The Bookseller.com

8th January 2009

Alan Giles spent 20 years in bookselling with Waterstone’s and W H Smith. He retired as c.e.o. of HMV Group last year to take up non-executive and teaching roles.

Riders on the storm

22.09.08

And so a new "term" begins, as British consumers return en masse to the office. Even in good times the prospect of colder, shorter days, with no bank holiday until Christmas, creates a pall of gloom. This year there's the added worry of rising fuel and food bills, plummeting housing values and unremittingly gloomy media headlines. With many having endured a rain-swept "stay-cation", there's not even a fading suntan for comfort.

The vicious correction in the housing market is casting a particularly long shadow over consumer sentiment. For over a decade, many households have been underpinned by the warm glow of owning an appreciating asset. Some have literally cashed in their windfall; at peak, equity withdrawal was contributing some six percentage points to consumer spending. In 2008 this source of sub-conscious comfort has been ripped away. Their new sense of impoverishment, coupled with the very real squeeze on disposable income, has prompted many to join the rapidly lengthening queues at their local Aldi.

You would think that a rational response from the retail industry would be to cut costs and capacity, battening down the hatches for 12, 18 or 24 months until the storm has passed. Individual companies are doing precisely that, but at a sector level an unprecedented amount of new shopping centre space is opening this autumn, with long-planned new schemes, inter alia, in London (White City), Leicester, Liverpool and Bristol. These centres will be attractive and novel enough to succeed; the impact on adjoining shopping areas doesn't bear thinking about.

In such times it is much better to be selling books than higher ticket items. In the frequent periods of recession through until 1992, our industry was relatively immune from the worst effects. Results were disappointing but certainly not disastrous. As domestic budgets are squeezed, books benefit from being an inexpensive form of recreation and indeed a necessity for priorities like education. Above all, families will do all they can to still have a great Christmas. Our opportunity is to reinforce the strengths of the book as a gift: inexpensive, enduring and, if well-chosen, relevant to the needs of the recipient.

Of course it will be a highly promotional Christmas, and nerves will be tested by consumers leaving their decisions to the last minute. The winning booksellers will be those who offer value for money, but who also have the systems, expertise and willingness to take risks to sustain availability and tantalising displays through the final six trading days.