Aldi is to remove newspapers and magazines from all of its approximately 400 UK sites following an alleged dispute with an arm of Menzies distribution.
Under an agreement that dates back to Aldi’s initial decision to stock the categories in 2014, Fore UK, owned by Menzies Distribution was made responsible for merchandising both selections twice a week across all of Aldi’s sites. This included making sure newspapers were returned before the cut-off point.
A confidential source close to the agreement informed RN: “Aldi were disappointed with the merchandising, the agreement was that a rep would go in twice a week and process returns, but the store discipline just wasn’t good enough. Field staff were not turning up and the newspapers were not getting returned in time. Overall, Aldi had a 10% deficiency between what was sold and what was returned.”
“It simply wasn’t profitable for them," they added.
No official market share data has been released, but industry expert Douglas McCabe of Enders Analysis told RN that the discounters’ growing retail market share had made them increasingly important to publishers. In March, Siobhan Galvin, commercial director at magazine publisher Egmont claimed Aldi and Lidl’s combined market share accounted for 10% of the children’s magazine market in the UK. She added that Egmont was the ‘number one’ publisher in this area in both discounters.
Aldi’s removal of the categories was first revealed by The Grocer. NFRN head of news Brian Murphy warned that the decision could put pressure on newspaper and magazine rangings in other grocery multiples. A publisher source recently told RN: “Supermarkets expect each square foot of space to generate a set level of revenue. As overheads increase this level is getting higher and category managers [at supermarkets] are asking publishers to defend why the current space given to titles should continue.”
Even in 2016, the Print Publishers Association was warning that major grocers were cracking down on magazine categories. Its member tracking survey for the year claimed supermarkets were becoming “more demanding in terms of listings fees and promotional costs.”
A source claimed to RN that Aldi was demanding £20,000 for listing a magazine title in its stores.
RN approached Fore UK/Menzies, Smiths News and Aldi for comment and is awaiting their response.