A more social Christmas will support Card Factory on its recovery, says GlobalData

Following the trading update from Card Factory this morning:

Zoe Mills, Senior Retail Analyst at GlobalData, a leading data and analytics company, offers her view:

“With the festive period upon us, Card Factory is heading into the event in a weak position, with two-year store like-for-likes down 3.0% in Q3 FY2021/22. While transaction numbers are down on a two-year like-for-like basis (-20.9%), average basket sizes continue to exceed pre-pandemic levels, up 22.5%, as consumers prepare for more sociable celebrations. The anticipated festive get-togethers offer the greeting cards specialist an opportunity to recoup lost sales from earlier in the year. Card Factory must focus on encouraging impulse greeting cards and complementary gifting purchases, appealing to shoppers with its price credentials.

“Demand for Christmas products is rife, with 60.8% of UK consumers having already started their festive shopping by early October, compared to 48.6% in 2020 according to GlobalData Retail’s October 2021 monthly consumer survey. Card Factory’s decision to bring forward its third drop of Christmas cards is the right move to keep up with heightened demand. Despite its vertical supply chain, the greeting cards specialist is not immune to supply chain issues, with it warning that a small proportion sourced from the Far East are subject to delays. With this disruption likely to hit its gifting ranges most, Card Factory must ensure it provides shoppers with other options to bolster average transaction values.”

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