WHSmith has added to its empire with a new discount chain called Card Market. Retail Week pays a visits to the retailer’s Swindon branch.

How low can you go? If you’re in the business of selling greetings cards, one answer might be 19p. That’s the price of part of the range offered by Card Market, WHSmith’s new discount cards fascia.

The first Card Market stores opened last month and one is in Swindon, home of the parent retailer.

The shop is in The Brunel, a shopping mall in the heart of the Wiltshire town that was once all about steam trains and latterly has become a production centre for Honda cars among other things.

The shopping centre might fairly be described as a low-cost development, if the tenants are anything to judge by, although Marks & Spencer, Sainsbury’s and Boots all have branches there.

This is a stamping ground for Calendar Club (yes, it sells calendars), 99p Stores, a House of Fraser Outlet and Carole’s Crafts indicating that this is a location for price-conscious shoppers.

Card Market, Swindon

Owner: WHSmith

Location: The Brunel

Ambience: Clinton Cards back in the day

Low-margin model

All of that makes sense as far as Card Market is concerned. If one of the core platforms of an offer is 19p greetings cards, margins are going to be narrow and therefore high expenditure on a lease, long or short, is unlikely to be part of the equation.

But first a couple of thoughts about the genesis of Card Market. To an extent, although WHSmith declined to comment on the motivation for creating a discount format of this kind, it is hard not to look at the success of competitor Card Factory.

Card Factory is just two units along from Card Market in The Brunel and is part of an empire that was started in 1997 and now has more than 700 stores, has floated on the stock market and which continues to generate EBITDA advances.

Why would a retailer with capacity to enter this part of the spectrum not want to do so?

The outcome is a store that looks remarkably like its near neighbour and rival in terms of the appeal made to the passing shopper. Both have glassline banners where the emphasis is on price – in the case of Card Factory shoppers are informed that small cards are ‘now from 29p’ while Card Market has round decals stating that gifts are ‘from 99p’ while cards ‘from 19p’.

The major difference is the size of the shops and the manner in which they have been merchandised.

Card Factory has a ‘pile it high, sell it cheap’ ambience right the way up to the windows. Indeed, the window to the left of the entrance has packs of cards more or less blocking views into the shop. Peer through the right-hand window and this is a small, very densely merchandised store with all of the diagnostic signs of a cheap card shop – vast amounts of overhead signage and shiny helium-filled balloons tethered to the mid-floor gondolas. As well as price, the message that is heavily promoted is ‘quality and value’. Overall, this looks a very crowded space, but its appeal is easily understood.

“If one of the core platforms of an offer is 19p greetings cards, margins are going to be narrow”

John Ryan, Stores editor

Along the mall at Card Market, the storefront is of an almost identical size. The windows and position of the entrance are also the same. Even the logo is of a very similar size and form. The difference is that the shopper can easily see into the shop.

Inside it is brightly lit, principally owing to the fact that it is less crowded and that the floor is a light vinyl wood, rather than an office-blue carpet.

Card Market’s interior smacks of Clinton Cards in a previous life, with vinyl-wood mid-shop fixtures and perimeter trim and slatwall at every turn.

Cheap and cheerful

The heavy emphasis on price is everywhere, from the cuddly toys at £3.99, which fill the left-hand perimeter at the front of the shop, to the 19p card message that is pretty much ubiquitous.

Cheap and cheerful is the order of the day and there is a conspicuous amount of circulation space. The two members of staff who were behind the counter at the cash desk – it was almost closing time – said that this store “has more aesthetic appeal” than Card Factory. Maybe so, but these look for all the world like two sides of the same coin.

In fairness, if Clinton Cards had looked like this and priced its products similarly, it would probably not have had the problems that engulfed it a couple of years ago.

That it looked the same, but had stores that were located in much higher-profile locations, with correspondingly increased rents, was one of the major contributory factors to its demise and takeover by American Greetings.

The other point about Card Market is that it is sufficiently different in terms of price from WHSmith stores for it not to represent a competitive threat to the main chain.

According to a WHSmith spokesman, the eponymous retailer is eyeing the “premium” end of the card market and there is room for that and a discount format.

WHSmith also owns online card retailer Funky Pigeon and has opened a handful of branded stores predominately in travel hubs.

Ten locations were chosen for the initial tranche of Card Market openings. That was followed, at the beginning of this month, by a further 10 in towns and cities from Brighton to Bromley. The real question is whether there is indeed room for this latecomer to the discount card retailers’ ball?

Given the success Card Factory has enjoyed and its continued expansion with a “small number” of stores that will open in Ireland in 2015, there continues to be a strong appetite for this kind of retailing. Equally, however, its store portfolio is so large that making inroads will be difficult for any newcomer, even if the bottom price for a card at Card Market is 10p lower than Card Factory.

On the evidence of the Swindon store, Card Market has a more welcoming appearance and there is a sense that if WHSmith decides to run with this one it could create an Aldi v Lidl-style competitive arena for the greetings card market.

And even at the lowest end of the market, in terms of price, as with Lidl and Aldi, there is still room for the creation of in-store environments that have appeal.