Making sense of the past seven days
Not many people in retail are huge fans of the UK's competition authorities, but Ottakar's shareholders have more reason than most to feel aggrieved.

When HMV first bid for Ottakar's last September, it offered 440p a share. That bid was scuppered by a referral to the Competition Commission and by the time it had completed its deliberations the value of Ottakar's had fallen to the extent that the company is now worth only 285p a share.

The 40 per cent in nine months is not the damning reflection on Ottakar's management it may seem - more a reflection on the widespread gloom hanging over the future prospects for book retailing. Sadly for the shareholders, with WHSmith's cautious chief executive Kate Swann unlikely to sanction a bid, HMV is the only show in town.

The challenge for HMV post-takeover is to prove that it can use Waterstone's newly-found scale to fight back against the supermarkets and the internet. This won't be easy. The new channels for book retailing are relentless on price, and Waterstone's has been slow to translate its authority on the high street onto the internet.

However, that authority will be the key to Waterstone's survival. Neither a supermarket or a computer can match the experience of browsing a bookstore that has a great range, a comfortable and relaxed environment, as well as knowledgeable, friendly staff.

In future, high street retail will become less a necessity, and more a leisure activity, and Waterstone's should be well-placed to capitalise on this trend. For many, an hour spent in a good bookshop is among the most pleasant ways of whiling away spare time.

If Waterstone's can get this right - and come up with an internet presence that can reflect at least some of the store experience - then there is no reason that its future can't be a lot brighter than the pessimists predict.

Retailers can sometimes be their own worst enemies. Take Tesco, which like any other retailer worth its salt is trying to cash in on the excitement around England's world cup appearance. Yet this week in a ridiculous act of nit-picking it told its drivers they couldn't display the flag of St George from their cabs.

Tesco has now seen sense, but the damage is done and Tesco looks silly. The episode shows that when the bureaucratic machine is allowed to get in the way of common sense, negative headlines are inevitable.

If you have any comment to make on this story, click here.