The National Federation of Retail Newsagents (NFRN) has suggested to members that selling news and magazine titles above their cover price could help restore margins eroded by recent carriage charge rises.
The Federation, which is forbidden by law to call for collective action from its members, has “reminded” retailers they are free to charge above or below cover price if they choose.
However, NFRN head of news and magazines Stefan Wojciechowski stressed that the Federation was not calling for removal of cover prices. “We are reminding retailers they have the right to set the ultimate selling price of newspapers and magazines,” he said. “Pricing is a decision for individual retailers.”
He pointed out that a combination of “fixed cover prices, publisher-determined margins, increased retailer operating costs and ever-escalating wholesaler-imposed carriage charges” meant that many small newsagents were operating at a loss.
Many retailers feel that any move away from printed prices, while initially allowing newsagents to restore margins, would inevitably lead to heavy discounting by the multiples.
West Sussex Londis retailer Steve Denham said he would not be following the NFRN’s lead. “If there is one lesson that can be learnt from the effect of freeing up retail pricing, it is that the butcher, the baker, the greengrocer and other small shops have been the losers to the supermarket juggernaut,” he said.
However, John Lennon of the Association of News Retailing dismissed this argument. “If a supermarket reduced the price, how many of your customers would bother to walk past your store just to get a cheaper newspaper?” he asked. “If they thought that reducing the price of a newspaper would increase their footfall, wouldn’t they have done it by now?”
Wojciechowski added: “Publishers and wholesalers are encouraged to engage in meaningful talks on the impact of financial decisions by the supply chain on newsagents.”