State of the Canadian Greeting Card Industry

By Clancy Delbarre Exec Dir., Greeting Card Association of Canada
January 2003

The economic doldrums of the early '90s led to increased competition amongst retailers and publishers each seeking to increase or at least maintain market shares. That period also saw the birth of "everything for a dollar" stores which in turn led to more discounting by other store chains who wished to retain their customers and who were not about to give up sales. Publishers also were reluctant to give up this market to any one supplier and geared up to provide low price cards to this discount sector.

Overall unit sales of greeting cards increased only modestly over the past decade, in the area of 1 to 2% per year. Although the consumer was well served by the increased selection of lower price cards, publishers saw profit margins shrink to zero. The cost of manufacturing a greeting card to retail at $1.00 (bearing in mind that the Canadian Dollar is only worth 64¢ U.S.) is such as to rule out any profit margin unless overhead costs are absorbed by other products or quantity runs are in the hundreds of thousands.

Who will be the brave soul, retailer or publisher, who decides that the Dollar price point greeting card can no longer be sustained? Will someone explore a higher but still discounted price point such as $1.49? Bearing in mind that some retail chains only offer a 10% or so discount off traditional prices and those are not expected to change their policies in that regard.

China, becoming the major low cost producer of many products to the world is an unknown factor and possibly in position to supply the dollar price point for the upcoming decade. We may see more production of greeting cards shift to that country.

No one is prepared to say what the next decade holds for greeting cards. Electronic greetings have had only a nominal effect, perhaps capturing 1 or 2% on the traditional paper and ink greeting card sales, the consensus being that electronic greetings are largely used by people who would not have purchased a traditional card in the first place. The trend also is towards payment required rather than free supply of designs on the internet.

Computer users are expected to gravitate towards the traditional product as time goes on, convenience and selection being the major contributing factors as well as more creative embellishments on the manufactured product.

Charity cards, other than at Christmas, have not had any noticeable impact and even at Christmas their market share has not shown growth exceeding industry norms.

The Canadian market is small, estimated total annual retail sales of approximately $750 million dollars and the number of publishers is also small, perhaps a dozen or so of significance with the majority share of the market in the hands of two dominant publishers. A challenge to publishers aspiring to serve the whole market is the requirement for french texted product estimated at approximately 16% of the total. Idioms of the French Canadian language differing from that of french spoken in France means that texting has to be done locally.

Although mainly dependent on our largest trading partner, the United States, and the North American Free Trade Agreement (NAFTA), the Canadian economy is currently showing growth in the 3 to 4% range, much higher than the U.S. This has been largely fueled by the Automotive and Housing sectors both of which are noted cyclical industries. It is only a matter of time before these two sectors dip downwards and it is hoped that they do not do so simultaneously as the effect would be felt throughout . Every job in these industries directly and indirectly generates 7 more jobs in other goods and services sectors.
State of the Association

The Association operates at a low key, serving mainly as a watch dog over regulatory bodies ( government, postal authorities, etc.) assessing their impact on the industry and taking concerted action when necessary. Our members collectively serve roughly 90% of the total market .

The industry enjoys a good relationship with Canada Post. Format based pricing has been in effect for many years. Recently sorting equipment has been installed at Canada Post plants which will handle the U.S. standard lettermail size which was larger than the Canadian standard. Square cards are nonstandard and subject to higher postage rates. There are no increases in lettermail postage rates for 2003.

Detailed industry statistics are hard to come by; the intense competitive nature of the market and the small number of players precludes obtaining much information. Government statistical information does not measure activity pertinent to our industry.

We do not currently operate a web site but that may change depending on whether or not our members see any benefit in having one.

 
actualities

New charts with information
of the greeting card market
in Germany in 2008.
A study of GFK ordered by AVG,
Feb. 2009

Foreign Greeting Card Markets:
United Kingdom 2002
Canada 2002
USA 2002
USA - Facts and Trends -