Friday, December 01, 2006

Merry Christmas

Although Christmas in retail begins in late October, it feels like a phoney war until someone fires the starting pistol on December 1st. For the next three weeks, the public will engage in an orgy of spending which will be make or break time for the high street chains.

I feel ambivalent about the whole thing. On the one hand I feel disgusted by the way Christmas has become commodified. Seeing crowds of bad-tempered people fighting over goods that will produce a few minutes of pleasure on Christmas Day before being consigned to the attic is a depressing spectacle. On the other hand, I know that if my shop is to survive I need to sell as many unwanted presents as I can, particularly given this year's appalling sales.

With the exception of a few chains - Marks and Spencer for example - there has been a steady downturn in high street sales for the last two years. There are three main reasons for this. First, internet usage has now reached the point where 60% of people shop online. The internet is not only more convenient, but is also usually significantly cheaper. Second, there is more competition from supermarkets. Why make a special trip to a bookshop when you can pick up the latest Jordan biography during the weekly shop? Third, many people have borrowed more than they can afford and are feeling squeezed by repayment charges, rising fuel bills and a hike in interest rates.

I cannot speak for other retailers, but from a bookseller's persective I think that the next few years are going to be very hard. During the last 20 years, over 400 bookshops have opened. Most of them are over 4,000 sq ft and will have a turnover of at least £1,000,000 a year. This has been a great success story and repudiates the view that people aren't reading any more, but now that people can also buy books online or in their local Tesco, how many bookshops will we need?

If my shop's sales continue to decline I can do two things: I can reduce my payroll costs and try and improve my margin from the supplier. However if, after paying for the stock, staff and site, I am making a loss I'm in trouble. Where do I go from there, assuming that I've done everything possible to increase sales?

I'm ashamed to say that in my particular case, I do have another option: I can drive a competitor out of business. I would rather focus on positive things like selling more books, but if that isn't happening then I have to do everything I can to safeguard my staff's jobs.

I am convinced that he next few years will see a lot of closures in the book trade, but at some point the dust will settle because there will always be a need for proper bookshops where people can browse, attend signings and meet authors. The internet can't replace that. As for Tescos, I'll start worrying when they sell Sartre.

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