Grocery wholesalers are exploring the viability of supplying newspapers and magazines, it has been revealed, as Menzies announced its second carriage charge hike in six months.
The news comes as fresh calls were sounded for an overhaul of the supply chain following the announcement that retailers will be hit with an average 3.75% increase in April to offset a proportion of Menzies’ additional wage costs.
RN understands various grocery wholesalers are investigating the possibility of supplying newspapers and magazines. Naeem Khaliq, Day-Today symbol group controller at United Wholesale Scotland, said: “It’s not easy working with Menzies so we are looking at doing magazines and newspapers ourselves and with other wholesalers who have symbol groups to give an alternative route to market.
“We have direct-to-store deliveries for bread and a big chunk of our customers come into cash and carries every morning to buy bread and milk, so I don’t see it being any different.”
Dee Thaya of Abra Wholesale said he is looking at supplying his customers’ magazines and would explore newspapers if there was demand.
We’re paying champagne prices for a lemonade service. It needs a complete overhaul from top to bottom
Wholesale expert David Gilroy said: “It’s outrageous that shops are being milked. If a third player offered news at the current price, it would be goodbye Smiths and Menzies. A wholesaler would only need to make a 10% margin for it to be worth its while.”
Retailers say they would welcome an alternative supplier. Martin Ward, of Cowpen Lane News in Billingham, whose charge is going from £48.02 to £51.72, said: “That’s a lot of newspapers you have to sell just to break even. I would prefer to pick up my papers and make money out of news.”
Brian David, of Ruscoes in North Wales, whose charge is going from £56.67 to £58.56 agreed, he added: “We’re paying champagne prices for a lemonade service. It needs a complete overhaul from top to bottom.”
A Menzies spokesman said there will be no further increase until 2017, at the earliest. He added: “We remain committed to working with retailers and publishers to support the long-term health of our shared supply chain.”
Menzies’ new managing director Mark Cassie talks to RN in the 4 March issue of RN