UK Greetings Cards Market Research Report Released

Villeurbanne, France, October 15, 2007 --(PR.com)-- The UK greetings cards market is a mature one, where volume growth is limited and competition is intense. Retailers find it more efficient, and ultimately cheaper, to work with fewer suppliers delivering more products, and these suppliers are frequently foreign competitors with lower production costs than those in the UK. From historically having a favourable overseas trade balance until 2004, the trade deficit for greetings cards and illustrated postcards reached £40m in 2006, as the value of UK exports increased insufficiently to compensate for the rise in imports.

Rising interest rates also continue to increase the strength of the pound against the US dollar, making conditions more difficult for exporters of greetings cards.

Nevertheless, the UK greetings cards market is renowned for its innovation and design skills, and the value of retail sales increased by a further 3.6% in 2006, to an estimated £1.4bn. An increase in population numbers, longevity and expanding family networks through divorce and remarriage mean an increase in the number of card-giving occasions and in the number of potential recipients. At the same time, the growth among minority ethnic groups offers considerable potential to increase sales of multicultural cards. Although there is a price-sensitive element to 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. Key Note's exclusive consumer research found that, in 2007, penetration of birthday and Christmas cards was as high as 93.2% and 90.2%, respectively, albeit this represented a decrease from the penetration rates recorded in a similar survey undertaken in 2006.

The greetings cards industry appears confident that any risk from electronic greetings is minimal, although it should, perhaps, be mindful of the fact that younger consumers have increased their usage of these forms of greeting in lieu of a traditional card. Other potential difficulties facing the greetings cards market include the growing encroachment of non-specialist retailers (particularly the supermarkets) into the market, Royal Mail's imposition of Pricing in Proportion (PiP), further intended closures of Post Offices and the need, in common with other industries, to be seen to be as environmentally friendly in its production as possible. Failure to do so may mean further `green' legislation and/or adverse publicity.

Key Note forecasts that, between 2007 and 2011, the total UK greetings cards market will continue to grow by between 1.9% and 2.4% year-on-year.