The Rise of the Superstore K Chain

LOGOS The rise of the k chain superstore

Stephen Horvath The retail book business in the United States is diverse and highly competitive, and, as the follow ing figures show, its pattem is changing:

1993 1994

Chain bookstores 23% 27% Independents 24% 19% After twenty years in the Book clubs and mail order 20% 22% publishing business, during Discount/waiehouse stoies 13% 14% which he worked for a US Used book stores 5% 4% Food/drug stores 5% 4% educational publisher, for an All other 10% 10% international STM publisher and as a publisher of academic and There is every indication that chain professional journals, Steve bookstores will continue to increase their market shaie. Chains ate not new, but a lot of new things Horvath entered bookselling. have happened in the chain segment of the indus His first job was with Barnes & tiy ovei the last ten yeats. Like many other book- Noble. He is now Assistant buyers, I have observed these changes from the Manager of the Borders customer's point of view. My vantage point, until 1988, was Boston, Massachusetts. As an avid reader Superstore in San Francisco. and compulsive bookstore browser, I was well- Horvath holds AB and MBA served thete by a numbei of independent book degrees from Dartmouth College. stores - Harvard Bookstoie and Woidsworth in Cambiidge, Boston Univeisity Bookstoie in Ken- mote Squaie, and Biookline Booksmith. They were all good places to biowse, with inviting (albeit somewhat pedestrian) displays, with all the curtent books and with a good backlist selection. These stores were suited to the seiious leadei. Theit stock selection was made by a knowledgeable "book pet- son", not by a computei. You might have had to canvass mote than one shop in order to find out what you were after, but that was a pleasuie, not an inconvenience. There were chain bookstoies in the Boston vicinity in these yeats, confined mostly to shopping malls. The one exception was a multi- stoiey Bames & Noble downtown. To my mind.

such stoies were for discounted bestsellers (or books 1. legional chains, a few of which (B Dalton and published with such aspirations) and children's Bames & Noble) were precursors of today's books. Serious readers did not go to malls to shop mega-chains; for books. 2. consolidation, merger and expansion among In 1988, we moved to Thousand Oaks, the chains; California. The bookstore landscape changed dra 3. location in shopping malls, eventually result matically - for the worse. We found ourselves in a ing in most major malls having both B Dalton town of 75,000, well above average in education and Walden Books as tenants; and affluence, but without a single decent book 4. deep discounting of bestselleis; and shop. What was there - sterile, cramped Walden 5. the coming of the book superstore, pioneered and B Dalton mall stores - did nothing to excite by Boideis and aggiessively joined by Bames &. the book lover's soul. The nearest independent, a Noble. shop called Book Soup, was thirty miles away in West Hollywood. The superstoie phenomenon has pro Our next move, to Palo Alto, pait of the ceeded by means of a serial saturation of selected Bay Aiea anchored by San Francisco, San Jose and markets. This has brought intensified competition Oakland, brought us back into good bookstore based on price, selection, service and 100-hours-a- country. Palo Alto, a university town, had the same week store operation. Superstore appeal has been quality of bookshops as Boston/Cambiidge. But in enhanced by the cieation of pleasant browsing the foity miles between Palo Alto and San Fran enviionments, events for adults and children, large cisco - an aiea known as the Peninsula - there was periodical offerings, music - and coffee. The typical nothing but Walden and Dalton in a mall. supeistoie compiises at least 10,000 squaie feet of Not any mote. With the coming of a new floor space and a minimum of 100,000 book titles kind of chain bookstoie - the supeistoie - staiting on hand. in late 1991, the sophisticated Peninsula bookbuyei The outcome of these developments is a today has little to complain about. Wheie befoie retail book industry in which national chains ate thete was a deseit, theie ate now thiee Barnes & becoming piedominant. Independent bookstores Nobles, one Crown and a Borders store opened in are struggling. In 1994, the leading chains increased Palo Alto in eatly 1996. All of these ate laige, theit sales by 16% over the previous year, while attractively laid out, well-stocked and well-staffed total bookstore sales were up only 5%. Not only are empoiiums, some with cafes added. This levolution the independents being crowded out, but within in the Bay Area is lepiesentative of what has the chains there have been numerous stoie closings, occuired in almost eveiy majoi metiopolitan aiea in as the old mall sites have lost business to the supei the US. If the plans of the laigest players are real stoies. ized, it will soon be happening in medium-sized As of the end of 1995, there were four cities and towns as well. majoi bookstoie chains: Wheie did this bookselling blitzkrieg come from? What is the cunent state of the game? Where is it going? 1994 1995 Increase ($m) ($m) % Bames & Noble (including B Dalton, Doubleday and Scfibneis) 1,337 1,623 21 Over the past twenty years, the bookstore Boiders business has expeiienced a series of changes cen (including Walden) 1,370 1,511 10 tered on expansion, mass merchandising, discount Crown 275 305 11 ing, uniformity of piesentation and concentration Books-a-Mdlion 123 172 40 on high-volume titles. Majot developments in this evolution have included: Total 3,105 3,611 16