Newspapers

Menzies carriage charge rise ‘triple whammy’ for retailers

The retailers want to create something more akin to that seen in the Northern Ireland market.

Menzies Distribution is to increase its carriage charge by 3.5% from 4 April, just three days after the national living wage for employees aged 23 and over increases by 6.6% and amid soaring utility bills.

NFRN National President, Narinder Randhawa, said: “This is a bitter blow for Menzies Distribution’s retail customers as it comes at a time when our costs are spiralling out of control.“Where are retailers supposed to find the cash to fund this increase? Wholesalers should be going to the publishers who not only control cover prices but the margins across the industry too.”

RANDWHA WARNING

Randhawa warned that this latest increase could push more independent retailers into dropping the news category completely in favour of products that offer enhanced margins and that demand less time and effort being spent on them.

Alternatively, others could take control of the price and margin, by covering the RSP on the front pages of both newspapers and magazines and setting their own cover price.

Randhawa added: “Quite rightly, all wholesalers decided to freeze their charges during the pandemic in recognition of the torrid time that retailers were facing. Sadly, very little has changed, and many members continue to struggle financially. Menzies Distribution’s management also has to recognise that it is impossible for retailers to pass these extra costs onto their customers.”

The charge increase was announced just days after the NFRN’s summit, attended by news wholesalers and national newspaper representatives, which heard the newspaper category still has a “bright future” but the industry must work collaboratively to promote it.

Randhawa said: “During the summit, all parties were reminded that retailers have seen no increases in payments for inserting supplements or handling vouchers for many years. Having listened to our concerns about these paltry payments, it is baffling that just a few days later we are told that the carriage charge is going up. There is no justification, especially as Menzies is failing to provide all members with a high level of service.”

The summit discussed the sustainability of the supply chain, some of the challenges facing independent newsagents, and the merits of cut-off extensions. It was identified that opportunities existed around retail subscriptions and home news delivery.

NFRN members shared experiences around the handling and returns processes for vouchers, and publishers and wholesalers agreed to look in the principles of making these paperless. It was also deemed important to create one database of home news delivery retailers and to ensure the data was refreshed regularly.

INITIATIVES

Accepting that bunching and late newspapers impacted negatively on the service to stores, publishers and wholesalers said they would explore ways of using technology for live updates.

Working groups comprising representatives from all three sectors will now be set up to progress these initiatives.

Randhawa said: “Buying a newspaper is still one of the key reasons for customers to come into our members’ stores, so it is important that the printed word survives and thrives. But it is equally important that independent retailers get the level of service that they deserve.

“I am pleased that we were able to get key colleagues from publishing and news wholesaling in one room for such a positive discussion and that all attendees expressed a willingness to work to work together to safeguard the future of the printed word.”

Smiths News Chief Executive, Jon Bunting, added: “It was a really constructive meeting where we focused on the things that both unite us and also where we have differing perspectives. Importantly, we all left with a common understanding of the areas we will look to tackle first.”