Kids’ magazine publisher Story House Egmont faces action over its return to giving most independent shops returned unsold copies from supermarkets.
Analysis and test purchasing by RN last week revealed independent stores being given copies of Go Girl and Toxic two editions behind those ranged by major retailers.
Responding to what it previously described as a “discriminatory” system, the Fed blocked and delisted Go Girl from its more-than-1,500 stores signed up to the Fed’s magazine range management service, Newspro. It is thought that approximately 200 of these currently sell Go Girl. The move could cost the publisher nearly £30,000 in lost sales per year, based on two copies sold per store per month at £5.99.
The Fed said Toxic would also be delisted unless Egmont can satisfactorily resolve the situation. RN understands similar titles will be ranged in its place to protect Newspro partnered retailers’ sales.
Explaining the move, the Fed claimed stocking recycled and out-of-date titles was not in the interests of its members, who faced losing sales due to customers having already bought the copies on their shelves from larger stores months before.
RN’s research found that copies in independent stores featured a new sticker barcode hiding the original barcode, allowing copies returned by major chain retailers to be redistributed to independent stores through news wholesalers with different on- and off-sale dates.
Egmont and its distributor Seymour tried the tactic of giving unsolds to independents in a ‘test’ in 2019, but abandoned the scheme a year later after pressure from RN and the Fed. It instead began shifting unsold UK copies to be sold in Ireland and has so far failed to fulfil its promise to share the results of the test involving independent stores.
At the time, Egmont claimed the scheme was needed to “ensure a sustainable future for our children and grandchildren”, and said it could cut waste by 10%. The scheme potentially represents a significant cost saving for Egmont as well.
For instance, earlier this year, Seymour claimed redistributing copies returned to wholesale cost around 65p, making it a lucrative option for titles with high production costs, like kids’ titles with extensive use of cover-mounted toys, such as Egmont’s.
Speaking during the original trial, Peter Wagg, owner of News on the Wharf in London, summed up the response from independent shops, telling RN: “I am a specialist magazine newsagent, not a second-rate one, and if they don’t provide me with copies with the supermarkets, then I will delist them. I cannot accept it, and will not accept it.”
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