Despite improved economic indicators, competition has driven revenue down.
New York, NY (PRWEB) August 30, 2014
The Gift Shops and Card Stores industry is comprised of retailers who sell a range of gifts, gift wrap, novelty merchandise, souvenirs, greeting cards, party supplies, and seasonal and holiday decorations. The industry is highly fragmented and excludes retailers who operate primarily as used merchandise stores, electronic shopping and mail-order houses or discount retail stores.
During the five years to 2014, the industry has continued its long-term decline as a result of rising external competition. “Intensifying external competition, driven by big-box and discount retailers, such as Walmart and Target, has undermined demand for the industry's core servicesm,” according to IBISWorld Industry Analyst Dmitry Diment. Moreover, the industry has been hurt by the growing prevalence of e-commerce. In particular, demand for the industry's greeting cards segment has deteriorated rapidly as a result of rising competition from internet retailers, social-networking websites, auction websites and free virtual greeting card websites. Consequently, IBISWorld expects industry revenue to fall at an annualized rate of 2.4% to $4.0 billion over the five years to 2014, including a drop of 1.1% in 2014.
The industry's decline has been somewhat mitigated by broad improvement among various macroeconomic variables as the economy recovered from the recession. Because goods sold at gift shops and card stores are discretionary, disposable income is a key determinant of industry performance. Over the past five years, per capita disposable income has trended upwards, benefiting industry retailers. Likewise, tourism, which fuels demand for products sold at gift shops, has increased among both Canadian and international travellers. “These positive developments, underscored by a substantial rise in disposable income, are actually expected to push the industry to modest growth in 2015,” says Diment.
Nonetheless, trends of the past five years are expected to continue during the five years to 2019, facilitating the industry's decline. While disposable income and tourism among Canadians are projected to rise, external competition is expected to intensify at a greater rate. Big-box and discount stores, as well as online retailers, are expected to expand their operations, siphoning demand from industry retailers. Consequently, industry revenue is projected to decline over the next five years. In response, remaining operators are expected to consolidate amidst rising price competition and pressured profit margins.
For more information, visit IBISWorld’s Gift Shops and Card Stores in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
The Gift Shops and Card Stores retails a range of gifts, gift wrap, novelty merchandise, souvenirs, greeting cards, party supplies, and seasonal and holiday decorations. This industry excludes retailers that operate primarily as used merchandise stores, electronic shopping and mail-order houses or discount retail stores.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.