Australian Newsagency Blog

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News Corp deal makes Coles look cheap and newsagencies look expensive

Mark Fletcher
June 27th, 2014 · 25 Comments

appalling-insideoutNews Corp’s Inside Out magazine is on sale at Coles for $6.00, $2.20 less than the price in newsagencies and other retail outlets.

How is it that this News Corp. title can be sold to shoppers at Coles for less than newsagents pay for it?

Why would newsagents not early return all Inside Out stock right away in protest at this deal?

One of my newsagencies is directly in front of Coles. This deal makes us look expensive. It plays into the Coles advertising that they are driving prices down.

I’d love to know if there is a deeper deal between News Corp. and Coles that could see other deals that make newsagencies look expensive to what Coles offers.

Once you consider this Inside Out deal and last week’s Woman’s Day deal, supermarkets certainly have newsagents in their sights and some suppliers appear willing to play with them. We need to remind these suppliers that we are a strong national channel.

Other newsagent suppliers note: resist pressure from Coles to join them on the race to lower margin business. The more shoppers you turn away from newsagents the more you rely on the likes of Coles and think for a moment what that world looks like to you.

Note: I moved this post from yesterday to today to keep the issue in the spotlight.

19 likes

Category: Ethics · magazine distribution · magazines · Newsagency challenges

25 responses so far ↓

  • 1 Steve // Jun 26, 2014 at 4:04 PM

    If newscorp aren’t backing this I’d like to know how the insert card and front cover advertising promoting it got in during the printing proccess? Pull it and early return it. I have to admit its easy for me to say my sales of Inside Out are so dismal they stopped sending it. Real Living and Aust House and Garden however are holding up well. Maybe they needed to look at the quality of their content before they decided to started discounting through only one (admittedly large) retailer.

    2 likes

  • 2 Mark Fletcher // Jun 26, 2014 at 4:24 PM

    Steve, sadly too many in business think the only way to differentiate and attract sales is to cut price. Dumb.

    2 likes

  • 3 Steve // Jun 26, 2014 at 4:37 PM

    Your right about the dumb bit mark, and knowing how Coles likes to make its suppliers pay for their promotions I dare say Newscorp are paying for it.

    0 likes

  • 4 Carol // Jun 26, 2014 at 5:01 PM

    Two of my subagents have recently been changed to direct supply. Caltex is offering a free paper with $3 cup of coffee. Mobil is offering free paper with any purchase over $20 (we could probably match this). Maybe we should do the $20 deal. I am still expected to deliver to them.

    0 likes

  • 5 Bernard // Jun 26, 2014 at 5:27 PM

    Let me start doing Early Return as protest.
    Actions speak louder than words.

    2 likes

  • 6 Phillip Chapman // Jun 26, 2014 at 5:52 PM

    As always Mark your industry commentary hits the target, The Newsagency Channel would appear to be clearly in the Duopoly’s sites. These examples of where margins are being eroded need to shared across the entire supply chain-including the Landlords. Operating Costs (occupancy costs) need to reflect these true market forces. Keep up the good work. Phil

    4 likes

  • 7 Adam // Jun 26, 2014 at 8:19 PM

    Returning 1st thing in morning slap in the face to all concerned

    1 likes

  • 8 Gary // Jun 27, 2014 at 6:15 AM

    if Coles did this consistently with weeklies I would be worried. For niche monthly titles like Inside Out, not too fussed. Happy to cancel the title and free up a pocket for something else.

    0 likes

  • 9 Mark Fletcher // Jun 27, 2014 at 6:50 AM

    With more activity like this in recent months I am concerned. I hope that associations are raising it with the ACCC as it is, in my view, predatory pricing. This from the ACCC website: Predatory pricing is one way in which a business may misuse its market power. Predatory pricing occurs when a company with substantial market power or share of a market sets is prices at a sufficiently low level with the purpose of damaging or forcing a competitor to withdraw from the market. This conduct is illegal.

    9 likes

  • 10 ed // Jun 27, 2014 at 8:49 AM

    thanx for the heads up gone…..

    0 likes

  • 11 Wally // Jun 27, 2014 at 9:06 AM

    I am returning today and will continue to do so in the future. it will free up space for more sales at a better margin

    0 likes

  • 12 Garry // Jun 27, 2014 at 9:19 AM

    I will not be early returning inside out for the same reason I didn’t early return WD I do not want my regular customers going to Coles to buy their mags because I didn’t have it in my store.
    That is just more retailing in my opinion.

    4 likes

  • 13 Jenny // Jun 27, 2014 at 9:42 AM

    I wouldn’t early return even if I was next to Coles because not everyone shops at Coles but if they do this with this title every month I would stop selling it.

    1 likes

  • 14 David @ Angle Vale Newsagency // Jun 27, 2014 at 12:05 PM

    Bugger, but its hard sometimes. yes, it is IMHO predatory pricing and must be stopped. But sometimes I also love supermarkets.

    I’m right next door to one, sold out of That’s Life by 2pm yesterday because the Stupidmarket have still got last week’s on show. Now its almost Noon Friday, they still have last week’s on show and I am waiting on a top up order.

    3 likes

  • 15 Paul // Jun 27, 2014 at 1:01 PM

    I emailed them and here is the resoponse

    Dear Paul,

    Thank you for your recent email regarding InsideOut magazine which has been forwarded to me as I am the National Sales Manager at NewsLifeMedia.

    As you would be aware InsideOut recently announced it would be increasing the frequency of the magazine to 12 issues per year. As part of this exciting initiative, InsideOut has a number of marketing promotions across multiple retail channels. This includes an exclusive newsagent promotion to drive sales through the newsagent channel which we will be rolling out shortly

    NewsLifeMedia invests significantly in the newsagency channel with multiple promotional programs across our wide portfolio of magazine brands. The newsagency channel is an important retail channel for our business and one we are committed to supporting.

    Regards

    Jonathan Gross

    National Sales Manager – Retail

    0 likes

  • 16 Paul // Jun 27, 2014 at 1:07 PM

    His email if you would like is
    “Gross, Jonathan”

    0 likes

  • 17 Mark Fletcher // Jun 27, 2014 at 1:07 PM

    Thanks for sharing Paul.

    News has demonstrated its commitment to the newsagency channel by giving Coles a deal that puts the Coles retail price lower than the newsagent wholesale price for this product.

    This letter from Gross is corporate spin at its best. Nonsense.

    4 likes

  • 18 Paul // Jun 27, 2014 at 1:07 PM

    sorry missed a bit

    1 likes

  • 19 Paul // Jun 27, 2014 at 1:08 PM

    jonathan.gross@news.com.au

    0 likes

  • 20 NATALIE // Jun 27, 2014 at 1:32 PM

    That ‘spin’ email from Mr Gross is more insulting to the newsagency channel than the original deal with Coles IMHO.

    4 likes

  • 21 David // Jun 27, 2014 at 2:24 PM

    We newsagents should all be early returning them , forego one months commission . Put a sign in a empty space explaining this is our form of industrial action with the reason why I am sure you will get a sympathetic customer when they understand why.

    1 likes

  • 22 shane // Jun 27, 2014 at 4:16 PM

    This is not a one off promotion from Coles Its DOWN AND STAYING DOWN whats to follow?

    1 likes

  • 23 Shayne // Jun 27, 2014 at 5:16 PM

    The cover also says “down since June 2013″

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  • 24 Mark Fletcher // Jun 27, 2014 at 8:36 PM

    Shayne that’s interesting. Have we missed it?

    0 likes

  • 25 Mark // Jun 28, 2014 at 8:29 PM

    I know this has been happening for at least 2 years now. Only this Magazine though.

    0 likes

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