Christmas crisis blamed on price war
Bookseller Ottakar's has issued a profit warning, blaming an unprecedented price war within the sector.

With like-for-like sales plunging 6.7 per cent in the first 19 weeks of the second half, the group -the target of a presently lapsed bid from HMV - said: 'Ottakar's has chosen largely not to engage in this price war, but nevertheless has felt some pressure on sales and margins. There are two important trading weeks ahead of Christmas and therefore it is too early to predict the final full-year outcome with any degree of certainty.'

Evolution analyst Nick Bubb said: 'Though it has tried to protect gross margins, Ottakar's has suffered from lower customer footfall as a result of the heavy promotions and advertising by the likes of Waterstone's and WHSmith.'

The retailer's management is taking steps to reduce costs, details of which will be announced at the pre-close trading statement, expected on January 12.

The Office of Fair trading decided last week to refer HMV's bid for the book group to the Competition Commission. Ottakar's said it has incurred costs of about£2 million as a consequence.