Reach slashes Daily Record margins
'It gives retailers yet another reason to give greater attention to higher-margin categories'
Reach has cut retailer margins on weekday and Saturday editions of the Daily Record, following price rises.
The changes announced this week saw the Monday-to-Friday editions introduce a cover price of 85p, up from 80p, with retailers receiving 17p per copy sold. Percentage retailer margins have fallen from 20.8% to 20%.
The Saturday edition introduced a 10p price rise, bumping up the cover price to £1.30.
Retailers receive 26p per copy sold, but percentage margins are down from 20.6% to 20%.
Analysis by betterRetailing shows the new terms equate to 3.85% and 2.93% respective decreases in retailer margins.
As a result, retailers are expected to make nearly £240,000 less per year in gross profit on the titles, compared with if percentage margins had been maintained after the price rise. This equates to £189,781.71 less per year on Monday-to-Friday editions and £50,273.54 on Saturdays.
NFRN national president Stuart Reddish said the move would encourage retailers to focus on higher-margin categories to counter potential losses.
“It gives retailers yet another reason to give greater attention to higher-margin categories and give these products more space to maintain or grow their bottom line,” he said.
Reach chief operating officer Neil Jagger told betterRetailing: “I appreciate that any changes to cover price and terms are hugely unpopular, and rest assured that everyone at Reach Plc would prefer not to have to implement them. However, being part of a PLC brings with it obligations, and it is these obligations to staff, shareholders, banks, among others, that require these difficult decisions to be made.
“With the ongoing help of the retail trade, we can continue to maintain the healthiest regional and national newspaper coverage possible.”
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