Gift card boom points to upcoming post-COVID boom for high street

Despite rising costs and the pressures of post-pandemic recovery, new research has revealed a boom in gift card and voucher sales, pointing to strong UK retail performance in the first half of 2022.

According to the latest analysis from the Gift Card and Voucher Association (GCVA) and KPMG UK, consumer gift card sales increased across all channels, with in-store sales accounting for 54.7% of purchases as consumers continue to return to the main street.

Broken down by sectors, fashion retailers saw the highest levels of growth at 63.8%, with 75.8% of fashion gift card sales being physical gift cards.

The research also revealed that the leisure gift card industry has remarkably rebounded from the effects of the COVID-19 pandemic, with sales of gift cards for experiences, travel and entertainment up 94% on a comparable basis to the first half of 2021. .

Despite the resurgence of physical gift cards, the accelerated shift to digital gifts over lockdown has resulted in a permanent shift in shopping habits, it seems. Sales of digital gift cards continued their upward trajectory, with a like-for-like increase of 20.7%.

Further research by the GCVA in June found that gift cards are particularly resilient to the cost of living crisis, with 23% of UK adults planning to increase their spending on gift cards to make the process of more affordable current purchase.

Commenting on the findings, Gail Cohen, Managing Director of GCVA, said: “It is extremely encouraging to see that gift card and voucher sales have remained resilient despite an environment of inflation and rising cost. The industry has made a strong comeback after the challenges of the Covid-19 pandemic and gift cards continue to be a huge part of people’s spending habits.

“Many are using gift cards as an innovative way to mitigate the impact of the cost of living crisis, for example, to manage overall gift spending with fixed price cards and reduce additional costs associated with donations. This is reflected in the growth in sales of digital and physical gift cards.

“While retail is holding up, in-store B2C sales have increased, showing that people are coming back to stores and footfall is increasing.”

Don Williams, Retail Partner at KPMG, said: “The surge in digital gift card products seen during Covid-19 remains “locked in,” and the like-for-like growth of 22.7% in the first half of 2022 is particularly pleasing against the backdrop of the lockdown seen in the prior year. . Digital products look set to become the dominant form in the gift card and voucher market over the next year and continued investment in the availability and experience of these products should be a priority for all participants. »

Earlier today, The Confederation of British Industry said there was “no time to lose” before taking decisive action to help businesses tackle the energy crisis.

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