ECONOMY

UK booksellers face twists and turns in plot to beat supply crunch

With its glass ceiling and oak panelled galleries, Daunt Books on Marylebone High Street is among the prettiest shops in London. This festive season, however, the Edwardian surroundings are a little less elegant than usual. Between the aisles and above the shelves in some parts of the store sit cardboard boxes and piles of unarranged books.

Like booksellers across the UK, Daunt is worried that the crunch in global supply chains will leave it unable to meet customer demand in the run-up to Christmas. To reduce the chance of shortages, it has ordered far more stock than usual. The chain’s storerooms are almost full, and it has nowhere else to put the inventory.

Rose Cole, general manager, warned its supplies of some titles could still start to run low by the end of this month. “More titles won’t come in on time,” she said. “It’s going to [get] progressively worse.”

She is right to be concerned. Further up the supply chain, bottlenecks have been developing for months. Fabrice Holler, chief operating officer of CPI Books, the biggest printing house in Europe, said there was “very heavy pressure on the system”.

The problems begin near the top of the chain, where supplies of raw materials are tight. The paper industry has been in decline for years, not least because digitisation of books, and a wide range of other media, forced mills to close.

Figures from commodity data provider Fastmarkets show the sector in Europe has lost 1.3m tonnes, or about 20 per cent, of its capacity in so-called mechanical grinding, a primary production technique, in the past five years.

During the pandemic, demand for the raw material unexpectedly surged. The boom in ecommerce left retailers scrambling for cardboard, while book sales rose as people under lockdown restrictions began reading again.

Lars Lundin, chief executive of Holmen, one of Europe’s largest producers of paper for books, said it was still meeting its supply agreements but acknowledged the Stockholm-based group was taking longer to deliver paper than earlier in the year.

Such delays are causing problems for printers. CPI, which accounts for about 40 per cent of the trade printing market in Europe, said the difficulty in securing supplies meant it now took the company three weeks to produce books — much longer than the usual seven days.

Expenses had also risen sharply over the past six to 12 months, Holler said: paper by about 20 to 30 per cent, energy about 25 per cent and transport, glue and plastic wrapping as much as 15 per cent.

“We have to pass on the increases where we can,” he said, adding that the printing company had raised prices for publishers by an average of 5 per cent.

Demand for paper had been so strong, Holler said, that CPI also had to put caps on sales to some clients. Amazon had been particularly aggressive in building inventories in both packaging and books, he added.

Hold-ups in paper mills and print factories are just the start. Publishers also need to contend with the same shortages of containers, logjams in ports and lack of lorry drivers that have afflicted a wide range of consumer industries.

Factories in the UK can print regular black and white texts, yet the country lacks facilities for colour publications, which need to be imported. As a result, the risk of shortages is most acute in genres such as children’s, cookery and gardening, according to publishers and retailers: titles that tend to be popular gifts for Christmas.

Boxes of books at Daunt Books
To reduce the chance of shortages, Daunt Books has ordered far more stock than usual, resulting in storage problems for piles of boxed-up books © Billy Barraclough

Delays to shipments are “getting worse by the day”, said Karina Stevens, head of operations at children’s publisher Nosy Crow. Delivery times from Hong Kong had approximately doubled from the typical five or six weeks, she added.

Smaller publishers in particular lack the bargaining clout to secure space on ships. Larger companies, especially those with higher value stock, can pay more for the slots.

Recently a ship had unloaded a container full of Nosy Crow products bound for Southampton in Singapore, Stevens said. “They literally just offloaded our container at the port in Singapore. We had to wait for the next ship, which was a week later.”

“We’ve tried to pull dates forward, and have allowed more time. But there’s a limit to what we can do . . . There are still things such as port closures happening at the last minute that you can’t plan for.”

Andrew Franklin, co-founder of Profile Books, publisher of authors including Francis Fukuyama and Jonathan Dimbleby, said: “We’ve got some big titles going through at the moment. Will we be able to keep them in print? We don’t know.”

Already book launches and signings have had to be postponed.

Brexit-related complications had made exports, as well as imports, problematic, Franklin said. “It used to take us a day and a half to get our books into Ireland. It’s currently taking between six and 10 days.”

The rush from retailers such as Daunt to order well in advance has boosted publishers’ sales in recent months: at London-listed Bloomsbury, for example, first-half revenues surged 29 per cent year-on-year to a record £101m.

Column chart of H1 revenues (£m) showing Pre-orders lift Bloomsbury's sales to 10-year high

However, given the difficulty of balancing supply and demand, publishers warned that retailers were likely to return more unsold books than usual after the festive season. “We’re seeing big gaps in what has been ordered [by retailers] and what has been selling through,” Franklin added.

Consumers, meanwhile, are being urged to place orders now if they want to ensure they land their chosen titles in time for Christmas.

Cole said none of Daunt’s customers had so far encountered unexpected shortages. But she added: “If you ask me the same question in a month’s time, it’ll be different.”

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