Heavy discounts, as much as 50%, on top-selling books by the big three Internet retailers isn't immediately expected to affect supermarket book sales, said retailers.
But they eventually could cut into hardcover sales at supermarkets as the volume of books ordered on the Internet through Amazon.com, Barnesandnoble.com and Borders On Line continues to grow, nonfood buyers cautioned.
"Our hardcover books still benefit from the traffic coming through our stores, and most sales are on impulse," said a nonfood executive for a Midwest wholesaler that also operates supermarkets.
Although he wasn't immediately concerned about losing sales to online retailers, he said, "That's not to say that this won't change somewhere down the line. More people are getting used to buying books over the Internet."
The wholesaler, who requested anonymity, said store-level hardcover books are discounted 25%. "But we really aren't in the hardcover book business in a big way, except for a handful of our stores with 3- or 4-foot endcaps for bestsellers."
Yet the recent flurry of deep discounting indicates the competitive lengths to which the big online booksellers are willing to go to win business, even though bestsellers are less than 10% of books sold online.
Nonfood executives expect the volume of books purchased online to continue to grow. They pointed out however, that consumers ordering bestsellers and other titles through large book dealers' Web sites weren't typical supermarket shoppers.
Food retailers with sizable book sections need to closely monitor the heated competition among the Internet book dealers as they scramble for customers, commented John Conzemius, general merchandise promotion manager for Supervalu, Minneapolis.
"This is definitely a category-killer situation worth watching. Retailers will have to assess their book sections, especially if sales start tumbling. As happens with any category killer, you must either play ball or back out," he said.
In spite of this new competition, retailers can cash in on high-impulse bestsellers, discount cover prices 25% and merchandise the titles at high-traffic grocery endcaps, he added.
"It's not a lot of real estate to dedicate if you aren't trying to support a large book or magazine destination section," the nonfood manager explained.
Ray Wallace, director of nonfood at Cub Foods Georgia division, Lithia Springs, Ga., doesn't think the hot competition from Internet book sites will affect sales at supermarket book racks, at least not in the short term.
Cub's sales are mostly in paperbacks. "We carry a small percentage of hard-back bestsellers that are used primarily as traffic-builder loss leaders," he commented. The retailer has found that promoting 10 to 12 hardcover bestsellers is an effective customer draw. About 24 copies of each title are displayed and an outside supplier refills stores twice a week.
Cub stores merchandise books in 40- to 120-foot reading sections. Space devoted to books ranges from 6 to 48 feet in these sections; hardcovers get 4 to 10 feet of the space.
Wallace said aggressive pricing by on-line book retailers "will probably start to cut into book sales at chains with extensive reading centers. It is only a matter of time for that to happen."
The emerging competition for book customers on the Internet "should have some impact on grocery stores with hardcover sections," said Christine Kennedy, general merchandise category manager at United Grocers, Portland, Ore.
Most of United's retailers carry "limited selections of hard-back bestsellers," she said.
The highly charged atmosphere created by the three Internet booksellers "is clearly a threat to supermarket book sales," said a nonfood executive at Giant Eagle, based in Pittsburgh, Pa., who asked not to be identified.
Despite the severe price-cutting by the Internet operators, the Giant Eagle executive maintains there is still a niche for hardcover books in the supermarket. "Hard-back bestsellers are very high-impulse and profitable. But we are not trying to compete head to head with the on-line retailers or superstores of the world," he asserted.
A Barnes & Noble opening near one of its stores "will clearly hurt us; we haven't seen that impact from the Internet yet," added the retailer.
Giant Eagle's book areas run from 4 to 80 feet. The chain displays the top hardcover bestsellers in a depth of six or eight books per title.