Retailers say they will lose up to £3,000 per year after publisher Newsquest reduced newspaper and magazine margins following its buyout of Carlisle-based CN Group.
The US-owned publisher bought the group in March, but last week cancelled the long-standing agreement between the NFRN and CN giving federation members who have ‘ambassador status’ for their HND sales, in-store displays and promotional support 25% margins on newspaper and magazine sales, instead of the 18% received by other stores.
According to retailers in the region, the change will cost them between £1,000 and £3,000 a year in profit.
“I’m really disappointed. I don’t know what we can do to stop it. I stand to lose £2,000 a year and I’ll have to generate that money from somewhere else, which is not easy in this environment,” Colin Reed, from Hodgson’s News, Carlisle, told RN.
Mike Mitchelson from Mitchelson News, Cumbria, said: “To pull the rug out from under our feet like this is unacceptable. There was no discussion and no advanced warning. I sell 340-350 copies of the News & Star a week, and 60-70 of the Cumberland News. It will cost me around £2,000 annually.”
“I would have thought the best way Newsquest could build the circulation of their titles would be to work with retailers, who should be recognised as the backbone of their business,” he said.
The NFRN called it an “unprecedented” cut by Newsquest. News operations manager Jerry Hayes said: “The scale of this jeopardises the core of their sales and the future of home news delivery. The extent and speed of these cuts is a terrible blow.”
Brian Murphy, NFRN’s head of news, added: “The NFRN is looking to take all necessary action to support members affected, including protesting outside Newsquest’s offices.”
Newsquest was contacted by RN, but declined to comment.