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Bauer speaks out on Coles magazine discount

Mark Fletcher
June 16th, 2014 · 26 Comments

Julie Green, National Channel Manager – Newsagents, at Bauer Media has issues a statement about Coles discounting Woman’s Day today in Victoria:

It has been brought to our attention that Coles has made the decision to discount this week’s current edition of Woman’s Day to $2.10 in their Victorian stores.

Bauer Media would like to state categorically that it does not support this decision and is not funding this promotion in any way.

Our extensive research has clearly demonstrated that discount price promotions of this nature do not perform positively both in terms of sale numbers or brand equity. The magazine category within a grocery outlet serves as an impulse sale which in turn builds baskets. They are not discount sensitive. Our strategy for magazines continues to be to add value to the purchase, not discount the product. We have spent considerable time, effort and resourcing to launch the Reader Rewards magazine loyalty program for newsagents that meets this strategy. The investment is substantial and ongoing. To then have this inappropriate activity happen in an alternative channel is extremely disappointing and frustrating.

We strongly urge those newsagents with Reader Rewards to exploit this competitive advantage. An issue of a magazine can be sold only once – claim the sale of Woman’s Day early by leveraging the reward of a free magazine with shoppers. Reader Rewards provides a key point of difference that will build customer traffic, loyalty and repeat purchase that will outlast and outperform this singular promotion.

It’s terrific to see Bauer being so clear on this issue.

16 likes

Category: Competition · magazine distribution · magazines

26 responses so far ↓

  • 1 vaughan // Jun 16, 2014 at 9:22 AM

    Mark; if Bauer were that concerned they would pull the product from Coles and issue them with a stern warning about supply. It’s not like Coles can source WD from anywhere else!
    Action speaks louder than words!!

    10 likes

  • 2 shauns // Jun 16, 2014 at 10:09 AM

    Vaughan I would have to agree with you .Also who was this statement issued to ?

    1 likes

  • 3 Dean // Jun 16, 2014 at 10:33 AM

    Vaughan, if Bauer pulled Woman’s Day from Coles because of this then they would be in breach of section 48 of the Competition and Consumer Act and subject to fines as well as compensation from Coles for lost profit.

    Shauns – it was issued by Bauer it should be in your email inbox if you have a direct account

    4 likes

  • 4 Mark Fletcher // Jun 16, 2014 at 10:46 AM

    Shaun, Bauer contacted me direct this morning. They also emailed Connections members.

    0 likes

  • 5 Jenny // Jun 16, 2014 at 11:14 AM

    I have customers who will buy at Coles if a magazine is cheaper.
    We have reader rewards and we have win a tablet with pacific mags and we have discount vouchers but I am getting really tired of pushing all this, being under/oversupplied with magazines, working back to make my mags look great, paying 3 staff 6 hours each on a Thursday to get all the mags marked put out and topped, paying staff to scan returns, it really is all getting too much for 25%.
    And in 4 days GG will tell me my payment is late!

    10 likes

  • 6 shauns // Jun 16, 2014 at 11:30 AM

    18 hours to do your magazines ?

    2 likes

  • 7 Jenny // Jun 16, 2014 at 12:02 PM

    Yes Shauns 8-2 3 shopping trolleys 3 staff (less 2 hours in breaks) sub agents made up at end (they get mags the next day) and most Thursdays are really busy with shop customers and home delivery calls.
    Sounds crazy but that’s how long it takes each week!

    1 likes

  • 8 June // Jun 16, 2014 at 12:04 PM

    Coles (and us) are entitled to discount any of our mags to compete.
    We cannot charge more for the mag but we have always been allowed to discount.
    Just words from Julie Green – they know this and while not condoning it they accept that it can and will happen.
    We are at the “farmgate” being squeezed just like other suppliers who sell to Coles/Woolies.
    This procedure is how they capture market share and they don’t care how they do it.
    The only form of retribution we have as customers is to boycott the duopoly and spend our money at the local IGA/Foodland/Timesavers etc.
    Our government has been negligent in allowing the duopoly to control 80% of the market. This is simply not allowed in other countries e.g. UK.
    Has anyone had any success yet, with Reader rewards?
    I am giving it my time but so far – nothing.

    1 likes

  • 9 shauns // Jun 16, 2014 at 12:14 PM

    June . yes one customer. WOW .
    jenny that’s a whole lot of mags I only get one or two trolleys worth .One good thing about woolies Is their trolley I would be lost without them

    1 likes

  • 10 Gary // Jun 16, 2014 at 1:22 PM

    I’m not the sharpest tool in the shed, but maybe Coles is firing a shot across your bow. Maybe they are letting Bauer know that Coles is the top dog and are not entirely happy with the newsagents rewards program. Seems timely to happen at the launch of the program.
    Shoppers are a fickle mob. $2.10 against $4.20, no brainer. Coles have the resources to make this hurt. Lets see what Woolies do.

    6 likes

  • 11 Richard // Jun 16, 2014 at 2:16 PM

    Maybe they are selling at cost!!! Who knows?

    0 likes

  • 12 Gary // Jun 16, 2014 at 2:23 PM

    Interesting thought Richard. The $2.10 seems to come from some base.

    1 likes

  • 13 Brucez // Jun 16, 2014 at 3:28 PM

    Yes Dean is right. We can also sell cheaper if we wish. I am betting COLES want to DISRUPT the market a bit. Can you imagine how a coles customer will feel. CThey will bypass the newsagency to go to Coles just in case their weekly mag is cheaper again this week. If it is at normal price they will still buy it. It is the uncertainty that will get them back to Coles.

    1 likes

  • 14 Carol // Jun 16, 2014 at 4:52 PM

    All of you newsagents near Coles go buy your WD there and return your Bauer supply. Looks like another petrol station type move. Is this the thin edge of the wedge.

    6 likes

  • 15 Gary // Jun 16, 2014 at 6:23 PM

    1, Buy all WD copies from nearby Coles.

    2, Early return same amount online.

    3, Sell WD as normal now with increased margin.

    4, Pickup sales from those who missed out at Coles.

    5, Profit??

    4 likes

  • 16 Dave // Jun 16, 2014 at 7:10 PM

    $2.10 is half price. Gary your suggestion in post 15 is the best way to go. Just make sure you keep the Coles supplied sales out of exchange it. Easy to do actually.

    Fight the fire with the fire

    2 likes

  • 17 rick // Jun 16, 2014 at 8:23 PM

    I’m more cynical, the bauer letter is to appease newsagents, how does it hurt Bauer if Coles discount, unless they are being forced by Coles to help pay for the discount? Bauer got into bed with them (Coles/woolies)and now might be realising the rough end of the pineapple is a bit painful when inserted.

    2 likes

  • 18 David @ Angle Vale Newsagency // Jun 16, 2014 at 9:30 PM

    I guess this is an eastern sates issue. Just been to Coles Elizabeth SA and price is $4.20, so dashed my hopes of an increased margin :-)

    0 likes

  • 19 Mark Fletcher // Jun 16, 2014 at 9:56 PM

    I have just been to a Coles in Hawthorn and another in Richmond in Melbourne tonight and neither are pitching this price.

    I’m not sure about the idea of going to Coles and buying up stock where this offer is being promoted. You don’t want to start something like that unless you know what you do next time they do this.

    0 likes

  • 20 Cameron // Jun 17, 2014 at 6:29 AM

    I’ve often seen mag deals at 7-11 buy one get a second for $1. This was invaluable once when my Womans Day supply went astray. I can’t imagine the Sri Lankan guy and his lovely wife are bankrolling this.

    It’s more likely Bauer get a fixed percentage of the scan-based-sale, whatever price the big boys choose to sell them for.

    0 likes

  • 21 Richard // Jun 17, 2014 at 11:42 AM

    Foster stopped supply back in 2011 of beer because they ( Coles and Woolies )were going to discount the price.
    Why cany Bauer do the same?

    A Foster’s spokesman said supply was withheld to protect its brands against ”loss-leading” – the practice of deliberately selling a product at a loss in the hope of attracting customers who will also buy other products that are not discounted. ”We take loss-leading of our brands very seriously,” the Foster’s spokesman said.

    Read more: http://www.smh.com.au/business/beer-wars-big-retail-v-fosters-20110322-1c59d.html#ixzz34rABXi31

    1 likes

  • 22 ebo // Jun 17, 2014 at 12:08 PM

    Similarily with cigarettes. Some weeks ago Coles were selling some Dunhills well below wholesale prices, a few cigarette retailers shared the good news and went out to clean out their stocks, depriving Coles of sales to their regular customers, and still enjoying inflated margin at Coles expenses. We should really want Coles to do these promotions more often.

    0 likes

  • 23 David @ Angle Vale Newsagency // Jun 17, 2014 at 9:53 PM

    ebo, not sure I can agree. Coles won’t care where the money came from, they will simply see the effect on their sales. And if your purchases from your regular supplier drop, they will not thank you.

    0 likes

  • 24 Mark // Jun 17, 2014 at 10:13 PM

    I remember Coles had a deal with the distributor/ publisher for “Inside Out” Magazine. I wonder if they still selling that mag for $5?

    0 likes

  • 25 Mark // Jun 17, 2014 at 10:17 PM

    Is this discount only in Victoria?

    0 likes

  • 26 Mark Fletcher // Jun 17, 2014 at 10:28 PM

    It is Victoria only from what I understand Mark.

    0 likes

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