Declaration Of Independents
Independent bookstores look for ways to compete with chain retailers.
Thursday, April 16, 1998
Over the last 25 years, the face of retailing in the United States has dramatically changed as one after another small business closed its doors in the face of competition from large, chain retailers. The Marts, K and Wal, decimated locally owned department stores; mom-and-pop grocery stores were bagged by Safeway and Von''s; Orchard Supply and Home Depot hammered nails in the coffin of small hardware stores. As our downtowns withered and the malls blossomed, our response as communities and consumers amounted to little more than occasional nostalgic tears as we saved nickels and dimes in the new national chains. For all intents and purposes, we, the consumers, the owners of the displaced businesses and the communities they served, did nothing.
But that isn''t the case with one of the most recent industries to be threatened. In the courtroom and in the aisles, independent bookstores are fighting back.
On March 18, the American Booksellers Association filed suit in US district court charging big-box booksellers Barnes & Noble, Inc., Borders Group, Inc., Borders, Inc. and Walden Book Company, Inc. (B. Dalton Booksellers is owned by Barnes Noble, while Walden Books is owned by Borders) with unfair business practices. The suit was filed largely at the instigation of small, independent bookstores who, over the last decade, have seen superstore book emporiums menace their businesses.
It''s a battle that''s mixed with equal parts of philosophy and self interest.
May Waldroup''s Thunderbird Bookshop in Carmel was one of the 26 bookstores throughout the country that signed on to the suit.
"The thing is, when you support big boxes, when you think of Wal-Mart and how many businesses it''s put out of business, it''s destroying the very fabric of our communities," says Waldroup. "Every chain bookstore--and there are 300 in California--has affected [independent bookstores]. When the chains came in, they doubled the floor space of what was there with the independents. But there wasn''t double the money suddenly."
Waldroup says she "couldn''t imagine not" signing on to the suit.
The ABA lawsuit alleges that the chains engaged in unfair business practices covered in the Robinson-Patman Act of 1936 and in California''s Unfair Practices Act, enacted to protect "smaller, independent retailers" against "unfair competitive practices of the large chain stores."
In the complaint, the independents point to the rapid expansion of the chain bookstores--Barnes & Noble more than tripled its number of "superstores" from 135 in 1992 to 469 in 1997, while Borders increased its number of "superstores" by a multiple of six, from 31 to 189. The complaint also underscores the decline of independent stores: "Nationally, the market share of independent booksellers has declined by 40 percent since 1991 and countless independent bookstores have been forced out of business.
"Although the national chains justify their rapid expansion by aggressively promoting the view that "bigger is better," this marketing message is belied by reality. Most books from publishers are bought by retailers, including the chains, on a returnable basis. Taking advantage of these returnable terms, national chains have often massively overbought and undersold titles. A study by Open Book Publishing found that the return rate for national chains is approximately 50 percent higher than the return rate for the average independent bookstore...Because of inefficiencies such as this, "[p]ublishers say returns of new hardcover books last year ran between 35 and 50 percent, compared with 15 to 25 percent 10 years ago."
If the suit seems like cold haggling about business practices to book consumers who are mostly interested in saving a few dollars, the potential consequences of the suit''s outcome may be more interesting.
"[W]hile chains trumpet the myth that they offer significant "discounts" to consumers, their inefficiencies instead force publishers to drive up the list price of books," reads the suit, in part.
"The ultimate victims of the national chains'' expansion will not only be the many independent bookstores forced out of business, but also the book reading public."
And the lawsuit also makes clear that readers may find more than their pocketbooks affected. Readers may find their reading selections severely curtailed by chains afraid to stock any book that may offend one philosophical faction or another. As an example, the suit quotes Andy Ross from Cody''s Books in Berkeley:
"Several years ago the bookselling community was in a state of fear due to the terror surrounding the publication of Salman Rushdie''s Satanic Verses. America''s two largest chains responded by pulling the book from the shelves of 1,000 stores nationwide. Independent stores throughout the country rallied to the cause of intellectual freedom by continuing to carry this book even in the face of possible physical harm."
Even if the suit is successful in curtailing the alleged unfair practices, it seems unlikely that it will put the large chains out of business. It will remain to the independents to find a way of successfully competing with stores that have more floorspace, more resources and more titles.
Local bookstore owners and managers stress that the key to successful survival is their ability to know and understand their community--whether it''s based on geography or interests.
The Thunderbird''s Waldroup says, "The one thing we have that they don''t have is individualized buying. We know our clientele and we buy to suit their needs. The chains do across-the-board buying."
"We have tailored our books to books that people in our community are looking for," echoes Anne Congleton, manager of Bay Books in Monterey. "For example, we recently switched from using the New York Times best-seller list to the Northern California Booksellers Association list."
Marcia Stearns, owner of Bookmark, a small bookshop specializing in books on the performing arts, says, "I know what my customers are asking for--and I can spell Shchedrin and Mussorgsky. We do a lot of research here for people in music and theater, particularly. I don''t know if a place like Borders is equipped to do the kind of research we do."
The locals also agree that a high-quality of service and knowledge are essential. But those are difficult qualities to sell and they could be duplicated by chain retailers. Certainly, in the past, the large chains have incorporated ideas--like in-store coffee houses and hosting a variety of events--pioneered by the indies.
This leaves local owners in somewhat of a quandary about how to further define themselves and attract customers.
"You know," says Waldroup, "it''s difficult to come up with new things. We are basically in the business of selling books and coming up with events around that. We are constantly looking for new events we can do now."
According to some owners, these events are essential for keeping their bookstore in the community''s consciousness. Esther Hicks and Wouter Van Rossum purchased Bookworks in Pacific Grove in March. For the last several years, the store had hosted few events and put little emphasis on publicizing what booksignings and author parties they did present. According to Hicks, that''s a dangerous policy to pursue.
"I come from academe," says Hicks, "and if you don''t publish, you don''t have visibility. I translate that into the book business: If people don''t know who we are, if people don''t know what we do, we might as well hang it up.
"One of my jobs, is to find out exactly what events are going on, to analyze and find the place in our market where we are best represented."
Waldroup says her bookstore has discovered at least one area that chains shy away from: events related to metaphysical books or issues. She postulates that the chains avoid the potentially controversial area of spirituality for the same reasons they dumped Rushdie''s Verses: They are afraid of offending any segment of the community.
Not all bookstores agree, however, that events are important for their their future welfare. Bay Books, which up until the beginning of ''98 had a full schedule of events every month, has drastically reduced their number of special events.
"We loved doing the events, and we''ll continue doing them from time to time," says Congleton. "But we felt that we had to concentrate on our core business, our customers who were already our customers." She says that the store''s policy is to focus on high-quality service and, "We try to sell that concept one customer at a time."
Looking to influence more than one potential customer at a time, about a year and a half ago local booksellers formed Monterey Bay Independent Booksellers (MBIB), an organization still waiting to receive its non-profit status. The group has sponsored two short-story contests, a gift certificate program at Christmas time, last year''s Book Festival ''97 and this weekend''s Book Festival ''98 at the Monterey County Fairgrounds (see inset box).
"Whether or not it will raise public awareness for independent bookstores, I don''t know," says Bookmark''s Stearns. "I think the more humanitarian intent, the philanthropic intent, is to raise consciousness about reading and literacy. And then, all the rest falls into place." cw