Commodities Prices, Recession Fears Dent Flower Sales

May 09, 2008 01:08 PM
by findingDulcinea Staff
by Anne Szustek
Mother’s Day usually accounts for 25 percent of annual flower sales. Yet recession fears, high gas prices and even tropical volcanoes have left the industry wilting.

30-Second Summary

Florist Gabriel Soto, who runs a flower shop in the financial district of Los Angeles, is ordering 30 percent fewer flowers than he did before Mother’s Day last year.

Recession worries have translated into a slump in flower sales across America that hit the sector the past two quarters, which encompassed the Christmas and Valentine’s Day shopping seasons.

Eric Beder, an analyst for investment bank Brean Murray, told Reuters, “If you look at what’s happened on Valentine’s Day and Christmas … Mother’s Day will probably be a slow quarter, too.” Indeed, estimates from the National Retail Federation project Mother’s Day 2008 sales at $2 billion, down 13 percent from last year.

High gas prices have pushed up shipping prices on both the supplier-to-store and store-to-consumer ends. Soto said, “The gasoline is expensive … we’ve had to raise prices on deliveries,” making orders of below $50 unprofitable.

Oil hit a record price of $126.25 a barrel on Friday morning. And many economists believe the country is in the throes of a recession.

Prices for tropical varietals may skyrocket further because of sulfur dioxide emissions from a new crater on Kilauea Volcano. Flower raisers Tony and Sam Bayaoa, who have lost 70 percent of their proteas because of the gas, told the AP, “The first reaction was—did someone poison the plants? I’ve lost my livelihood.”

The bearish flower sector may indeed be a sign of a recession. But in the Netherlands, during the Renaissance, tulips themselves caused the country to fall into an economic depression after people went into hock to trade the bulbs. Today, the term “tulipomania” refers to any sort of economic bubble.

Headline Link: '"I Love You, Mom, but Can’t Afford to Send Flowers"'

Background: Record-high oil prices; America’s recession fears

Related Topic: Halemaumau Crater in Hawaii killing flower crop

Historical Context: Tulipomania

Reference: FindingDulcinea’s Web Guide to Gift Giving


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