I mentioned in an article over Christmas that book retailers in Ireland had performed marginally better in 2008 than on previous profits for 2007. However, early figures suggest that the UK book retail trade recorded profits that were marginally down on last year. There is much discussion amongst UK retailers about the strategy of committing themselves to larger discounts for the buying public. The figures for 2008 seem to suggest that without these extenuated discounts, profits would have been significantly up. What this does tell us about the UK market, which has been mirrored in Ireland, is the buying public are actually spending more on books year by year.
You only have to walk into your local WH Smiths, Waterstones, Easons or Borders stores to see the real passion and patronage of the buying public to realise that they are doing all that can be expected of them. They browse, they buy, and they read. So where does that leave our distributors and publishers?
According to Steve Plackett, a Business Development Manager at Ajanta Offset Printers, ‘The poor old publisher is stuck in the middle, they are getting pressure upwards from W H Smith and Waterstone’s and downwards from the printers. They can’t easily pass on price increases.’ The nub of it seems to be the control the large high street chains and wholesalers have on publishers and distributors. The answer clearly does not seem to be to allow retailers to hurl discounts out at the buying book public and then step back and consider their good deed done and any distress in the book industry ‘couldn’t possibly be their fault, as, after all, they are looking after the public’. The fact is, the discounts have to be made up somewhere, and someone in the industry isn’t having steak with their fries this Friday.
A further concern is emerging in the print industry. The sterling pound is continuing to struggle against the euro and the dollar is also engaged in its own global and economic dogfight. News is that print costs are rising significantly and it is due to the cost of paper, that is the raw stuff, the paper without the head of George Washington or The Queen! Cromwell Press and Alden Press will not be the last printers to go into administration . Tony Chard, Managing Director of MPG, said that paper prices had gone up 25% in just the last six months. ‘We don’t swallow the increase: we pass it on. We have no choice but to pass it on 100%. The margins just aren’t there.’
‘We’ve had a really good start to 2009. We’re finding our model is very appealing to publishers looking to reduce inventory.’
These are the words of Lightning Source president, David Taylor, one of the world’s leading digital print on demand printers.
The fact is that publishers are constantly revising and reducing their off-set print runs throughout the last two years. This in itself has to reduce the margin of profits. The pressures will continue to increase on publishers to revise their business models in 2009, and it remains to be seen if they are the ones in the driving seat with the ability to direct the true future of publishing.