The NFRN statement continues: “This means that retailer percentage margins are reduced from 24.5 per cent to an industry worst of just 16.33 per cent.
This issue was discussed at a meeting with the Leicester Mercury today (November 3), attended by National Vice President Alan Smith and National News Operations Manager Bob Scott, who made the strongest possible representations on behalf of the members affected. After the meeting Alan Smith said: “No matter how we made the case, Leicester Mercury was not to be moved over its decision on terms. Even when we pointed out to them that the printed cover price was only a recommended retail price, and retailers were likely to surcharge the title to maintain their margin, not only did they accept that this was likely to be the case, but they were prepared for any other brickbats that retailers decided to throw against them.”
Whilst the Leicester Mercury quotes the usual excuses of lack of advertising and increased paper costs, the feedback from affected retailers suggests this is a foolhardy error. With wholesaler carriage charges amounting to 10 per cent of margin or more for many small retailers, and operating costs at a similar figure, the Leicester Mercury now seems to think that retailers will be willing to pay for the privilege of selling its Saturday title, since there is no way that small retailers can make a profit out of a gross margin of just 16.33 per cent.
From the NFRN’s perspective, we have no need to risk infringing the law by recommending to members to delist this title. All we have to do is to tell members about the financial reality of what the Leicester Mercury has done to them and the only result imaginable is that retailers will make a decision that does not harm their income.
It is incredulous that the Leicester Mercury should seriously expect any retailer to want to sell its Saturday title at a loss, and as a means of improving revenue to compensate for advertising losses and increased paper costs, this appears to be more than counter-productive, it is down-right stupid.
If the Leicester Mercury wants to survive, it can only be hoped that it will come to its senses SOON and realise that if they want to keep retailers selling its title, they need to make a profit, and they need to work with retailers to achieve it.
Says NFRN National President Kieran McDonnell (pictured), “The key theme we have been stressing in all of our recent meetings with regional publishers has been “working together for mutual benefit.” That has to be the way forward and publishers have to understand that there is no more blood to be extracted from the stone by way of further reduced margins. No retailer in his right mind is going to stock his shop with products that make a loss and if publishers want to keep retailers support, then they have to make it worthwhile to the retailer to sell their titles. I run my shop to make a profit and a living for my family, I will not hesitate to delist and replace any product that thinks I will support it as a charity.”
