A retail market study commissioned by the Association of Canadian Publishers concluded what the industry has been saying for years: that one retailer dominates the retail book market. The study, entitled "A Review of the Canadian Book Industry," showed that the new Chapters-Indigo combination has a market share of 68.8% of the total retail book market in Canada. If Internet sales are included, that figure rises to 75%.
The company's market share was particularly pronounced in Toronto, where Chapters sales alone accounted for 83% of all book expenditures; in Ottawa, they accounted for 76%, while in Calgary and Vancouver they accounted for 74% and 70%, respectively.
Prepared by retail market consultants Evans and Company, the study also showed that the retail book market has become saturated over the last five years due to the proliferation of superstores. The study—commissioned before the merger was announced—concluded that a decrease in square footage was required for a healthier retail environment and that the remaining dollars were insufficient for other retailers to compete successfully.
"This study emphasizes the need for the Code of Conduct, which was recently approved by the Competition Tribunal," said Susan Renouf, the new ACP president. "The Canadian-owned publishing sector has long been concerned about the dominance we now face. However, the behavioral undertakings which have been approved by the Competition Tribunal and the assurances we have received from Heather Reisman about her commitment to Canadian books lead us to be guardedly optimistic going forward."
Seven publishers were interviewed for the study; Chapters was the largest retail account for all but one of them, averaging 42% of their sales. Price Costco was their second largest account, averaging almost 12% of purchases, while Indigo came in third with almost 7%.