Like many people in the trade, no doubt, I have had some very important reading material on my bedside table this week. No, not the Competition Commission's 10-page, 8,000 word Remedies Statement. I'm talking, of course, about the new Harry Potter book.
Let's face it, when it comes to bedtime reading,any analysis of the Herfindahl Hirschmann Index and supermarket isochrones is always going to struggle to compete with the excitement of Voldemort, Potter et al.
But in a strange, roundabout way, I think JK Rowling's new book also tells us a lot about the current state of play in the UK retail scene. I'm clearly not suggesting the book itself offers any insights. Rather, I think it is the way in which the launch was handled that speaks volumes.
Consider this: here we had a premium product (ie: a hardback book selling at £16.99), which everybody in the country wanted (including, I believe, quite a few children) and which was underpinned by an enormous publicity and marketing campaign.
Despite all this interest, and the obvious demand, practically every major retailer in the country decided to crash the price to below £10. Clearly, that was great news for shoppers like me. But it was a disaster for independent booksellers. Even the small shop where I bought my copy felt compelled to cut the cover price by a fiver, taking out most of his profit in the process.
Now, I accept that smart retailers simply used price as a short-term way of cashing in on the Harry Potter hype and getting punters through their doors. Nevertheless, that tactic created a hideous bear market in which the price of this book seemingly fell every day as retailers desperately tried to outdo each other.
It wasn't a particularly pleasant sight, but I guess it demonstrates the intensely competitive nature of the entire retail sector in this country.
And I think the past week raises an interesting philosophical point: if retailers felt compelled to slash the price of something that clearly deserved to command a premium, and for which there was huge demand, is it any wonder that we are seeing such intense deflationary pressure on other, arguably less glamorous, products?
{{COMMENT & LETTERS }}
Let's face it, when it comes to bedtime reading,any analysis of the Herfindahl Hirschmann Index and supermarket isochrones is always going to struggle to compete with the excitement of Voldemort, Potter et al.
But in a strange, roundabout way, I think JK Rowling's new book also tells us a lot about the current state of play in the UK retail scene. I'm clearly not suggesting the book itself offers any insights. Rather, I think it is the way in which the launch was handled that speaks volumes.
Consider this: here we had a premium product (ie: a hardback book selling at £16.99), which everybody in the country wanted (including, I believe, quite a few children) and which was underpinned by an enormous publicity and marketing campaign.
Despite all this interest, and the obvious demand, practically every major retailer in the country decided to crash the price to below £10. Clearly, that was great news for shoppers like me. But it was a disaster for independent booksellers. Even the small shop where I bought my copy felt compelled to cut the cover price by a fiver, taking out most of his profit in the process.
Now, I accept that smart retailers simply used price as a short-term way of cashing in on the Harry Potter hype and getting punters through their doors. Nevertheless, that tactic created a hideous bear market in which the price of this book seemingly fell every day as retailers desperately tried to outdo each other.
It wasn't a particularly pleasant sight, but I guess it demonstrates the intensely competitive nature of the entire retail sector in this country.
And I think the past week raises an interesting philosophical point: if retailers felt compelled to slash the price of something that clearly deserved to command a premium, and for which there was huge demand, is it any wonder that we are seeing such intense deflationary pressure on other, arguably less glamorous, products?
{{COMMENT & LETTERS }}
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