EXCLUSIVE: Telegraph to cut store margins to as low as 16.2%

The Telegraph has slashed retailer margins to well below 20% at short notice, sparking uproar from news sellers.

Monday to Friday editions in England, Wales and Scotland will increase in price from £2.50 to £2.80 from 7 March, but retailer margin will fall from 20.5% to 18.3%. On Saturdays, the cover price will jump 50p to £3.50 while retailer margin falls from 20.5% to 17.57%. Only Sunday edition prices and margins remain unchanged.

For stores in Northern Ireland, the reduction is more severe, with weekday and Saturday edition margins falling to 17.08% and 16.18% respectively.

On 5 September, margins on affected titles will rise to 20%, still half a percentage point below the margin at the beginning of 2022.

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The decision by publisher Telegraph Media Group (TMG) comes despite all seven other national newspapers to have increased their price since Christmas opting to maintain retailer margin. The cut also follows a high-profile meeting hosted at the Telegraph’s headquarters in February this year, attended by all major wholesalers, publishers and the NFRN. At the meeting, all attendees promised to work collaboratively to protect the future of newspapers.

However, as of 3 March, just four days before the change was scheduled to come into effect, the Telegraph was still yet to inform most news sellers.

NFRN national president Narinder Randhawa said: “Only last month, and at the Fed’s newspaper summit in London, we listened as the Telegraph’s CEO Chris Taylor insisted that the printed word had a bright future as he updated retailers, news wholesaler and his publishing colleagues on its subscription strategy and the importance of our support in achieving that.

Retailers furious as Telegraph slashes margins

“This latest decision to accompany these price increases with a cut in our terms and deferred payment is a bitter blow – especially as they come at a time when our costs are rocketing, and we have no way of passing these increased costs on to our customers.”

HND agent Brian Webb of Webbs of Leverington in Wisbech told Better Retailing: “It’s completely unacceptable and stores will just stop stocking it. As soon as the margin goes under 20% it’s not worth touching.”

For the past several years, The Telegraph has cut percentage retail margin for six months when introducing price rises. However, this is the first year where percentage margins remain lower even after the six month period.

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Previously, retailers have reacted furiously. In 2020 the Co-op removed The Telegraph from sale, and WHSmith ordered staff to boot the title off its newspaper racks and bury it in its business magazines section. In 2021, HND giants News Team Group stopped taking new Telegraph orders following the margin cut.

Asked about the increase, a TMG spokesperson told Better Retailing: “From Monday March 7 2022 the cover price of The Daily Telegraph (Monday to Saturday) will be increasing. For a six month period we will be maintaining the current retail pence per copy sold and from September 5 onwards, the retail pence per copy sold will increase by 9% on weekdays and 14% on Saturdays. With subscriptions accounting for the largest proportion of Telegraph’s sales, aligning with the annual renewal cycle of the business allows for continued investment in our journalism, subscriptions and supporting retailers.”

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