Rising To The Challenge

As we look forward to celebrating Easter in April, the King’s Coronation in May, and hopefully much else besides in 2023, for many, 2022 and all its woes seems a long time ago; and yet it was the year of rising inflation, increased mortgage repayments, increased energy and fuel costs, the outbreak of war in Ukraine - all major contributors to the costof-living crisis - rail and postal strikes, and three different Prime Ministers.

So how did independent gift retailers fare in what, to say the least, was a challenging year? PG&H’s 17th unique, annual retail barometer delved into the findings of the latest survey, with the majority of retailers reporting a decent year despite the hurdles.

The latest PG&H Retail Barometer revealed that 2022 was, on the whole, a surprisingly good one for gift indies, if a bit of a rollercoaster due to external factors.

Some two thirds of respondents reported that business in 2022 was better or the same as in 2021. The average spend increased for 70% of respondents, who reported it had increased slightly or significantly, or had remained the same. Despite the naysayers, Christmas turned out to be a strong one for many, with 70% of respondents (compared to 90% in 2021), confirming that Christmas 2022 was better or the same as Christmas 2021.

The biggest ‘positive’ was online/website expansion for those surveyed, (42%), with product diversification and staff tying for second place, and ‘shop local’ campaigns coming in at No. 3.

However, on the downside, the ongoing impact of the Covid19/Omicrom variant, coupled with the cost-of-living crisis had the biggest detrimental effect.

Home fragrancing was the strongest sector reported two thirds of respondents (67%), showing the biggest increase in 2022, followed by toys and games (60%) and greeting cards (57%). Some 83% invested in new products last year, and looking at the product areas gift indies see as ripe for further diversification this year eco/sustainable giftware is top of the list followed by home fragrancing, clothing, men’s gifts and greeting cards which all tied in second place.

Made in Britain too, was important to 93% of survey respondents. As for online trading, 57% of respondents reported a transactional website, with almost two thirds of respondents planning to develop their website further this year.

As for 2023, the mood seems encouragingly positive, with most retailers predicting that business will remain about the same or will see marginal growth this year. Showing their support for King Charles, over half of respondees said that they were planning to celebrate the Coronation in May.

How was Christmas 2022?

Having experienced an unsettling Christmas in 2022, with the costof-living crisis raging, disruptive rail and postal strikes causing havoc, and the media across the board putting out continuous, negative stories, the expectation was that consumers would tighten their purse strings when it came to Christmas gifting, with a lower spend expected as gift givers edited their present buying list or abandoned gift buying altogether.

However, 70% of respondents (compared to 90% in 2021), confirmed that Christmas 2022 was better or the same as Christmas 2021, with less than a third saying that it was worse.

Left: For many respondents, Christmas didn’t disappoint.

How did the average spend compare to Christmas 2021?

Interestingly, the findings of the PG&H Retail Barometer knocked the media’s predictions on the head when it came to gift buying, with 81% of respondents revealing that shoppers were determined to dig deep for the festive season. Less than a fifth said that shoppers spent less than the previous Christmas.

On The Downside

Which main factors had a detrimental effect on your business in 2022?

For 67% of respondents, the cost-of-living crisis (to include inflation, increased mortgage repayments and energy hikes) coupled with the hangover effect of the Covid-19/Omicrom variant, had the biggest effect on business last year, with half of those that responded also citing the expansion of online retail platforms such as Trouva, Faire and Ankorstore. (Last year’s figures are shown in brackets)

1= Cost-of-living crisis 67% (new entry)

1= Covid-19/Omicron 67% (1)

2 Expansion of online retail platforms such as Trouva, Faire, Ankorstore 50% (8=)

3= Supply chain disruptions (post Brexit/pandemic) 37.5% (4)

4= Charity shops selling gifts 25% (9)

4= Reduced visits from reps/agents 25% (2)

5 Lower consumer spend 22% (new entry)

How did your business fare overall in 2022 compared to 2021?

With challenges galore last year, two thirds of respondents reported that business in 2022 was better or the same as in 2021, although, as many respondents pointed out, 2021 was an unprecedented 12 months, with shops in lockdown for a significant part of the year, making it difficult to compare like-for like. Some 70% of respondents reported that the average spend increased slightly or significantly, or had remained the same.

On The Up

Which main factors had a positive effect on your business in the last year?

Online/website activity took the No. 1 spot for 42% of gift respondents in 2022, (leaping up five places), with product diversification and staff tying for second place. ‘Shop local’ campaigns made it to the No. 3 spot, followed by increased social media activity in fourth place. Increased promotional activity, and winning an award, or generating local media coverage, tied in fifth place. (Last year’s position is shown in brackets)

1 Online/website activity (6)

2= Product diversification (5)

2= Staff (new entry)

3 ‘Shop local’ campaigns (3)

4 Increased social media activity (7)

5= Increased promotional activity/initiatives (4=)

5= Winning an award/media coverage (9)

6= People still working from home (new entry)

6= Upsurge of new customers (2)

6= Competitive websites 20% (5=)

6= Empty shops in the vicinity 20% (7)

6= Parking issues 20% (5=)

6= People holidaying outside the UK 20% (new entry)

7 Competition from multiples 17% (6=)

8 Expansion of gift and home products in supermarkets 14% (6=)

9 Suppliers’ websites selling direct to the consumer 12% (6=)

Online Sales

Do you have a website for your shop?

According to respondents, a massive 88% of gift independents now have a website, with 57% having a transactional site, and 43% of respondees opting for one providing information only. Almost two thirds (63%) of respondents plan to develop their website further over the coming year, with a similar percentage intending to get a website up and running in 2023. For those with both bricks and mortar stores and an online business, 57% confirmed that the website drove footfall into their shop(s).

Product Matters

How did the following sectors fare in 2022?

(‘Star’ performers have been shown in blue)

Made In Britain

When purchasing a product, how important is it to you and your customers whether a product is Made in Britain/manufactured locally?

For many gift retailers, supporting local suppliers is very important, with many finding that locally designed and manufactured products ring up sales. A whopping 93% of respondents confirmed that Made in Britain was important or very important to them when placing orders in 2022.

‘Must Have’ Products

New, New, New

Did you invest in new products in 2022?

A huge 83% of respondents reported that they had invested in new products last year, to include jewellery, sentiment giftware, bath and body, interiors and leisurewear.

Finding New Avenues

Eco-friendly/sustainable giftware was anticipated as the most significant growth sector this year for almost a third of retail barometer respondees. This was followed by the sweet smell of success for home fragrancing products (25%), a sector that continues to grow year on year for gift retailers, tying in second place with clothing, men’s giftware and greeting cards. Other gift categories expected to see growth this year include gift books, food gifts, games and puzzles, jewellery, home accessories and gift-led stationery.

Which product areas would you like to further expand/diversify in in 2023?

(In alphabetical order) Eco

Top: New product investment included jewellery. (Shown are earrings from Hot Tomato).

Above left: Games are seeing growth. (Shown is Phone Escape Room from Boxer Gifts).

Above right: Environmental concerns were a major focus in 2022.

Which three gift/home suppliers’ products could you not do without in your shop(s), and which were your ‘hero’ products in 2022?

Stand out top sellers were (in alphabetical order): Jellycat (plush) and Joma Jewellery (A Little bracelets).

Other winners included Ashleigh & Burwood’s fragrance lamps, Freckleface’s wax melts and Wrendale Designs’ bamboo socks.

Environmental Issues

Did environmental concerns play a part in your gift buying decisions over the past year? The environment continues to be a major topic, with people looking to do what they can, however small, to help save the planet - both personally and in business. Unsurprisingly, a whopping 87% of gift shops confirmed that it was a decision maker when it came to selecting products and placing orders.

Did you make changes to your suppliers and/or the running of your business on the environmental front in 2022?

Almost three quarters of gift shops taking part in the survey (73%), confirmed that they had changed or found new suppliers based on their environmental credentials (62%), and had also made changes to their businesses accordingly, with more vigilant recycling (62%) also at the top of the list.

1= Increase in stocking suppliers with greater sustainable credentials

1= More vigilant recycling

2= Reduction in plastic bags

2= Reduction of gifts or cards with glitter

3 Introduction of paper bags/‘bags for life’

4 Persuading staff to be more sustainable

5 Change of energy provider

Have you expanded your ranges of eco products over the past 12 months, and to what extent have environmental concerns impacted on gift sales?

A significant 87% of survey respondents confirmed that they had expanded the number of eco products stocked in their shop(s). Almost all respondents said that environmental concerns had impacted on gift sales, with sales remaining the same or slightly increasing in 2022.

Up For Promotion

Did you run promotions and/or advertising for your shop in the last year?

Some 95% of respondents said that they had run promotions in 2022, with social media activity again way out in front, taking the top spot (63%). This was followed by charity fundraising (38%), up four places, and in-store money off/discount promotions (31%). Other ways in which gift retailer respondents promoted their stores included Facebook live events.

(Last year’s figures are shown in brackets)

1 Social media promotions (1)

2 Charity fundraising (5)

3 In-store money off/discount promotions (2)

4= Customer events (6=)

4= Loyalty cards (3)

4= Gift voucher scheme (4)

4= Free gift promotions (6=)

5= Press advertising (6=)

5= Leaflets (8)

5= Collaboration with other local retailers/businesses (7=)

5= BOGOF (or similar) (7=)

Socially Speaking

Is social media a vital tool in promoting your business?

Once again, social media is seen as one of the most important and biggest drivers in the independent gift shop armoury, with 75% seeing it as vital. Facebook is used by 100% of respondents, followed by just over two thirds using Instagram (67%). Other sites helping to drum up business include Twitter, used by a third of respondents, and LinkedIn (8%).

Celebrating The King’s Coronation

Are you planning any celebrations to mark the King’s Coronation on 6 May?

With the King’s Coronation homing into view, almost half of respondents said that they were planning to celebrate the historic occasion, with gift retailers looking forward to hanging out the bunting and decorating their shops with flags. As well as show stopping window displays, there will also be celebratory food and drink in store, as well as related, keepsake Coronation giftware.

Connecting With The Community

Which local organisations were you involved with in 2022?

Threats And Opportunities

As an independent retailer, what are your biggest concerns in 2023?

Supermarket Challenge

How do you view supermarkets’ continuing expansion on the gift and home front?

Supermarkets, allowed to sell everything during lockdown, to include gifts and homewares, continued to be a threat to independent gift shops in 2022, with over 80% of respondents viewing them as a threat or serious threat.

Third Party Selling

How do you view third party online operators in the gift and home sector (eg Amazon)?

Although shopping online saw huge growth in 2021, due to lockdowns, there has been a positive change in how people are choosing to shop now, with ‘shop local’ gaining ground, helped by more people working from home. Although almost two thirds (63%) of respondents saw third party operators as a threat in 2022, this compared to 88% in 2021.

Selling Direct To Consumers

How do you view gift and home suppliers selling online direct to the public?

For independent gift retailers, suppliers selling online direct to consumers remains an issue, with 75% (compared to 88% in 2021) of respondents viewing it as a threat or a serious threat.

Exclusively Yours

Do you see geographical exclusivity of supply as an issue?

While once, having product exclusivity in their location was of paramount importance to indies, the pendulum is swinging, with 56% of those surveyed saying that it is no longer as important

Garden Centre Growth

How do you view garden centre growth in the gift and home sector?

As garden centres continue to expand, becoming ‘mini department stores’ as many describe them nowadays, they have evolved to become the biggest single retail threat for gift independents, with a huge 88% citing them as their biggest threat or serious threat in 2022.

It’s Showtime

Are you hoping to attend any trade exhibitions this year?

Some 87% of gift shops are intending to visit trade shows over the next 12 months, with almost all respondents planning to head off to Spring Fair, closely followed by Autumn Fair, Home & Gift, Harrogate, and PG Live.

Other ways in which gift respondents keep up to speed with industry news, views and products included regularly reading Progressive Gifts & Home and www.GiftsandHome.net

Cautious Optimism

What are your expectations for your business in 2023?

Most retailers predict that business will remain about the same or will see marginal growth this year, with 6% predicting significant growth. However, a quarter of respondents said they expected to see a decline.

Investing In The Future

What investments did you make in your shop(s) in 2022?

Investing in new shop units (50%) was the biggest investment for gift independents in 2022, with almost a third giving their shop a partial re-fit and/or investing in their website. Over 40% intend to make further improvement to their store this year, to include new signage and a lick of paint.

People Matter

For three quarters of respondents, staffing levels will remain the same in 2023, with a further 12% looking to recruit new members of the team, and the same percentage looking to reduce the number of people on the payroll. As for opening new stores, only 6% said they would be doing so.

At The Source

When it comes to sourcing products and placing orders, 80% of indies said that the number of suppliers they currently deal with would increase or remain the same this year, with 60% adding that they would not be increasing their online orders in 2023. As for service levels, just over two thirds (67%) said they had improved slightly or significantly, or remained the same.

Could We Have A Word Please?

Which word (polite!) would you select to describe the UK gift and home industry today?

Once again, gift indies chose the word ‘challenging’ to sum up the gift industry, alongside ‘unpredictable’ On the positive front, words included ‘bright’, ‘strong’ and ‘diverse’

Fun Stuff

Who would you most like to receive a gift from? (Celebrity, politician, dignitary, fictional character etc., dead or alive?)

A diverse range of people included King Charles, Claudia Winkleman and Grayson Perry

Celebrity Watch

Which famous person would you most/least like to walk into your shop?

The welcome mat would be given an extra hoover if Sir David Attenborough, Tom Cruise, Brad Pitt, the Princess of Wales, Emma Thompson or Sarah Lancaster walked through the door to buy a gift, while the likes of Boris Johnson, Jeremy Clarkson, Liz Truss, Angela Rayner and Madonna, would swiftly be shown the door.

Crystal Ball Time

How do you view the future of independent gift shops in the next one to three years?

Despite a rollercoaster few years, some 53% of respondents feel positive or very positive about the future of gift retailing.