Stormy waters?

<p>So we now realise we have been spending at unsustainable levels for far too long, neglecting to save in the good times, and pushing up our borrowings instead. And that is just the government.</p>
<p>Atonement is a word replete with meaning for the book trade. Well, clearly the UK consumer is entering a period of atonement for past sins. Equally unwillingly, our economic masters will have to follow suit. But how will the book trade fare as belts are tightened by their increasingly lardy cus&shy;tomer base? Take solace in the robustness shown in the past. The growth in book sales has beaten that for general non-food sales in almost every year of the past decade. Recalling my memories of the distant recession of the early 1990s, as far as I can remember, book growth remained in positive territory, despite non-food sales declining by more than 2% p.a. at their trough.</p>
<p>The resilience, of course, is largely because books remain a small-ticket item, and can often be a &ldquo;comfort&rdquo; purchase when spending on more expensive &shy;products has been rejected as less than sensible. This time round, sales of household products have already started to crumble, and administrations of furniture retailers are following in tandem. But there is no reason for book sales to show such volatility.</p>
<p>As I see it, two of the most important issues that will determine the robustness of book sales in the next year or two are the approach to online, and promotional tactics. The shift to online purchasing has further to go across the retail trade, and our book retail majors are still in the relative foothills of their online development. &shy;Second, as retail sales become more elusive across the high street, the level of promotional noise will rise. Advertising rates are falling, so budgets are stretching further and it is becoming easier to shout more loudly.</p>
<p>The challenge for the book trade will be to retain its place in the consumers&rsquo; &shy;psyche, at a time when their attention may be diverted by increasing numbers of blue, yellow or even red cross days further down the high street. In this regard, maybe, just maybe, the three-for-two mechanic has become a tad stale.</p>
<p>So overall, if there is the odd, slight budget shortfall in months to come, management across the book trade will be able to content themselves with the feeling that there are many more in other retail categories hurting a lot more. No need to give up the cigars just yet.</p>