Birthdays are set to get more expensive, according to Card Factory bosses, who have revealed the cost of greetings cards is rising.
The company said inflationary pressures have seen card prices already rising and higher price points are expected to last throughout the year.
Bosses also revealed the hit they took from the pandemic has almost been reversed and they expect sales to beat pre-Covid levels by this year.
A spokesperson for Card Factory said: “As previously guided in January, the board expects significant inflationary headwinds to continue through (the current financial year).
“Pre-emptive action has already mitigated a significant proportion of the identified inflationary headwinds through a combination of efficient management of costs and working capital as well as targeted price increases.”
The company added there has been a shift away from a reliance on major peaks in business linked to national celebrations, including Valentine’s Day and Mother’s Day, towards everyday ranges of birthday cards and general greetings, which make up 70 per cent of sales.
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Chief executive Darcy Willson-Rymer explained how the past year had seen an improvement, although the reopening of physical stores took a knock to online sales.
He said: “We saw a steady recovery in store performance as lockdown restrictions eased, particularly in the run-up to Christmas with store sales approaching pre-pandemic levels in this key trading period.
“As we reopened our stores, we saw our online performance decline slightly year on year; however, we remain greatly encouraged that our Card Factory online sales were significantly ahead of pre-pandemic levels.
“This year will see us make further progress in developing our customer proposition, through a broader product range and improved online experience, as part of our transition to a leading omnichannel retailer.”
Overall sales in the 12 months to the end of January were up 28 per cent to £364.4m, with pre-tax profits hitting £11.1m compared to a £16.4m pre-tax loss a year earlier.
Store sales were up by 33 per cent year-on-year due to an extra 20 per cent more store trading days as pandemic restrictions ended.
However, online sales fell 13.5 per cent on a like-for-like basis.
The company added it would not be paying a dividend until loans taken out during the pandemic, including the Government’s Covid-19 loan scheme, are repaid.
Russell Pointon, director of consumer at Edison Group, said the end of lockdown had helped drive Card Factory’s growth.
He added: “The group also delivered good progress across its strategic priorities. During the period, both online platforms were transitioned into a single platform to unlock cost benefits.
“The group also opened its first new ‘model store’ and strengthened its leadership team. Looking ahead, it anticipates key strategic milestones to include expanding its market share in complementary categories, such as stationery, confectionary and toys, and completing the rollout of trial ‘model stores’.
“It also plans to open its first Central London stores and continue its Republic of Ireland expansion as the group targets further growth.”
“In anticipating the widespread impact of inflation to continue, Card Factory has taking significant pre-emptive action including price increases as consumers are set to continue facing rising costs. Looking ahead, its recovery leaves it well placed to navigate current economic uncertainty and continue driving further growth.”