The Booksellers Association of the United Kingdom and Ireland (BA) today launched its Benchmarking Study, authored by retail experts Sarah Charles and Tim Ingle. The purpose of the study was to analyse how other bookselling markets operate in order to provide insight to UK booksellers on possible causes of differences in profitability. The report compares the UK bookselling market to that of the Netherlands, Ireland, Sweden, Finland, and the USA and specifically considers the changes in market volume and value growth, industry and bookshop profitability and key profit drivers such as competition, pricing, promotions, discounts and costs. The report also briefly explores the related UK retail markets for CDs, DVDs and stationery.
The study included both academic and trade sectors although the findings focus particularly on the trade (consumer) sector (defined as bookshops which primarily sell fiction, non-fiction/reference and children’s books to the general public). The report recognises that there is a significant blurring across the boundaries of the academic and trade sectors, partly because many books do not fall neatly into a single category and partly because booksellers and other distribution channels may sell both consumer and academic titles.
There are clear indications that the UK is suffering from a ‘triple whammy’ of declining prices, declining volumes and rising costs.It concludes that the UK market is more competitive, and has lower-than-average levels of profitability for booksellers. Relative to other markets studied, the UK is more fragmented with greater on-line and supermarket share, which many survey respondents perceived to have significant influence on sector performance.
Key findings include:
- Total UK market growth appears to be one of the slowest in the sample.
- The use of promotions and discounts creates a ‘vicious circle’ for UK booksellers.
- On-line and supermarkets have a more significant influence on booksellers in the UK.
- Low prices and low gross margins in the UK combine to drive the lowest gross profit per book in the sample.
- UK bookshops offer a narrower product range with a lower weighted average gross margin than most other markets.
- Independent booksellers in the UK do not cooperate as much as in other markets.