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The Book Retail Sector in Canada

February 24, 200824 February 2008

Reading, Publishing and Literacy

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This report provides a profile of the retail book market in Canada. A key argument in the report, prepared for the Department of Canadian Heritage by Turner-Riggs, is that “the supply of books in the Canadian market is growing much more quickly than is consumer demand”:

  • Almost 17,000 new titles were published by Canadian publishers in 2004, a substantial increase from the 12,000 new titles published in 1998. In addition, American publishers produce approximately 300,000 new titles each year.
  • Although the percentage of Canadians reading books has remained relatively stable, the report argues that the numerous pressures on people’s leisure time and the perception that books are expensive are significant risk factors.

The traditional book retail channel – physical bookstores – “still accounts for the majority of consumer book sales in Canada”. The book retail sector is highly concentrated, with a “shift in market share from the independent bookstores to a single national chain throughout the country and powerful regional chains in Quebec”. In 2006, the market share of Indigo was 44%, compared with 20% for the nearly 2,000 independent bookstores in Canada, 20% for non-traditional bookstores, 7% for sales of trade books to libraries and schools, 4% for online sales, and 5% for others.

The report estimates overall consumer book sales to be approximately $1.6 billion in Canada. The report notes that concentration in the book retail sector has led to a situation of “more sales for fewer books”. Of the 373,000 books with sales in 2006, the 500 bestselling titles accounted for almost one-quarter of the total value of sales.

Regarding consumer behaviour, the report argues that “book buyers are greatly influenced by the way books are displayed in store” and that impulse purchases are an important component of book sales.

A significant proportion of books are imported into the country. The high value of the Canadian dollar has provided added incentive for imports and created downward pressure on the prices of Canadian-published books.

Although similar in a number of ways to the rest of the Canadian book market, the book market in Quebec “has a number of distinctive characteristics as well, including a greater level of government support for the book trade, accreditation of bookstores, the role played by major regional chains, the vertical integration of publishers, distributors, and retailers under the same ownership, and cooperative arrangements for the distribution of new releases”.

The report argues that non-traditional sales channels, including the Internet and non-traditional retailers such as Costco, Walmart and others, could become major growth channels. The report also argues that “online bookselling is both a constructive and a disruptive force. It provides new choice and valued services to consumers, and it is a new sales channel for publishers; yet it breaks down conventional boundaries related to territory, trading information, and roles within the supply chain.”

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