards peat dilution in the UK and mainland European markets we are encountering added complexity across the supply chain from material procurement right through to customer delivery.