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'In serious danger of commercial suicide'

23 February 2004

One issue is currently dominating the pages of the British book trade press, which is the increasing incursion of non book-trade elements into bookselling and the ever-increasing pressure on prices and discounting as a way of selling books. The end of the Net Book Agreement has had many unforeseen effects for the book business. Expected to liberate it from an old-fashioned price maintenance system which was thought to restrain more active modern marketing of books, it has in fact brought may other players into the bookselling business. For the supermarkets books are just a useful way of promoting themselves as the consumers' champion and providing added value to the weekly grocery shop.

Something similar has happened in the US, where the price clubs have substantially undercut the book chains, but at least in the States the worst excesses of selling books like baked beans have been avoided. This is because of the Patman-Robinson Act, which, broadly speaking, forces publishers to give all customers the same discount. The American Booksellers' Association has aggressively enforced this through lawsuits against publishers who are thought to have broken its provisions. The Act has therefore provided a 'sanity check' to hold back the market forces which have overwhelmed bookselling in the UK.

The bookseller Richard Barker expressed his views about the situation in the Bookseller last week as follows: 'We are caught in a spiral being driven by the actions of a very few powerful retailers - the larger supermarket chains - which have little interest in the longer-term viability of the book market and for which books are a short-term tactical tool... The book trade (and in this case I mean publishers) is in serious danger of commercial suicide as it responds with little thought to the flattering advances of super-league retailers whose intentions are in direct conflict with the long-term best commercial interests of the majority within the book industry.'

The supermarket supplier Cork is currently going through liquidity problems. Its demise would be a disaster for publishers. For Tesco, whom it supplies, books are only a quarter of 1% of turnover. The supermarkets account for only about 5% of the total UK consumer book market, but on individual bestsellers they may handle as much as 60% of the sales. And, according to a new report, there will be an aggressive fight over terms this year, as big bookselling chains like Waterstone's try to level the playing-field. At the moment they mostly trade at a 50% discount, whereas the supermarkets can get 60% or even 70% from publishers.

In this big-dog-eats-not-quite-so-big-dog scenario it's not surprising that many in the book trade are worried about the effect on both independent bookshops and on the 'primary producers' - the authors of the books that everyone else is fighting over.