SUPERMARKET SWEEP

SUPERMARKET SWEEP

American-style retail album exclusives could become a permanent U.K. fixture if an initiative by the country's largest mass merchant Tesco pays off.

Tesco became the first U.K. retailer to offer a major pop/rock act album exclusive when it began selling Simply Red's 12-track collection "Songs of Love" Feb. 28 in about 800 of its biggest stores, 200 smaller outlets and at TescoEntertainment.com. Tesco entertainment director Rob Salter says the chain expects to handle three to four music exclusives per year, initially focusing on established acts without a current label.

While U.K. retailers have previously offered exclusives on classical albums and pop singles—including a Tesco deal for Katie Melua & Eva Cassidy's 2007 No. 1 single "What a Wonderful World (Dramatico)—the Simply Red deal has the beleaguered independent retail sector worried. "I can see HMV following suit, and that would be a complete nightmare," says Kevin Buckle, owner of Edinburgh, Scotland, indie Avalanche Records.

HMV (the United Kingdom's market leader with a 24.1% share of album sales by revenue in 2008, according to the BPI's latest figures) declined to comment for this story but would seem well-placed to strike exclusive deals. Its recent acquisition of MAMA Group includes an artist management roster featuring the likes of Franz Ferdinand and Kaiser Chiefs. The BPI noted that Tesco had a 10.5% albums market share in 2008.

Bruce Kirkland, president of Los Angeles-based music and media group Tsunami Entertainment, brokered the Simply Red deal for Tesco with Simply Red's Silentway Management, having previously negotiated deals with U.S. retailer Target for Pearl Jam's 2009 album "Backspacer" and Christina Aguilera's 2008 hits collection "Keeps Gettin' Better."

While Kirkland acknowledges that U.S. indie retailers have long objected to exclusives, he insists that "this is not about putting other retailers out of business."

But Richard Sefton, sales director at independent distributor PIAS, says Tesco's Simply Red deal "sets a precedent people will look at carefully." While Sefton expects other retailers will follow suit, he says PIAS would be "uncomfortable going into any exclusive agreement."

That echoes the views of many other indie retailers in the United Kingdom, currently awaiting the spring launch of U.S. mass merchant Best Buy—a major proponent of American retailer exclusives.

Universal Music U.K. commercial division managing director Brian Rose declined to comment for this report, but told Billboard in January that his company wasn't interested in retail exclusives. "It's not a great message to the consumer," he said. "It's confusing if they can only get a record at such-and-such a retailer."

Sony Music U.K. commercial sales group senior VP Nicola Tuer says Sony welcomes "any initiative that demonstrates commitment to music." EMI didn't respond to requests for comment.

"Songs of Love" contains 10 previously released tracks that were originally recorded for East West/Warner Music but are now owned by a joint venture between Simply Red founder Mick Hucknall and Warner. Since 2000, Simply Red's new material has been issued through Hucknall's own company SimplyRed.com. Tesco's Salter says Warner wasn't directly involved in negotiating the Tesco deal.

Salter says Tesco hopes to sell 100,000 units of "Songs of Love," which debuted at No. 25 on this week's U.K. albums chart, selling 9,000 units in its first week, according to the Official Charts Co.

Kim Bayley, director general of the Entertainment Retailers Assn., says its members, including Tesco, abide by an "informal compliance" outlawing exclusives on front-line product. With only two new tracks, "Songs of Love" doesn't constitute a front-line release, Bayley says. However, she concedes that "inevitably retailers are going to push at the boundaries as sales decline," adding that the ERA's board will discuss the issue.

Tsunami's Kirkland, however, insists that any U.K. opposition is misplaced.

"There's no reason to resist these things," he says. "Music is the beneficiary." ••••