“Despite holding an urgent meeting with News International today, it was obvious from the outset that the company’s decision to slash retailer percentage margins from 25% to 23.5% was a fait accompli and not open to discussion. Coming on the back of cash margin reductions on the Sun and the Daily Star in recent months, this is a bitter blow for newsagents who are all having to pay increased carriage charges to their news wholesaler.
Although the cover price is increasing from £2.00 to £2.20, News International is keeping 18.3p of the price increase for itself and giving retailers a paltry 1.7p rather than the 5p it should have done. In effect, retailers are being ripped off by 3.3p for each copy sold at the new cover price.
Whilst News International thinks that retailers should be grateful for the crumbs it offers, retailers will, of course, know that this is the first time that the Sunday Times has increased in price since 2006, during which time the National Minimum Wage (just one of the retailers’ rising overheads) has increased by 10.84%. Without pro rata terms, to offset increased overheads newsagents are being squeezed financially.
This can only have one of two outcomes. Either retailers will give up the struggle to sell products that give them a diminishing reward, or they will exercise the right they already have which is to obliterate the printed RRP and set their own cover price and determine their own margin.
Says NFRN National President, Parminder Singh, “Despite our efforts to bury old enmities in order to have constructive discussions with News International – even against the wishes of some of our members – it appears they have been stringing us along. How on Earth are we meant to work with a company that offers progressive dialogue on one hand whilst having its other hand in our members’ back pocket and robbing them blind?
“As far as we are concerned, any constructive relationship or work streams that NI might wish to have progressed with the NFRN is off indefinitely. How this will affect the 30+ people NI have employed to work on developing sales through retailers, when NI gives retailers every reason not to want to work with them, is unknown. From the NFRN’s perspective, it is very difficult to find a reason to have a relationship with a company that demonstrates time after time that it cannot be trusted.
“The NFRN will, of course, happily work with any other publisher that genuinely wishes to support our members.””
