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cardsharp
Musical
Chairs
Cardsharp was thinking the other day, when it comes to UK greeting card retailing, every decade has had a dominant feature. He recalled that in the 1990s and the noughties, it was all about the dominance of Clintons; the teenies were all about the rise and rise of Moonpig and Card Factory while so far, the twenties so far have been all about the grocers. And with these massive retail accounts, it’s been a bit like musical chairs, reflected Cardsharp, pondering about what will happen when the music stops next. As everyone knows supermarkets’ greeting card sales went through the roof during the pandemic and although high street retailing has opened up again and supermarket sales have dropped back a bit, the net result of the last couple of years has undoubtably seen an increase in the grocers’ market share of the card industry. But the game of ‘musical chairs’ has seen the respective victors of these mega accounts rotate over the years, changing the fortunes of the broker who wins the top ‘chair’. Cardsharp thought back to the recent industry news that UK Greetings has secured Tesco’s business from 2022 onwards, taking over from Hallmark. But then five years previously, Hallmark pulled off an audacious coup winning Tesco from UKG. ‘Plus ça change, plus la même chose’, which roughly translated means, ‘The more that changes, the more of the same’. Meanwhile, Woodmansterne managed to regain upmarket grocer, Waitrose last year, after losing it five years
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PROGRESSIVE GREETINGS WORLDWIDE
Above: It has always been a case of ‘musical chairs’ of which publisher is ‘in the seat’ as the main category partner of the respective grocers. Left: UKG becomes Tesco’s broker for greeting cards at the start of next year. Below: Morrisons is now owned by CD&R, the same private equity company that is the majority shareholder of American Greetings, UKG’s parent company.
previously to Hallmark. Talk about revolving doors! And Cardsharp can see the major grocer situation becoming even more fluid in the future. Morrisons has traditionally been very loyal to their supply chain, but
that was when the influence of the late great Ken Morrison was still strong. The recent rather unseemly auction for the Yorkshire-based grocery chain, means that Clayton, Dubilier & Rice (CD&R), a highly leveraged US private equity company now owns Morrisons (coincidently CD&R became the majority shareholder of American Greetings, UKG’s parent company, in 2018). Private equity is generally about brutal short-term maximization of profit and that can mean decisions can be taken that are not in the long-term interest of the brand or the company Moreover, Asda was recently sold by Walmart for £6.8 billion to a private equity consortium fronted by two Blackburn-based millionaire brothers, Mohsin and Zuber Issa, in a heavily leveraged deal. And there are rumours that Sainsbury’s and even our largest grocer, Tesco, may be subject to hostile overseas takeover bids.