UK gift card and voucher sales continued to thrive in the second half of 2023, growing a combined 7.4% on a like-for-like basis, “demonstrating robust growth in the market despite a backdrop of a difficult year for the UK economy”, the Gift Card & Voucher Association (GCVA) has said.

The body’s research, in conjunction with KPMG, shows the rise was driven by transactions in grocery, leisure and fashion, as retailers overall recorded a 7% increase in sales growth in H2. 

Despite consumers reining-in discretionary spending, fashion retailers saw an overall 6.1% growth in sales on a like-for-like basis. However, supermarkets made up for the bulk of usage, driving 20.5% higher on a year ago, and the leisure sector reported 13.7% growth on a like-for-like basis.

But GCVA members in this space reported varying success in sales of gift cards and vouchers “highlighting the diverse trading conditions in which retailers are operating”.

The purchase of digital gift cards grew 17.6% within B2B and made up 42.7% of overall sales across the last six months of 2023. While it was expected that digital purchases might overtake physical gift cards last year, physical still represents over half of sales, “reflective of in-store sales making up the largest share of the market in B2C”. 

Despite this, the acceleration of digital gift card purchases can be best seen when compared to the same period five years ago. In 2019, digital sales made up just 18.7%. 

Meanwhile, B2B retains the largest share of the gift card and voucher market following a post-pandemic boom. Its share continues to increase, up 15.6%, led by the use of gift cards for employee benefits, savings and salary sacrifice as consumers and businesses alike seek ways to dilute the impact of high costs. 

Don Williams, Retail Partner at KPMG UK, said: “Against [the economic] backdrop, the performance of the gift card and voucher segment has been strong and extremely pleasing. We continue to believe there is lots of opportunity for the industry going forward whether that be in employee benefits, and the continued trend of ‘self-gifting’ as a response to the current challenges around disposable income, and particularly in ensuring the journey from purchase to gift (to self or to another) to redemption is seamless whichever environment the customer chooses to operate in: physical or digital.”