Fed criticises Reach and News UK for cutting margins

The Federation of Independent Retailers (the Fed) has expressed deep dismay at the decisions by Reach and News UK to accompany price rises on a large swathe of their national and regional titles with a cut in the percentage margin that news stockists receive.

The Fed National President Narinder Randhawa said, “This is yet another kick in the teeth for hard-pressed retailers. We totally get why Reach and News UK have to raise their cover prices – these are very tough times, indeed, but Fed members are facing considerable financial pressures too.

“We try, time and again, to explain to decision-makers in the newspaper industry the impact that cutting percentage margins has on independents. We need pro rata terms just to stand still. This latest news from these publishing giants is another big blow.”

Reach has announced cover price rises of 10p on a large number of its regional titles, including the South Wales Evening Post, Western Mail, Teesside Gazette, Grimsby Telegraph and Cambridge News, from week commencing May 30.  At the same time, the percentage margin that retailers receive will be cut to as low as 16.5 per cent on some of the publications.

Monday to Friday editions of the Daily Record will now cost £1, and £1.60 on Saturdays, while the Sunday Mail will rise to £2.30.  The new margin for the Daily Record will be 19.5 per cent on Monday to Friday editions and 19 per cent on the Saturday newspaper. The Sunday Mail margin is being adjusted to 19.5 per cent.

Meanwhile, News UK has revealed that price increases on Monday to Friday, Saturday and Sunday editions of the Sun and Times will take effect from the week commencing Monday June 6.

Weekday editions of the Sun will rise 10p to 80p, the Saturday edition will increase to £1.10, and the Sunday edition rises to £1.40.  The percentage margin on all editions will be cut to 21 per cent.

Weekday editions of The Times will rise 30p to £2.50, the Saturday paper will cost £3, and the Sunday Times cover price will increase 50p to £3.50. From December 5, the margin of all Times editions will be cut to 20 per cent.

“While each cover price rise does offer some pence per copy increases, this is limited ,and Fed members will not see such moves as in the interest of a fair-trading relationship.  I have said it before and will say it again – cover price increases and margin cuts will cause more people to exit from the category when the net percentage margin and volume sold is evaluated against the space it is given,” Randhawa added.