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Posts Tagged ‘Asda’

Tesco and Asda Under Competition Commission Scrutiny

The Guardian reports that competition watchdogs are considering sending staff into Tesco and Asda offices to hunt for evidence that the supermarkets have been abusing their suppliers. The Competition Commission has ordered the two biggest supermarket chains to hand over all internal emails and other documents sent and received during five weeks in June and July.

The move came after the commission uncovered evidence of buyers using threatening language to demand cash payments from suppliers to finance the supermarket price wars. The new investigation could delay the initial findings of the watchdog’s inquiry into the way the big grocers operate, which are due late next month. Yesterday Leeds-based Asda admitted it was a target of the new competition commission inquiry, but insisted it had “nothing to hide”. A spokeswoman said: “We have had an approach for emails over a certain period. We are not sure what they are looking for but clearly some suppliers have taken certain allegations to the commission.”

Tesco, however, responded angrily to the inquiry being made public. Its legal affairs director, Lucy Neville-Rolfe, said: “It is extraordinary to see the Competition Commission putting these prejudicial allegations into the media in this way. The allegation that threatening and aggressive emails have been sent has not been mentioned to us.”

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HP-1: Asda Prices HP7 at 5 pounds

Supermarket Asda has set a new benchmark for pricing as it will be selling HARRY POTTER AND THE DEATHLY HALLOWS for an unprecedented £5, 72% off the recommended retail price, reports the Bookseller’s Graeme Neill. Bloomsbury said they were “bemused’ by Asda’s pricing and warned that it will sell out very quickly, disappointing those keen to pick it up cheaply. “We are confident that readers will still choose to buy their books at other retailers across the country amid crowds of fans looking for a magical atmosphere rather than just a cheap price and they are more likely to continue to have it in stock,” said Marketing Director Minna Fry, who added that pricing the book at 5 pounds means incurring an extra 2.5 million pounds of debt for parent company Wal-Mart. Ah, the joys of price wars…

HP-2: Spoilers, Embargos, All That Jazz

  • Another advance review of DEATHLY HALLOWS, without spoilers, but Mary Carole McAuley comments that “once the pieces fall into place, it all seems rather obvious. No other outcome would have been as plausible.” [Baltimore Sun]
  • Bloomsbury is confident that UK press won’t break the embargo. See the flying pigs over in the sky? [The Bookseller]
  • Nicholas Clee is astonished that Asda knuckled under to Bloomsbury. [Guardian blog]
  • More on the breach of contract suit launched by Scholastic against [BBC]
  • UK retailers will line up like civilians to buy their copies cheap from Tesco. [Times]
  • Boston teens hide their eyes from spoilers and predict their own ending for HP7. [Boston Globe]
  • Did Harry Potter change the world? Maybe, maybe not. [WaPo]
  • HP-3: BA Slams Potter Discounts

    Tim Godfray, chief executive of the Booksellers Association (BA), has slammed the “crazy” levels of discounts being used by retailers to flog the latest Harry Potter book. Godfray said the book industry had been “considerably weakened by this deep discounting”, reports the Bookseller. The strong comments follow a day of extraordinary developments after Potter publisher Bloomsbury forced supermarket chain Asda to apologise for accusing it of “holding children to ransom” by raising the price of the final Potter book. After withdrawing its supply of the book, the chain apologised unreservedly and withdrew the comments.

    However, Godfray admitted that the BA could not interfere. “The publisher sets a Recommended Retail Price and it is up to the individual retailer to decide on the selling price.” Which means that statements like these, while they attract media attention here and elsewhere, don’t really amount to much…

    Asda and Bloomsbury Make Up

    The Bookseller reports that Bloomsbury and supermarket chain Asda have resolved their dispute, after the giant retailer apologised for accusing the Harry Potter publisher of holding children to “ransom” by raising the price of the latest Harry Potter title. A joint statement isssued late today read: “ASDA apologise unreservedly to Bloomsbury for its press release dated 15th July and withdraw their statement. We look forward to a good relationship with Bloomsbury going forward including selling the latest Harry Potter book from 00:01am BST on Saturday 21st July and many other Bloomsbury books in future.” Minna Fry, Bloomsbury marketing director, added: “We are pleased that this situation has been resolved and look forward to working with ASDA in the future.”

    HP-4: Bloomsbury and Asda at War

    Boy, this is big news in its own right: the Bookseller reported that Bloomsbury had canceled Asda‘s 500,000 Harry Potter order and declared the supermarket a “Harry Potter free zone”. The publisher said that it had taken the decision because it had not been paid by the chain, but it has also been angered by the supermarket’s claim that it was holding “children to ransom” over the price of the latest Harry Potter. Words were exchanged in newspapers and on the radio, and the war isn’t about to abate anytime soon, even if an Asda spokesman says, the money for overdue bills “will be in their bank account tomorrow. Customers can rest assured that they will be able to pick up a Potter at an Asda price.” That’s because the threat of legal action on both sides looms, with Asda saying that if Bloomsbury doesn’t deliver, the publishing house will be in “breach of contract.”

    Though Neil Denny gives Bloomsbury “full marks”
    for slapping Asda down, if the supermarket chain pays as promised, oddly enough it may become a bit of a win-win-situation for both sides – Asda gets the books, and Bloomsbury stands on principles. “Of course, for the wider reading public the whole exercise is baffling and a little unnerving, making it ever more obvious that the rrp printed on the back of books is a piece of fiction quite the equal of anything dreamt up by a novelist,” Denny points out. “The full cost of the scales falling from consumer’s eyes since the demise of the net book agreement is yet to be calculated.”

    HP-18: Inquiry Into Price Wars

    So what took so long for a UK MP to investigate the massive price wars going on between Tesco, Asda, and Waterstone’s, leaving the poor chains pretty much to fend for themselves (if they’ve elected not to stock HARRY POTTER AND THE DEATHLY HALLOWS at all?) But now, according to the Evening Standard, Conservative MP Charles Walker has called for an urgent inquiry into the prices supermarkets will charge, saying the price war would put huge pressure on independent retailers who cannot compete with the giants. “I’ve already written to the Office of Fair Trading to ask them to look into this but we need a full-scale investigation,” he said.

    “A lot of small bookshops survive off the profits of just four or five blockbusters rather than a wide range of books, and here we have a situation where supermarkets are effectively selling books at a loss to get people in. That may promote literacy in the short term but it will force more book retailers into liquidation. This price war takes away the oxygen of economic survival from the smaller businesses, making it difficult to remain viable. The same can be said for small shops overshadowed by supermarket monsters.” But at this late juncture, I can’t see the OFT doing much about it, so on with the 60 percent-plus discounting at a supermarket near you!

    Asda Goes Direct for Children’s Books

    Publishing News reports on a new twist that may have repercussions for the UK publishing world: supermarket chain Asda has given notice to Warrington-based Handleman that it will be going direct to publishers for children’s titles, as it does for adult books. The supermarket, which sells books in some 310 stores, believes it will save money by the switch. One observer commented: “They have a new warehouse in Corby, which they have to fill and for which they are now selecting categories. Asda will have to merchandize all their children’s departments themselves, but they’re already doing this on the adult side. Their decision is about saving money on the supply chain.”

    The news also comes as Asda continues discussions with publishers over investment payments to secure ‘preferred supplier’ status, and the move to sell children’s books directly to consumers further cements its upwardly trending market share status.

    Asda To Add 300 Home-based Stores

    Though the Guardian’s news that supermarket chain Asda will open 300 new homeware stores in the UK as part of a push by chief executive Andy Bond to beat Sainsbury’s in the battle for sales may not have direct correlation to the publishing world, want to bet that the expansion means that Asda – already one of the biggest players in bookselling – expands that clout yet more?

    Over the past 18 months he has steered Britain’s second biggest supermarket chain out of a four-year sales slump and is now focused on growing sales by expanding its homewares arm. “We will open significantly more than 30 supermarkets over the next three years. I will be massively disappointed if we don’t,” said Bond. “We have other avenues of growth such as Asda Living which we will expand very rapidly now. There are probably 300 locations where you could have an Asda Living store.” And that means more places to sell books, compete with the chains and make a bigger dent in the publishing pie.

    Harry Potter and the Illusion of Moneymaking

    I’m really linking to this Sunday Telegraph piece on why many in the book trade are worried sick over the impending release of HARRY POTTER AND THE DEATHLY HALLOWS for the left-hand graphic – which sums up said worries rather well, as many retailers are privately fuming that such a huge event will leave them no richer. “It really is incredible that no one apart from JK [Rowling] and Bloomsbury will make a shekel. When you think of the work we have to do and the hoops we have to jump through around the launch, it is unbelievable,” says the managing director of one of the UK’s largest book retailers.

    Old news, but the piece spells out what a pickle booksellers are in more clearly than usual. That’s because Bloomsbury set the recommended retail price at 17.99 pounds and offers HP7 to booksellers at anywhere between a 45 to 55 percent discount. But because of price wars between bookstores and supermarkets, the final Harry Potter volume will be sold at half-price or less. Even for those with little interest in number crunching, the math is obvious: zero profit or a loss.

    And no matter how much spin there is about the Potter books bringing in potential customers who will then buy more books, that didn’t exactly happen in a large scale when HARRY POTTER AND THE ORDER OF THE PHOENIX was released in 2005, and Tesco & Asda are even more major players today. So Potter 7, says the Telegraph, “is being treated with a mixture of excitement and anxiety among book retailers. Excitement because the book will bring people flooding into their stores. But anxiety because retailers fear that the days of no-profit blockbusters could be here to stay.” And I’d say that fear is reality, especially in the UK.

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