Reach makes further cuts to retailers’ profit margins

The Federation of Independent Retailers (The Fed) has voiced its disappointment over Reach PLC’s decision not to include pro rata profit margins as part of increases to the cover price of the Daily Mirror and Daily Star.

From Monday, May 2, weekday editions of the Mirror will increase by 5p to £1, with the Saturday edition increasing from £1.60 to £1.70. In Scotland, weekday editions will go up to £1.10. The same increases of 5p and 10p apply to the Daily Star.

However, in a blow to independent retailers who sell the Mirror, the move means that their profit margins will reduce from 20 per cent to 19.5 per cent for weekday editions and from 20 per cent to 19 per cent on Saturdays. Profit margins on sales of the Daily Star will also reduce from 20 per cent to 19 per cent on all editions, except Sundays.

“This decision by Reach lets down the very people who have kept the news trade going for many years and particularly during the Covid pandemic,” Fed’s National President Narinder Randhawa said.

“Reach previously included pro rata terms following price increases to the Sunday Mirror and Sunday People, while it also advised that all its regional papers would follow suit. It therefore goes against the grain to now say the same conditions do not apply to its national daily titles.”

“While we understand that publishers have to raise cover prices to counteract increases in the cost of raw materials, such as paper and aluminium, it is unfair to ask retailers to absorb these costs at their expense,” he added.