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In the past few hours, Borders joined the recently departed from Britain's high streets, taking Books Etc with it. Gone are Dillons, Ottakars, James Thin, John Smith, and so on.

closed tonight, with 40 more south of the Border. Having employed more than 1100 people, Christmas Eve will be their last day with the company.

Instead, if you're looking for a read as a late Christmas purchase, you could go to Tesco, which is reckoned to have around 5% of the market, or other supermarkets sharing about as much again. You won't find much choice, but you'll probably find this year's big sellers at very competitive prices; Leona Lewis, Paul O'Grady and Jamie Oliver doing America.

WH Smith provides some safe, mainstream offerings in a few locations.
But on the high street, only Waterstone's remains as a significant chain. However, it's using 20th century supermarket retailing techniques to fight a 21st century battle with the virtual world of Amazon.

Founded by Tim Waterstone in 1982, his shops revolutionised British
bookselling: more browsing, pleasure and a coffee bar, and less detective work in finding what you wanted. By 1995, it had driven a big hole in the Net Book Agreement, which until then required all books to be sold at cover price. This was to protect the smaller retailers, and the publishing of more marginal books.

But having changed the booksellling game then, now it is Waterstone's that is being squeezed from two game-changing technological shifts - one towards online retail, driven by price: the other towards digitised publishing. Is it irony, clever marketing or merely a death wish that makes Waterstone's put e-readers into their window displays?

The price of all this cost-cutting may be the book itself.

There's a reason why you get the low prices on Amazon and on the tables as you walk into Waterstone's. It's because those retailers have such market clout that they can squeeze the publishers on wholesale cost.

Amazon can get books for as little as 25% of cover price, which is why they can sell the most popular titles for as little as 33%. Waterstone's can drive nearly as a good a bargain.

The online retailer doesn't have the high costs of a high street presence, carrying stock in many locations, or employing so many (increasingly demotivated) shop staff.

The bookshop's advantage is that it can bundle up 'three-for-two' offers, and charge publishers a hefty fee for the privilege. The books in window displays and the deals you find on those display tables nearest the shop door are not because that's what you want to read, but because the publishers have paid to put them there. Far less stock shifts from wall displays, and at the sharp end of bookselling, titles are quickly removed from display and then from stock if they're not delivering returns.

So it's no surprise that publishers are pulling back on the number of titles, or on the risks they're willing to take in promoting little-known authors.

Celebrity dominates the Christmas market, but even that is being hauled back, as publishers realise the idiocy of selling book rights to newspapers, only to find them strip out the best bits and depress sales. (Admittedly, Sarah Palin's best-selling success in the USA over recent weeks suggests mainstream media coverage can still shift astonishing numbers of books.)

And publishers play it safe. What is today's hot news from the children's publishing world? That the 116-year old Beatrix Potter books are to be refreshed in a new TV animation.

The pressure is all the greater on the smallest publishers. They have least clout in negotiating terms with so few retailers. And Scotland's publishing business, which has long been at the precarious end of the corporate spectrum, depends rather too heavily on the work of Alexander McCall Smith and of the marketing nous of Jamie Byng at Canongate.

The good news could yet be for the independent book store. If Amazon, Waterstone's and the supermarkets pursue a cost-driven strategy, there should still be a niche for those who carry a wider or specialist stock and, crucially, those who provide a passion for books, a knowledge of them and who connect with their local customers.