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News UK cuts newsagent newspaper margins

Mark Fletcher
July 3rd, 2020 · 19 Comments

Newsagents in the UK are angry that News UK has increased the newspaper cover price and cut newsagent margin. Better Retailing has the details:

The NFRN has said “enough is enough” on newspaper margin cuts after News UK increased the price of The Times, but introduced a 0.5% drop in percentage terms for retailers.

From today (6 July), the cover price of Monday-to-Friday editions of The Times have risen by 20p to £2, while the margin for retailers has dropped from 21.5% to 21%, bringing the margin in line with the title’s weekend editions.

Its weekend titles will also increase in price, with the Saturday edition rising 20p to £2.20 and The Sunday Times moving up to £3. However, margins will be maintained at 21%.

This is an appalling move by News UK and one that should capture the attention of Australian newsagents.

The margin percentage cut and the cover price increase play on each other to intensify the financial hit to retailers including small business newsagents.

News Corp. in Australia is on a mission to cut operating costs and improve their own financial position as much as possible. Newsagents have seen this through the change in treatment of margin in recent years, closing of newspapers, changes to distribution arrangements and more.

UK newsagents are known for being strong and swift to act when they are wronged. I expect there will be considerable push back against the News UK move.

News UK is not alone in having on cover price and retailer margin in the UK:

Newspaper retailers can make their decisions as to what they stock. I know of newsagents who have decided to not stock newspapers because of the declining percentage of gross profit and because of declining sales. One I spoke to recently said that even though customers ask about papers almost daily, not offering reduced a key personal stress point for them.

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Category: Ethics · Newspapers · Social responsibility

19 responses so far ↓

  • 1 The good one // Jul 9, 2020 at 3:34 PM

    I have yet to see one newsagency in Australia, that does not stock newspapers.

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  • 2 Mark Fletcher // Jul 9, 2020 at 3:37 PM

    I know of several.

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  • 3 Graeme Day // Jul 9, 2020 at 7:14 PM

    Within the realms of the English language a Newsagent is a News Agent therefore the owner of a news agency “The good one” is correct if it is taken literally. However we know what he means. and what Mark is saying
    Sooner or later we are going to take the ‘bit’ and promote a different image. The name needs to have the word “agent” removed so that peole will recognise News and other products. I saw some interesting innovations in my recent trip through the NSW Country Southern Highlands Tablelands and Coastal ares over the past week. Inspiring to say the least.

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  • 4 Colin // Jul 9, 2020 at 8:13 PM

    If you surveyed the public, I would hazard a guess that 99.99% would say a “newsagent” not selling papers is NOT a newsagents.

    OR

    In the public view, there are NO newsagents not selling newspapers.

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  • 5 Mark Fletcher // Jul 9, 2020 at 8:29 PM

    The shingle discussion is tiresome and a distraction. The single biggest determinant of what shoppers expect in newsagency type businesses is lottery signage.

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  • 6 Graeme Day // Jul 9, 2020 at 8:56 PM

    Yes it is tiresome and a distraction all the more reason to address it. Signaling Lotteries as a non event in retail is not only incorrect it is I understand it’s personal for you but it’s bullshit for the public. The pub talk is not that Lotto is finished it’s the old newsagency model that is over. Agent is what we are NOT We are now a business in our own right and time to claim it as such, proudly and distinctively so. I have owned two Bookshops with Lotteries in them and no problem The stores were highly sucessful.
    We now have IGS’s Cignet tobacconists and others such as Pharmacies and Sports stores with Lotteries.
    i have just visited a most successful Cafe with Lotteries in a small town rural NSW.
    Yes it was an newsagency and still sells newspapers however the emphasis is the Cafe with Lotto. the outside newsagency sign is insignificant -the Town knows it and it will change.
    Incidently the Cafe makes more money that the Lotto and each seperatley more than the newsagency as a whole.
    Colin is correct and to add to it, today’s folk don’t do newsagencies as such. they do local they do innovation and they do community.

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  • 7 Mark Fletcher // Jul 9, 2020 at 8:58 PM

    Read my comment again Graeme. I’ve not said what you claim. Lotteries in a business does more to set shoppers expectation than anything else, especially the business shingle.

    The people who will decide the shingle issue are those who own and run newsagencies.

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  • 8 Graeme Day // Jul 9, 2020 at 9:08 PM

    i re read your comments and find them not so I haven’t it wrong. I pointed out that two Bookshops 30 years ago and today a Cafe e is not defined by the Lott it does NOT set shoppers expectations it is accepted in many different outlets as a “Host” Franchise within the concept. It is accepted as that not the main part of it.
    My point is the public are deciding what the shingle represents Cafe, Bookstore Sports outlets Pharmacies NOT the newsagent and they are accepting Lotto within these very different outlets.
    Time for Retail News resellers to look at their offer and how the Lott can be within their new image amongst other changes going forward.

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  • 9 Mark Fletcher // Jul 9, 2020 at 9:11 PM

    Graeme, I said: The single biggest determinant of what shoppers expect in newsagency type businesses is lottery signage.

    You replied with: Signaling Lotteries as a non event in retail is not only incorrect it is I understand it’s personal for you but it’s bullshit for the public.

    Lotteries are important to many retailers, many newsagents. Their signage is more important in lottery businesses than the overarching business shingle.

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  • 10 Colin // Jul 11, 2020 at 7:21 AM

    Graeme,

    People accept the lottery in various scenarios where the local situation dictates or justifies it.

    But I know from experience that developing from a newsagency into business that no longer relies on traditonal newsagency lines soon encounters if the lottery and its signals remain.

    There are suppliers who will not supply lottery outlets. There are many people who will not consider entering a store with the lottery signals. The lottery signals dictates what store you can have. You cannot put the lottery into just any store.

    For many emerging newsagents the lottery is the biggest challenge to overcome. Those that keep it, will always be regarded as a lottery outlet, no matter what other services they provide. And those that keep it will, in every business decision they make, have to address …. “will this work with the lottery signage”

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  • 11 Graeme Day // Jul 11, 2020 at 7:56 AM

    It is living fact that Lottery outlets operate successfully as host operations in a variety of businesses. Tobacconist, Hardware Chemists, Toy and Sports stores, Service Stations (the latter not so successful) and Gift Stores I owned and operated two very successfull Bookshops with lottery outlets within and the Cafe at Harden that we just returned from visiting is exceptionally successful.
    As for suppliers, more fooled them for there are a lot more that will not service newsagencies especially with the same terms and conditions as they suppier other specialty outlets-Bookshops – Stationers etc.
    I think your experience may be more assumption based than experience.
    i am not taking sides with the Lott just stating facts and what purchasers of a News “Agency” want. i have had three clients wanting a “chain” of tobacco outlets (a dying industry at that) with Lotteries. Tabcorp are promoting them as outlets.

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  • 12 Colin // Jul 11, 2020 at 11:23 AM

    Not assumption, experience. You miss my point, but no matter.

    Suppliers are not stupid. Some won’t supply outlets with lottery because of the bias in shopper it brings and the shoppers it does not bring.

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  • 13 Graeme Day // Jul 11, 2020 at 3:09 PM

    Colin I really do understand howvere one experience of transforming your own newsagency into a “new” model and seeking outside the usual channel new suppliers is not new and can be overcome.
    Book suppliers do not give the same discount to newsagencies that they give registered Bookshops for example. Same with Toy shops.
    My newsagencies had the same problem. I opened a Bookshop joined the Booksellers Association and bought the books at a much higher discount then had the accounts at the news
    As for the lotto my experience as explained was the opposite-Not under any “gaimg” snobbery in fact we called the shops The Bookmark and some suppliers suggested that we could have called it “The Bookie” and I replied I had thought of that and thought it “too trendie to punt on”.
    Colin I am only saying that we are in a very different World now even different pre COVID to now in COVID purchasers want different things and do different analysis for what they want to suit their focus and overall purpose and suppliers will supply them especially if the pay up front and have good financial backgrounds.
    Suppliers are hungry for sales.

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  • 14 Mark Fletcher // Jul 11, 2020 at 3:33 PM

    Graeme there are publishers giving terms to newsagents equal to bookshops. There are toy suppliers giving newsagents deals equal to and even better than toy shops. There are also homewares and gift specialty retailers giving newsagents discounts that used to only be for the other channels.

    Look at newsXpress, 75% of our suppliers are from outside the channel. They bring to the retailers opportunities that were not available 10 years ago, opportunities that are loved now. Those relationships are about product access, better buying, information to help drive stock turn and extended trading terms.

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  • 15 Graeme Day // Jul 11, 2020 at 4:51 PM

    Hi Mark,
    I understand this, I was answering Colin and siad the same as you. It’s a different World today. Read latest post above. Colin’s experience is that if one has a Lotto shingle a lot of suppliers will not deal with you. etc. I stated it could have happened and did happen as in my post 45 years agon -not today.

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  • 16 Mark Fletcher // Jul 11, 2020 at 4:56 PM

    I took your comment “Book suppliers do not give the same discount to newsagencies that they give registered Bookshops for example. Same with Toy shops.” to mean what you said.

    Lotteries in a business does more to set shoppers expectation than anything else, especially the business shingle.

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  • 17 Graeme Day // Jul 11, 2020 at 5:03 PM

    My mistake I was referring to two Bookshops I owned in the 70’s as i stated earlier in the post except forgot the 70’s time frame. same with Toys which I sold in ’84.
    This is why I asked Colin what his experience was.

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  • 18 Steve // Jul 11, 2020 at 5:17 PM

    Graeme we are on full return and 40 per cent Gross Margin with 2 of the major book distributors. Books is our highest growth category and compliments toys and games, giftware and card sales. We have decreased our magazine floor space and moved out of drink sales to make room for books. Interestingly despite the reduced magazine floor space and reduced magazine lines our magazine sales are currently up year on year. We have joined the Australian Booksellers Association and our Newsagency Association memberships entitle us to discounted membership.

    Leases permitting I encourage others to look at this category which compliments our traditional lines.

    Importantly for us lotteries is just one part of our business. We have deliberately rebranded ourselves with a new unique logo though we still carry the newsagency shingle. Books & Gifts are very prominent both in our window displays and outside signage. Like giftware and toys and games , book sales are increasing our GP and replacing declining stationery and newspaper sales.

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  • 19 Graeme Day // Jul 11, 2020 at 8:07 PM

    The way to go no doubt. we did this in the 70’s with great success and as mentioned did the same as you have done Joined the correct affilliated Associations and got extra discount. Mark thinks this isn’t the ame now You have cleared the matter for me as I wasn’t sure of today’s market.
    and Yes your store would be great right are for good reading material a wet long weekeend in the winter preferably raining and in front of the log fire. Great. Done it many times. Will call in soon as we are that way and have a peek.

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