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Dog days dispute threatens book supply

22 August 2005

In what the UK reckons to be the dog days of summer, the most extraordinary dispute looks headed for open warfare. W H Smith, purveyor of books, stationery and newspapers, is currently struggling to wake out of its long slumber. The company wants to become the effective force in retail that it used to be. Given the chain’s enormous number of branches, their power - for good or ill - in the book trade is considerable. For years they have punched beneath their weight, but now a well-regarded retail specialist, Kate Swann, is trying to reshape the organisation to meet the newly competitive world in which it finds itself. Given what‘s going on in the shops, this is now against the background of a major retail downturn.

All this makes it even more amazing that Smith’s should join battle with its major suppliers over an issue on which the publishers cannot give way. But that is exactly what the chain seems to be poised to do. It is endeavouring to push through a new Conditions of Purchase contract, which will fine publishers for late delivery. The fines are being deducted from accounts and thus imposed in a summary fashion. If publishers deliver late this may seem fair on the face of it, but WHS itself is famed for its poor compliance. Publishers are threatening to retaliate if the retailer does not fulfil its side of the bargain in terms of paid-for promotions.

The core of the problem is WHS’s stock system, which remains unable to talk to the Nielsen BookData system on which the entire book trade operates. This includes the chain’s major competitors Waterstone’s and Ottakkar’s. Large amounts of manual update, which is impractical in practice, would be the only way of keeping abreast of all the book information Nielsen BookData updates weekly. The result is chaos.

In the meantime tempers are getting decidedly frayed. ‘If Smith’s don’t back off, there will be legal disputes’ one senior figure in the trade told Publishing News. This looks like a battle no-one can win, and it might be a last straw for Smith’s in the current shaky retail situation.