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Are books recession proof?
By Bookseller | November 28, 2008
Suddenly books seem less recession proof than they used to be.
In reporting on the book business for more than 10 years I’ve lost count of the number of times I’ve been told that as relatively cheap but highly valued items, books tend to weather economic turbulence well.
That view may now have to change.
It has been apparent for a couple of months that books were proving to be less resilient to the credit crunch. A couple of weeks ago the chief executive of the UK’s biggest publisher Hachette UK told The Bookseller that “publishers will have to plan on the basis that books may not be as little affected by the economic downturn as some had expected.”
While this week, we reported that for the first time since Nielsen BookScan TCM records began in 2001, book sales have slipped into negative territory. The rolling 52-week sales total this week shows growth down 0.2%—in other words sales over the last 12 months are smaller than sales over the 12 months before that. Over the last five weeks the average weekly decline has been 4.5%, so we are falling well behind last Christmas already.
Also this week, the high street chain Woolworth’s went into administration, taking entertainment products and books distributor EUK with it. Woolworth’s plc also owns the giant book wholesaler Bertrams, but fortunately it is still trading healthily and is not part of the administration.
But, administration or no, this was the last thing the book business needed at what is its key trading period.
The potential loss of supply to supermarkets, via EUK, could devastate some publishers’ Christmas plans, and knock a hole through their profit margins. That does not even take into account the five-figure sums that will already have been written off due to the administration order.
Despite some suggestions otherwise, publishers have done well out the supermarkets’ wider move into books. The big books now sell in numbers unimaginable ten years ago, principally because they are so widely stocked across retail, and also so heavily price promoted. Not everyone likes this, but getting more books out to more people is unarguably a good thing.
So publishers are now facing a double-whammy: credit-crunched consumers who suddenly think spending £10 on the memoirs of Dawn French is something of a luxury, and a whole infrastructure built to put those books in front of those punters in the first place suddenly in collapse.
The only upside here is that Bertrams has survived and its obviously profitability is not being used to service Woolies’ debt.
There will be some concern about Bertrams for some time, but it won’t go the same way as Woolies. Over the past decade book wholesalers, including Bertrams’ great rival Gardners, have grown fat and profitable servicing the chains, the online booksellers, but in particular the independent bookshops, to an extraordinary high degree of competence.
It is way too soon to make predictions, but I wonder if we are at the start of something of a shift back to traditional booksellers. As supermarkets struggle for stock, suddenly independent bookshops might be back in business.
Topics: Uncategorized |
November 30th, 2008 at 2:24 pm
[...] also called Inside Book Publishing. The site includes a blog, which has an interesting update on the potential effect of the recession on British publishers. [...]
December 4th, 2008 at 4:00 pm
An interesting analysis, thanks. (And having been out of the country, I hadn’t even heard about Woolies…)