The Telegraph has announced sweeping price rises and margin cuts for retailers with less than 48 hours’ notice.
Retailers received letters addressed from Telegraph Media Group on Thursday morning outlining the following rises. The Daily Telegraph Saturday will rise to 30p to £2.80 from 1 February, The Sunday Telegraph will rise 30p to £2.50 and the weekday Daily Telegraph will rise by 50p to £2.50.
As with last year’s price rises, The Telegraph Media Group has frozen pence margin. The move means dramatic cuts to pro rata margins from 21.5% to 19.2% on Saturday editions, from 21.5% to 18.9% on Sunday editions and from 21.5% to 17.2% on weekday editions.
The changes make every edition of the Telegraph the lowest margin UK title on sale on the news stand.
The letter promises that from August 1, margins will be increased to 20.5% across all editions, which is still below the current 21.5% across its titles.
In its letter, the Telegraph Media Group explains its reasoning behind the margin cut. The publisher stated: “the annual payment cycle of subscriptions means any cover price rises we make do not immediately transfer to subscribers – It takes around 12 months to fully capture the price rise benefits.”
NFRN national president Stuart Reddish described the move as ‘disappointing.’ He commented: “The NFRN does not and cannot endorse margin reductions, particularly when our members are operating under such financially challenging operating conditions.”
“However, we have held discussions with the Telegraph to explore ways in which we can work together to increase sales and we have identified some clear benefits for members prepared to support the newspaper publisher’s subscriptions-first strategy.”
Reddish encouraged NFRN members to promote Telegraph subscriptions to their customers, referencing an ongoing scheme that gives NFRN members £50 for every Telegraph subscriber secured. Since the launch of the scheme retailers have delivered 272 new subscribers for Telegraph under the system, securing £13,600 in payments.
News sellers react
HND agent Brian Webb of Webbs of Leverington in Cambridgeshire said the move was: “seriously making me consider whether to continue providing the Telegraph. The 50p a week rise will kill off casual readers, and the below 20% margins will hasten the number of stores switching off news and magazines altogether.” He added short notice meant charges for the week had already been sent to many home delivery customers.
John Vine, of Newsworld in Church Stretton, Shropshire said: “We sell about 100 a day and about 80% are subscribers so they won’t see it. Telegraph customers are quite loyal and they normally accept a price rise, but a 25% rise is unheard of as far as I know. We are used to these kinds of changes cuts by now so we just roll with it, but I used to drive to our depot at Shrewsbury when bad weather or a re-run had held up the Telegraph, I won’t be doing that any more, I’ll be switching it out for a rival title instead.”
Asked about how he would respond to the news, James Wilkinson of Pybus Newsagents in York, responded: “We’ll recoup the lost margin through increases of the delivery charge on affected titles. If the margin is reduced by publishers, we have to make it up from somewhere.”
The price increases on John’s 100 Telegraphs will add £310 a week to his turnover, but according to my calculations it will also add £316 to his newsbill, so he’s entitled to feel let down by the publisher’s pence per copy freeze. Being forced to put up your prices in a way that makes you worse off isn’t good business for retailers, and the Telegraph needs to understand this.