KN52072

KEY NOTE Bookselling : February 2002

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EXECUTIVE SUMMARY

The UK bookselling market is currently the strongest — though not the largest — bookselling market in Europe. Unlike its main European counterparts, it has been thriving since the beginning of 2001. The market comprises three sectors: consumer books, school books, and academic and professional books.

Key Note estimates that the value of retail sales in 2001 was £3.67bn, which represents a rise of 6.1% on 2000. More than two-thirds of the market is accounted for by consumer sales. Most of these books are sold in the High Street by large retailers such as WH Smith and Waterstone's — which dominate bookselling — or by smaller independent shops.

There were two main surprises during 2001, one of which was the strength of sales of school books, and academic and professional books; the other was the small proportion of books sold through Internet booksellers. The fact that book buyers like to browse, preferring to see and handle books before they buy, goes some way to explaining why Internet sales did not leap ahead in 2001, as had been expected. However, online bookseller Amazon is working hard to reverse this trend.

A number of the large retailers plan to expand over the next 3 years (2002 to 2004). How far they will grow the market and how far they will take market share from the independent booksellers remains to be seen, but it is likely that the market will experience something of both these potential trends.

The market still depends heavily on affluent professionals for its sales, and heavy book buyers — those who buy ten or more books per year — represent an important part of the market. Book buying is spread across all age ranges, but there is a slightly higher propensity to buy books among those aged around 25 to 54 than among other groups. Tastes in book buying are constantly changing and are susceptible to influence by the media. Currently, children's titles are running high.

A growing problem that the market is currently being forced to address is theft. The Booksellers Association and the leading book retailers are exploring ways of preventing book theft, which is now said to be running into several hundred thousand pounds a year.

With one or two exceptions, booksellers' profits were squeezed sharply during 2000/2001. Low profitability is becoming an important issue for independent bookshops — both the small chains and those with just one outlet. Some bookshops — including some of the large chains — have made losses. The more difficult financial circumstances that now confront bookshops has led to one bookshop (John Smith & Son) being taken over and another (James Thin Ltd) going into voluntary administration. Although Waterstone's appears to be on the mend after a very disappointing year in 2000, the rumours that it might be sold back to Tim Waterstone continue to surface.

Key Note forecasts that the total book market will increase in value by 5.1% in 2002, with annual growth rising slowly thereafter, to 6% in 2006. Consumer books, parts of which are thriving, will remain the largest sector, but school books are forecast to show the fastest growth.

Table 1: UK Publishing Sales by Sector,

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Text © 2002 Key Note

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Last updated by Amanda Porteous February 2004