The small puzzle magazines which are published by Pacific and ACP under the That’s Life and Take 5 brands respectively are not performing as well as they need to in shopping centre newsagencies. Each magazine pocket needs to return $8.00 a month and above just to break even.
The minimum gross profit per pocket per month is higher this year than last since most newsagents in shopping centres face an annual rental increase of 5% or more and an annual labour cost increase of 4% and more.
The long shelf life and the volume of stock received brings these small puzzle titles into focus when assessing magazine performance based on a cash flow measure. They are cash flow negative in stores for which I have data. We cannot afford them to be cash flow negative.
I would prefer to see the publishers use a sales based replenishment process for supplying newsagents. Send the average sales volume for the last three issues and top up through the on-sale as required. This stops newsagency businesses being the bankers to the publishers.
While ACP has rolled our SBR for some of its titles, this initiative needs to be more widely adopted across the channel.