Bookstore woes to continue

 

Books1altThe book stores industry in Australia has battled over the five years through 2013-14, with revenue estimated to decline at an annualised 8.5 per cent, according to IbisWorld.

IbisWorld industry analyst, Claudia Burgio-Ficca, says industry conditions have been affected by numerous challenges including tough competition from the online market and external operators, a decline in the overall price of books and a change in the reading habits of consumers from physical books to e-books.

The operating landscape for industry players has also been influenced by trends in real household disposable income, consumer sentiment, the IT and telecommunication adoption rate and demand for buying products online. Industry revenue is projected to decline by 8.1 per cent in 2013-14 to $1.9 billion.

Retail trade has exhibited a lacklustre performance over the past five years. Demand and expenditure on retail goods has been largely affected by the global financial crisis, which led to a reduction in consumer sentiment and a drop in spending, as individuals began to worry about the stability of the domestic economy. The Federal Government responded by implementing a series of direct stimulus payments, but these did little to boost spending across the declining book industry.

“Bookstores were also affected by solid competition from department stores and pure online retailers that sought to attract and retain a larger share of the market,” says Burgio-Ficca.

Despite the doom and gloom, industry conditions are expected to have been aided by the rising popularity of e-books and e-readers, which created a new growth area for bookstores, however, the sale of e-readers by external players is likely to have reduced revenue prospects across the industry.

The industry exhibits a low level of concentration, with Dymocks the only remaining major player.

Book stores industry operators are forecast to encounter declining sales over the next five years. While trading conditions are expected to remain intense due to further competition from internet-based operators and other external players, demand for e-books and e-readers is likely to offset some of the fall in revenue.

For more information, visit IbisWorld’s Book Stores in Australia report.

 

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