Dismay among retailers as Telegraph terms cut takes effect

Over the past two days, news retailers have received letters from The Telegraph advising that, from this weekend, the pence per copy margin they receive for each edition of the newspaper that they sell is to increase to 76p on Saturdays and 60p on Sundays and weekdays.

What the letter failed to make clear is that these new payments relate to cover price increases that took effect in February this year but were deferred for six months.

There is also no mention within the letter that while the pence per copy margin is increasing, that the percentage profit margin that retailers receive will be cut by 1 per cent for the Saturday edition and 0.5 per cent for the Sunday newspaper.

Commenting, Muntazir Dipoti, the National President of the Federation of Independent Retailers (The Fed), said, “Retailers everywhere are operating under intense financial pressure and pro-rata terms are a necessity if we are simply to stand still.

“Six months ago, when The Telegraph first unveiled its intentions to up its cover prices, cut our terms and delay the new payments, we expressed our anger and disappointment.

“Since then, in conversations with the newspaper publisher, we have made it abundantly clear that this annual cycle of terms cuts and deferred margin is untenable and that rocketing costs, without suitable reward, are making the financial positions of many more retailers even more precarious than before.

“It is hugely disappointing, therefore, that six months on the Telegraph is pursuing with its margin cuts. As we have warned before, at best, such actions will accelerate the number of retailers giving over the space in their stores that they previously devoted to newspapers and magazines to other products and companies who support them or, at worst, exiting the news category completely.”