General trade – Half year review 2016

By Olinka Nell.

The first half of 2016 proved most eventful in the general trade. The currency rollercoaster first wreaked havoc with unit sales (post-Nenegate) before blowing holes in budgets based on price increase projections (post- Brexit). Prices increased by up to 12% in the first months of the year, with unit sales dropping by more than 6% as a result. Bookshops were still able to show some growth based on higher price, but could potentially be hit hard when prices started to drop after the weakening of the pound in the wake of Britain’s decision to leave the European Union.

At the end of January, the Rand was trading at 22.6 to the pound. By the end of June it had recovered to 19.5. The downwards trend seems set to continue with the post-election currency surging to 17.1 to the pound in mid-August. Book prices follow the curve correspondingly, most obviously so when sourced from agencies such as Jonathan Ball. Whereas Penguin Random House were able to announce a stable 6% price increase which will be kept to until the end of the year (thanks to their net-price ownership model), Jonathan Ball and the smaller distributors are forced to adjust according to exchange rate fluctuations. In an economy under strain, we have to hold fast to the hope that unit sales will recover in time with lower prices.

To add to the uncertainty, the trade saw significant changes in the rights and distribution landscape this year. Trinity Books closed their doors after years of service to the industry, their many lists subsequently picked up by Peter Hyde, Real Books, Phambili and others. PSD Agencies officially declared insolvency, with most of their lists still being negotiated. On The Dot closed their book distribution arm, resulting in supply disruptions for many local publishers such as NB, Jacana and Protea Books. NB consolidated their warehousing with Jonathan Ball, whereas Jacana partnered with Booksite. Protea elected to go their own way. Interestingly, RNA saw an opportunity to expand their book distribution arm, “RNA Entertainment”, by acquiring the local publishers left adrift by On the Dot as new clients.

In a further surprise move, Gerald Wratten announced the establishment of Crystal Brook Distributors, which will distribute for agencies such as Sula. Managing bookshop databases in an environment fraught with change is proving a challenge in an industry where most have forgotten the secret code of prefixes. The latter system is showing signs of redundancy as publishers are increasingly unable to provide accurate digit calculations. For booksellers to know where to order any particular book from, the time is ripe for an industry solution from a local service provider.

Sales trends in the first half of the year continued where they left off in 2015: colouring books kept on selling, low carb cookbooks proliferated and the “Girl on a Train genre” remained resilient. Political titles showed sustained customer interest with books from Justice Malala, R.W. Johnson and Ferial Haffajee keeping their top 10 positions. Jojo Moyes sales showed no signs of decline, buoyed by the movie release of Me Before You. The surprise of the year thus far was Jan, which hit the shelves in March right after chef Jan Hendrik van der Westhuizen was awarded a Michelin star. With book launches around the country and a warm personality to boot, he was a star overnight.

Disconcertingly though, children’s book unit sales plateaued, whereas we saw more than 20% growth in the same period last year. Fewer South African books were published and sold, with ISBN’s sold seeing a 3% dip year on year (775 fewer than in the same period in 2015). While range sales in the trade grew by 7%, this was driven by Adult Fiction which was the only category that saw an increase in ISBN’s sold.

Theft remains a concern in the trade, with more and more informal sellers popping up across the country. Whereas new kid on the block Bridge Books legitimately caters for a burgeoning sector of book buyers, there are constant reports of syndicate activity channelling stolen books to secret clients in downtown Johannesburg. Thieves are allegedly paid R200 a day to steal books from all over Gauteng.

With a silver lining on the horizon, mainly in the form of Harry Potter, Deon Meyer and AB de Villiers, the trade holds its collective breath for some reprieve in the second half of the year.