Consumers are increasingly shifting toward online shopping and will continue to shop on a budget
New York, NY (PRWEB) April 29, 2014
The pages were falling out for the Book Stores industry over the five years to 2014. The industry, which relies on discretionary purchases of products, such as books, has been plagued by sluggish growth in per capita disposable income and consumer confidence, as well as increased external competition from e-commerce sites and department stores offering the same goods at lower prices. As a result, industry sales of books, newspapers and magazines have declined. Industry revenue is estimated to decrease at an annualized rate of 4.1% to $1.7 billion over the five-year period. Consumer trends are not expected to change anytime soon, leading to a further decrease in industry revenue of 3.9% in 2014.
Consumers are increasingly shifting toward online shopping. According to IBISWorld Industry Analyst Sally Lerman, “With many mass merchandisers adding books to their product lines, in addition to being able to offer lower priced goods due to their economies of scale, industry operators are left with fully stocked shelves and declining revenue.” Consequently, there has been great merger and acquisition activity among firms, while other operators have left the industry altogether. Therefore, the number of industry establishments has decreased at an average annual rate of 3.6% to 1,899 over the five years to 2014. Profit, however, has risen from recessionary lows of 2.6% in 2009 to 3.1% in 2014 due to operators more efficiently managing their expenses.
In the five years to 2019, the industry is forecast to continue declining, albeit at a slower pace. “Despite rising per capita disposable income and consumer confidence in the strengthening economy, changing consumer shopping preferences and declining leisure time for activities like reading books will lead to further drops in revenue,” says Lerman. Technological advancements and mobile applications from external e-commerce competitors make online shopping more appealing to the time strapped consumer. Consumers are also anticipated to keep shopping on a budget, specifically for discretionary items, which are largely substitutable. For example, a consumer may opt for a mass market paperback book on sale over a hard cover book in the same genre, which creates a lower profit margin for industry operators. Over the next five years, revenue is expected to decrease at an average annual rate of 1.0% to $1.6 billion in 2019.
For more information, visit IBISWorld’s Book Stores in Canada industry report page.
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IBISWorld industry Report Key Topics
Operators in the Book Stores in Canada industry retail a broad range of book and newspaper merchandise, 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.
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