Mirror, Star and Express publisher Reach said its 20% annual decline in newspaper sales to continue, even as cover price rises on its titles ease.
Speaking at the firm’s half year results on 25 July, chief executive Jim Mullen said cover prices are “not something we have in our plans for [the second half of 2023].” The announcement follows what Reach Plc chief financial officer Darren Fisher described as six to nine months of price increases ‘greater than in previous years’.
Despite currently losing one in five print sales every year, the firm described print revenue as ‘strong and predictable’ and reported a 2% increase in copy sales revenues due to higher cover prices on the nearly one million papers it sells each day. “We’ve got a very loyal and therefore ineleastic print circulation audience but we don’t take it for granted,” said Mullen.
Mullen went on add there is “no change expected” in its current 20% year on year copy sales decline, which is significantly above figures from other publishers.
While cover price rises protected profits for Reach, the same cannot be said for retailers, due to the publisher’s repeated cuts to retailer percentage margins during the period, described as ‘scrooge-like’ by the Fed.
While much of the benefits of the cover price increases for Reach were absorbed by increased paper and energy costs, Fisher said recent ‘significant’ reductions in paper and energy prices meant the higher prices were now ‘supporting profitability’ for the publisher.
Mullen added: “We moved in line [with rising costs] and those revenues came through. There’s always a place we can go but cover price rises are not something we have in our plans for H2.”
Highlighting a potential sales opportunity for shops, the chief executive also announced that Reach is increasing the number of themed print specials it produces, naming previous examples such as specials Wrexham FC, Man City and a ‘We Love TV’ special, celebrating the best in UK TV.
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