News Limited has announced a price rise for the Sunday Telegraph and while newsagents will welcome this, I am sure they would prefer a price rise for the Daily Telegraph. While News has taken care of itself with advertising rate rises over the last ten or twelve years, they have condemned newsagents to be the working poor with no cover price increase in that time.
In the ten or twelve years that the Daily Telegraph has been $1, newsagents have faced many wage rises, rent increases and operating cost increases. Also, in that time, News has pushed its product into more retail outlets, taking traffic away from newsagents.
That News has increased the cover price in line with even CPI is appalling behaviour against small business newsagents and other retailers who sell this product.
Footnote: the timing of the announcement of the Sunday Telegraph price rise is disappointing. many newsagents would have preferred to know of Sunday so that they could let their customers know.
Mark, you make a valid point re weekly Telegraph still at $1. Despite my many requests to justify the reasons why, News Ltd just ignore you. Disgraceful effort by a company that doesn’t give a rats about newsagents and the channel
What do you think the cover price of the daily paper should be, Mark. Consumer perception is a funny thing, and I would be surprised if the average person realised that the price hasn’t gone up in around 10 years. Indeed, it would be a rare Monday if no one complained about the poor value of the Mercury because it only contains 48 pages (or 44 this time of year). The exception is when its full of advertising inserts, as this apparently makes it seem like better value!
Put quite simply, they are trying to preserve the print cash cow long enough to make the transition to digital.
This means keeping the current drain on circulation as low as possible to maintain advertising rates.
That’s why increases to cover price have and will continue to be minimal.
Chris I think that we need to make at least 30 cents from a newspaper sale for it to have even borderline value. Given the cover price is the determinant of what we make and 25% appears to be the ceiling, we need a daily cover price of $1.20 if I am right.
this was bought up at the news ltd forum in november thaat i went to… the question was asked by the speaker “do you want the price to =go up, or increased commision”
my answer is for an increase in commision, how ever they get it”
Mark – this is a catch 22 situation. They put the price of The Daily Telegraph up and rest assured the decline in circulation will increase. This then results in you, the retailer, possibly getting more cents per copy on the back of the price rise but selling a lot less!
We all know that the printed verion of news is being challenged by the internet but increasing cover prices will be the straw that breaks the camels back.
I agree with one of the omments above regarding the number of consumers who are aware it has been a long time since a price rise on The Daily Telegraph – but rest assured they will stop buying it in droves should the price go above $1.00. I think The Sunday Telegraph is a different scenario – it is more a lifestyle read where a rise of 10 or 20 cents will be tolerated by the consumer because they feel they get good value out of it as they put their feet up on a Sunday morning and have a read.
Just my thoughts Mark.
Adam
mark
dont you think an increase in delivery charge would work better to say 60cents per day like postage?
Andy,
Delivery fee increases would not benefit retail-only newsagents, nor the in-store sales of delivery newsagents.
Adam,
Increasing the price would need to be a slow and delicate process to ensure a minimal amount of circulation loss.
Adam I don’t think that sales history supports that. There are many instances of a well managed cover price increase not hurting sales. Something needs to give. The same dollar margin for more than ten years is unfair on us when the publisher has been able to increase their revenue.
Andy, As Jarryd notes this is a different issue. What I do know is that newsagents who have surveyed customer about delivery fee increases have found that customers will happily pay a fair price for the convenient service. A business where the business owner cannot control costs or revenue cannot be sustainable to their financial benefit in the long run.
It costs nearly $2 mostly in wages to deliver the paper 7 days per week, but we get $1.14 (1.04 if you subtract GST).
I could accept no price rise if they increased the delivery fee to something close to $2 per week. I don’t think this would impact on home deliveries much.
That would mean we would be happy to stay in our delivery only round for maybe 5-10 years yet, and achieve a good work-life balance.
Instead as they only let us charge peanuts we are strongly considering selling.
I am not sure what the answer is for retail sales, I think a small price rise maybe 10c every 2-3 years could be justifiable to the consumer. But even at this level, the increase in revenue would still be unacceptable to a retailer as it would not keep up with rising costs and declining sales.
Put the papers at the back as we have done ,over all our paper sale are up
“A business where the business owner cannot control costs or revenue cannot be sustainable to their financial benefit in the long run.” Mark, your sentence is the best summary. It pinpoints the current dilemma facing by thousands of newsagents in this country including me.
Samuel, Unfortunately, newsagents are spending too much time and money negotiating with demanding suppliers rather than taking a more entrepreneurial approach.
I started writing about newspaper retail and home delivery challenges more than six years ago at this blog. While individual newsagents have made moves, the channel has not.