Blue Eyed Sun

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How will Royal Mail's Price Increases affect the Card Industry?

It's been a busy week in the news for greetings cards. Sharon Little, Chief Executive of the Greetings Card Association, appeared on the BBC Breakfast News to discuss the 30% price increase in Royal Mail's stamps and Clinton Cards announced poor results.

With many retailers relying on card sales to bring core bread and butter revenue and footfall into their stores, the sharp increase in price of postage stamps is a concern. Will such a noticeable rise alter the card buying and sending habits of our card crazy country? We do love our cards in the UK and send an average of 31 greetings cards a year each. Our total annual spend on single cards in the UK is £1.39 billion which supports over 100,000 card related jobs. Christmas card sales raise over £50 million a year for charities too. Does this mean they too may lose even more, much needed, revenue in the coming years? Will e-cards and the internet take over and radically alter the card industry in the way that the internet has forever altered other sectors like book selling?

Well, when hysteria strikes it always helps to look at the facts first. So let's do the sums on this shock 30% price increase. If we each send 31 cards a year on average and we post them all using first class stamps we are currently spending £14.26 (31 x £0.46). Increasing the price to 60p each means we will be spending £18.60 instead. This is an annual spending increase of £4.34 to show our loved ones how much we care.

All age groups still love receiving cards for special celebrations and sending them definitely strengthens relationships. According to a recent study people aged 18-24 need to receive at least nine cards to feel valued on their birthday (that's in addition to texts, calls and messages on social networks like Facbook and Twitter). The relationships we care enough about to celebrate, by posting greetings cards, are unlikely to be changed overnight and, if anything, the higher cost of stamps is even more likely to show the recipient how much they are truly valued.

Because we tend to give cards to those closest to us, the recipients are often literally close to us too, so the majority of our cards tend to be delivered by hand (we find this especially true in the handmade sector). If we take this into account as well, I'm not sure that this headline making price rise will have a noticeable effect on the card sending. We still love sending and receiving cards in the UK and an extra £4 a year is hardly worth worrying about. Royal Mail has struggled to make profit for several years now and if you think about what it actually takes to get a card from you to a friend in Scotland the next day, 60p doesn't seem too bad.

**** 1 April 2012 ***** Additional note since first posting this:

I just saw this great comment from a reader at the bottom of the BBC article on this subject:

"Those complaining that the post is to expensive and the internet is 'free' are conveniently forgetting the £500 or so they paid for their computer, plus software, plus say £10 a month for broadband. Not so free now is it? For those on fixed incomes like pensioners this is a double blow on top of their pension freeze. Buy a computer? Only worth it if you send more than 1800 letters in 5 years."

You can read the BBC article on the stamp price increases by clicking here