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Posts Tagged ‘Tesco’

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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How Retailers Are Handling the Booker Prize

The reaction to the Booker Prize longlist has been, shall we say, rather muted. “Too many unknowns,” some grumble, though others welcome the lack of bestsellers and notable names. But what does this mean for the high street? The Bookseller’s Alison Bone endeavors to find out in the wake of a recent survey of retailers by the Man Booker Prize people. In a presentation to longlisted publishers on Thursday, the Booker Prize’s organisers–including administrator Ion Trewin and marketing consultant Gordon Kerr–outlined the results of industry research into the status and impact of the prize.

Kerr said that every single retailer interviewed during the course of the research raised the issue of availability of shortlisted titles. Prize administrator Ion Trewin agreed. “We don’t want a repeat of a couple of years ago when for two weeks two of the books were not available. It seems such a waste given the massive amount of publicity,” he said. Kerr believes that having a shorter longlist will help publishers prepare themselves for reprints on shortlisted titles. Other retailers brought up the notion of receiving advance word provided they sign confidentiality letters, a notion that intrigued both Trewin and Kerr.

And what of the supermarkets, so critical for the UK’s book industry now? This year’s prize will see Tesco promote the shortlist in its stores for the first time, publishers were told. Tesco’s instore shortlist marketing is likely to run alongside a website promotion and targeted emails, backed by co-operative press advertising. Category manager David Cooke said: “We’ve never really supported the Booker, so whatever we do will be a step forward.” And at Asda, books buyer Steph Bateson is also considering whether to stock the entire shortlist. “It’s an opportunity for those customers who may be intimidated by going into a Waterstone’s, or maybe haven’t even heard of the Booker,” she said.

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 DeepDiscount.com. [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-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!

    Retail Slowdown for Tesco?

    The Telegraph reveals that Tesco, the UK’s largest retailer, reported a slowdown in sales growth and gave warning that four interest rate rises in less than a year have hit consumer confidence. Group sales at Tesco increased 10pc in the 13 weeks to May 26 – boosted by a strong performance in Asia – but in the UK like-for-like sales growth slowed to 4.7pc, down from 5.8pc in the previous quarter. City analysts had expected Tesco to report a 5.2pc increase in UK like-for-like sales. Shares in the retailer closed down 22 and 1/4 p at 434 and 1/2 p – the largest one-day fall for four years.

    “It appears that higher UK interest rates might finally be starting to bite,” said Sam Hart, retail analyst at Charles Stanley. Andrew Higginson, finance director at Tesco, said customers were more cautious, particularly when buying non-food products. “Things have got a bit tougher with the interest rate rises, but we are still outperforming the market,” he said, adding he had no idea why Tesco shares had fallen so sharply. “We are very pleased with the numbers. They are good numbers.”

    Announcing…the Tesco Book Club

    Tesco and Random House are teaming up to launch the Tesco Book Club, reports Booktrade.info. Tesco will select one Random House Group title each month which will be featured in their stores nationwide, branded with Tesco Book Club branding. The launch title, INNOCENT TRAITOR by Alison Weir, will be followed by ONE GOOD TURN by Kate Atkinson in July. The books will be Tesco Special Editions with a branded bookmark and each will feature “exclusive extra content”. Titles will also feature in Tesco Magazine and be promoted to Tesco.com customers via an email campaign.

    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.

    Returns for New Harry Potter Capped, Just Like Last Time

    And the news that Bloomsbury is once more imposing a cap on returns – reduced from 20 per cent last time to 10 per cent – is no doubt extremely unwelcome to independent bookstores, reports the Independent. Recall that many of these stores once vowed en masse in the UK that they would not bother stocking HARRY POTTER AND THE DEATHLY HALLOWS since they couldn’t compete with the deep discounting from Tesco, Asda and the like. The publisher argues that it’s simply being eco-friendly, but wholesalers are supporting the indies’ complaints, and the Booksellers Association has presented concerns to the publisher. We’ll see what happens, but the Independent figures that the indies will order the new Harry in conservative quantities – and then go to the supermarkets to replenish their stock.