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Viewing report
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Greetings Cards Market Report Plus 2003
Key Note Publications Ltd, Sep 2003
The UK market for greetings cards, both publishing and retail, is one of maturity and intense competition. Two US companies, American Greetings Corporation and Hallmark Cards Inc. dominate the global market for publishing cards and, in recent years, their UK subsidiaries have expanded through acquisitions. Of the hundreds of `other publishers' identified by official statistics (Business Monitor PA1003), which include publishers of greetings cards, just 7.1% have annual turnovers in excess of £1m - a fair indication of the fragmentation of the market. Almost three-quarters of companies involved in `other publishing,' liable to pay VAT, currently have turnovers of less than £250,000 and more than a quarter have annual sales below £50,000.
The UK greeting card publishing sector is renowned for its design and innovation and enjoys a favourable trade balance. However, the value of greetings card imports into the UK has steadily risen since the mid-1990s so that the trade surplus stood at just £13.6m in 2002 compared with a peak of £45.1m in 1996. The majority (92%) of the value of greetings card and postcard imports into the UK was attributable to imports coming from countries outside the European Community, primarily Hong Kong and China, which, combined, accounted for 88% of the value of non-EC imports and 81% of total imports in 2002.
In May 2003, the retail side of the industry witnessed unexpected change with a surprise takeover of the chain Card Warehouse by its rival, Cardfair. It remains to be seen if this creation of a sizeable `value' chain will result in still lower prices that will do little for the value of the market, currently valued in excess of £1bn. Christmas and New Year greetings cards account for the greatest share of the market volume at around 70%, yet only 28% of the retail value in 2002.
The UK has an established card culture comprising avid buyers or those merely sending out of a sense of duty. In fact, its population sends more cards per capita than any other country and, according to a recent Bmrb Access survey, only 3% of respondents admitted to not buying or sending any type of greetings cards. Publishers are constantly launching new designs to fuel this demand and the industry on the whole strives to introduce new occasions. In recent years there has also been a proliferation of cards conveying many more sentiments, such as `Thinking of You' and `Missing You' and cards with inspirational messages.
Potential threats to the health of the market include the introduction of format-based pricing, imposing postal surcharges on non-standard size envelopes as used for around a quarter of greetings cards is. Such regulations have had a punitive effect on the markets of other countries, such as Germany and Australia, and are being forcefully opposed by the UK's Greeting Card Association. There is an opinion that the threat of e-greetings, meanwhile, may not be as damaging as anticipated and may even have a positive effect on demand for traditional cards that are seen as more thoughtful and individual.
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