Stores have slammed Daily Mail Group’s (DMG) decision to cut retailer percentage terms during its latest price rises.
From 4 April, Monday-to-Friday Daily Mail editions increased by 10p to £1, with the percentage margin falling from 22.31% to 21.8%. The pence margin rose from 20.1p to 21.8p.
The cut in percentage terms has resulted in the Daily Mail no longer having the best weekday margins, with the Guardian and the i now giving the best percentage terms of any UK paper.
Analysis of current sales figures by Better Retailing shows the average store stands to make an extra £619-per-year profit from the change, compared with £805 extra if the Daily Mail protected retailer percentage terms.
A letter to stores from the publisher’s head of circulation, Shaun Jones, announcing the change read: “Market conditions have meant we have had to take the difficult, but necessary, decision to reduce percentage margin.”
The reduction in all retailers’ terms comes less than a month after DMG introduced premium margins for the stores and roundspeople taking part in the publisher’s home news delivery subscription scheme, which requires the use of the paid-for PaperRound system.
Fed national president Jason Birks suggested the cuts to terms fail to recognise the “considerable financial pressures” faced by stores. “To give on one hand with its enhanced payments and then to take with the other, by cutting our terms, is a bitter blow,” he said.
Describing a meeting between the Fed and the Mail on the day of the terms cut, Birks revealed: “The publisher tried to further justify this move by saying it was the first time margins had been reduced on the daily paper for seven years.
“We replied by saying that, as the market leader, it should be leading the way by supporting news retailers and maintaining our terms, not treating us with such total disregard and disdain.”
One store owner said: “I won’t be taking vouchers any more and I have already cut my supply.”
The price rise represents the second weekday Daily Mail change in less than eight months, equivalent to a 25% price increase year on year.
Scottish weekday Daily Mail editions have the same terms changes as the main edition.
Retailers in the Channel Islands have seen weekday editions increase 10p to £1.50, with margin per copy rising to 32.7p and percentage margins cut to 21.8%. Weekend Mail editions are unaffected.
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