Magazine Waste in the UK

There’s a nagging question on everyone’s mind at the moment. If copy management systems in the UK are at their best and most sophisticated ever, then why are unsold levels the highest that they ever have been?

The answer to that question is a complex one. Yet it is also one of the most important currently facing the industry.

What is the current situation?

Magazine waste in the UK reached a record 37% in 2006 for regular frequency magazines (excluding one-shots and partworks). That figure is for returns between retailer and wholesaler. There is an additional 3% or so of waste which sits at wholesale level - copies that are held in the warehouse balance, but which are simply never used. So, the real returns rate for the total supply chain is currently in the region of 40%. This global figure in turn, breaks down into 35% for weeklies and a much higher 53% for monthlies.

The long-term trend in waste

The graph below shows what has been happening over the last 16 years.

In the early 1990s, sale or return was still flushing through the system after decades of firm sale. Firm sale was an oddity of the post-war UK market and was a left-over from wartime paper rationing. It was only blown apart by the arrival in the UK in the late 1980s of G+J and Bauer, both of whom launched fully and permanently sale or return (SoR) products, forcing domestic UK publishers, very reluctantly, to follow suit, although this shift was gradual and took several years to work through the system, starting in the women’s sector until the whole industry was eventually fully SoR.

Rising paper costs forced publishers to throttle back on supplies in the 1995-96 period, but since then returns levels have steadily risen, with a brief plateau in 2001-02.

What drives waste levels?

When looking at magazine waste, there are two distinct areas – (1) demand (retailer-driven) and (2) supply (publisher-driven) factors. Both are outlined in the boxes below.

What is clear from the available data is that waste levels vary much more widely from magazine to magazine than they do from retailer to retailer, which makes many people conclude that waste levels are much more driven by publishers than by retailers. The suggestion, therefore, is that this is why the new generation of copy management systems do not seem to be kerbing waste – because the systems can allocate copy in the right proportions, but that publishers are simply forcing out too much copy in absolute terms. With print and production costs holding pretty steady currently and with retail copy sales being very soft, the temptation is great for many publishers simply to pump copy out in order to boost flagging sales. Yet this is a major – and highly political – assumption that needs more substantiation and debate.

So, what can be done to reduce waste?

Only when the precise causes of waste have been identified and quantified more scientifically can this question be answered objectively. Also, only then will the various links in the supply chain really commit to doing something tangible to tackle the problem, rather than just wringing their hands in anguished concern.

The likely answer is that it will require a package of co-ordinated actions. Sales based replenishment must be part of that package, but SBR can only manage a limited number of the larger magazines at any one time. Also, the SBR tests to date have only focused on reducing retail waste. The next step is to take copy out of the chain completely through reduced print runs, but this has not actually happened to date.

Creating limited pockets of firm sale for specific retail types is another suggestion which has been floating around the industry for some time and needs more rigorous evaluation.

Yet what is clear is that the waste is a time bomb ticking beneath the industry. The current furore over the amount of waste being generated by the free London newspapers – three tonnes of paper needs to be cleared off the streets each day – demonstrates what a hot and sensitive issue this is, which could explode into a "green backlash" at any time against magazine publishers as well as newspaper publishers.

The concern is that before the industry can agree internally a voluntary package of waste-reduction measures, there will be some kind of external government intervention to force waste levels down in an aggressive and punitive way. The clock is already ticking. The fear is that time will simply run out.