Independent retailers are taking action to protect their profit margins as a price cut by the Daily Star threatens to cut millions of pounds from the trade.

The daily has halved its cover price to 20p on weekdays, 30p on Saturday and 50p on Sunday, with retailers’ profit per copy cut to 4.84p, 7.26p and 11.05p respectively.

Star-front-coverOne publisher told RN sales of the Star increased by 32,000 copies on Monday, a rise of between 7.5 and 8%, resulting in a 46% or £18,440 drop in total retail margin.

The Sun was up by 50,000 copies, likely to be driven by its Tesco fuel promotion, while sales of the Mirror, Mail and Express were “broadly flat”.

The publisher said: “Just because the Star didn’t steal share from any other titles on day one, it doesn’t mean it’s not going to happen.”

RN has calculated that if the Star maintains existing sales, while also taking 5% of both the Sun’s and Mirror’s sales, the average loss per store per week would be £4.39 – an annual loss of £11.4m in total retail margin.

Star-2If it maintains sales and also takes 10% from the Sun and Mirror, the loss would be £5.66 per store per week – or £14.7m in retail margin per year.

RN has heard from dozens of retailers this week who have delisted the title, others who are returning any allocated copies in protest, and some who are continuing to sell it at its former price.

This is a disgraceful decision by the publisher. If it needs to increase sales, reducing the price and retailers’ income isn’t the answer

Yorkshire retailer Martyn Brown has taken the title off his shelf  and is encouraging HND customers to switch to The Sun.

“This is a disgraceful decision by the publisher,” he said. “If it needs to increase sales, reducing the price and retailers’ income isn’t the answer.”

News UK independents sales manager Greg Deacon said retailers should be aware of the potential for conversion from the Sun, Mirror and Mail, while Mirror general manager Neil Jagger encouraged retailers to focus on higher-earning titles.

Star publisher Northern & Shell declined to comment.