WH Smith stopped selling UK newspaper the Daily Telegraph for several days in train station outlets because of a dispute on margin.
WHSmith has banished the Daily Telegraph from its outlets in railway stations, escalating an industry-wide battle over shrinking margins for newspaper retailers.
After ordering managers to move the Telegraph titles to the magazine section on Friday, the UK chain this week refused to stock the daily newspaper in about 120 railway stores.
The dispute arose after the Telegraph raised the cover price of its newspapers by almost a quarter this month — the daily edition to £2.50 and the Sunday Telegraph to £2.80 — but did not increase the amount paid to retailers by the same proportion.
That move, not sharing cover price gain with retailers, is what has been happening in Australia for a while. As the Financial Times story continues…
The disagreement reflects years of frustration among newsagents, whose sales income has fallen along with tumbling circulation of print copies. While Britain’s national papers have steadily raised their cover prices over the past decade, the increases have been offset by cuts to the retailers’ share.
Yes, here too.
A study in 2016 by Deloitte found that the industry, on average, paid 23 per cent of a newspaper’s cover price to retailers and 5 per cent to wholesalers. Today, the national newspaper average for retailers is closer to 22 per cent, according to Financial Times calculations.
Whoa! UK newsagents are better off that us. We are on 12.5% – making newspaper loss making. Plus, newspaper shoppers are not efficient, they rarely purchase anything else.
Like much of the industry, the Telegraph has struggled to cope with plummeting print circulation over the past decade. Since 2017, the Daily Telegraph print circulation has fallen 34 per cent, from 484,000 to 317,000 copies a day, according to data from the Audit Bureau of Circulations.
Boo hoo. The challenges faced by newspaper publishers are not something small business newsagents have to financially support. We have our own challenges that demand our time and capital.
Note, a few days after the newspaper was removed, it was back on sale. No news of the details of any deal being struck.
So how is a newsagent now only a sub agent going to make 12.5 % margin make a profit?
I know a few newsagents that sell just on $250k of newspapers instore at 12.5% that is just on $31k p.a. or $600 p.w. Doesn’t cost a full time staffer to look after that many newsapers. Just stack ’em high and watch ’em fly”
Before uoi jump on me I understand it’s not the norm and for some it means a decision of what to do. It’s a scenerio not unlike Europe where the cover price is exorborant and the Convenience outlet or stall only has a dozen or so papers a day to sell al else is online or not read..
Graeme I doubt that there would be more than 10 newsagents in Australia selling the required 300 or so papers a day, 7 days a week, to meet the example you provide. The average newsagent makes around $15.00 a day from a title out of which they need to pay space, labour and operating costs. 12.5% is ridiculous. 20% is ridiculous. 25% is ridiculous.
25%! Who gets that anymore?
Newspaper commission is a joke!
How they ever got away with changing 25% commission to a ‘service fee’ astounds me
As a distributor if we were still getting 25% especially from Fairfax I’d be very happy with commission