For those of us who majored in Economics, the dreaded word “recession” always seemed straightforward. You’re either in one, or you’re not. While the economy has become rather nuanced in the first few years of the ‘20s, the downward pressures are clearly being felt. Except in some very rare situations, books are the definition of a discretionary purchase. So, a downturn—whether or not you want to call it a recession—is definitely going to rear its ugly head here in the Update.
The folks at Variety conducted a survey in early July and found that 55% of U.S. adults expected to reduce their spending on entertainment in a recession (a category that includes books). Only 10% said that none of their spending habits would change in the event of a recession, to which their credit card companies shouted “hooray.”
Regardless of what the politicians might be telling us, the fact is that Amazon saw a drop in revenues from its online business of 4% in the second quarter. If that’s not a “leading economic indicator,” we don’t know what is (note the previous reference to an economics degree). Of course, these results are being compared to pandemic-boosted 2021. But still, this is Amazon.
Perhaps on a related note, brick-and-mortar bookstores continued their Phoenician rise with another jump this May, up 12.3% from last May, and only 2.8% below the distant past of 2019. Year-to-date, our bookstore buddies are up nearly 18% year-over-year.
Hang in there, Mr. Bezos.
The industry continues to deal with higher costs, including paper, shipping, labor – and probably just about everything else.
Hachette reported a 7.7% increase in revenue for the first half of 2022 but came out upside down on the earnings front to the tune of 29% below the same period a year earlier—thanks to those ever-pesky rising costs.
Back To School
As the summer enters its waning month, and parents ache to hear school bells again (it’s not just me), good news comes from educational mainstay, Scholastic. Announcing its results for full fiscal 2022 (ending May 31), the book fair favorite reported “pre-pandemic norms,” as sales jumped 26% from fiscal ’21 results – that period that took a direct hit from COVID-19 shutdowns/precautions/limitations. Scholastic’s FY 2022 revenue was $1.64 billion, which placed it in the exact median of pandemic-less FY ’18 and FY’ 19 results ($1.63 billion and $1.65 billion, respectively).
Great news for the industry—and the kids. Who doesn’t have fond memories of a Scholastic Book Fair?!
In a bright spot, after nearly 5 months of lower year-over-year weekly sales reports (save a seasonally adjustable late Easter), the week ending July 23, 2022, turned back into positive territory – up 4.4% over the same week a year prior.
Hope it holds—but then there’s that looming “R” word again….
TAKE ACTION: ACU 2022-23 Enrollment is Coming
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The enrollment period for the 2022-23 Author Coaching University term is not open yet, but you can join our waitlist and be one of the FIRST to know when the application window opens for the next session!
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