In an interview with RN in July, new Menzies MD Forsyth Black pledged to keep a lid on costs and said the supply chain needs to be as lean as possible. He is not the only news boss who sees a need to take cost out of the supply chain.
On a recent visit to the Newsprinters site in Broxbourne, News UK commercial director Tracey Hart told me about her plans to adapt the business beyond newspapers. This includes using direct-to-retail vans to deliver non-news products to non-newsagents and direct to consumer vans delivering magazine subscriptions as a cheaper alternative to Royal Mail.
Where she is on the same page as Menzies boss Mr Black is with her plan to position News UK as a low-cost alternative to the traditional magazine distributor, focusing on operations – “delivering to wholesale, allocations, sales plan, retail ranging” – over account management.
A competitive price would be achieved by breaking down the service and taking out costs. “Some magazines have 50-60% waste and, with sales declining, we wouldn’t make publishers pay for an account manager coming up with sales drivers,” she said.
Menzies’ carriage charge hike last week shows that we won’t be seeing an impact from any cost-cutting instantly
Ms Hart predicts that in a few years we will be looking at a more basic supply chain, which “may be a bit rough and ready, but will deliver value for money”. You can read about some News UK new business in this issue. Another publisher, meanwhile, offered me a similar service when I tendered RN’s distribution earlier this year.
Menzies’ carriage charge hike last week shows that we won’t be seeing an impact from any cost-cutting instantly. And my worry is that the savings from any initiative will be absorbed long before retailers see the benefit.