Book Trade – Pricing policy, discounts and the deepening sense of unease

I completely understand the current strength of feeling across the Christian retail trade regarding the perceived inequity of Kingsway offering allegedly differing terms to its varying distribution channels.

I admit to feeling uneasy earlier this week with their seeming triumphalism, displayed in the social media, as the new Worship Central album began to sell strongly through the newer channels, then the announcement of its availability through branches of HMV and the unspoken sense that a better job was now being done than by just having to rely on their traditional Christian retail outlets.

The concerns centre around HMV, Amazon and iTunes apparently receiving better margins in order to reach a ‘broader’ market. I have to say that whilst Kingsway are high profile in this and have an aptitude for drawing ‘flack’ fairly regularly, they are not alone in so doing. Doing business with the big secular players is costly, frustrating and was often seen by suppliers simply as an add-on to the traditional market – nice to have if you can get it but not the end of the world if you can’t. 

However, that view is rapidly changing as the realities of market share begin to bite. For Christian suppliers, the old retail chain model is ‘holed below the water line’, Indy’s are flat-lining and any growth is elsewhere, not in retail. The truth is, that for most suppliers, our niche retail trade no longer provides the geographic coverage required to get a new product to market. Shops are dwindling and with them, a suppliers ability to reach its market and, more importantly, to sell enough of its initial print-run (in the case of publishers). No wonder suppliers are casting around looking for new, more viable alternatives. I say this, not to excuse such behaviour but to try to help to explain it. Sadly, these are now the rules of the marketplace. It may seem unfair to a small well-run Christian outlet but this is how it is in the real world. It’s not just our trade that affected – it’s happening right across UK retail.

One of our issues is that the retail book world still lives with the ghost of the Net Book Agreement. Yes, it’s long gone but some of us still operate (and think) as though it remains in force. I believe strongly that pricing should be left to retailers and that prices will always remain fluid. In order to compete on the basis of price, then retailers do need to have adequate margin in their armoury. Some suppliers are better than others in this respect. I’m led to believe that IVP and Lion Publishing remain the retailers’ favourites and sadly, it seems, Kingsway continues to draw their indignation!

My experience of dealing with Amazon as a supplier is that they have their own very strict pricing policies which it’s impossible for suppliers to influence – plus they take a far lower margin on a sale in order to attract the customer. It’s very much ‘take it or leave it’ but it would be a brave supplier who opted not to deal with them due to the volumes they are capable of generating. None of us may like this but that’s the truth of it. The same goes for music digital downloads over physical product sales – and who knows where eBooks are heading?

 If suppliers are guilty of anything, it’s that they can sometimes seem to take their small retail customers for granted and to put all of their energies into building relationships with new outlets – often secular, mostly larger. They assume the Christian shops will always be there or worse, they assume that most of these shops are on the way out anyway! Recent history has not helped this particular impression! Either attitude is damaging in these difficult economic times.

This issue is a major point of deep contention for both suppliers and retailers. Our brave new digital world is not helping. Everyone in the supply chain is feeling squeezed; small retailers feel unappreciated and powerless in the face of such huge change, suppliers are fighting for volume as they see their product runs ever diminishing and all of us are seeing the rampant switch to digital from print. Is it any wonder we can seem worried and anxious; emotions which are then expressed in a form of protectionism.

Of course, you could argue that we should neither be worried or anxious; indeed we are so commanded in the New Testament. However, reality is often a little different and invades our thinking in more negative ways particularly when it comes down to matters of money and business. Would that it did not – but it does and we need to recognise this fact more than perhaps we do. When suppliers have large payrolls and report to even larger owners, it takes a special kind of courage to manage these often huge and contradictory tensions in trying to make ends meet in the present climate.  

I do understand what’s going on because I’ve been on both sides of the argument. Still am. Neither side is fully right, neither side seems comfortable with the other and both feel misunderstood by the other. Not a great place to start when certain emotive ‘triggers’ occur and begin to inflame the understandable indignation. Somehow we have to deal with this or we will be torn apart by it. Our trade, made up as it is of several parties with a common goal of mission – but with very different economic drivers – could so easily degenerate into hostile and divided camps. Some would say these camps are already antagonistic to each other – I pray not.

If we truly believe we are about the Father’s business we should all do better – for the sake of the Kingdom.

Mark 8: ‘What shall it profit a man if he gains the whole world but loses his own soul’?

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Opinion – Support your High Street – Local retailers and small shops

Listening to Liz Pilgrim, a riot-hit small retailer from Ealing on BBC R4 tonight was an inspiration, providing a strident rallying call for support to the High Street.

Events of this past week have demonstrated that the UK High Street is hurting badly – in more ways than one. Shops in riot affected areas will have an uphill struggle to get their businesses back on track. Retailers everywhere are finding it hard work to make headway against strong and adverse economic headwinds.

If these local businesses are forced to leave their High Streets, it will be very hard, if not impossible, to open them again. Does that matter? Yes, I think it does. Those communities losing local traders are negatively impacted in a considerable way. We could all do much more to help – by stopping to think whether we can buy locally, by switching our purchasing from the internet to local shops (where possible) and from chain stores and supermarkets to the local trader. Yes, there’s often a price differential and I know that we all have time constraints but there is a positive social impact.

Some of you might say that it’s already too late. It’s not. You can make a real difference locally.

So much of retail in the UK is comprised of fairly small units and these outlets provide considerable levels of local employment in so many of our towns and cities. It cannot be all about Tesco’s and Debenhams.

Use local markets wherever possible as these too continue to help commercial life to thrive in our neighbourhoods and communities. Yes, it’s hard to do this but it’s also worthwhile. At the moment, any help for smaller retailers, and sole traders in particular, is very welcome.

 If you agree with this please ‘like’ it and post it elsewhere and let’s help bring more footfall to our High Streets. Do we really want to live in a homogenous world? Do we want all of retail life to move online? We all have to buy ‘stuff’. The only question is; where will we actually do our purchasing?

So go on – Support your own High Street. Support your local retailer. Support your small shops. Support your local Market. You might even enjoy yourself!

 

Update and postscript:

The key figures for UK retail. (Source: Dept for BIS)

• UK retail sales are around £300bn, the 3rd largest in the world, after the USA and Japan.
• The retail sector generates 8% of the GDP of the UK, and 5.2% of GVA.
• The retail industry employs around 3m people. One in ten of those in employment currently work in the retail sector – the highest proportion of UK private sector employment.
• Retail is the largest private sector employer in the UK with one in ten of the workforce working in retail.
• There are 450,000 shops in the UK owned by 300,000 enterprises, including 9% (190,000) of all VAT-registered businesses.
• Shops account for more than a third of consumer spending.
• Despite being the third biggest casualty of the recession with over 6,000 insolvencies, the sector continues to grow.
• The value of overseas shoppers in London is around £2bn p.a.
• Despite strong growth in recent years, internet sales currently account for only around 7.5% of total sales.