8 April 2022
Local gift cards power retail and hospitality recovery on Britain’s high streets
Two years on from the onset of pandemic restrictions, local gift cards are powering retail and hospitality recovery on the high street
Payments provider Miconex says that independent retail and hospitality businesses were the most popular places for consumers to spend their local gift cards in 2021.
“Looking at the data for the 2021 top 10 Town & City Gift Card programmes, we can see that overall, 72% of redemptions were for retailers with 19% for food and drink based businesses,” said Colin Munro, managing director of Miconex. “Local gift cards have the power to support retail and hospitality recovery, and many other sectors too.
“Independent businesses made up 83% of registered merchants in 2021 across the top 10 programmes. Two years on from the start of the pandemic and small, independent businesses need our support more than ever. ONS data shows that there were 6.5% fewer private sector businesses in January 2021, the largest fall in 20 years.”
Aberdeen, Enniskillen, East Ayrshire, Cambridge, Belfast, Barnsley, Perth, East Lothian, York and Kirkwall recorded sales of over £1.2 million for their local gift cards in 2021, a 32% increase on 2020. In addition to retail and hospitality, Town & City Gift Cards can be spent with leisure and attractions, health and beauty and services. The programmes are active in 70 plus towns and cities in the UK and Ireland.
Retail and hospitality have been particularly impacted by the pandemic. UK Hospitality estimates that the hospitality sector lost over £80 billion in sales between April 2021 and March 2021, equating to £220 million each day. Meanwhile, the BRC estimates that the three lockdowns cost non-essential retail an estimated £22billion in lost sales.
Independent department store Browns in York is one of the most popular places to redeem a York Gift Card
In York, 32% of 2021 redemptions of the York Gift Card at food and drink businesses, 58% at retail and 4% at both accommodation and leisure and attractions. Over 300 businesses are part of the York Gift Card, making it the largest local gift card in the UK.
Angela Horner is the Associate Director at Browns and is part of the York BID Board:
“I think Browns is one of the most popular places to spend a York Gift Card because we’ve got a wide offer. The brands, the departments, fashion, cosmetics, handbags, shoes. Local people love Browns, they’re very fond of it, and they’re happy to be able to spend their gift card with us. They’re not looking for the practical, they want to treat themselves with something decadent such as cosmetics or a handbag. If they’d never normally spend quite so much on a perfume or a handbag, or maybe see a brand as being a little bit expensive, having a gift card gives people the permission to spoil themselves.
“Being a part of the York Gift Card encourages new people through the door, and then, they have a positive experience, and we can convert them into loyal, regular customers. The good thing about the gift card is that it can be spent on a whole experience of the city. In York we have a really strong independent scene, we have lots of tourists and a big student population. The York Gift Card works for everyone.
“Retail and the high street will survive if it adapts, and initiatives like the York Gift Card play a big part in that. By getting behind the gift card, we’re all working together to bring people into the city centre. It’s a ‘use it or lose it’ situation with shops. If people don’t shop with the businesses, they won’t be here. The York Gift Card is a very positive thing to drive footfall, and that’s what we need”
East Lothian had 66% of gift card redemptions in 2021 at retail, 23% at hospitality and 5% at leisure and attractions.
Strawberry Corner Garden Centre is one of the most popular places to redeem the East Lothian Gift Card with over £3000 of redemptions in 2021 alone.
Neil Duffield is a Director at Strawberry Corner:
“When I heard about the East Lothian Gift Card, I was happy to join it. It’s a local gift card and the benefit to our business is that there is no commission for us to accept the gift card. It costs us nothing so it was a no-brainer to take part. People pay with the East Lothian Card and it works like a debit card and the money is in our bank like any other card payment. Our credit card payments are linked to our EPOS, so it was simple enough to register, nothing complicated.
“We see East Lothian Gift Cards come through on a regular basis and what we’ve noticed is that people tend to keep their gift card for something special. So, instead of the functional items like landscaping materials, they’ll spend it on shrubs, trees or water features. Every time they look at that shrub or water feature, it’s a reminder of the person that bought them the gift card and I think it’s a really nice way to spend it.
“Because they’ve received it as a gift, people look upon the East Lothian Gift Card as free money, so they’ll maybe splash out on that mini greenhouse or something they hadn’t budgeted for. Most people come in to spend their East Lothian Gift Cards between March and June, and we get lots over Christmas too.
“The East Lothian Gift Card has worked for us as a business with lots of extra sales through the till, and that’s what it’s all about. 90% of our sales are card payments, and as a business you need to find as many ways of accepting payment as possible. For any business thinking of joining their local gift card, I’d say there’s no harm in trying. It’s another method of payment and if you’re not part of it, then you’re losing sales.”
Enniskillen in Northern Ireland had 70% of redemptions in retail in 2021, 13% in hospitality, 9.3% at health and beauty and 3.5% at accommodation.
Three of the most popular places to spend an Enniskillen Gift Card in 2021 were restaurant The Firehouse, Irish bar The Crowe’s Nest and The Westville Hotel, with almost £10,000 in redemptions.
Shane Browne is the Group Sales & Marketing Manager for Westville Hospitality, owner of the three Enniskillen businesses:
“The Firehouse is one of the most popular restaurants in Enniskillen at present, so it’s not surprising that it’s one of the most popular places to spend an Enniskillen Gift Card too. The good thing about the Enniskillen Gift Card is that it allows people to use it at other places too. We’re happy to be a part of the Enniskillen Gift Card, and give people all opportunity to use their card across all sectors- hospitality, accommodation, retail and more.
“Things are naturally becoming more expensive now, so people are more likely to use their Enniskillen Gift Card on a treat, so maybe going for a meal on a Monday or Tuesday night when they’d normally only eat out on a weekend.
“It’s also a fantastic add on for our hotel guests. Not every hotel guest wants to eat at the hotel, and by adding on an Enniskillen Gift Card, it gives the customer flexibility on where they want to dine, and to encourage guests to really experience Enniskillen.”