Convenience stores reap newspaper, magazine sales in lockdown

The overall sale of newspapers and magazines continues to fall, even as the Covid-19 lockdown earmarked many newsagents and non-essential stores for closure. But convenience stores witnessed a slight rise in the sales of this category as they were able to remain open during the lockdown and soak up footfall from shuttered shops. Depending on the locality, some shops witnessed a rise in the sales of the national newspapers, women's magazines, and children's magazines.

According to ABC, the overall circulation of newspapers has dropped by 55 per cent since 2010. In the past ten years, the Sunday People has seen the worst fall of 74 per cent in its circulation. Secondworst was the Sunday Mirror: its circulation was down by 67 per cent over the past decade. The Daily Star saw a 64 per cent drop in its circulation from 2010 to 2020. Even for one of the UK’s leading newspapers, The Sun’s circulation has fallen by 58 per cent over the past 10 years. The Times is the newspaper that has witnessed the shallowest fall – 27 per cent since 2010.

The UK’s regional print daily newspapers’ circulations fell by an average of 18 per cent in the second half of 2020. The Manchester Evening News’s (MEN) circulation fell year-on-year by 46 per cent between July and December 2020. The Express & Star in the Midlands saw its circulation fall by 40 per cent, The Scotsman’s by 28 per cent and Reach’s Bristol-based The Post was down by 25 per cent. The Aberdeen Press & Journal saw circulation declining by 16 per cent, followed by the Belfast-based Irish News which was down nine per cent year-on-year. The worst-hit titles of those with figures available were the Nuneaton News, down 81 per cent year-on-year and the free Chronicle and Informer which was down 56 per cent.

However, among these falls seven non-daily regional titles grew their circulation in the second half of 2020, led by Archant’s Hackney Gazette which was up by 12 per cent and Reach’s MEN on Sunday which was up by nine per cent.

The UK’s magazine circulation fell by an average of six per cent year-on-year in 2020. Slimming World Magazine’s circulation fell 36 per cent between July and December 2020 while Bauer’s Heat and Closer’s circulation was down by 35 per cent and 32 per cent respectively. Meanwhile in the second half of the year The Week Junior, published by Dennis Publishing, grew by 37 per cent. In the home and food genres, Garden Answers grew by 35 per cent, BBC Gardeners’ World by 31 per cent, Landscape by 28 per cent, food magazine Olive by a quarter, and Garden News by 18 per cent. In current affairs, The Big Issue and The Spectator grew by 13 per cent and 11 per cent respectively. Clearly, hobbies and special interests can still be good revenue generators: local titles for local living.

Shifting circulation

To understand what contribution all this is making to their revenues, Asian Trader has reached out to newsagents and convenience stores that sell newspapers and magazines. The irony is that some of the convenience stores’ 30-40 per cent of revenue come from the newspaper and magazine category whereas newsagents are forced to merchandise other products to increase their revenue, as what they get from the sales of newspapers and magazines is very less.

Arif Ahmed, a newsagent in Coventry, has been selling newspapers for many years. He said, “I am a newsagent but still, I cannot rely on revenue from sales of newspapers. I have to rely on the other stuff in my stores like soft drinks, chocolates, photocopy and for revenue, I also do bus passes.”

However, for some of the newspaper retailers, this sector contributes around 30-40 per cent of their revenue depending on the locality. Shakil Dharas, of Shak’s News Limited located in Leicester, said, “In terms of the sales number, they've remained strong, but only across certain titles. The key newspapers for us here in Leicester are the Leicester Mercury and The Sun. Magazines-wise, our TV magazine and women's weekly magazine sells well. Children's magazines are a growth area for us in our store. Everything else is a little bit slow.

“So, in terms of national papers, and papers that we sell the least, especially in my store, are the Daily Mail and Daily Mirror. So certain papers are doing well, certain newspapers aren't doing that well. But magazines-wise, I think the seasonality comes into it, but kids’ magazines especially are doing really well in our store.”

Amish Shingadia of Londis Caterways and Post Office has dedicated space for the newspapers and magazines section in his store. The section has witnessed strong sales post-lockdown. “We have the elderly population, and after being locked-in during the lockdown, they need to get moving for both their mental and physical health. The Mail and The Sun sell well because they match our area, which is conservative politically.”

To boost the sales in this category Shingadia encourages his customers to purchase subscriptions for papers, this way he helps them to save money and also ensures repeat purchases from his shop.

Will Orr, The Times' General Manager, agreed that subscription is an important driver of reader habit. “We know Times subscribers are loyal to their newsagents - over half of Times subscribers visit the same store each time they pick up their newspaper,” he said. “While readers typically save one thrid on the cover price, retailers make the same margin as if they paid the cover price as we fully fund the discount."

The hard numbers

Credit: Press Gazette

Credit: Press Gazette

Marginal disappointment

Last year, Smiths News announced an increase to its carriage charges from 30 August 2020 but in February 2021, they freeze its carriage charges for 12 months in consideration of the impact of the pandemic on retailers.

Under the present carriage charge structure, Smiths News customers pay a minimum of £36.22 for a weekly supply of newspapers and magazines, and the maximum charge is £61.45. As the previous carriage charge reviews have resulted in average increases of up to three per cent, the decision could help some customers to save as much as £96 this year on their news bill.

News UK DTR (Direct to Retail), which supplies nearly 6,000 retail outlets inside the M25 area with the Sun and the Times, has also frozen its carriage charge review until December this year. They had earlier frozen the charge until May, but later decided to extend that to a 12 month freeze.

Menzies Distribution has also followed suit by suspending carriage charge review due for April 2021. Most of the newspaper retailers are upset about the margin they get from their newspaper sales and also about the carriage charges they have to pay to the distributors. Some of them revealed that despite the sales of some national newspapers growing in their locality, the margins they get remain the same.

Shingadia is only disappointed with the margins on the newspapers and magazines, adding: “Margins should be higher. The category only sells in the morning. After that point, it's dead space. With increasing retail costs, we need support for our suppliers.”

Ahmed opined, “I think the carriage charges should be abolished because many shopkeepers are going out of business. Don't forget we are scratching our head because of Covid, we have still not recovered from Covid.”

“The carriage charges are destroying the livelihood of the newsagents.”

Lockdown print headlines

When the lockdown was imposed at the start of the Covid-19 pandemic, most of the stores that were not in the essential category remained closed. Many high street shops and travel points were closed which impacted the sales of newspapers and magazines. But some convenience stores that were open during lockdown managed to keep the sales up. Many of them provided home delivery services for newspapers and magazine sections as well and they still continue to do so.

“The sales were down because people could not come to the shop. So, I did my best to deliver some papers to customers,” said Ahmed.

“We are an essential store. So we remained open,” Dharas added, “we saw is an increase in magazine sales particularly. Newspaper sales went up slightly. But magazine sales went up quite a bit. Now that's obviously to do with the fact that people couldn't do anything. They were staying at home, especially things like the crossword magazines, or magazines with lifestyle.”

He continued, “During the whole lockdown period, we saw a small boom in the number of copies we were selling. And, in addition, when we started delivering to a lot more customers, so we sell newspapers and magazines in store, but we also did home deliveries. Customers that were shielding didn't want to come out, we were delivering to them and those customers have remained with us. Some customers have switched off that service. But the vast majority of remained with us even after lockdown.”

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Neil Spencer, News UK Retail Director, commented that the dedicated Home News Delivery (HND) is a big part of the group’s strategy for driving sales.

“News UK along with other publishers have invested over £6million in The Deliver My Newspaper (DMNP) service to help drive awareness and connect you to new customers and our dedicated HND Field Team assists retailers with queries on setting up a service,” he said.

The service, a website specifically designed for customers to make it easier for them to find a retailer that offers HND, currently has a network of over 7,000 retailers covering 90 per cent of UK postcodes.

“HND … is going to play an increasingly important role in the future of the news category with over 250,000 customers taking up delivery of a newspaper during the pandemic,” Spencer added.

The group has invested in promoting DMNP in paper, on social media and in store, and urged retailers to continue their efforts to set up and grow HND services, maximising the opportunities that a guaranteed sale can bring.

The Federation of Independent Retailers (NFRN) National President Stuart Reddish told Asian Trader, “Despite being in overall decline, newspapers continue to sell in their millions every day. They remain the envy of all other products and continue to be a vital reason for many consumer journeys. Stores offering other services and products benefit from the footfall provided by these consumers and will continue to enjoy increased basket spend as a result.

"Following the closure of many high street and travel points during the lockdown, the convenience sector reaped extra sales and this has continued.”

When it comes to the margin provided to retailers, Reddish agreed with the retailers that their costs are increasing. When compared to most other products that largely have distribution costs included, newspapers are lagging.

He believes, unlike other categories, it is still a push supply chain category and it requires more time and skill to manage. As a solution to make this easier, the NFRN offers its members a free category management service (Newspro). The service has grown to over 1,200 members, has acquired a top 10 position in newspaper and magazine sales groups, and has sales in excess of £80m. Time and time again, Newspro members significantly outperform the market in respect of sales and copy efficiencies and enjoy additional opportunities to make and save money on a regular basis.

Dharas, who is also a member of NFRN, shared his experience on how the association helped him in managing the space better. "We had quite a large section of magazines – now obviously smaller as not every single magazine sells. However, the way Smith's work is once they deliver the magazine to you, they will charge you, so a lot of your cash flow is then tied up in holding stock. Jeremy at the NFRN was great working with me.Whichever titles not selling in my store were then removed from my order bank. So, I'm now holding less stock and I've managed to reduce my magazine section from four-meter base to two meters base,” he said.

“Now, I only stock the magazines that sell and that improves my cashflow, it's improved the offering in the store and the two meters base that I've now got free that's allowed me to do something else in the store apart from magazines that weren't selling. We've now bought in recently food to go so we sell fresh bread, fresh cakes, fresh coffee. I cannot help but commend the team of NFRN. They've done a brilliant job especially with my store.”

How newspapers boost their sales

With overall sales number of newspapers declining, publishers are kaing all out efforts to boost circulation. “To help drive sales we are constantly looking at ways in which we can improve our customers' experience and enjoyment of The Sun and Sun on Sunday,” said Jo Bucci, The Sun’s General Manager. “From adding new streaming content to the TV Mag on Saturday, to additional print pullouts for key events across the year such as Cheltenham and The Grand National. We have also recently launched a national radio marketing campaign to promote our Saturday print product, yet another great example of our investment in this important part of our business.”

Times’ Orr said, “Our regular sales boosters including Best Places to Live and Rich List continue to drive interest in our brands whilst our latest innovations in podcasting and Times Radio are designed as a free to access touch point to attract new audiences to the Times brand and ultimately drive subscriptions.”

Commenting further, Spencer explained their new campaign that targets commuters. “Newspaper campaigns are a great way to drive sales, like The Sun’s Hols from £9.50 and Sun Superdays campaigns - using PoS provided will drive awareness and increase sales,” he said.

“Stores on commuter routes should also start by making the news category as visible as possible as people gradually return to work - many commuters will have time back in their day to enjoy a paper and re-starting this habit as soon as possible is an important sales opportunity.

The Times’ recent ‘Space to think’ campaign has been tapping into is, reigniting the habit of buying a newspaper for commuters. “The campaign's central theme communicates how immersive and positive the experience of travelling while reading The Times can be and it’s an important dynamic for stores on commuter routes to tap into,” Spencer added.

"This promotion reinforces the print habit which is good for retailers and is designed to drive loyalty to print and has successfully driven thousands of redemptions, driving commuters back to the category into habits we hope will last all year long. In addition, over 70 per cent of newspaper shoppers pick up at least one additional item when they visit a store, further driving retail sales value.”

Newspapers are still the most trusted source of information. Nearly 32 per cent of the UK population consumes news through newspapers. Retailers can benefit from this category if the publishers and wholesalers support them by addressing the challenges they are facing. However, it is also important that retailers understand the demographic in their locality before they place orders for newspapers and journals so that they don't endup stocking what is not going to sell.

Encouraging customers to opt for a subscription model rather than buying a single supplement daily also improves sales. Subscription provides a win-win situation to both customers and publishers. Customers can save on their annual spending on newspapers and magazines. Whereas, this the publishers will have a secured number of circulation.