Menzies Distribution has warned its retailer customers of an upcoming round of Carriage Service Charge rises, to be introduced from 4 April 2020.
A Valentine’s Day Letter announce the changes, which are capped at a maximum increase of £4.99 per week.
The increases take the seven-day newspaper and magazine base charge to £35.31. Variable charges of 2.41% of newspaper sales and 1.15% of on magazine sales create a maximum weekly charge of £66.94.
The rise took James Wilkinson from Pybus Newsagent in York’s weekly news bill to the new maximum of £66.94. He said this accounted to 4% rise, equivalent to an extra £133 per year.
Explaining its actions in the letter, Menzies Distribution told those affected: “Whilst we are able to control and partially mitigate some of the costs directly relating to the delivery and collection of newspapers and magazines, there are wider economic influences outside of our control. As a result of a 6.2% increase in the National Living Wage from 1 April 2020 and increases to our direct cost bases, it is necessary for us to review our Carriage Service Charge.”
It added: “We are confident that our delivery and collection service remains good value in the wider distribution market.”
However, the increased costs and recent margin decrease from publishers such as the Telegraph and Reach raises the sales volumes needed for the news and magazines category in stores to remain profitable.
Menzies is yet to publish its annual accounts for 2019 which would show the impact on wage increases on its business. However, in 2018, the distributor once again blamed a 4.4% increase in the minimum wage for a 2.7% carriage charge increase, but its accounts for the year showed that staff costs rose by less than 1%.