Devoted to Managers and those that seek to improve their management skills

The retail book industry has long decided to use the Harry Potter series as a loss leader, rather than a profit generator. The idea is of course to get people to come in droves to the stores and buy higher-margin items. It seems that it has backfired, and probably left the industry wishing it had done things different - if they even could have.

This year the new "Harry Potter and the Deathly Hallows" is being discounted  between 40% and 50%. It seems if it didn't work in prior years, nothing is going to make it work this year. Now for retailers that offer books as only one of their categories, it may be helpful, such as Wal-Mart (WMT), but for book stores, it'll always be harder to get a lot out of the extra traffic.

Borders (BGP) has acknowledged that the last Harry Potter book caused them problems as the heavy discounting actually ate into their profits, and the result was a decline in their gross margins during that period.

Another problem from the business standpoint is because the hype has become so huge, the number of days with the big rush have declined as people demand their books now. That isn't good for the retail book market either.

While everybody in the business gets their gross and same-store sales to increase, in reality its an artificial increase, as it ends up hurting the profits for the overall business.
 
Strange, when you consider one of the most popular books in history in reality hurts the retail book industry by its very popularity.
 
Could have anything been managed better? I don't think so. When one company decides to offer the book at a steep discount, it pretty much forces everyone else to go along.

It's possible if physical book stores had offered special events or activities that would have included those paying full price for the book, they may have been able to make a difference in the profits, but I haven't heard of anything across any big companies doing that.

In the end, Scholastic (SCHL), J.K. Rowling and other publishers will make their money. Unfortunately for the book stores, they're ending up being simply commodity locations to pick up the book; victims of the series' own popularity.