Newspaper cover price increases a blow to profit margins: the Fed
Independent retailers have once again been hit by further newspaper cover price increases, combined with lower profit margins, just ahead of the new year.
The Federation of Independent Retailers (the Fed) learned before Christmas that Saturday and Sunday editions of The Mail would go up in price from 30th December, as will the same publisher’s ‘i’ newspaper.
However, while the changes to The Mail are supported with pro rata profit margin increases, the i newspaper price increase will see retailer margins cut from 22 per cent to 21.5 per cent for the Monday to Friday editions, putting it in line with the weekend edition.
Also, the Guardian and Observer have advised that, from 6th January, the Monday to Friday and Saturday editions, plus the Observer on Sunday, will all increase by 20p for each day.
Unfortunately, with all these editions, retailers will see a cut of 1 per cent on Monday to Friday editions, 0.5 per cent on Saturdays and 1 per cent on Sundays.
The Fed’s National President Muntazir Dipoti voiced his and Fed members’ disappointment that all the hard work retailers put into selling these products, particularly over the festive period when many are open throughout, are rewarded by a cut to the margin paid for selling them.
Mr Dipoti said: “I strongly recommend all our members to look into their news content, as these constant price increases without pro rata margins will not only affect overall profits within the shop but also put brand loyalty at risk.”
The Fed’s head of news Brian Murphy added: “We are not against sensible cover price increases, however it is only correct that retailers get their fair share. I urge members to take this opportunity to evaluate their newspaper fixtures to make informed decisions on which titles to support.
“Additionally, retailers should direct any dissatisfied readers to the publisher and consider offering them a print subscription to ensure their continued patronage.”
