Friday, July 20, 2007

Harry Potter - The Loss Leader

According to Wings On Some Wheels, ASDA is selling Harry Potter for less than cost. I was actually discussing this with someone (though I'm not sure who) last week and I said it wouldn't surprise me if ASDA buy the books from someone like Tesco(or someone who has a large supply) and then sell them at a loss just to piss off the publisher.

The tactic is nothing new, for many years supermarkets have sold basic products such as beans and milk at a loss just to get people in the stores. The loss leader tactic has left them with many enemies as they have crushed smaller retailers using the tactic.

Personally I support the tactic because it means cheaper stuff. In the long run it will mean smaller retailers will provide something different to compete, which I also see as a good thing.

I don't know how much this will directly bother Bloomsbury. They will make more money from ASDAs loss. Perhaps there will be some indirect losses from the competing retailers who will be frustrated they are selling less and the publisher isn't doing all they can, but I don't think that will be a big loss.

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