Small bookshops thriving despite e- books
Kiwi independent bookshops have fought back from fears their days could be numbered as sales of physical books have stabilised after the launch of e- books.
And store owners and operators are calling on the new Government to help them to keep thriving in the age of online shopping by forcing overseas- based retailers like Amazon to pay GST.
According to Nielsen BookScan, sales of physical books fell by 20 per cent between 2010 and 2013 from almost 6.1m to 4.8m but have remained relatively stable for the last four years, jumping to more than 5.2 million in 2015.
As at October 14 this year, Kiwis had bought almost 3.5m books from book stores around New Zealand, the data from Nielsen BookScan showed.
Jenna Todd, manager of Time Out book store in Mt Eden, said sales of hard copy books had been growing each year for the last four years and were now the best they’d been since the shop opened in 1988.
Carole Beu, who has owned Ponsonby’s Women’s Bookstore for 28 years, said business there was “flourishing” too.
They both cited personalised customer service and hosting engaging events as reasons independent book stores were succeeding while major chains were struggling.
Although no data on e- books was available from Booksellers New Zealand anecdotal evidence indicated sales had plateaued.
Beu told the Weekend Herald although there’d been “a scare” when people had thought e- books would ruin physical book sales “it didn’t really ever eventuate”.
Most consumers who’d bought e- readers — such as Kindles and Kobos — used them while travelling but preferred to read physical books at home, she said.
However, the presence of large international online retailers that had the scale to buy and sell books at cheaper prices than stores here remain a concern for Todd and Beu.
Retailers like Amazon do not have to pay GST on goods Kiwis buy — which Greg Harford, general manager public affairs of Retail NZ, said was unfair to small business owners including book stores.
Purchases worth more than $ 400 were removed from the freight or postal stream as they came across the border and the customer was charged the GST plus a processing fee by Customs, Harford said, but the company itself didn’t have to pay GST.
Booksellers New Zealand chief executive Lincoln Gould said his organisation and Retail New Zealand had been campaigning for lawmakers to close the “tax loophole” for years but their cries for change had been mostly ignored by the previous Government.
Last October the Government passed legislation to make foreign firms selling digital services to Kiwis register for GST, but not physical goods.
Harford said the law change had created an “utterly absurd” situation where retailers like Amazon had to pay GST on e- book downloads but not on a physical copy of the same book.
Todd said Time Out sold books at the recommended retail price and after it paid GST had a profit margin of 25 per cent.
“We’re already doing our job and the big retailers need to be doing their job too and be held accountable for how much money they’re taking out of New Zealand.”
Beu said where consumers spent their dollar was “a political decision” — because currently the profits Amazon made from New Zealand customers went overseas.
“If you have to pay GST on any item — whether it’s a book or a shoe or an apple — that you buy in a shop in New Zealand you should have to pay GST when you import it as well. It’s unfair otherwise.”
Harford estimated the New Zealand Government was missing out on $ 235 million a year in revenue by not charging overseas retailers GST.
Australia had recently passed a law requiring overseas retailers to pay a small goods tax on all imports from July next year.
A similar model could be implemented here by making all international stores that earned more than $ 60,000 a year in revenue from Kiwi consumers register for GST, Harford said.
Although Retail NZ was yet to meet with the new Government to discuss its concerns he said the organisation hoped it would get a “fair hearing”.
Newly appointed Finance Minister Grant Robertson said the Labour- led Government was “actively considering” the i ssue of GST on overseas retail purchases.