22-25.qxp_Grid 24/02/2022 14:01 Page 2
VIEWPOINTS
Inset: Publishers, suppliers and retailers are all weighing up how to best deal with the cost rises.
Weighing Up
The Costs Daniel Prince managing director of Danilo
“Danilo, along with many others within the industry, has experienced a number of cost rises over the last year. This includes shipping container costs which have gone up by 550% since 2020, paper costs which have increased between 10-20% and additional material costs rising by 5%. The impact of this has been that we have had to review our cost prices and having investigated different approaches, evaluated that that the best route has been via small percentage cost rises on certain products. We have tried to keep these rises to a minimum, have made considerable effort to inform our customers as soon as possible and have asked retailers to support an increase.” Resilience factor: “From a consumer perspective, I feel that the category is quite resilient, as shown by the continual purchase of cards over the past few years, even during lockdowns. However, consumers are coming under increased pressure from rising living costs and with cards and wrap often regarded as discretionary items, further category price rises are likely to result in reduced volume and spend this year.” Timeframe: “The hope has been that things would have settled down by the end of last year, but now it looks increasingly apparent that these raised costs will continue for a while yet.” Above: Daniel Prince is braced for cost rises to hang around for a while. Left: Shipping container costs have risen over 500% over the last two years.
At a time when UK inflation hits a 30 year high, sparking real concerns over those already living on bread line, cost rises (and raw material shortages) are hitting the greeting card industry from all angles. PG canvassed opinions from those all along the supply chain - printer, envelope company, publishers, agent and retailer - as to how they are feeling about the price rises and when they predict the situation abating.
Independent sales agent Richard Pass of STL agency (who represents Alljoy, Dandelion Stationery, Giftwrap UK, Redback Cards, Two Little Monkeys) in North of England “Virtually all my agencies have had to announce a price increase, fortunately this is industrywide and as such it hasn’t impacted negatively on the business. Card and gift companies are all facing a triple whammy increases in costs of raw materials, cost of shipping plus cost of production so it was inevitable that the prices would increase. They may need to increase again this year. Thankfully all the retailers are experienced in their business and understand this. The beauty of the card industry is that it isn’t really a price conscious market and the consumer seems to have accepted the price increases. The reality is that this industry is very strong, especially in the independent sector and what may have been seen as a negative has been embraced Above: Richard Pass believes the sector can live with retail price increases.
22
PROGRESSIVE GREETINGS WORLDWIDE
