Saturday, December 13, 2008

Anxious times in the high street

Desperate measures: WHSmith is trying to kick-start Christmas

It’s not looking good out there. An air of desperation hangs over the UK high street. The screaming window above – at WHSmith – is typical of the mood, as retailers desperately try to kick-start Christmas. Waterstone’s sales for the six months to 25 October were down 3.8%, with like for likes down 1.4% (allowing for the previous year’s release of Harry Potter 7). The total market is down 0.8% by value and 0.3% by volume. Woolworths – which should perform like WHSmith with books, but has never pulled it off – may now largely disappear from UK high streets and some 700 staff have already lost their jobs at its supermarket supplier EUK. Every week brings an announcement of a new recruitment freeze or salary freeze at a major house – Penguin was the last – while, on a much smaller scale, there have been redundancies at New Holland and Anova.

This is the real effect of the banking crisis and it’s not pleasant. Yes, books do remain good value and perhaps the increase in sales of the much-maligned celebrity memoirs bears this out. But it is making the entire UK book industry uncomfortable at the moment. Waterstone’s MD Gerry Johnson bravely says it can still be a “vintage Christmas”. We all hope so, or January could be very cold indeed.

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