KN21063

KEY NOTE STATIONERY : April 2003

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This report covers: box files, storage boxes, paper, board,account books, diaries, exercise books, albums, photograph albums, binders, folders, file covers, business forms, listing paper, book covers, blotting pads, blotting paper, self adhesive paper, gummed paper, paper, paperboard stationery, plastic products, school, writing instuments, filing trays, cabinets, metal filing trays, paperclips, staples, typewriter ribbons, printer ribbons, non-paper and board stationery items, envelopes, writing paper, school stationery,

Companies covered include: Acco UK, Avery Dennison Office Products, Charles Letts & Co., Esselte UK, Avery Post Office Products, John Dickinson Stationery, Sanford UK, Corporate Express, Globus Office World, Guilbert UK, Kingfield Heath, Lyreco UK, Office Depot International, OyezStraker Group, Ryman, Spicers, Staples, Dudley Office Supplies,

TABLE OF CONTENTS

Executive Summary 1

1. Market Definition 12

REPORT COVERAGE 12

MARKET SECTORS 12

Paper and Board Stationery 12

Other Stationery 13

MARKET TRENDS 13

Direct Mail Volume Continues to Rise 13

Prices Held Down and Margins Squeezed 13

Downtrading from the Top Brands 14

Low Demand for Some Traditional Products 14

Electronic Storage and Transmission Has Not Produced a Paperless Office 14

Growth in Demand from Schools and Students 14

Increased Emphasis on Style and Colour 15

ECONOMIC TRENDS 15

Inflation 15

Table 1: UK Rate of Inflation ( percent), 1998-2002 15

Unemployment 15

Table 2: Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 16

Population 16

Table 3: UK Resident Population by Sex (000 and percent), Mid-Years 1998-2002 16

Gross Domestic Product 17

Table 4: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100), 1997-2001 17

Household Disposable Income 17

Table 5: Index of Household Disposable Income (index 1971=100 and percent), 1997-2000 17

MARKET POSITION 18

The UK 18

Table 6: The UK Stationery Market Compared With Other Related Markets by Value at Current Prices (£bn at msp), 1998-2002 18

Overseas 19

Table 7: Comparison of Selected Major National Stationery Markets by Value (£bn at msp), 2002 19

2. Market Size 20

THE TOTAL MARKET 20

Table 8: The Apparent UK Market for Stationery by Value at Current Prices (£m at msp and percent), 1998-2002 20

Table 9: The Apparent UK Market for Stationery by Main Product Sector by Value at Current Prices (£m at msp), 1998-2002 21

The Consumer Sector 23

Table 10: The UK Market for Stationery and Drawing Materials — Including Greetings Cards — by Value at Current Prices and Constant 1995 Prices (£m at rsp and percent), 1998-2002 23

BY MARKET SECTOR 24

Paper and Board Stationery 24

Box Files and Storage Boxes 24

Table 11: The Apparent UK Market for Box Files and Storage Boxes of Paper and Board by Value at Current Prices (£m at msp and percent), 1998-2002 24

Boxed Stationery Assortments 24

Table 12: The Apparent UK Market for Boxed Stationery Assortments by Value at Current Prices (£m at msp and percent), 1998-2002 25

Envelopes 25

Table 13: UK Manufacturers' Sales of Envelopes by Value at Current Prices, Producer Price Index and Constant 1995 Prices (£m at msp and index 1995=100), 1998-2002 26

Table 14: Imports and Exports of Envelopes by Value and Volume (£m, 000 kg and £/kg), 1998-2002 27

Table 15: The Apparent UK Market for Envelopes of Paper and Board by Value at Current Prices (£m at msp and percent), 1998-2002 28

Registers, Account Books, Notebooks, Letter Pads, Diaries and Similar Products 29

Table 16: The Apparent UK Market for Registers, Account Books, Notebooks, Letter Pads, Diaries and Similar Products by Value at Current Prices (£m at msp and percent), 1998-2002 29

Exercise Books 30

Table 17: The Apparent UK Market for Exercise Books by Value at Current Prices (£m at msp and percent), 1998-2002 30

Albums 30

Table 18: The Apparent UK Market for Albums by Value at Current Prices (£m at msp and percent), 1998-2002 30

Binders, Folders and File Covers 31

Table 19: The Apparent UK Market for Binders, Folders and File Covers by Value at Current Prices (£m at msp and percent), 1998-2002 31

Multipart Business Forms and Computer Listing Paper 32

Table 20: The Apparent UK Market for Multipart Business Forms and Computer Listing Paper by Value at Current Prices (£m at msp and percent), 1998-2002 32

Book Covers, Blotting Pads, Etc. 33

Table 21: The Apparent UK Market for Book Covers, Blotting Pads, etc. by Value at Current Prices (£m at msp and percent), 1998-2002 34

Cut Self-Adhesive or Gummed Paper 34

Table 22: The Apparent UK Market for Cut Self-Adhesive or Gummed Paper by Value at Current Prices (£m at msp and percent), 1998-2002 35

Paper and Board Cut to Size for Writing or Printing 35

Table 23: UK Manufacturers' Sales of Paper and Board Cut to Size for Writing or Printing by Value at Current Prices, Producer Price Index and Constant 1995 Prices (£m at msp and index 1995=100), 1998-2002 36

Table 24: The Apparent UK Market for Paper and Board Cut to Size for Writing or Printing by Value at Current Prices (£m at msp and percent), 1998-2002 36

Other Paper or Board Stationery Items 37

Table 25: The Apparent UK Market for Other Paper and Board Stationery by Value at Current Prices (£m at msp and percent), 1998-2002 37

Other Stationery 37

Office and School Supplies of Plastic 37

Table 26: The Apparent UK Market for Office and School Supplies of Plastic by Value at Current Prices (£m at msp and percent), 1998-2002 38

Writing Instruments 38

Table 27: The Apparent UK Market for Writing Instruments by Value at Current Prices (£m at msp and percent), 1998-2002 39

Table 28: The Apparent UK Writing Instruments Market by Product Sector by Value at Current Prices (£m at msp and percent), 1998-2002 40

Metal Filing Trays and Cabinets for Desktop Use 41

Table 29: The Apparent UK Market for Metal Filing Trays and Cabinets for Desktop Use by Value at Current Prices (£m at msp and percent), 1998-2002 41

Fittings for Binders and Files, Paper Clips, Staples, Etc. 42

Table 30: The Apparent UK Market for Fittings for Binders and Files, Paper Clips, Staples, etc. by Value at Current Prices (£m at msp and percent), 1998-2002 42

Typewriter and Printer Ribbons and Ink Pads 42

Table 31: The Apparent UK Market for Typewriter and Printer Ribbons and Ink Pads by Value at Current Prices (£m at msp and percent), 1998-2002 43

Other Non-Paper or Board Stationery Items 43

Table 32: The Apparent UK Market for Other Non-Paper or Board Stationery Items by Value at Current Prices (£m at msp and percent), 1998-2002 43

OVERSEAS TRADE 44

General Overview 44

Table 33: Net Imports of Stationery to the UK by Imports and Exports by Value (£m), 1998-2002 44

Imports 44

Table 34: Import Penetration of the UK Stationery Market by Value at Current Prices (£m and percent), 1998-2002 45

Table 35: UK Imports of Stationery by Main Product Type by Value at Current Prices (£m), 1998-2002 45

Table 36: Import Penetration of the Stationery Market by Main Product Sector by Value ( percent), 2002 47

Paper and Board Stationery 48

Box Files and Storage Boxes 48

Boxed Stationery Assortments 48

Envelopes 48

Table 37: UK Imports of Envelopes by Source by Value (£m and percent), 2001 48

Registers, Account Books, Notebooks, Letter Pads, Diaries and Similar Products 49

Table 38: UK Imports of Registers, Account Books, Diaries, etc. by Source by Value (£m and percent), 2001 49

Exercise Books 49

Albums 49

Binders, Folders and File Covers 49

Multipart Business Forms and Computer Listing Paper 50

Book Covers, Blotting Pads, Etc. 50

Cut Self-Adhesive or Gummed Paper 50

Paper and Board Cut To Size for Writing or Printing 50

Table 39: UK Imports of Paper and Board Cut to Size for Writing and Printing by Source by Value (£m and percent), 2001 50

Other Paper or Board Stationery Items 51

Office and School Supplies of Plastic 51

Table 40: UK Imports of Plastics for Offices and Schools by Source by Value (£m and percent), 2001 52

Writing Instruments 52

Table 41: UK Imports of Pens, Propelling Pencils and Parts of Pens by Source by Value (£m and percent), 2001 53

Table 42: UK Imports of Pencils, Crayons, Chalks, etc. by Source by Value (£m and percent), 2001 54

Metal Filing Trays and Cabinets for Desktop Use 54

Fittings for Binders and Files, Paper Clips, Staples, Etc. 54

Typewriter and Printer Ribbons and Ink Pads 54

Other Non-Paper or Board Stationery Items 54

Exports 55

Table 43: Stationery Exports as a percentage of UK Manufacturers' Sales by Value at Current Prices (£m and percent), 1998-2002 55

Table 44: UK Exports of Stationery by Main Product Type by Value at Current Prices (£m), 1998-2002 55

Table 45: Stationery Exports as a percentage of UK Manufacturers' Sales by Main Product Sector by Value ( percent), 2002 57

Paper and Board Stationery Items 58

Box Files and Storage Boxes 58

Boxed Stationery Assortments 58

Envelopes 58

Registers, Account Books, Notebooks, Letter Pads, Diaries and Similar Products 58

Table 46: UK Exports of Registers, Account Books, Diaries, etc. by Destination by Value (£m and percent), 2001 58

Exercise Books 59

Albums 59

Binders, Folders and File Covers 59

Multipart Business Forms and Computer Listing Paper 59

Book Covers, Blotting Pads, etc. 59

Cut Self-Adhesive or Gummed Paper 59

Paper and Board Cut to Size for Writing or Printing 59

Table 47: UK Exports of Paper and Board Cut to Size for Writing and Printing by Destination by Value (£m and percent), 2001 60

Other Paper or Board Stationery 60

Office and School Supplies of Plastic 60

Table 48: UK Exports of Plastics for Offices and Schools by Destination by Value (£m and percent), 2001 61

Writing Instruments 61

Table 49: UK Exports of Pens, Propelling Pencils and Parts of Pens by Destination by Value (£m and percent), 2001 62

Metal Filing Trays and Cabinets for Desktop Use 62

Fittings for Binders and Files, Paper Clips, Staples, Etc. 62

Typewriter and Printer Ribbons and Ink Pads 62

Table 50: UK Exports of Typewriter and Similar Ribbons by Destination by Value (£m and percent), 2001 63

Other Non-Paper or Board Stationery Items 63

3. Industry Background 64

RECENT HISTORY 64

INDUSTRY SYNOPSIS 64

Table 51: Manufacturers of Paper and Board Stationery by Turnover, Pre-Tax Profit, Profit Margin, Average Remuneration and Current Ratio (£000, percent and £), Latest Financial Years 65

NUMBER OF COMPANIES 65

Table 52: Number of UK VAT-Based Enterprises Engaged in the Manufacture of Paper Stationery† by Turnover Sizeband (£000), 1998-2002 66

Table 53: Number of Units Manufacturing Paper Stationery by Number of Employees (number of factories in each sizeband), 1998-2002 67

EMPLOYMENT 67

Table 54: Number of Employees in the Stationery Manufacturing Industry, 1997-2002 67

Table 55: Leading Employers in the Stationery Manufacturing Industry (number of employees at financial year end), 1997-2001 68

Table 56: Selected Leading Employers in the Commercial Stationery/Office Products Distribution Industry (number of employees at financial year end), 1997-2001 69

REGIONAL VARIATIONS IN THE MARKETPLACE 69

Table 57: Average Household Expenditure on Greetings Cards, Stationery and Paper Goods by Region (pounds per week per household), 2000/2001 70

DISTRIBUTION 70

The Consumer Market 70

The Office Market 71

Wholesalers 71

The Contract Dealers 71

Local Independent Dealers and Retailers 72

Direct Dealers 72

Office Products Superstores 72

Internet Services 73

HOW ROBUST IS THE MARKET? 73

LEGISLATION 74

KEY TRADE ASSOCIATIONS 75

BOSS Federation 75

Envelope Makers and Manufacturing Stationers' Association 75

National Association of Paper Merchants 75

4. Competitor Analysis 76

THE MARKETPLACE 76

MARKET LEADERS — MANUFACTURING 76

Acco UK Ltd 77

Company Structure 77

Current and Future Developments 77

Financial Results 77

Avery Office Products UK Ltd 77

Company Structure 77

Current and Future Developments 78

Financial Results 78

John Dickinson Stationery Ltd 78

Company Structure 78

Current and Future Developments 78

Financial Results 79

Sanford UK 80

Company Structure 80

Current and Future Developments 80

Financial Results 80

PRODUCT SECTOR LEADERS 80

Personal Stationery 80

Envelopes 80

Registers, Account Books, Notebooks, Etc. and Exercise Books 81

Diaries and Organisers 81

Binders, Folders and File Covers 82

Multipart Business Forms and Continuous Computer Stationery 82

Table 58: Selected Market Leaders in the UK Business Forms and Continuous Stationery Sector by Turnover (£m), 2001/2002 82

Paper and Board Cut to Size for Writing and Printing 83

Writing Instruments 83

Desk Accessories 84

MARKET LEADERS — COMMERCIAL STATIONERY DISTRIBUTION 84

Table 59: Selected Market Leaders in the Commercial Stationery and Office Products Sector by Turnover (£m), 2001/2002 85

Corporate Express Ltd 85

Company Structure 85

Current and Future Developments 85

Financial Results 86

Globus Office World PLC 86

Company Structure 86

Current and Future Developments 86

Financial Results 86

Guilbert UK Ltd 86

Company Structure 86

Current and Future Developments 86

Financial Results 86

Kingfield Heath Ltd 87

Company Structure 87

Current and Future Developments 87

Financial Results 87

Lyreco UK Ltd 87

Company Structure 87

Current and Future Developments 87

Financial Results 88

Office Depot International (UK) Ltd 88

Company Structure 88

Current and Future Developments 88

Financial Results 88

OyezStraker Group Ltd 88

Company Structure 88

Current and Future Developments 88

Financial Results 88

Ryman Ltd 89

Company Structure 89

Current and Future Developments 89

Financial Results 89

Spicers Ltd 89

Company Structure 89

Current and Future Developments 89

Financial Results 90

Staples (UK) Ltd 90

Company Structure 90

Current and Future Developments 90

Financial Results 90

PERSONAL STATIONERY RETAILERS 90

OUTSIDE SUPPLIERS 90

Paper Mills 90

Table 60: Production, International Trade and Consumption of Paper and Board in the UK (million tonnes), 2000-2001 91

Other Suppliers 92

MARKETING ACTIVITY 92

Main Media Advertising 93

Table 61: Main Media Advertising Expenditure on Office Stationery (£000), Years Ending September 2001 and 2002 93

Table 62: Main Media Advertising Expenditure by Office Suppliers (£000), Years Ending September 2001 and 2002 94

Table 63: Main Media Advertising Expenditure on Fountain and Ball Pens (£000), Years Ending September 2001 and 2002 94

Table 64: Main Media Advertising Expenditure on Household Stationery and Sundries (£000), Years Ending September 2001 and 2002 95

Table 65: Main Media Advertising Expenditure on Stationery Ranges by High Street Retailers (£000), Years Ending September 2001 and 2002 95

Trade Fairs 96

5. Strengths, Weaknesses, Opportunities and Threats 97

THE TOTAL MARKET 97

Strengths 97

Weaknesses 97

Opportunities 97

Threats 98

PAPER AND BOARD STATIONERY 98

Strengths 98

Weaknesses 98

Opportunities 98

Threats 99

other STATIONERY 99

Strengths 99

Weaknesses 99

Opportunities 100

Threats 100

6. Buying Behaviour 101

PERSONAL STATIONERY 101

Ownership and Purchasing of Pens 101

Table 66: Changes in Ownership Levels of Fountain Pens, Refillable Ballpoint Pens and Refillable Rollerball Pens ( percent of adults owning), 1998-2002 101

Table 67: Ownership and Purchasing of Pens by Type ( percent of adults), 2002 101

Table 68: Socio-Demographic Breakdown of Pen Owners by Type of Pen ( percent of adults), 2002 102

COMMERCIAL STATIONERY 104

Demand from Direct Mail 104

Table 69: UK Direct Mail Volumes (million items and percent), 1997-2001 104

Demand for Office Use 105

Schools 105

Table 70: Number of School Pupils in the UK (000 and percent), January 1997-2001 105

7. Current Issues 106

RECENT ACQUISITIONS 106

Dudley Stationery Ltd 106

Bunzle PLC 106

NEW MARKET ENTRANT 107

STATIONERY GOES DIGITAL 107

8. The Global Market 108

TRENDS IN EUROPEAN DIRECT MAIL 108

Table 71: Volume and Growth of Direct Mail in Selected European Countries (number of items and percent), 2001 108

The US — THE WORLD'S LARGEST STATIONERY MARKET 108

JAPAN — EMPHASIS ON INNOVATION AND RECYCLING 109

CHINA — 5,000 STATIONERY MANUFACTURERS AND INCREASING SOPHISTICATION IN THE HOME MARKET 110

HONG KONG — A MAJOR stationery PRODUCER 111

TAIWAN — SOPHISTICATED stationery PRODUCTS 111

MALAYSIA — a key pen supplier 111

INDIA — ATRACTING THE YOUTH MARKET 111

SOUTH AMERICA — economic crisis affects sales 112

RUSSIA AND EASTERN EUROPE — growth markets 112

AFRICA — growing stationery demands 112

9. Forecasts 113

INTRODUCTION 113

The Economy 113

Growth of Direct Mail 113

FORECASTS 2003 to 2007 113

Table 72: The Forecast UK Market for Stationery by Value at Current Prices and Constant 2002 Prices (£bn at msp and percent), 2003-2007 114

FUTURE TRENDS 114

10. Company Profiles 116

Acco Uk Ltd 117

Acco Eastlight Ltd 119

Charles Letts & Company Ltd 121

Esselte Uk Ltd 123

Guilbert Uk Ltd 125

John Dickinson Stationery Ltd 127

Kingfield Heath Ltd 129

Office Depot International (uk) Ltd 131

Spicers Ltd 133

11. Further Sources 135

Associations 135

General Sources 135

Bonnier Information Sources 136

Government Publications 137

Other Sources 137

EXECUTIVE SUMMARY

The apparent market for stationery was worth an estimated £2.24bn at manufacturers' selling prices (msp) in 2002, with overall sales remaining static.

This market includes products for office, home and educational use, but excludes greetings cards and calendars. 77.7 percent of the market is made up of products made principally from paper and board, including, for example, envelopes, cut paper, continuous business forms and files and folders. The remaining 22.3 percent of the market is made up of writing instruments, desktop items and other miscellaneous stationery items.

Weaker economic growth in 2001 and falling business confidence in the wake of the US terrorist attacks on 11th September combined with intense price pressure from imports in many sectors. Some stationery suppliers reported an improvement in 2002, but price pressure remained strong.

Paper prices have been depressed and appear to have reached a minimum cost during 2002. This has affected all of the paper stationery sectors to some extent.

The generalised use of computers, page printers, e-mail and electronic trading has had its effect on the stationery market, but this has not been to reduce the overall demand for paper. Rather, the types of products needed have changed and some traditional stationery products are moving towards obsolescence.

The volume of direct mail continues to grow, although this market is more mature in the UK than elsewhere in Europe. This trend is particularly helpful to the bespoke envelopes and business forms sectors and to label sales.

Consumer spending has continued to grow. Christmas gift spending was strong in 2001 and remained at around the same level in 2002, and stationery items benefited from some of this spending.

For the future, Key Note expects a difficult economic environment in 2003, with gradual improvement from 2004. There will be continued pressure from imports, but prices of raw materials are likely to rise. Key Note forecasts gradual growth for the stationery market in current price terms to 2007, but a slight fall in 2003 in constant price terms.

Text © 2003 Key Note

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Last updated by Amanda Porteous July 2003