A Holiday Tale: The Christmas Tree Wars

The sale of fresh-cut Christmas trees may not rack up the billions spent on clothing or electronics at this time of year, but Americans did buy 27 million holiday conifers last year, dropping $976 million in the process. (And that number doesn’t include fake trees—real trees usually outsell the fake ones by a margin of 3 to 1, according to the National Christmas Tree Association.)

Which means it was probably just a matter of time before independent farmers, who have historically dominated the Christmas tree business, would get a snowball in their collective face with the arrival of big-box chain competition.

Indeed, while Lowe’s has been selling fresh-cut trees out of its garden centers for two decades now, and Costco is in its third season selling evergreens, the trend recently has picked up steam. Target started last year, and Kmart and Sears just entered the fray this season.

The business models vary from local-store pickup to Web-based click-and-ship, but the deals are pretty good. Costco sells a 6 ½-foot-tall Fraser Fir for $109. An informal canvas of independent growers shows an average price for the same height and same species to be approximately $125. At press time, Lowe’s was touting a 6-foot Noble Fir for as little as $39.97. The chains will not disclose sales figures, but Jennifer Dominiquini, Sears/Kmart CMO for seasonal and outdoor living, says the trees have been “generating a lot of buzz, and we’re pleased with what we see.”

Not surprisingly, mom-and-pop tree farms are decidedly less pleased. Though “choose and harvest” farms still enjoy greater market share (33 percent) than the chains (21 percent), family operators are wary.

“Category killers are great at putting small businesses out of business, so it does concern me,” says John Beffel, co-owner of Tall Timbers Tree Farm of Hartford, Mich. “I am totally aware of them,” adds Cynthia Curtis, who operates the Perfect Christmas Tree Farm in Phillipsburg, N.J. “I have a Super Walmart, a Lowe’s, and a Home Depot all within two miles of me.” In other words, she notes, she’s physically surrounded.

But some mom-and-pop farms hasten to add that they have inherent marketing advantages the chains cannot match—even though both often duke it out over the Web. “Costco offers a Fraser Fir,” says Beffel , who sells his goods online. “But we have 10 different kinds of trees in five sizes, plus 15 types of garlands and 50 wreaths. We’re the guys who cut the trees down—the experts. You can’t call Costco and ask them questions about your tree.”

“The personalization, quality, and freshness cannot be matched by mass distribution,” adds harvest manager Karen Wade of Green Valley Christmas Trees in Mountain View, Calif. “Most trees at big-box retailers were cut four-to-six weeks before they reach the customer.”

And while Perfect Christmas Tree Farm doesn’t take Web orders, Curtis has found a way to turn the nearby chain competition to her own marketing advantage. At season’s end, she operates a tree-recycling service that’s open to everyone—including those who bought trees from the big-box stores.

“I want people to come [to our farm],” she says, “to see what they could have had.”