WHS Travel stores to sell Penguin guides exclusively
07.06.09 | Victoria Gallagher
Penguin is believed to have signed an exclusive deal with W H Smith Travel to be the sole supplier of foreign travel guides in its airports, motorway, railway and hospital shops. Sources have told The Bookseller that the deal will begin next week and last for 12 months. The contract will mean that Penguin's travel imprints, including DK and Rough Guides, will be the only foreign travel guides on offer at the approximately 450 WHS Travel stores in the UK.
Lonely Planet c.e.o., Stephen Palmer, said: "I feel a bit disappointed and it was a bit of a shock when we were told [by WHS]. It will have an impact on the business." He urged the retailer to reconsider. Other rivals said they were aware of the deal, but did not wish to talk openly about the implications.
It is believed that the terms of the deal included a 72% discount with added cash upfront. This move could see travel guides such as Lonely Planet, Time Out and Berlitz missing out on trade at airports as WHS signed an exclusive deal with BAA earlier this year to service its seven UK airports. DK and Rough Guides declined to comment.
A spokesperson from W H Smith said that trials had indicated that the move would make travel guide shopping "easier for the customer", as travel customers are "extremely time pressed". The recent trials "had extremely positive feedback". They added that the deal would start "shortly". Sources told The Bookseller that books from other publishers were being delivered to WHS up until last week, with negotiations about returns ongoing.
Stanfords travel bookshop general manager, Andrew Steed, said the deal restricted consumer choice. He added: "I don't see this as a positive method at all. I think it's quite a defensive method by Penguin getting involved in this. It's a reaction to a hard year. They are buying a means to a market by agreeing these terms. Once this starts to happen and if it is perceived to be working then W H Smith would want this to happen to everyone and that would be a pretty significant move for the industry."
When comparing the genre bestsellers, UK and international travel guides are level pegging in terms of volume. However, in value terms international travel guides are worth around one-third more. According to Nielsen BookScan figures, in 2008 travel sales fell 8.7% in value year-on-year.
Penguin's overall market share during the first 16 weeks of 2009 fell to 9.1%, down from 9.7% over the comparative period in 2008. Penguin's share of the entire travel market last year was 18% (9.8% DK and 8% Rough Guides). Over the 16 week period, DK sales dropped 16.5%, with Rough Guides reporting a drop of 30%. DK published 27 of the top 100 international travel guides last year, with Lonely Planet publishing 23 and Rough Guides publishing 17.
Comments on this article
By K Steffen
This is yet another reason I avoid buying books in WHSmith (apart from the outdated decor). It infuriates me that as a consumer I have a choice restriction based on two large companies determining an exclusive contract for a 'better', and often crippling, deal. Especially when one is stuck in an airport and you cannot go anywhere else. A tragedy; WHSmith can no longer call itself a bookstore if they only sell, not based on what their customers want, but on what cut throat deals they can make. I will stick to my independant shop where the owner knows where his books are on the shelves and what people might be interested in by interacting and being interested in his customers.05 Jun 09 08:34
By Julian King
I still find it hard to fathom why practices common in all other areas of retail invoke such consternation in the book trade. Tesco's, Sainsburys, Dixon's et al all do similar deals and noone bats an eyelid. It sounds like an excellent deal for Penguin and you can be sure it is an excellent deal for WHS Travel.05 Jun 09 09:27
By Factotum
But is it an excellent deal for the customer? I'm sure books will still be bought and sold, and I'm not saying that Penguins guides aren't good. But it would be nice to have a choice.05 Jun 09 09:43
By jackson
It's a terrible deal for the customer, and a sign of desperation from Penguin.05 Jun 09 09:45
By Lil
This is really short-sighted. A silly compromise for the short-term gain of a minority, with no consideration for the possible long-term and wider implications for the whole industry - not to mention completely underestimating the customer's desire for, and ability to 'cope' with having a choice! And I'm not sure the 'pressed for time' argument holds water either, at least not in the airport stores - since most flights require you to check-in hours before departure and there's not a lot else to fill this with, it's a great opportunity for un-interrupted browsing in bookshops that (unfortunately) I rarely get any other time! Oh yes, and of course similar deals have been done in other areas of retail - and I'm sure it's done everyone the world of good...aren't we all feeling incredibly proud of our free-market global capitalism and the limits we can push it to right now...? Fair trade travel guide anyone?05 Jun 09 09:59
By Geoffrey Smith
This deal is causing extreme concern precisely because we do not want the book trade to go down the route of homogenised retailing exemplified by the supermarket monopolies. People who believe in laissez fair capitalism, as I suspect Mr King does, are always banging on about choice but of course the end result of deals such as this can clearly be seen here - severely restricted choice for the consumer imposed via a stitch up between two large companies.05 Jun 09 10:06
By Jason Dunne
Makes sense to me, though I can understand Penguin's rivals feeling dismayed by it. Consumers who value choice can go online; consumers who are in a hurry need convenience and thoughtful merchandising. How many consumers in a hurry also want to wade through lots of choice? Not many. I'd understand the outcry if we were talking about fiction, but the Smith's deal is only to be expected for any product with a high rate of substitution, especially when those products are coming under price pressure from free alternatives. We can expect to see more of this in the non-fiction reference across the board. It's neither good or bad: it's just business.05 Jun 09 10:18
By Julie Hunt
I am sure this practice does go on in other areas of retail, but usually the customer has other choices of outlet in the area if they want an alternative product not offered at that particular store. Once you are in an airport you are a "captive" audience and have no other alternative. The airport authority should give retailers in their airport, strict guidlines on this type of practice. Maybe other publishers should get together and try to break the stranglehold WH Smith has on the travel retail arena and introduce their own outlets at airports and motorways, i for one would relish this as i find WH Smith very boring, staid, run of the mill and uninspiring in the book department.05 Jun 09 10:18
By downbythebeach
I like penguin guides, but it's Rough Guides and Lonely Planet, et al only from now on. This is hugely offensive.05 Jun 09 10:20
By milhaven
I was going to make the point that when pressed for time, if the customer doesn't like the look of the Penguin guide, the only other option is to not purchase at all. However, we have to consider that a traveller who leaves buying a guide to the time just before boarding their plane is doing so more on impulse than in serious preparation. This kind of customer is unlikely to be concerned about the lack of choice on offer. Airport shopping is not 'serious' shopping, and those who are genuinely interested in travelling will still buy their guides from High St or independent stores. In the long term, Penguin may suffer from concentrating on the last-minute market; this kind of unit-minded strategic lock-down ultimately devalues the books in the eyes of more discerning readers.05 Jun 09 10:25
By Bert
The positive side to this is that it one way it will give customers more choice. Rather than 17 different books about one country on a shelf, there will be 17 countries each with one book about them... Plus, any customer who gets to an airport and hasn't picked up a guide is surely only doing it as an impulse buy and probably aren't the type of customer who knows - or even cares - about the different brands...05 Jun 09 10:27
By Customer Knows Best
I find most of the comments on here insulting from a customer point of view and very underestimating. Julian King/milhaven/Bert are spot on in their comments and mirror mostly how I feel. Many customers will expect some kind of pre-selection to be done by a retailer, especially at an aiport. If they genuinely wanted a particular kind of guide they would have bought it. I used to work in a bookshop that had at least 50 different guides on Paris only confusing customers. I would always be asked 'which one should I buy/which one is best' and all you end up doing is selecting or confirming a purchasing for a customer anyway. Condemning this decision based on commercial acumen which WH Smith are totally free to do, and trying to keep bookselling free from 'market-driven capitalism' is just such a boring argument. Yawn.05 Jun 09 11:11
By Alastair McKenzie
So have I got this right? If I am at a BAA airport waiting for my flight to, say, Oman, BiH, Botswana, Macedonia, Ukraine, Greenland, Malawi, Algeria, etc, etc... I wouldn't be able to buy a suitable guidebook? I wonder what the airlines will think of that?05 Jun 09 11:19
By Bill C
You make an assumption Alistair that guides to those places are currently available for your round the world trip!05 Jun 09 11:32
By Michael Howorth
This is news to me WH Smith sell books? surely not they may have a rack of books but then so does Waitrose. What is scary, is that a a 2nd rate high street retailer that used to be well respected as a bookseller is dictating what we can and cannot buy and by doing so is diminishing the market place for well written carefully researched travel books from other and frequently better publishers05 Jun 09 11:46
By Little Bee
Well if you're going somewhere less mainstream like Botswana and you want a guidebook you shouldn't wait to get to the airport before looking for one.05 Jun 09 11:46
By downbythebeach
'Customer knows best': I have to disagree. No-one is saying we shouldn't be driven by market forces, or that pre-selection by booksellers should not happen. This is not what has happened here. Penguin has not been pre-selected by booksellers. What this is creating is a monopoly situation, albeit a very minor one, in which there is no onus on Penguin/WH Smiths to keep prices down or quality up for these books in the longer term. Maybe they are impulse purchases, and not the bulk of the travel guide market, but it would clearly represent a damaging move over time for the competitors, and therefore the customers. This is being achieved not through innovation, or added value, but just by eliminating competition. Sorry if that sounds uncommerical. It is bad for the customer and the industry, and these moves are the thin end of a dangerous web. How plausibe would it be for a new travel guide publisher to enter the market now, or to make any impact? If this was widened out to other genres, perhaps fiction, would you make the same argument that we should have the choices made for us?05 Jun 09 11:55
By milhaven
downbythebeach - I agree with your viewpoint on this. Not sure why Consumer Knows Best was bringing me on board with his point view; I was trying to argue that the only people this deal benefits are those who see books as impulse buys while airport shopping, and so the discerning travel guide buyer sees no benefit while the whim-buyer's situation remains the same. I think the most important point the reiterate is that of quality. This deal does nothing to encourage Penguin - or its competitors - to work on the quality of their guides. Competitors won't see the point when the work will be in vain and Penguin simply don't need to improve the books as they have the market cornered. While not totally disasterous (airport retail trends rarely mirror those of the high street), this arrangement represents a potentially harmful precedent and does away with the link between quality and consumer choice.05 Jun 09 12:12
By Tony
But surely Penguin will be competing with other publishers in the rest of the Uk market on travel guides so the argument about failing qualitiy does not make sense.05 Jun 09 12:19
By Melissa Shales
What this means is that you will be able to get Rough Guides and DK Guides - both fine in their own way. But you won't be able to buy a Lonely Planet, Michelin, Time Out, Insight Guide, Bradt Guide, Berlitz or Frommers Guide (to name but some of the better-known options), nor will you be able to get guides to many destinations round the world not covered by the Penguin stable. And because major markets will be shut it means a serious restraint of trade to other publishers and authors, who could go out of business. In the end, the reading public are shortchanged, the publishers are shortchanged and the travel writers are shortchanged. We urge WH Smith and BAA to change their mind before it is too late. Melissa Shales - Chairman of the British Guild of Travel Writers05 Jun 09 12:32
By downbythebeach
Tony: There are other outlets, and I don't think Penguin will have completely lost all impetus to maintain their standards. But they may have lost some, when you consider this is 'airport, motorway, railway and hospital shops', and that can't be good. It's surely a substantial part of the travel guide market that has just been closed to others. And if the quality of other guides was to be raised, through more investment in quality, would that now be really justified? And to be honest, this just feels wrong. Particularly from a company with Penguin's heritage, for them to be involved in a move that disbars other entrants, possibly new and cheaper entrants, leaves a bitter taste.05 Jun 09 13:07
By Customer Knows Best
Milhaven: I would argue to opposite to be true. This deal doesn't mean WHS will forever stock Penguin guides only, in fact they could well change their mind in 12 months. Penguin will be doing their hardest to keep the contract by driving supply chain but also quality. If customers don't want to buy Penguin guides, WHS will drop them in exchange for another publisher. Equally other publishers may look to improve the quality to compete for future contracts. If Selfridge's decide to only stock knickers or perfumes brought to market by the Beckhams does that mean the consumer is short changed? Oh no of course books are different ... blah blah blah. Melissa, I would expect you in your position to take this view point. But quite frankly anyone turning up at the airport to travel to Botswana without a suitable travel guide *expecting to buy one last minute* should have their passport taken off them. Penguin more than cover the destinations wanted at an airport or they are about to based on WHS feedback.05 Jun 09 13:21
By Tony
I for one have never seen an overseas travel guide in the majority of the Motorway shops I've been regardless of it being a WHS shop or not.05 Jun 09 13:30
By Alastair McKenzie
To be honest, Bill C, I hadn't thought about my world trip....yet! I keep having the image in my mind of a business traveller at Heathrow, or Gatwick waiting for his flight to Seoul or Muscat and thinking 'I'll be there for a couple of days I should buy a guidebook" MEH MAAH! sorry no. And the sudden restriction of overall choice; he wants a guidebook to Kuala Lumpur and all he is offered is DK's Malaysia & Singapore... I've no problem with Penguin's right to do the deal - they should be congratulated on a coup! - but from the traveller's perspective it seems....ridiculous.05 Jun 09 13:56
By Tiamaria
I enjoy researching and buying my main travel guides well in advance of my trip. However, that does not mean that I never browse the travel section in the airport bookshop looking for a possible impulse-buy: a little Berlitz guide perhaps, to complement my text-heavy Rough Guide hiding in my checked-in luggage; or a handy AA City Guide with map for a possible excursion. In future I would not bother visiting the travel section in WHS airport shops if I knew that there was a limited choice of just DK Travel Guides and Rough Guides from the same publisher. I think it is arrogant of WHS to assume that if I am an impulse buyer I do not require, or deserve choice.05 Jun 09 13:58
By CountryGirl
72% discount with added cash up front? It doesn't sound like a fanstastic deal to me. Unless they have put up the retail price of the books by a huge amount I can't see Penguin making much out of this!05 Jun 09 14:38
By Kuala Where
They do have bookshops and books in Kuala Lumpur, Seoul and Muscat to you know besides bamboo huts and spears. Customers could even buy them there in english if they really can't get one at an airport shop they had happened to walk into on the off chance.... if they are really lucky they could even hire a pigeon to send a postcard to their family.05 Jun 09 14:43
By Melissa Shales
This doesn't only affect overseas guides. Imagine you are incoming traveller fresh from Heathrow arriving at Paddington and you want a guidebook to London - wouldn't you have thought that the bookshop on Paddington station would have a decent selection? I don't know how long this deal is going to run but it could mean that Penguin has sewn up some very key outlets in time for the Olympics. As for the quality issue, I have been a guidebook writer and editor for many years and know the industry from the inside and have to tell you, it isn't pretty, these days. The quality issue is already a very real one and one we have been fighting for years, with budgets squeezed to the bare bones, too much style over substance and too little care about intelligent content as opposed to brand performance in many cases (with notable and honourable exceptions). This deal will almost certainly mean that some of the UK's best guidebook writers finally throw in the towel and look for a new way to make a living.05 Jun 09 14:45
By CountryGirl
72% discount with added cash up front? It doesn't sound like a fanstastic deal to me. Unless they have put up the retail price of the books by a huge amount I can't see Penguin making much out of this!05 Jun 09 14:48
By Tony B
Melissa-as the article above states this covers Overseas guides only, when did London become an overseas deastination?05 Jun 09 15:02
By CountryGirl
72% discount with added cash up front? It doesn't sound like a fanstastic deal to me. Unless they have put up the retail price of the books by a huge amount I can't see Penguin making much out of this!05 Jun 09 15:07
By CountryGirl
72% discount with added cash up front? It doesn't sound like a fanstastic deal to me. Unless they have put up the retail price of the books by a huge amount I can't see Penguin making much out of this!05 Jun 09 15:08
By Kuala Where
Melissa, it also clearly states it is a 12 month period according to sources...05 Jun 09 15:08
By Alastair McKenzie
lol! "They do have bookshops and books in Kuala Lumpur, Seoul and Muscat to you know besides bamboo huts and spears." Glad you've been! Unless, of course, you've been reading guidebooks by other publishers - hope u don't work for Penguin ;) . So..... guidebooks are available on arrival, but, as you acknowledge, not on departure. How exactly is that situation BETTER for travellers than before?05 Jun 09 15:18
By CountryGirl
I apologise for the multi-post my browser had a strange five minutes!05 Jun 09 15:41
By Kuala Where
Alister, the point is that customers still have choice (even if they can't buy it at a WHS travel) unlike people think here. Offering good choice to consumers doesn't mean every guide book should be available on every street corner. Besides it not being commercially viable, 'the customer' is a lot more street-savvy than people give them credit for on here. And no I don't work for Penguin, I work for a WHS competitor. It's just time to stop all this nay-saying in the industry and need to move with the times. Books are special to all of us, but still subject to the same economic rules.05 Jun 09 15:44
By Alastair McKenzie
Agree with you, mostly, Kuala Where. You're right when you say "Offering good choice to consumers doesn't mean every guide book should be available on every street corner." But before this deal my travelling businessman stood a chance of picking up a city guide to Helsinki (Insight, Bradt) for his short visit.... as opposed to the less suitable Rough Guides to Scandinavia. It's not a biggie, but it is a shame.05 Jun 09 15:53
By SPY
Hum...... After cutting the costs down to the bone and milking every ounce of profit by cutting product lines and staff..... There getting desperate..... Have been following WHSmith business over the years and there fortunes.... They are no more a bookshop than any of the supermarkets are..... And you carn't get what you want from them anyway..... Shame on them....05 Jun 09 17:02
By Melissa Shales
Really sorry! It's been a long day. I take back what I said about London and the Olympics but still maintain that the deal is not healthy. Penguin does publish some good guides, but they do not cover a full range of destinations, do not provide a broad range of options in terms of the type of guide they offer, and are squeezing the market and consumer choice to the point of no return.05 Jun 09 17:06
By David R N Livesley - Woodstock Vermont
Welcome to the real world of commerce everyone... As a few folks have said, this is no different than any other retail outlet who selectively buys a range of goods be it wine or handbags. Also as has been mentioned...if W H Smug don't get an increase in turnover and margin the idea will be dropped like a stone. For Penguin I think it's a smart move, discount given not unreasonable and they simply concluded a deal before a competitor did. Now if I was Borders and Waterstones et al I'd soon be out with a travel promotion along the lines of...'don't wait until you get to the airport/travel outlet to buy these guides...as these are 100% exclusive to the high street'. and market the backsides off them with price promotion/free travel bags or whatever it takes. Hey ho...welcome to the competitive world folks...goes to show Bridlington for your hols has a certain appeal as security clearance is so much simpler....Come visit us in the US and I'll buy you a guide from Amazon of course!05 Jun 09 18:04
By C.B.Osborne
The deal W.H.Smith has concluded with Penguin is a shrewd corporate decision and one which they may regret. I will now know their travel section is limited and will detour to other bookshops where I can select the best of the range available. But regarding other comments, I do wonder how many travellers suddenly feel an urge to buy a guide-book at an airport? Researching in advance is half the pleasure for many people. And I honestly can`t see a businessman, finding himself off to `Muscat or Seoul` racing to buy a guide at Heathrow. He can get any nitty-gritty information off the internet once he has arrived at his destination. And the internet is the far more dangerous competitor of printed travel guides.06 Jun 09 08:49
By DavidH
Hmmm. I'm a book reader, not seller, but this caught my eye as I've really been wondering for ages what Smiths think they're up to. Their shops have always been cluttered and hard to get round, but there was a time when they had a decent range of books. More recently they have had fewer books and been even harder to get round. And in the past few months they have set up a maze in front of the tills, made up of racks of sweets, water, downmarket magazines and general tat. You have to shuffle through this to pay, then when you get to the front they try and sell you half price chocolate. It's completely offputting. I think that WHS is now the last shop I'd think to browse for a book in, because even if I found one I wouldn't want to go through all that hassle to pay for it.06 Jun 09 16:52
By Disgruntled
WHSmith's stronghold on the travel market becomes more apparent when you learn they have an exclusivity deal with all UK commercial airports that means no other retailers in these places can sell any books whatsoever, even if books make up part of their product mix on the high street (eg HMV). I'd be interested to hear what sort of market share on overseas travel guides Smiths' airport stores have, I'd imagine it's pretty large if Penguin are willing to offer 72% discount on titles. Not surprised that Lonely Planet et al are concerned, this is a bit of a kick in the teeth for them.08 Jun 09 09:24
By Beege
It is understandible that people's reaction is to jump on the side of consumer choice. However WHS Travel stores are a different beast. If you want to find a travel guide here, you have to fight your way thru the discounted Kit Kats, £1 Buxton water bottles, PC magazines, newspapers, chick lit fiction and then - if you are lucky - you might see a couple travel guides at the back corner. I cant imagine they would have a material slice of the guide market. They are not pleasurable retailing experiences and they dont exist to give you range. Everything is substitutional. They offer you one or two lines of a product that you really want and tempt you with a couple of items that you dont need along the way. And yes, there is often no retailing alternatives in these locations. But that is what I expect when I go into a WHST so I dont mind. If a choice of travel guides is what I want then I should have gone to Waterstones or Amazon. This seems like a pragmatic deal that suits the retailing reality that WHST operates in, which presumably includes having landlords like the BAA or Network Rail!08 Jun 09 11:00
By Bookbuyer
As a previous buyer for airport bookshops, I can tell you that the stores located there sell A LOT of guides; it seems like not every customer wants research their trip beforehand, and that surely should be respected. Readers of the Bookseller now know they will not have any choice in travel guides when they get to the airport - what about the average customer who is not aware of this? Who may not even be aware that only WHSmith stores can sell books at the airports? It's a shame that BAA gave them the monopoly, and it's a shame that WHS have given Penguin the monopoly - especially when it concerns captive customers.08 Jun 09 11:17
By Beege
I think the consumer knows that when they shop in any confined retail space like an airport the range will not be as comprehensive - for anything. Retail space is clearly limited and at a premium. Why would BAA want 3 or 4 bookstore chains when there is more money to be made from pharmacies, electronic stores, fast food/restaurants etc. You can bet that BAA would be charging an eyewatering amount for rent and service and for this captive audience and for WHST, it is about extracting every penny from every retail inch and hence their decision here. That is why you never see independent shops at the ports and stations. I agree with "Bookbuyers" points in a general sense - but consumer principles dont neatly apply to these rather contrived shopping experience. Consumers I feel, know this.08 Jun 09 12:32
By Simon Veness
As the co-author of the UK's best-selling travel title (which isn't a Penguin title, funnily enough), this is definitely alarming but also very sad that WHS and Penguin think they can rip the public off in this way. We are very fortunate that the bulk of our sales come from good word-of-mouth and loyal past readers who wouldn't buy anything else, but it is mystifying why a book-seller wouldn't want to sell a market leader (or dozens of other worthwhile titles) when they are already struggling. Can anyone say 'short-sighted'? RIP WHS (as I've said elsewhere).08 Jun 09 14:03
By Travel writer Paul
The interesting point which seems to be rather overlooked is that effectively WHS isn't interesting in selling more books. It's interested in asking for more money from publishers. This has been seen to a truly terrifying extent in its dealings with magazine publishers ("We'll stock you if you commit to buying expensive in-store promotions, and not unless, even if you are selling well and a respected title.") And of course WHS are far from alone in this – other large chains also demand either sizable sums in promotions, or huge discounts, which smaller publishers find difficult or impossible to give. The issue here is not the lack of choice for consumers in airports - it's the future lack of choice anywhere, as publishers (travel, fiction, whatever) are driven out of business by the demands of the behemoth retailers, in the high street, the airport or the internet. Of course, smaller booksellers can't demand the discounts, so they're going under too, and the last refuges of the smaller publishers go with them. Before I'm scorned for being sentimental or socialist, note that I'm not arguing that this is right or wrong - merely observing that consumer choice of guidebooks in airports is the thin edge of the wedge.08 Jun 09 19:40
