Two major newspaper publishers announced a set of price rises and margin cuts last week, affecting multiple national titles.
News UK revealed that from 6 June, weekday cover prices for The Sun will increase by 10p to 80p, with the Saturday edition going up by 10p to £1.10 on 10 June. On both, retail margin will fall to 21%, from 22.3% and 21.4%, respectively.
From 11 June, The Sun on Sunday will go up by 10p to £1.40, with the retail margin remaining at 21%.
The Times will experience a more significant increase across England, Scotland, Wales and Northern Ireland. From 6 June, Monday-to-Friday editions will increase by 30p to £2.50.
For the Saturday and Sunday editions, prices will go up by 50p, bringing the papers’ new retail price to £3 and £3.50, respectively.
betterRetailing understands the publisher will protect margins for the latter for six months from 6 June, seeing retailers continue to earn 21%. However, from 5 December, the margin will drop to 20%.
News UK’s retail director, Neil Spencer, blamed the decision on the pandemic and national cost-of-living crisis.
“Unfortunately, our business is not immune to those pressures,” he said. “Because of the inflationary impact on all elements relating to print newspaper production, News UK has taken the difficult but necessary decision to review cover prices and retail margin percentages for all its titles.”
In a letter sent to independent retailers confirming the news, and seen by betterRetailing, the publisher confirmed that subscription vouchers for The Times and The Sunday Times will be credited at the new cover price, given they are valid from 6 June.
Vince Malone, owner of Premier Tenby Stores in Pembrokeshire, said moves like this are “not going to help build a viable business”.
“These measures aren’t a long-term answer to the problem,” he said. “Retailers are being challenged by both ends. The prices of papers go up, our margins get cut and customers aren’t going to be happy about it.
“I’m looking for open dialogue between publishers and retailers about what we both can do, together, to improve the future of the newstrade.”
When asked by betterRetailing how News UK intends to work collaboratively with independents to mitigate the impact of price rises, Spencer said: “The results of these changes mean retailers will make more money selling a copy of News UK titles than they do today. This is essential to ensure the sustainability of the print category.
“Our subscription price for The Times and Sunday Times will result in the best-value subscription discount of any national newspaper.
“We advise retailers to encourage their customers to sign up for a subscription to generate a guaranteed sale.
“We also offer six weeks of free home news delivery, which, again, we fully fund up to £2.80 a week for the retailer delivery charge to the consumer.”
The news came in the same week Reach also confirmed a raft of price rises and percentage margin cuts on four more of its titles.
From 30 May, Monday-to-Friday editions of the Daily Record will increase by 5p to £1, with the margin dropping from 20% to 19.5%.
In addition, from 4 June, the Saturday edition will increase by 10p to £1.60, with the margin slashed from 20% to 19%.
The Sunday Mail is also impacted by a 10p price hike, taking it up to £2.30 and its margin down from 20% to 19.5%, from 29 May.
This marked the fourth time the publisher has increased cover prices this year, after confirming it would cut retailer margins to below 20% on the Daily Express in April. This was followed by the Daily Mirror and Daily Star last month.
Reacting to the margin cuts, The Fed‘s national president, Narinder Randhawa, said: “We totally get why Reach and News UK have to raise their cover prices – these are very tough times, indeed – but Fed members are facing considerable financial pressures, too.
“We try, time and again, to explain to decisionmakers in the newspaper industry the impact that cutting percentage margins has on independents. We need pro-rata terms just to stand still. This latest news from these publishing giants is another big blow.
“While each cover price rise offers some pence-per-copy increases, this is limited. I have said it before and will say it again: cover price increases and margin cuts will cause more people to exit the category when the net percentage margin and volume sold is evaluated against the space it is given.”
Reach was approached for a response.
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