News UK to cease direct newspaper supply to London stores, saving shops £700 per year

News UK is to shut down its direct newspaper deliveries to London retailers in November, saving each independent shop an average of £700 per year in carriage charges.

The Sun, Times and Sunday Times publisher’s News UK Direct to Retail (DTR) operation currently supplies its titles to more than 4,000 shops within the M25, meaning each site must pay two sets of carriage charges – one to DTR, and the other to either Smiths News or Menzies, depending on location.

However, from 13 November, supply of News UK titles in the region will be switch to the national wholesalers. The change takes 100 News UK vans off London’s roads and is expected to save retailers a combined £3m per year in charges, reduce shrink, simplify store procedures and support the existing newspaper supply chain.

Tracey Hart, commercial director at News UK’s Newsprinters told RN: “I fully understand the cost pressures that retailers are facing in today’s dynamic market. The decision to discontinue our direct-to-retail service is designed to alleviate some of these challenges, enabling the affected retailers to benefit from the elimination of the dual carriage charge. Moreover, this strategic move allows us to contribute to a positive environmental narrative by removing 1.4 million miles from the road each year. We are committed to fostering a resilient retail category and promoting sustainability in our operations.”

The move was met with support from one of London’s most influential independent newsagents. Peter Wagg, owner of News on the Wharf in Canary Wharf, who told RN: “It just makes a lot of sense. For retailers, it will save them a lot of money and a lot of administration. It means no more sorting two sets of returns or managing two sets of accounts. I’d imagine it will take quite a bit of planning to ensure the extra volumes on Smiths News and Menzies vans are manageable, but News UK do deserve praise for moving quickly and helping to reduce costs for stores.”

London was the last region in the mainland UK where most retailers paid two sets of carriage charges. The Fed’s head of news Brian Murphy added: “The Fed welcomes this, we’ve campaigned for this to happen over a number of years and common sense has prevailed. We expect Smiths and Menzies not to increase their carriage charge to reflect this, as that would negate the savings retailers need. The Fed will work with supply chain to ensure that service levels are maintained.”

Smiths News is expected to pick up 55% of News UK DTR’s London drops, with Menzies taking the remaining 45%. The Fed told RN there is likely enough capacity in existing Menzies and Smiths News vans to avoid disruption to rounds or delivery times.

In an update to investors, Smiths News revealed the switch will deliver around £27m in annual revenue for the wholesaler. Commenting on the change, Smiths News chief executive Jon Bunting said: “It marks a milestone in our relationship to be distributing News UK titles across our whole network. It is also excellent news for London retailers, reducing costs, removing complexity and making the category much easier to manage on a day-to-day basis. It clearly demonstrates the desire of publishers and wholesalers to promote the long-term sustainability of the newspaper supply chain.”