It was a record year, whatever else they say about it. In 2005, British publishers sold more books for more money than ever before. While they may not be jumping up and down with excitement, they are tapping into an appetite for books that occasionally verges on gluttony.

Pity about the margins. Nevertheless, sales value was up 3.7% to £1.65 billion, while units grew a beefier 5.9% to 216 million—illustrating that pressure on margins. Random House (including Transworld) continued to lead the field with almost static sales of £230 million, according to Nielsen BookScan. After a storming Christmas, Pearson (Penguin) sales leapt 7% to £207 million, putting it in second place. That forced Hachette (Hodder Headline, Orion), which liked to think of itself as number two into third place, with a marginal rise to £206 million. It can console itself by looking forward to first prize in 2006, now that it has bought Time-Warner.

The year's bestseller was—no surprise—Harry Potter and the Half-Blood Price (Bloomsbury) which sold 2.9 million copies in the children's edition and another 659,000 in the adult version. The adult edition alone came in eighth. Places two to five were colonized by Dan Brown, whose second-place The Da Vinci Code (Corgi) sold 2.2 million units. The dark horse was The World According to Clarkson(Penguin), a collection of columns by TV automotive journalist and all-round big mouth Jeremy Clarkson, in sixth place (844,000 units, making it number one in paperback nonfiction).

Penguin had a cracking 2005, celebrating its 70th anniversary with aplomb, after a dismal 2004. It had two of the year's top three hardback nonfiction sellers: Jamie's Italy by TV chef Jamie Oliver (which sold an extraordinary 153,000 copies in one week before Christmas) and Next to You by TV personality Gloria Hunniford.

Time Warner had another record year, with sales up 7%. Its star performer was the number two in hardback nonfiction: Extreme: My Autobiography by Sharon Osbourne. Patricia Cornwell's Predator took the number three slot in original fiction, and the house also had the surprise Christmas hit Is It Just Me or Is Everything Shit? by Steve Lowe and Alan McArthur, two grumpy young men.

Bloomsbury had a Harry Potter year, boosting sales by 89%. The Harry Potter 6 paperback is due out June 23, and this year will see new works from William Boyd, Joanna Trollope and William Dalrymple.

Those were the growth stories on the sales front. HarperCollins, with its June 30 year-end, grew sales by just under 2%. It is having to get used to life without Tolkien, though the Narnia film has brought good cheer since the financial year-end, and Collins's sudoku books continue to race out of the stores.

At Hachette, Hodder Headline completed its first full year as part of the group, which chief executive Tim Hely Hutchinson runs on a firmly federal principle. Its John Murray imprint has reintroduced fiction for the first time in 30 years. Hodder's Cloud Atlas, a Richard & Judy Best Read, continues to sell in large quantities, as does Jodi Picoult. On the original fiction charts, Headline's The Take by Martina Cole was outsold only by Harry Potter.

Orion was named Publisher of the Year at the 2005 Nibbies. It put translated fiction on the mass market map with Carlos Ruiz Zafón's Shadow of the Wind, which sold 567,000 copies. It also won the hottest fiction auction for many years, paying a reported £800,000 for Diane Setterfield's The Thirteenth Tale. What Your Clothes Say About You by TV's Trinny and Susannah kept the Weidenfeld & Nicholson banner aflutter.

Transworld remains the sales generator par excellence within Random House, Even after stripping out Dan Brown sales, it was ahead of its 2005 budget, it says. Sophie Kinsella's The Undomestic Goddess and the biographical Margrave of the Marshes by John Peel and Sheila Ravenscroft helped that achievement. Random House as a whole motors on, despite the lack of a conspicuous Christmas bestseller. "We are a range publisher, with a solid backlist, and we're sticking to it," it insists.

Macmillan saw sales fall by 11% as it lost market share. Sales difficulties contributed to a 17% tumble at Simon & Schuster, which has now strengthened the gaps in its sales team and believes 2006 will be a better year.

There was better news from some smaller publishers, including Faber, which put on nearly 20% in sales. Jointly with Profile, it published Untold Stories by Alan Bennett, who begged readers to buy it at independent booksellers. They didn't listen, but bought it anyway, in large numbers. Profile's own Christmas successes were Talk to the Hand by Lynne Truss and Does Anything Eat Wasps?, a distillation from New Scientist magazine. Virgin Books, which recently acquired supermodel Kate Moss's autobiography for a reported £1 million, said that high street margins were tough, but it was "holding its own."

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On the Children's Side

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The children's book market looks increasingly, and uncomfortably, like its adult counterpart. As publishers all acknowledge, if you've got the right children's books, they will sell in shedloads. Total sales grew by 17%, to £244 million, BookScan says, and volumes by 11% to 49 million. But without Harry Potter, sales and units grew by a more sober 5% and 5.5%, respectively.

Average selling prices without Harry Potter came down a touch, from £4.70 to £4.68. But the retail price and space squeeze experienced in the adult market is becoming increasingly evident in children's books. And market segments such as series and even hardback fiction are joining picture books as victims of oversupply.

Supermarkets began to expand their children's ranges during 2005, which is good for sales but not so good for prices. As high street retailers have to compete more with supermarkets on children's titles, their demands for better discounts grow more insistent.

"We're still feeling the pressures less dramatically [than adult books], but they are beginning to grow," says Francesca Dow, managing director of Puffin. "There was a huge rise in supermarket sales last year, though Waterstones, WH Smith and Ottakar's are still our number one customers."

The sense is that this trend will continue, Dow says, adding that the supermarket focus is firmly on key established authors and bestsellers.

Like everyone else, you might say. As the series and fiction segments become dangerously overcrowded, the market grows visibly more polarized—the big names get bigger and the unknowns find life harder than ever.

Last year's top 20 children's titles, according to Nielsen BookScan, bear out this hard truth. At the top is the sixth Harry Potter, which sold more than the other 19 books combined. Number two was the evergreen Beano Annual. Then came Anthony Horowitz, Horrid Henry's Bedtime and a Roald Dahl box set. Two Lemony Snickets, three Jacqueline Wilsons, Harry Potter and the Order of the Phoenix and The Gruffalo (still in there after six years, at number 20), are among the other rankers.

That isn't dampening the spirit of enterprise. Short Books is launching a children's fiction list to accompany its existing Who Was... stable of children's historical biographies. Simon & Schuster will launch a new young fiction list for six to 10s in the spring.

Scholastic is launching two eponymous imprints, Marion Lloyd Books and Alison Green Books. Both publishers migrated, in the wake of Scholastic chief Kate Wilson, from Macmillan. In the (hardly unexpected) coup of the year, Alison Green Books acquired the latest picture book from The Gruffalo's Julia Donaldson and Axel Scheffler—Tiddler, to be published in September 2007.

New imprints will do nothing to relieve market pressures. "This year will be difficult in the U.K. market because of the Waterstones/Ottakar's situation," predicts Emma Hopkin, managing director of Macmillan Children's Books. "At the same time there is still an increase in titles, and more competition, because there are more publishers."

In sum, U.K. publishing remains tougher than U.S. publishing on virtually every level. Which is at least one reason why Hachette has swooped on Time Warner.