Margin cuts and charges mean £3,000 loss for retailers

Analysis by Better Retailing of figures since 2009 reveals the scale of the steady erosion of margins by publishers.

At the same time, carriage service charges (CSC) have soared. In 2009, all wholesalers charged approximately £15 a week. 

The Bank of England’s inflation calculator shows this should be below £20 in today’s terms, but the actual cost is closer to £60 for most stores – a rise of more than 400%. 

Over a period of one  year, that amounts to more than £2,000 taken out of retailers’ pockets.

Similarly, on an average weekday news bill of £100, retailers are earning £2.33 less in profit than they would have been with pro-rata increases in margin.

Over a year, this equates to around £1,000 in lost profit. In many cases, a handful of percentage points have been shaved off the retailer’s cut of a title over the past 20 years or so. 

Peter Robinson, of Robinson Retail, Pembroke, said: “My news bill 20 years ago was similar to what it is now – around £1,000 a week. Years ago, that might have generated £600 profit. Now, allowing for carriage charges and everything else, it’s £200 at most. 

“Eleven years ago, it was £15 a week for carriage charges,” said Kate Clark, of Sean’s News, Upton-upon-Severn. “Petrol hasn’t gone up that much in that time.”

Graham Doubleday, of Doubleday Newsagents in Mossley, Ashton-under-Lyne, told Better Retailing: “Prices have gone up considerably over the years and the margins are now coming down all the time.”

The percentage margins from 1999 applied today would bag shop owners an extra 1p margin on each copy of The Sun and the Daily Mail, 10p on the Financial Times, 20p on the Times and 8p on the Telegraph.