By Michael Johnson, Managing Director, Card Connection
The franchise industry in the UK is growing. It has been estimated that the size of the industry has tripled in the past 20 years. Further, research completed by the British Franchise Association and NatWest published in January 2014 – the NatWest bfa Franchise Survey – reports a 20% increase in franchise employment over the past 5 years.
The survey states the total number of people now employed in franchising in the UK is 561,000, of which just under half are in full-time employment. The overall contribution of franchising to the UK economy is estimated at £13.7 billion – up 2.4% on 2013; which equates to just under 1% of GDP.
These facts clearly demonstrate that the franchised business model is here to stay and represents a real chance for people to own and run a successful business. And, with 930 different franchise systems in operation in the UK, there are plenty of sectors to choose from! Interestingly, the opportunities are not just limited to the UK, with a quarter of the franchise systems in the UK now exporting their business model abroad too.
So how does the greetings card industry fit in?
The UK market as a whole is valued at over £1.6 billion at retail, employing an estimated 100,000 people in the UK: from publishers to artists, photographers and printers to warehouse and distribution companies to retailers.According to the Greeting Card Association Market Report 2015, “Figures from 2012 onwards show the UK market has emerged from recession and is experiencing a sustained growth in sales across all occasions.” The total value of single cards sold in the UK in 2014 stood at £1.39 billion with 878.8 million single cards being sold in this period. This is estimated to be an increase of 7.77% compared with the previous year.
This positive trend forecasts an optimistic future for this established industry sector. Good news for retailers, publishers, franchisors and most importantly franchisees. There are a number of sales outlets in the greetings card market including supermarkets, high street stores, independent retailers, market stalls, plus online sales.
Card Connection’s model which has been established for more than 20 years, enables franchisees to distribute quality greetings cards to retailers on a ‘consignment’ basis. Franchisees target a mix of independent retailers and some national account retailers. The award winning model means stores only pay for what they sell and has proved popular throughout the UK over two decades.
Often new franchisees ask us about the rise in online and personalised greetings cards and how these distribution models are affecting the market. Interestingly, statistics obtained from UK Greetings, show that online sales account for only a small percentage of total market sales. Between 2010 and 2014 online card sales have remained flat at around 4% of market share and must surely struggle to attract much more incremental business?
The independent and convenience sector which accounts for around 15% of the market, also remains comfortably static over the same period. If you are considering franchising then the statistics provided in this article should help you build a picture of the industry. When it comes to the greeting card market, no other country has such a tradition of sending greetings cards and the sector can offer some interesting franchising opportunities in an established and stable marketplace.
Card Connection is one of the UK’s most successful card publishers and is the market leader in the franchised distribution of greeting cards. Card Connection is part of UK Greetings, which is a subsidiary of American Greetings Inc., one of the largest greeting card publishers in the world and has limited vacancies for franchisees that are keen to run an expanding business.