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Reach protects retailers’ margins in cover-price increases

Retailer margins will be adjusted alongside cover-price increases on papers such as the Daily Mirror

Reach has announced price rises on its national newspapers, with a pro-rata increase in margins for retailers.

All editions of the Daily and Sunday Mirror, Daily Record and Sunday Mail, the Daily and Sunday Express, the Daily Star and the Sunday People increased by 10p.

Margins, which range from 18% to 18.5% across Reach’s titles, will be maintained.

The letter sent out to retailers notifying them of the price change, seen by Better Retailing, states: “With ef­fect from 26 August, our national titles will be increasing cover prices of all editions. The retail margins have been ad­justed pro-rata.”

Based on the latest sales figures, the price rises will generate an extra £4.89-per-month gross profit for the average store selling all affected titles.

The letter continues: “We are, of course, aware of the challenging trading conditions we all face, and would like to pass on our thanks to all retail col­leagues for the much-val­ued support they give our titles day in, day out.”

Frequent rises

The increase is Reach’s second “across the board” price rise on its national titles in four months, con­tinuing its reputation for having the most frequent increases of any national publisher.

Experts have suggested the strategy is responsible for the publisher’s high rate of circulation decline – the worst of any national publisher, at nearly a 20% year-on-year drop on some editions.

Despite the suggested impact on volumes, store owners were positive about Reach’s decision to maintain retailer percent­age margins, though they remain some of the lowest in the industry.

Tony Hewson, owner of KeyStore Express Central Stores in Middleham, North Yorkshire, told Better Retailing the news was “worth celebrating”.

Read more Reach PLC news

Hewson added: “As long as we’re getting something as retailers, it’s worth cel­ebrating that it’s increased pence margin.

“Decreases in percent­age margin are what we’ve been seeing so often for the past few years.”

Hewson added that he was not concerned about the impact of the price rises on sales, explain­ing: “On titles like the Telegraph or The Times, I’m worried about price increases. A lot of custom­ers have told me another 10p is going to be the point at which they cancel their subscriptions,” he said.

“A lot of people are just waiting for the straw that breaks the camel’s back, but that’s at the higher-priced end of the spectrum. I’ve not really heard any customers with concerns about prices on the Reach titles I sell, but we’ll see what happens once this rolls out.”

Read more news and advice about the newspaper and magazines category and click here for the latest ABC circulation figures

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