In a first for independent newsagents, the fledgling National Newsagents Network (N3) has instructed wholesale to cancel supply of Star titles to all its members.
The decision by the multiple group’s board of directors came after publisher Northern and Shell slashed cover prices by half.
As a single entity with authority to control members’ news supplies, N3 is not limited by competition legislation that prevents collective action.
N3 director of news Brian Murphy said: “N3 is not going to stand idly by while publishers slash its members’ margins to fund price promotions.
“This is an unwilling step by N3, which was created to improve the trading strength and profitability of its members.”
Click here to tell us how you will be reacting to the price cut.
N3 chairman Ray Monelle added: “N3 is in the business of making money for its members and business partners by adopting the highest standards of retail to increase sales.
“We are not a cash cow for publishers who want to use retailers to fund price wars on their competitors.
“While this action is not our preferred choice of doing business, it was not a difficult decision for the N3 board to delist titles offering uneconomic terms of trade.”
“Meagre retailer margins have to fund operating overheads, wages and ever increasing carriage charges.
From Monday 5 October, the Daily Star will cost 20p Monday to Friday, 30p on Saturday and 50p on Sunday.
Retailer margins remain at 24.2%, with the daily pence per copy margin falling from 9.68p to 4.84p.
Northern and Shell has declined to comment.
See the 9 October issue of Retail Newsagent for more on this story.