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For bookstores, soaring loonie


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For bookstores, soaring loonie yields plot twist on prices

RICHARD BLACKWELL

 

From Tuesday's Globe and Mail

 

Publishers who distribute U.S. books in this country are scrambling to reprice their products, after an outcry from book stores and consumers unhappy over the outdated exchange rate used to calculate Canadian prices.

 

Canadian book buyers will soon see discounts of up to 20 per cent on some American-published books, as prices are shifted to take into account the soaring loonie.

 

The publishers are making the move after months of complaining from book store owners, whose customers can see both Canadian and U.S. prices on the dust jackets of most imported books.

 

Jeannette Walls' book, The Glass Castle: A Memoir, for instance, is priced at $19 in Canada, 36 per cent higher than the American price of $14 (U.S.). With the U.S. dollar at about 11 per cent over the loonie, the difference seems drastic.

 

Consumers have been grumbling for months, said Paul McNally, owner of the Winnipeg-based McNally Robinson book store chain, and past president of the Canadian Booksellers Association. But the ferocity of their complaints increased considerably when the Canadian dollar hit 90 cents in May, he said, because at that benchmark "people can do the math so easily."

 

He said book stores get no benefit from the discrepancy, as they pay publishers in Canadian dollars, and usually get a fixed 40-per-cent discount off the list price as their gross margin.

 

Jim Deva, co-owner of Little Sister's Book and Art Emporium in Vancouver, said his customers are "extremely upset" when they see the contrasting U.S. and Canadian prices. "Every publisher's representative that comes in through our door I give a major lecture about it," he said.

 

Most publishers have already made pricing changes with new books, or reprints, that have been printed recently, reducing the difference between the U.S. and Canadian price to about 20 per cent. Book sellers say that markup is reasonable because of the higher costs of distributing books in Canada. Still, it can take up to a year for a newly priced book to work its way into a store.

 

More significantly, some publishers have promised to change pricing on their backlists -- effectively altering the retail cost for books printed over a year ago, where there is the biggest price discrepancy because of the exchange rate.

 

Random House of Canada, for example, which distributes U.S. books in Canada, will give book stores an extra discount on its backlist U.S. books that are older than 12 months, allowing the retailer to reduce the selling cost to consumers.

 

"We did hear the concerns from book sellers and consumers," said Random House spokeswoman Tracey Turriff. "We wanted to ensure that the pricing continued to be appropriate given the rising Canadian dollar."

 

Mr. McNally said the new policy means most Random House books on his stores' shelves -- about 10 per cent of his inventory -- will fall in price by about 20 per cent as of July 1. He'll put new stickers on each book to reflect the new price.

 

Other publishers are making similar price-cutting moves. John Wiley & Sons Canada will move its Canadian pricing to a 20-per-cent premium over the U.S. dollar price on new U.S. books, reprints and the backlist, said Robert Harris, head of the company's trade division. Unlike Random House, Wiley will put price-change stickers on the backlist books in its warehouse, before they are shipped to stores.

 

Wiley felt it had to take action, Mr. Harris said, because of complaints over the sharp change in exchange rates. "This is affecting just about every product that comes up from the U.S.," he said. "We looked at it and said, 'We should have a price that's more or less in line with what the exchange rate is.' "

 

Not all retailers will handle the price changes the same way. Some, like Mr. McNally, will make sure there are new price stickers on all repriced books to indicate the changes. Indigo and Chapters book stores, on the other hand, will put up signs to tell customers to check with cashiers to see whether the prices marked on the books have been reduced. Sorya Ingrid Gaulin, spokeswoman for Indigo Books & Music Inc., said the new prices will be in the computer system and show up at the cash register.

 

Because of the differing policies, pricing will be haphazard -- and likely confusing -- for book buyers over the next six months.

 

Still, Mr. McNally said, "I'm confident that by the turn of the year we'll see the vast majority of the stuff on the shelves will have been repriced."

 

Mr. McNally said one concern with reducing the price of books is that the gross revenue at each book store will fall accordingly. He said he is optimistic, however, that with lower prices there will be a corresponding increase in the volume of sales.

 

Discrepancies in magazine pricing have also been an irritant to consumers.

 

However, Indigo's Ms. Gaulin said it has not been as big a problem, because the more frequent publishing schedules for periodicals means pricing can be shifted more easily to take into account changed exchange rates.

 

http://www.theglobeandmail.com/servlet/sto...y/Business/home

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