Retail: voucher sales up 20%.

The second quarter of 2010 saw ‘exceptional growth’ for the voucher and gift card sector with sales totalling £388.5million, the industry trade body revealed on 11 August.

Employee incentives

UK Gift Card & Voucher Association (UKGCVA) director general Andrew Johnson told ModernSelling.com: ‘These latest sales figures spell fantastic news for the industry with strong performances across the board. As the recession begins to subside, organisations are becoming more confident in re-introducing incentives for their employees and vouchers and gift cards provide the perfect mechanic for this.

He added: ‘In the consumer market, vouchers and gift cards provide an effective gifting solution that covers a vast array of different tastes suitable for all occasions.’

Like-for-like sales

Like-for-like sales were up 22% when compared with the same period in 2009, a performance that outshines the wider retail sector, according to the British Retail Consortium’s (BRC).

Like-for-like percentage growth of voucher sales during this quarter was at least twice that achieved at the height of the market in 2009 and is the strongest ever recorded. Consumer sales were up by 24% to £172m and sales in the business-to-business sector leapt by 20% year-on-year to £216m.

Compiled as part of thee BRC’s full sales data report on the retail sector, members of The UK Gift Card & Voucher Association (UKGCVA) – which include leading high street retailers, department stores, supermarkets, online retailers, B2B agencies and industry service providers – submitted their data for sales of gift card and voucher products to form what is the ‘most authoritative financial overview of the industry’.

By category

Sales of retail vouchers/gift cards increased overall by 20% to reach £296m. This growth is marked in particular by a strong performance from department stores and other non-food stores, which grew by 17% and 22% respectively, far outstripping wider market growth of 2-4%. It’s also worth noting that B2B sales in the retailer category – in decline in the previous period – have made a complete recovery, growing by 15% to £147m, according to the UKGCVA.

The leisure category grew by 11% year-on-year on the back of solid gains made in the last period. The bulk of the growth came from B2B, which was up by an outstanding 26%, with sales now worth £10m, a third of the value of the leisure category as a whole. This is an impressive performance when considered against the wider leisure market, up by just 2.5% in the same period.

Like-for-like sales of vouchers by agents continue to make striking gains, growing by 37% to £63m, now representing 16% of the total voucher market. Consumer sales via agents are also growing strongly, albeit from a small base, by over 50% to £3m over the period, but it’s B2B sales that take the bulk of the market here.

By channel

Sales of vouchers online have remained flat this quarter, with consumer sales sticking at £10m and B2B at £2m.

Corporate direct sales are up by a striking 20%, more than double the growth rate achieved between Q1 09 and Q1 10. Notably, internal sales increased by 35%, again surprising on the back of consecutive declines. All evidence points towards healthy corporate spending on vouchers this quarter.

In store is still the place where the majority of consumers buy their vouchers. Sales of vouchers through this channel amount to £151m, an increase of 26% over the period. Gift card centres continue to make outstanding gains, up by 77% and worth £7m in Q2.

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