The British books market is turning over a new leaf. After two decades of fierce price competition driving shops out of business, book prices are rising at their fastest rate since 1997.
A trend towards buying hardback books and a growing number of parents purchasing real books to lure children away from screen-reading are part of the story.
In addition, many in the book trade are hoping that Amazon – under pressure from shareholders in the US to increase profit margins and from publishers to stop hard discounting – may be about to lift the price of its books.
New chapter: Waterstones boss James Daunt says buyers want both books and ebooks
This is bad news for voracious readers, perhaps, but good news for the long-suffering books industry as inflation on many other products stalls.
The price of books rose by 12.8 per cent in the three months to the end of September and an average of 7.4 per cent over the whole of 2014, as tracked by the Office for National Statistics. That is the highest rise since ONS records began in 1997.
The figures, which include hardbacks, paperbacks and ebooks across a range of outlets online and on the high street, reflect a new attitude among some book buyers, believes James Daunt, managing director at 276-store chain Waterstones.
‘The ebooks market was embraced very strongly at first, but it now looks like most ebook buyers are also buying physical books,’ he said.
‘The value of having a book sat on your desk, that you can pick up or lend to someone, has come back. It would be nice to say it was about consumers supporting local bookshops, but I’m not sure that is the case.
‘But as a company – and we are a large part of the high street market now – we are getting much better at selling hardbacks and we’re selling more, which hasn’t been the case for a long time.
‘We’re also seeing strong growth in children’s book sales. There was an expectation that children from the ages of nine to 12 would increasingly want to read on digital readers, but that doesn’t seem to have happened,’ said Daunt.
There has been some evidence that shareholders have been pushing Amazon to increase profit margins by easing the pressure on prices and by exiting unprofitable categories altogether. A recent drive to increase fashion sales has been a part of the company’s plan to raise profits by selling more higher margin products, rather than relying on its traditional staples of music, DVDs, electronics and books.
Last year The Mail on Sunday revealed that music chain HMV had seized the crown as the country’s biggest seller of physical music goods, helped in its revival as sales of vinyl rose and as Amazon sold fewer CDs and DVDs at cut prices.
Meanwhile, in November, Amazon settled a seven-month dispute with French publishing house Hachette during which the $89 billion turnover dotcom giant was accused of ‘aggressive’ negotiating tactics.
From this year Amazon said it had agreed to allow Hachette to set the consumer prices of its ebooks. Amazon said Hachette will receive better terms and promotions when prices are set lower.
But Daunt said there is so far little evidence that overall pressure from Amazon is easing off.
Turning over a new leaf: A trend towards buying hardback books and a growing number of parents purchasing real books to lure children away from screen-reading are part of the story
Daunt said: ‘The inflation growth is about a change in mix from what people are buying, higher value items and people spending more on hardbacks and children’s books, and not a fundamental change to higher prices being paid on books like-for-like. On that we are seeing zero change or very little. The pressure on prices from Amazon on the top titles is as ferocious as it ever has been over Christmas – astonishingly so.
‘We could have bought our books cheaper from them than we could have from publishers. That is not an exaggeration. It is a literal statement of fact.
‘The whole business of Amazon was predicated on the basis that book buyers are the best wallets around.
‘If you needed to define people who have a high disposable income – highest earners, educated and so on – selling them books in high volumes is about the best way to bring them to your website.
‘That wouldn’t necessarily be the same for music buyers or for DVDs. But our theory is they need to remain aggressive in books because you need to keep those credit cards working to keep them coming in and buying other things.
‘I think the overall book market is still declining. Waterstones is growing which means someone isn’t. Supermarkets are doing really badly and I think being more impacted by digital books than specialist booksellers.
‘We’ve sorted the business out to a greater degree and we’re on an upward trajectory,’ he added. ‘On top of that our book sales are increasing which hasn’t been the case for a long time.’
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