Greeting Cards Market Report Plus 2006

The UK greetings cards industry is a mature one, in which the value of retail sales is virtually static and competition is intense. While dominated by the US giants Hallmark Cards and American Greetings, there is a myriad of small publishers that contribute to the diversity of the UK industry and the innovation for which it is justifiably renowned. More than a quarter of UK publishers of items other than newspapers currently have turnovers of less than £50,000, while just 1.3% achieves sales in excess of £5m.

The days of high profit margins for greetings cards publishers look to be well and truly over in this oversupplied market. Bearing in mind the relatively low production cost of a card compared with the average selling price, margins should be healthy, but publishers have little choice but to comply with the increasingly stringent demands of multiple retailers (including the leading supermarket chains). Another characteristic of the market is the growth in the discount retailing of greetings cards. These difficulties have resulted in many corporate casualties and near-casualties. Further consolidation on both the retailing and publishing sides of the industry looks inevitable in the future.

In common with other manufacturing sectors, the UK publishing industry struggles to compete with overseas operators with lower production costs. Some companies, including International Greetings PLC and Hallmark Cards PLC, have moved some of their own production facilities overseas. The UK now has a trade deficit in greetings cards — whereas its surplus was as high as £31.2m in 1995.

On the positive side, longevity and expanding family networks through divorce and remarriage mean an increase in the number of card-giving occasions and of potential recipients for greetings cards. The industry continues to endeavour to persuade the card-buying public to embrace more card-sending occasions. While there is a price-sensitive sector of the market, it is also the case that many consumers do not begrudge spending significant amounts on quality cards that serve as keepsakes, and the UK has the highest per capita consumption of greetings cards, with the average consumer sending 55 cards each a year. It is little wonder, then, that the industry put up such a fight to prevent the imposition of Pricing in Proportion (PIP) by the Royal Mail. Its failure to do so means that the scheme, effective from August 2006, makes it more expensive to post letters and cards of other than standard size and weight. It is to be hoped that its implementation does not stunt creativity in the industry or confuse consumers into sending fewer cards. In a difficult market, the UK greetings cards industry can do without such negative aspects, as it strives to maintain a buoyant market value. SHOW LESS READ MORE >

1. Market Definition

Report Coverage

MARKET SECTORS

Everyday Cards

Christmas and New Year Cards

Spring Season Cards

MARKET TRENDS

Wholesale and Direct to Retail

Family Structures

Sending Occasions

The Bridal Market

Growth of the Ethnic Minority Population

Alternative Means of Communication

Economic Trends

Gross Domestic Product

Table 1: UK Gross Domestic Product at Current and Annual Prices (£m), 2001-2005

Inflation

Table 2: UK Rate of Inflation (%), 2001-2005

Household Disposable Income

Table 3: UK Household Disposable Income Per Capita (£), 2001-2005

Population

Table 4: UK Resident Population Estimates by Sex (000), Mid-Years 2001-2005

Unemployment

Table 5: Actual Number of Unemployed Persons in the UK (million), 2001-2005

MARKET POSITION

The UK

Table 6: Household Expenditure on Newspapers, Books and Stationery at Current Prices (£m), 2001-2005

Overseas

2. Market Size

The Total Market

Table 7: The Total UK Retail Market for Greetings Cards by Value at Current Prices (£m at rsp and %), 2001-2005

Figure 1: Sector Share of the Total UK Greetings Cards Market by Value (%), 2005

MARKET SECTORS

Birthday and Other Everyday Cards

Table 8: The UK Everyday Cards Sector by Value at Current Prices (£m at rsp), 2004 and 2005

Christmas and New Year Cards

Table 9: The UK Christmas and New Year Cards Sector by Value at Current Prices (£m at rsp), 2004 and 2005

Spring Cards

Table 10: The UK Spring Cards Sector by Value at Current Prices (£m at rsp), 2004 and 2005

Overseas Trade

Table 11: UK Balance of Trade in Greetings Cards and Illustrated Postcards (£m) 2001-2005

EU Trade

Table 12: UK Imports and Exports of Greetings Cards and Illustrated Postcards Within the EU by Country by Value (£000), 2005

EU Imports

EU Exports

Non-EU Trade

Table 13: UK Imports and Exports of Greetings Cards and Illustrated Postcards Outside the EU by Region by Value, 2005

Non-EU Imports

Table 14: UK Imports and Exports of Greetings Cards and Illustrated Postcards Within Asia and Oceania by Value (£000), 2005

Non-EU Exports

Leading Export Publishers

Table 15: Percentage of Sales of Leading Publishers Derived from Exports (%), 2004/2005

3. Industry Background

Recent History

number of companies

Table 16: Number of UK VAT-Based Enterprises Engaged in Publishing by Type by Turnover Sizeband (number and %), 2005

Employment

Table 17: Number of UK VAT-Based Local Units Engaged in Publishing by Type by Employment Sizeband (number and %), 2005

Regional Variations in the Marketplace

Distribution

From the Publisher

Wholesale or Direct to Retail

Own-Label

Card Buying Groups

Franchises

Brokerage

Direct to the Consumer

From the Retailer

Specialist Greetings Cards Retailers

Multiple Retailers

Supermarket Chains

Confectioners, Tobacconists and Newsagents

Post Office

Charity Shops

Others

HOW ROBUST IS THE MARKET?

LEGISLATION

The Commercial Agents (Council Directive) Regulations 1993

Green Claims Code 1998

Printers' Imprint Act 1961

key TRADE ASSOCIATIONS

Confederation of Paper Industries

The Giftware Association

The Greeting Card Association

4. Competitor Analysis

Market Leaders

Table 18: Top Ten Companies Involved in Greetings Cards by Turnover (£m and %), 2004/2005

Table 19: Top Ten Companies Involved in Greetings Cards by Pre-Tax Profit Margin (%) 2004/2005

Publishers

Hallmark Cards PLC

Company Structure

Current and Future Developments

Financial Results

International Greetings PLC

Company Structure

Current and Future Developments

Financial Results

The Paper House Group PLC

Company Structure

Current and Future Developments

Financial Results

UK Greetings Ltd

Company Structure

Current and Future Developments

Financial Results

Retailers

Clinton Cards PLC

Company Structure

Current and Future Developments

Financial Results

Greeting Card Group Ltd

Company Structure

Current and Future Developments

Financial Results

Outside Suppliers

Paper and Board Suppliers

Printers

Specialist Greetings Cards Envelope Manufacturers

Display Equipment and Shopfitting

Administrative Services

MARKETING ACTIVITY

Main Media Advertising Expenditure

Table 20: Main Media Advertising Expenditure on Greetings Cards (£000), Year Ending 31st March 2006

Recent Promotions

Hallmark Cards

The Royal Mail

Simon Elvin Promotion

Exhibitions

UK Exhibitions

Spring and Autumn Fairs

Summer Fair London

Harrogate Home & Gift

Top Drawer

1ST! FAIR Harrogate

International Exhibitions

National Stationery Show

Paperworld

5. Brand Strategy

Introduction

Types of Cards

Traditional

Contemporary

Humorous

Cute/Whimsical

Juvenile

Photographic/Fine Art

Licensed

Current Events

Multi-Cultural/Religious

Cards for the Male Market

Same-Sex Cards

Selected New Ranges from Publishers

Awards

Greeting Card Retail Awards

The Henries

Table 21: Winners of the Henries Awards, 2005

6. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

7. Buying Behaviour

HOUSEHOLD EXPENDITURE

By Gross Income Decile Group

Table 22: Average Weekly Household Expenditure on Diaries, Address Books, Cards, etc. by Gross Income Decile Group (£), 2005

By Age of Head of Household

Table 23: Average Weekly Household Expenditure on Diaries, Address Books, Cards, etc. by Age of Head of Household (£), 2005

CONSUMER penetration

Traditional Cards

By Age and Sex

Table 24: Purchase of Greetings Cards by Age and Sex (%), 2006

By Social Grade

Table 25: Purchase of Greetings Cards by Social Grade (%), 2006

By Geographical Region

Table 26: Purchase of Greetings Cards by Type by Geographical Region (%), 2006

Electronic Greetings

By Age and Sex

Table 27: Use of Electronic and Text Greetings by Age and Sex (%), 2006

By Social Grade

Table 28: Use of Electronic and Text Greetings by Social Grade (%), 2006

By Geographical Region

Table 29: Use of Electronic and Text Greetings by Geographical Region (%), 2005

8. Current Issues

CLOSURES, MERGERS AND ACQUISITIONS

Beaumonde

Card Crazy

Card Store

Kardonia

Kingsley Cards Ltd

Simon Elvin

Wayzgoose Ltd

BOARD AND SENIOR MANAGEMENT CHANGES

Birthdays

Clinton Cards

Greeting Card Group

Hallmark Cards

International Greetings

Paper House

FACTORS AFFECTING THE GREETINGS CARDS INDUSTRY

Pricing in Proportion

Charity Cards

Charity Shops

The Royal Mail Faces Competition

The Future of the Post Office

Environmental Concerns

9. The Global Market

The European Market

The US Market

The Louie Awards

SELECTED GLOBAL COMPETITORS

Albert Horn Söhne GmbH & Co

American Greetings Corporation

Busquets

Hallmark Cards Inc

Paramount Cards Inc

10. Forecasts

introduction

Gross Domestic Product

Table 30: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2006-2010

Unemployment

Table 31: Forecast Actual Number of Unemployed Persons in the UK (million), 2006-2010

Population

Table 32: Forecast UK Resident Population by Sex (000), Mid-Years 2006-2010

forecasts 2006 to 2010

Table 33: The Forecast Total UK Greetings Cards Market by Sector by Value (£m at rsp), 2006-2010

Market Growth

Figure 2: The Forecast Total UK Greetings Cards Market by Value (£m at rsp), 2001-2010

Future Trends

11. Company Profiles

Clinton Cards Plc

Greeting Card Group Ltd

Hallmark Cards Plc

International Greetings Plc

Uk Greetings Ltd

12. Company Financials

13. Consumer Confidence

METHODOLOGY

KEY FINDINGS THIS QUARTER

THE WILLINGNESS TO BORROW

Confidence Declines Again

Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), May 2005, August 2005, November 2005, February 2006 and May 2006

Signs That the Decline Could be Bottoming Out

Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), May 2005, August 2005, November 2005, February 2006 and May 2006

THE WILLINGNESS TO SPEND FROM SAVINGS

Sharp Decline in Spending from Savings

Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), May 2005, August 2005, November 2005, February 2006 and May 2006

Table D: The Proportion of Adults Without Any Savings (%), May 2005, August 2005, November 2005, February 2006 and May 2006

Borrowing Grows in Relative Importance

Table E: The Average Amounts Adults are Confident Spending to Purchase Expensive Items (£ and %), May 2005, August 2005, November 2005, February 2006 and May 2006

14. Further Sources

Associations

Publications

Government Publications

General Sources

Other

Bisnode Sources

- Albert Horn Söhne GmbH & Co
- American Greetings Corporation
- Beaumonde
- Busquets
- Card Crazy
- Card Store
- Clinton Cards Plc
- Greeting Card Group Ltd
- Hallmark Cards Plc
- International Greetings Plc
- Kardonia
- Kingsley Cards Ltd
- Paramount Cards Inc
- Simon Elvin
- The Paper House Group PLC
- UK Greetings Ltd
- Wayzgoose Ltd