Declining sales at Clinton Cards are symptomatic of changing dynamics in the greeting cards sector rather than a weak economy, according to retail research agency Conlumino.
In the 26 weeks to January 2012 Clinton’s total sales declined by 4.7% and like-for-like sales by 1.1%.
Neil Saunders, managing director of Conlumino, said: “Overall this is a disappointing set of results. Although Clinton makes reference to weak consumer confidence, in our view a fragile economy has little significant impact on greetings card purchases and these numbers say more about the dynamics of the card sector than they do about anything else.
“There are three fundamental shifts which are impacting on Clinton’s performance. First, there is a longer term softening of demand for greetings cards as consumers find other ways of communicating; this looks to be irreversible and makes growing sales ever harder.
“Second, the sector is now much more competitive as many players, including the grocers and high street stores, have their own credible card and wrap offerings; these often have the advantage of convenience and keen pricing. Third, a rapidly growing digital card market is actively taking share away from the physical stores; with more innovation in this segment this trend will continue.
“While Clinton’s proposition is not ideally suited to such dynamics, it deserves credit for undertaking a review to put the business on a sound footing, the results of which will be known next month.
“In our view the key to future success is relevance: Clinton needs to give consumers reasons to visit, part of which will involve making shops more inspirational and putting in place a coherent digital strategy. In our view it is also inevitable that Clinton needs to reduce store numbers further and faster; we also believe the struggling Birthdays chain should be offloaded to allow a focus on the core proposition.
“Clinton is a business under pressure. It has a lot of things stacked against it, including a forthcoming rise in postal prices, which will generally be unhelpful to the market. However, it is a business that seems to understand the pressures and is proactively tackling them.”