Coles Express is promoting half price Bauer Media magazines: Woman’s Day, OK!, NW and The Australian Women’s Weekly.
This extraordinary deal is available with any fuel purchase, yes, any fuel purchase. The AIP says retailers make around 5% on fuel sales so they can’t be funding this deal.
While I understand there is a difference between the magazine shopper in a newsagency and someone buying a magazine, this type of promotion encourages shoppers to expect to purchase magazines at half price. I say this because the campaign is running for two months. People purchase fuel, say, weekly. This campaign has the right triggers and is running long enough to educate the weekly magazine shopper to switch from their current retailer to the Coles Express outlet.
I think the only way to see this campaign is to drive people to choose Coles express for their weekly magazine purchase. Sure, there will be some incremental business – but I doubt this will amount to much.
Weekly magazine shoppers are not as loyal as they were – because of price games like these,
I’d love someone from magazine publishing or distribution to tell me that I am wrong, that this two month long half price campaign for the Bauer titles is not designed to change shopper behaviour like I suspect it is.
This supermarket chain campaign is the type of campaign I hate to see. It makes us look expensive. Hell, we are expensive when we charge double for these participating Bauer titles. Where is the sense in that?
Based on a network size of 650 stores and considering the titles involved, allowing for conservative sales numbers, I’d expect this campaign to have a cost of at least $15,000 a week in terms of what is being given away. Whoever is funding this must be expecting a return on this investment for the titles being promoted.
With newsagents selling close to 50% of all magazines sold in Australia, why run a campaign that makes them look expensive compared to Coles?
Would Bauer fund a campaign like this in newsagencies? If they want us to grow magazine sales they would as they would want us to be seen as competitive.
My supermarket contacts say they expect Coles Express will make full margin on all titles if this campaign is run in the same way other magazine campaigns are run. That would make it an expensive for whoever is funding the campaign. I would love to see that level of investment made in selling these magazines in newsagencies.
What do others think?
This is a no brainer Mark.
As evidenced by their strategy on milk, bread, and other staples, part of Coles market strategy is to drive small local retailers out of business.
The second element is that Coles expect the supplier to fund price driven promotions. The answer is simple, my belief is that Bauer is funding the promotion.
Now put the two together and my interpretation is that Bauer is actively supporting Coles in its endeavours to eliminate the Newsagency channel.
Until Bauer come out and confirm they are not funding the promo, that’s my take.
With Bauer getting out of distribution and most of their portfolio being supermarket-fodder, I think we can see what’s happening long-term. Another cosy deal between large corporates at the expense of small business.
Maybe the Baurer Weekly titles will suddenly become a Coles supermarket/Coles Express only proposition next year ? Same coverage as delivering to newsagents and they appear to have been actively promoting that channel for thei magazines for a while,
Discount until the local retailer is gone, then put the prices back up above what they used to be. Seems the be the same as what they have done in other areas – liquor, fuel…..
Bauer titles have the greatest decline in my store as they become more irrelevant by the day. Bauer should have learnt from the newspaper companies that devaluing your product for short term sales is not a long term strategic move. We can not be surprised though as these deals occur at head office where the supermarkets have a high skill set in getting great deals for themselves. Bauer knows that as a whole newsagents are not going to do anything to stop deals like this. A few newsagents protesting by pulling Bauer titles is only a tiny and they know they have this strength over our poor market position.
Hope you don’t mind a little OT, but this is in response to Chris’s “…devaluing your product for short term sales is not a long term strategic move.”
Same thing with my incumbent greeting card supplier. They have, in my opinion, devalued the brand by putting them in a nearby take-away food joint. So, they gained 60 pockets, right now I am in discussions with alternative card suppliers for my 1000 pockets.
David, range sells cards. I wouldn’t sweat over 60 pockets in another store even if they were right next door. They may be chasing the longer (I assume) opening hours of the take away shop.
How can Coles offer half price Bauer Magazines??
Probably the same way Woolworths Plus Petrol stations have been able to gain a Tatts lotto franchise without meeting the same fit out or training requirements of Newsagents.
I have been into two Woolworths site in Newcastle (NSW) and the only Tatts lotto imaging / colours have been the changing of colour of the cigarette cabinet doors from white to red with a perspex poster frame….total cost to Woolworths probably nothing because they would have told the cigarette companies to pay for it…but if they did pay for it would cost under $1000.
Yet despite this, in the same suburb a newsagent was forced to spend spend $40,000 on their lotto fit out ten months ago.
Tatts have claimed Woolworths sites will provide incremental sales, yet the two newsagents in the same suburb as one of these sites both recorded a decline in sales after the opening of the store……so they are taking sales from existing sites and devaluing the Tatts brand.
All this without the setup costs or goodwill newsagents have paid…
Is that fair?
Not fair at all Amanda unless your a shareholder in woollies but can you just imagine it if Aldi gets Lotto ? they will do it even cheaper but you will probably have to bring your own thermal printer or paper or something heh heh heh !
And Ken they would call it litto rather than lotto.