The average retailer stands to gain an extra £108.75 per year in profit after News UK increased retail margins on all Times editions to 20%, beginning on 5 December.
The move follows six months of the title having the lowest retail margins of any national newspaper.
The broadsheet had followed the Telegraph’s model for the first time in June of increasing price, but freezing margins in order to subsidise subscribers continuing to pay at the old cover prices.
The new 20% margin is still lower than the previous 21% rate that was scrapped in June.
Analysis by RN suggests the decision to cut terms from 21% to 20% is forecast to save publisher News UK nearly £3.2m per year in payments to stores across all seven days, equivalent to £58 lost profit per newsseller.
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All figures above are based on copy sales extrapolations of News UK’s last published ABC circulation figures from March 2020.
From Monday 5 December, the margin on weekday copies of The Times changed from 18.48% to 20% while the cover price of £2.50 is maintained, increasing gross margin per copy sold by 3.8p to 50p.
Saturday copies from 10 December increase from 17.5% to 20% margin with the £3 cover price also maintained, netting retailers 60p per copy in profit, up 7.5p.
The Sunday Times will go from 18% to 20% on 11 December, worth an extra 7p per copy sold and taking total margin to 70p.
When the announcement was made in June, News UK blamed the margin cut on subscriptions and “inflationary cost pressures”.
Asked about future potential price rises last month, News UK commercial director of operations Tracey Hart told Better Retailing: “The only thing I can stress is our focus is to protect the retailer as much as we can.”
Discussing the change, Hamlatta Patel, owner of K & L Newsagents in Winsford, Cheshire, said: “The margins should be reverted to 21% – publishers are under pressure, but so are stores.
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“We are having late deliveries, so our rounds go out late and we lose sales. Even a single lost sale takes out the margin gain, so stores deserve to at least receive the same terms as we received previously.”
With the Telegraph’s price rise cycle and margin cuts running from March to August and the Times’ cycle running from June to December, there are now only three months of the year where newsagents receive a ‘standard’ margin on all broadsheet editions.
A senior newspaper industry source said: “This year has been exceptional in terms of costs, but, generally, price rises are a long-term strategy. They know when and by how much prices will rise far in advance.
“They could factor this into their subscriptions. Freezing margins to subsidise subscriptions is a choice they are making.”
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