New York, NY (PRWEB) January 03, 2014
Book retailers have had their pages ruffled during the five years to 2013. While demand for book store merchandise has fallen, consumers have not ceased purchasing books altogether. Beginning in 2008, the recession lowered disposable income and consumer sentiment, causing individuals to cut back on discretionary purchases such as reading materials. The recession also made consumers more price conscious, as they now tend to survey all purchasing options for the best price and value before buying products. In the five years to 2013, Book Stores industry revenue is expected to decrease at an average annual rate of 3.8% to $16.7 billion, including a 2.7% drop in 2013.
With these changes in consumer behavior, the Book Stores industry has experienced increased competition from mass merchandisers, department stores and online retailers that has persisted well into the economic recovery. All of these competitors are able to offer a wide selection of books at competitive prices, causing consumers to buy books at places other than book stores. The trend toward shopping online will keep the industry in decline. Over the past five years, many stores have been unable to remain profitable, and will close their doors as a result. According to IBISWorld Industry Analyst Sally Leman, “Industry establishments are therefore projected to decrease at an annualized rate of 3.8% to 27,409 during the period.” The industry profit margin is projected to rise in 2013, however, partly as a result of cost-cutting strategies, including store closures, consolidations and employee layoffs.
While the economy is expected to grow in the next five years, the industry will not follow suit. Revenue decline is anticipated to slow to over the five years to 2018, as consumer spending improves with the economy. The industry will continue to face heightened competition from external competitors and will find it difficult to adapt to new technological trends. In the previous five years, many consumers shifted from reading physical books to reading digital books on e-readers and tablets. As this trend continues, physical book sales will decline, negatively affecting the bottom line of most book stores. “This trend will benefit a few industry stores, such as Barnes & Noble, because the company has created its own e-reader and thriving e-book store,” says Leman. Some firms will be able to weather the changes in the industry by differentiating themselves through niche markets or adapting to new technological trends.
For more information, visit IBISWorld’s Book Stores in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Companies in the Book Stores industry primarily retail a broad range of books and newspapers including trade books, textbooks, magazines, paperbacks and religious books. These goods are purchased from domestic (and in some cases international) manufacturers and wholesalers. Operators then retail these goods, through their stores, to the general public. This industry excludes retailers that operate primarily as used merchandise stores or electronic shopping and mail-order houses.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.