Poor reading from Waterstone’s

Waterstone’s no longer has a single specialist rival of scale and should be making hay. But the market leader is underperforming.

In the first half, Waterstone’s total sales fell 4.3% – a lacklustre result against a book market down 0.5% year on year – and losses mounted. Of course competition no longer comes from other specialists. Shoppers are likely to pick up popular titles from a grocer or buy books online.

Waterstone’s has made a stab of claiming online spend and pushing sales of emerging technology such as e-readers, but its shops seem to find it difficult to pull readers in profitably. Many feel a bit dull and worthy, despite store events. The chain needs an injection of energy and more effective positioning for the digital age.

Books may seem old-fashioned but surely the retailer can carve itself out a worthwhile place? Information and opinion are at the heart of the category, sharing defining characteristics if not the format of digital media.

There have also been retail discipline hiccups. Waterstone’s much vaunted distribution hub should bring benefits but has cost more than planned. For a man with a grocery background like Waterstone’s boss Gerry Johnson, the shaky start is a chapter he could have done without.

An unpleasant streak of paranoia also runs through Waterstone’s. More than once it has cut off relations with media whose coverage it dislikes – a tactic that sits ill in the liberal world of bookselling.

It’s been a long time since Waterstone’s has been the equal of stablemate chain HMV, which has been fleeter of foot in adapting to changed conditions. Has Waterstone’s a part to play in HMV longer term or is it destined for disposal? The longer Waterstone’s languishes, the more you wonder whether it would not fare better under private ownership. It may be the last man standing, but at present its victory looks pyrrhic.