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Newspaper sales fall but profits still buoyant
by Steve Denham on 22 February, 2010
The national newspaper circulation figures for January 2010 were published recently and showed an annual decline in copies sold almost across the board. But sales numbers by themselves do not reveal the whole story.
The Daily Star is the only title to gain in circulation in the past 13 years
For retailers it’s the gross profit generated by our sales that matters and over the past couple of days I have been digging through my collection of old copies of Retail Newsagent to get a longer view.
Looking back to 1997 and comparing gross profit generated with the 2010 figures a remarkable picutre is revealed.
While only The Star has increased its circulation in the past 13 years, four newspapers have increased their retail margin. These newspapers that have significantly increased retailer margin, even with a reduction in sales over the past 13 years, are more valuable to the trade than those that have not.
I am one of the fortunate newsagents who has three of these four newspapers, The Times, Daily Telegraph and Daily Mail, as our top selling titles. How do you fair?
The Daily Mail, The Daily Telegraph, The Times and The Guardian have increased their estimated retail margin over the past 13 years, despite losing circulation
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Comments (2)
An interesting piece of analysis, Steve. I wondered, though, whether these increases in estimated retail margin would still be observed if the 1997 figures are adjusted for 13 years of inflation.
Using this page (http://www.watsonwyatt.com/europe/pubs/statistics/render2.asp?ID=1), using the Retail Prices Index, it appears that prices have risen by just under 45% since 1997, which means that that year’s estimated retail margins, in “2010 money” are as follows:
Daily Mail – £264,439
The Sun – £369,006
Daily Telegraph – £172,593
Daily Mirror – £247,736
Times – £114,698
Guardian – £65,315
Daily Express – £149,977
Daily Star – £68,083
FT – £81,861
Independent – £36,320
…which means that the only titles to have offered in a *true* increase in retail margin over that time period are The Times and The Guardian – and some, like The FT and the Daily Express, have experienced a massive decline.
Thanks Sam, I am glad that you have looked at the inflation issue. You beat me to it. I think that the effect of inflation is often over looked by retailer of all sizes.
The real worry of your observation is that the past 13 years has been a period of relatively low inflation. The kick up in price increases that last weeks government statistics suggest means that the next 12 months as the VAT rise and further fall in Sterling against the US Dollar work their way through is going to be very challenging for us all.
Steve