Smiths News has announced a 2.9% carriage charge increase from 28 August.
The news wholesaler sent letters out to retailers today, blaming the move on ongoing cost increases, driven by inflation.
In the communication, seen by Better Retailing, commercial director Simon Gage said: “This year’s review has highlighted that all businesses, including ours, are facing significant cost inflation, particularly fuel and living wage increases. This is in addition to the widely discussed increases to delivery costs brought about by the shortage of drivers across all industries.
“In previous years, we have been consistent in implementing a template that took account of the inflationary measures of RPI, labour costs and fuel as published by the government at the time of review. This ensured that any delivery service charge increase was proportionate to the additional costs of delivering to your business.
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“Due to the current economic environment, had we taken the same approach this year, it would have meant passing on a cost increase of more than 8% to our customers – and we fully recognise that this is an amount that many retailers would not be able to bear given other challenges.”
In response, The Fed’s national president Jason Birks told Better Retailing that, although expected, he was “dismayed”. He said: “While Smiths News’ action is not surprising – in fact, its CEO Jon Bunting alluded to it at our April national council meeting – as the cost of living continues to bite and our bills go upward, we are dismayed.
“Also, there is no guarantee from Smiths News as to how or even, if, this new income from carriage charges will be reinvested into its business. If that were to be the case, at least members would see some service improvements. Currently, for too many of our members, the service levels they are receiving remain unsatisfactory.”
However, Gage confirmed the wholesaler remains committed to the “sustainability of the newspaper and magazine supply chain”.
“We are constantly initiatives that support easier, more cost-efficient trading, service improvements and stronger relationships with our supply chain partners,” he explained.
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