Rising fuel costs, inflationary pressure and cautious customer spending are all driving a tightening of the market currently.
Landscape companies that have weathered past downturns say they are seeing a pullback on enhancements, irrigation repairs and other major projects currently. However, they say it’s not quite as grim as 2008.
“We are seeing a little bit of pullback, probably in the 10 to 15% range year-over-year,” says Chris Lee, president of EarthWorks, based in Lillian, Texas. “We’re getting more pricing pressure on maintenance. We’re getting more requests to either reduce services or just flat reduced pricing.”
Steve Corrigan, president of Mountain View Landscapes, based in Chicopee, Massachusetts, says they’ve been communicating with architects and engineers to see what is on their plate for projects coming out to bid.
“There are going to be fewer opportunities than there have been in the last few years,” Corrigan says. “Our construction backlog is down versus the last few years.”
Communicating to Clients as a Partner
As clients seek savings, it is important to communicate the value you offer them rather than debate prices. Lee says it’s best to tie your services back to a client’s objectives.
“Their objectives are to lease office space and to keep and to renew office space, and you do that by making sure people feel good when they come to work, and everything’s clean and tidy,” Lee says. “You still have that competition when people are looking for office space or an apartment.”
John Munie, founder and president of Focal Pointe, based in Caseyville, Illinois, says it’s best to work with clients who view their landscapes as an asset, as they are the ones who are going to invest in their properties no matter what.
Brian DuMont, CEO of Yardnique, based in Morrisville, North Carolina, agrees that your ideal customer shouldn’t lead with price only.
“It starts with casting the vision for them,” DuMont says. “Ask them, ‘What is your 1-, 3-, or 5-year goal?’ and that’s what we try to sell on, not necessarily on price. Our job is to help you execute your 1-, 3-, 5-year vision, and I think that’s what really differentiates certain companies, and it allows you to take price off the table, to drive margin, to really cast these long-term partnerships that we were really proud of.”
Lee says when they have conversations with customers who threaten to go out to bid over price increases, they try to remind them how this isn’t a high-margin business and they are just as impacted by the same economic factors as everyone else.
“One of the things that a lot of people don’t understand, especially larger clients, is they expect there’s some sort of economy of scale that they get with other businesses,” Lee says. “In essence, especially within maintenance, we’re selling this labor. There is no economy of scale for labor. If I have to double my employees, it costs me twice as much. I don’t gain any efficiency necessarily there.”
Lee says while there isn’t free money built into their contracts they can just give away, they will work with customers to reduce the scope of their work, combining an acceptable level of service and quality with a better financial result.
“You get into a real slippery slope fast if you start negotiating on nothing,” Lee says. “You’re just giving stuff away, so the idea is explain the value, build the picture, and then from there help guide them through what services could be reduced that are going to have the least impact on their aesthetics or capital preservation.”
To Fuel Surcharge or Not to Surcharge?
One particular pain point recently has been the surging fuel costs. The challenge is deciding how much of this to absorb and how much to pass on to customers.
Corrigan says year-to-date their fuel costs are up 32% from 2025, by approximately $10,000 YTD.
“On an annual basis, if this remains as is, we will spend $40-$50K more on fuel this year,” Corrigan says.
Corrigan says so far they have absorbed these costs, but for new estimates and contracts they will be increasing their equipment costs to reflect the current prices.
With around 700 trucks on the road, fuel costs are having a big impact on Yardnique as well. DuMont says they have lost anywhere from half a point to three-quarters of a point in profit right now.
DuMont says the question of whether to activate a fuel surcharge is a fine line they walk because he is proud of the long-term partnerships they’ve had for 20 to 25 years.
“We don’t take those lightly,” DuMont says. “Those are true partnerships. Yes, we do have them in our contracts, where we say, ‘Hey, anything north of $4 we can implement a fuel surcharge,’ but we’ve taken a different approach to truly use this opportunity to show that we are a true partner, and letting our customers know, ‘Hey, we’re not raising our prices, and here’s why.’ Is it impacting us financially? 100%, but for us, it’s so hard to gain a customer for life, so our focus is on really making sure that we’re a true partner to our customers.”
Instead, DuMont says they are leveraging their GPS system, Samsara, to ensure the team is maximizing the best use of their time. He says only once you’ve exhausted all of the other ways to be productive and determined if this a profitable, ideal client, should you pass that cost on to the consumer.
Munie says for them the surge in fuel costs will affect their bottom line by about 1%. They also are not implementing a fuel surcharge.
“We have been able to get appropriately significant price increases since the pandemic; our customers have been loyal to us through that, and we just feel an obligation to hold true to our numbers,” Munie says.
One way Munie battles rising costs is by staying vigilant and making sure vendors aren’t pushing unreasonable price increases.
“We’ve had fertilizer suppliers tell us within a week after the war started that fertilizer prices are going up because of oil, and I’m like hang on and I got on the phone and was like, ‘Guys, what are you doing? Your fertilizer will be in storage through August,’” Munie says.
For EarthWorks, if fuel costs remain high, it will be an additional half-million-dollar expense for the year.
Lee says when expenses get out of balance due to external factors, they’ll make cuts where they can, but there’s not always a place where it makes sense to cut. He says they have regular conversations about at what point they should implement fuel surcharges, but he isn’t a fan of these as they feel reactionary.
“The reality is we’ll finally pull the trigger, and we’ll move forward with the fuel surcharge, and then the war will be over, and fuel prices will drop the next week, and then people be like, ‘Oh, well, the price of fuel is less than it was before the surcharge, so now do we get a discount?’” Lee says.
In uncertain markets, it’s not about absorbing every price increase, but knowing how to control costs internally while educating the client on how your work continues to protect the property’s long-term value.
