Waterstone's drops its online fee to boost bookshop sales

Waterstone's is firing a fresh salvo in the increasingly bitter battle taking place among internet book retailers by offering to deliver cut-price editions to customers' local stores at no extra cost.

Waterstone's is firing a fresh salvo in the increasingly bitter battle taking place among internet book retailers by offering to deliver cut-price editions to customers' local stores at no extra cost.

The offer comes as British readers are being forced to pay more for having multiple orders delivered by Amazon.com, the giant American online bookseller.

Amazon, which previously charged a set amount for postage and packing, regardless of the number of books being delivered, has begun to charge extra for every additional tome dispatched. The company blamed the hike on an increase in the Royal Mail's tariffs.

The contrasting moves by Waterstone's and Amazon will add to fears that online retailers in general, and booksellers in particular, have yet to find a way to make their businesses profitable.

The offer from Waterstone's means that customers will be able to buy certain books at half price from their local stores, providing they order them on the internet at least a couple of days in advance.

The idea behind the offer is to encourage more people to set foot inside Waterstone's stores. Consumers who choose to have their wares delivered to their front door will continue to pay the usual postage and packing fee for the service.

The Royal Mail's additional imposition on Amazon comes at what is a sensitive time for the company. Its shares fell more than 19 per cent on one day last month after an analyst's note highlighted fears about the company's long-term ability to make a profit. The gloom deepened earlier this month with reports that Amazon had failed to make money out of the latest Harry Potter novel despite the huge demand for JK Rowling's work.

Amazon insisted that its aim had been to use the Potter craze to attract new customers but industry sources say that Amazon has been easing back on its discounting in a bid to stem its losses.

Although Waterstone's is a relative novice in the online retailing game, its virtual library is already bulging with a million and a half titles. The high-street chain, which is part of the privately owned HMV Media company, recently revealed a 3.7 per cent fall in annual sales.

Although the latest offer has so far been a complete success, it is understood that Waterstone's is nonetheless struggling to make money out of its internet operations. The company is keen that it should at least boost physical sales - a plan it describes as its "clicks and mortar" strategy.

Waterstone's, which was named after its founder, Tim Waterstone, became part of HMV Media in 1998 along with another bookstore, Dillons, and HMV, the music store. Its main shareholders include Advent International, the venture capitalist, and EMI, the music group that is now part of the giant AOL/TimeWarner media conglomerate.