Christmas Tree Sellers Say Trouble Comes in Big Boxes

It’s hard to find yuletide cheer this year at Christmas tree lots.

Operating a roadside Christmas tree stand has never been a huge moneymaker, and now the big boys have moved into the market, making it even tougher.

The National Christmas Tree Assn. said 17% of the approximately 30 million Christmas trees sold last year came from so-called big-box chains led by Wal-Mart Stores Inc., Home Depot Inc., Lowe’s Cos. and Target Corp. That’s up from 14% in 2000, the first year the association began tracking sales at chain stores.

At the same time, sales at roadside and parking-lot tree stands fell to 21% from 27% of all sales, and purchases from nonprofit organizations remained steady at 15%, the survey found.

Wal-Mart sells Christmas trees at nearly 1,800 stores nationwide, and Home Depot sells trees at all 1,400 of its stores.

“Christmas tree sales are growing in excess of 20% annually over the past two years,” said Home Depot spokesman John Smiley.

More grocery chains also are selling trees. Food Lion, for instance, sells trees at all 1,200 of its stores in the Southeast and Middle Atlantic regions, with sales projected to be $2 million this year, spokesman Jeff Lowrance said.

Mike Roth, owner of a tree farm in Franklin, Maine, shut his stand in Ellsworth in 1999 in part because of competition from Wal-Mart. If he hadn’t, he said, he certainly would have shut down after Home Depot opened last year.

“The unfortunate thing is they use it as a loss leader,” Roth said of big chains’ tree sales. “They seem to drive out the small guy with low prices.”

The Wal-Mart in Scarborough, Maine, for instance, sells 6- to 9-foot trees for $18.98 (and 4- to 6-footers for $14.47), and Home Depot sells trees for $19.96 for balsam fir and $29.96 for Fraser fir.

The average nationwide purchase price for a tree last year was $31.09, according to the Christmas tree trade association.

Tom Williams, spokesman for Wal-Mart, says selling Christmas trees is part of Wal-Mart’s emphasis on one-stop shopping.

“You’re shopping for gifts and you’re walking out and the trees are right there,” he said.

He would not comment on the profitability of tree sales, citing company policy against discussing individual product sales or profit margins.

Annual sales of real Christmas trees have hovered between 32 million and 37 million over the last 10 years. Sales last year dropped to 27.8 million trees, though the association projects sales of 33 million to 35 million for 2002.

Although Christmas tree sales at chain stores represent a growing trend, the biggest worry for growers is artificial trees, not big-box chains.

Last year among U.S. homes with Christmas trees, only 32% were real, the association said. A decade ago, the percentage of real trees and fake ones was about evenly split.

The slow decline has some growers cheering the big chains’ entry to the market.

“I think this is good because, after all, they’re selling real trees, and they’re pricing trees very competitively and making them available to everyone,” said Jim Corliss, president of the trade association.

Local sellers are battling back by promoting the selecting and cutting of a Christmas tree as a family outing, offering wagon rides and hot cider, said Al Gondeck, owner of a tree farm in Turner, Maine.

About 33% of U.S. live tree sales last year came from such choose-and-cut farms, up from 20% to 25% in the mid-1990s.

“People are going back to what counts: the real tree and what goes along with it, rather than the plastic,” Gondeck said.