Stephen Foley: Bookshops face bonfire

US Outlook: Long queues at the checkout in a Borders store in Manhattan last weekend, but instead of being a good sign for the ailing bookseller, I watched a business model crumbling in front of my eyes.

Almost like dominoes, shoppers in front of me pulled out their iPhones, checked Amazon.com for the books they had in their hand, put them back on the nearest shelf and then walked out the door. So I did the same. Amazon is shipping wrapped presents to my loved ones, as you read this.

As for me, I joined the e-reader revolution last month, and it's exhilarating. I read a review, wanted a book, went to Amazon and with one click – one single click – it was downloading on my Kindle back at home.

Like the UK Borders business, which was owned separately by a European private equity group before collapsing into administration last month, the original US business is buckling under these new realities. Loaded up with $375m in debt and with sales slumping at double-digit percentage rates, the company is struggling to avoid a similar fate.

Online competition is hardly a new trend, but it is accelerating. Last week was the heaviest online spending week on record, at $4.74bn of sales, according to comScore. Now the e-reader has the potential to relegate bookshops to the status of a shop window for an online retailer. A bonfire of bookstores is about to begin.