The advent of digital publishing has shaken the industry to its core.
Melbourne, Australia (PRWEB) September 15, 2013
Newspaper and book retailers have faced tough trading conditions over the past five years due to a decline in the sale of printed publications and growth in the volume of sales lost to international e-tailers. IBISWorld industry analyst Claudia Burgio-Ficca states, “industry trading conditions have been affected by competition from external operators, including supermarkets, department stores, convenience stores and milk bars.” The challenging operating landscape has culminated in revenue for the Newspaper and Book Retailing industry declining by an annualised 5.6% over the past five years. Consumer demand for newspapers has been influenced by trends in real household disposable income, consumer sentiment, internet connections and the volume of shopping done via internet sites and catalogues. Industry revenue is forecast to fall by 5.3% in 2013-14, to $3.8 billion.
Growth in disposable income has done little to fuel the decline in industry revenue over the past five years. The collapse of global financial markets and uncertainty regarding the stability of the domestic economy have led to a softer retail economy. Spending has been affected by a drop in consumer sentiment and an increased focus on price. A rise in interment connections and online shopping by consumers has eroded revenue and product margins for bricks-and-mortar retailers.
Over the next five years, revenue will be severely hindered by a decline in the circulation of printed newspapers and magazines due to a shift by consumers to other media and platforms, including the internet. Mounting pressure from external players aiming for a greater share of the market will further hamper industry revenue. According to Burgio-Ficca, “newspaper publishers are likely to rationalise distribution networks, cut newsagent margins and ramp up digital offerings over the next five years.” Book retailers will respond to growth in the volume of sales being lost to the online book market (particularly those located overseas) by re-examining their online products and offers.
The Newspaper and Book Retailing industry exhibits a low level of market share concentration, with one major player, Newspower Newsagents accounting for a small percentage of industry revenue. The majority of industry participants are small-sized operators with fewer than 20 employees. Prospective entrants face low barriers to entry which acts as an incentive for new operators to enter the industry and gain market share. The entry of new players is supported by low capital requirements. Concentration has remained low over the past five years due to a decline in enterprise numbers. The book retailing market has suffered a period of rationalisation, exhibited by the collapse of Angus & Robertson and Borders in February 2011 and the purchase of Melbourne University and SPP Medical and Legal Bookshops by The Co-op Bookshop in June 2012. For more information, visit IBISWorld’s Newspaper and Book Retailing report in Australia industry page.
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IBISWorld industry Report Key Topics
Operators in the industry primarily retail newspapers, books (including religious publications), magazines and periodicals. Industry players may operate as independent businesses as part of a retail chain of stores or under a franchised model. Newspapers and books are largely purchased from the relevant wholesalers and then sold via stores or online sites to end consumers. Players that operate purely online are excluded from the industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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