‘Anger and disappointment’ as Reach again cuts retail margin

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

From Sunday, October 2, copies of the newspaper will increase in price from £1.40 to £1.50. However, the retail margin paid for each copy sold will be reduced from 20 per cent to 19 per cent, meaning that instead of receiving an additional 2p per copy if the margin had remained pro rata, retailers will only get 0.5p.

“Another price increase and another percentage margin cut for retailers,” Jason Birks, the Fed’s national president, said.

“This is the second price increase of the year for the Star on Sunday and the decision from publisher Reach follows the trend of 2022, whereby they have cut margins for all the national titles within their portfolio.

“However, even more frustrating for retailers is the lack of information when the margins are cut back – no notification is given that the terms are being cut when the announcements are released.”

The trade body noted that the Star on Sunday’s profit to a retailer for a sale is the lowest in the market, according to a compilation done by it, giving an overview of the pence per copy paid for each national title.

The Fed’s head of news Brian Murphy added: “Publishers too often tell us it is about pence per copy cash and not percentage margins but the 1/2p went out of circulation in 1984 and this is pitiful for what is supposed to be a business partnership.

“This may lead to retailers questioning the need for it when other similar products are available.”