News retailers are threatening to delist the Daily Star after publisher Northern and Shell’s decision to cut its price to 25p, reducing retailer’s profit to 6.05p per copy.
The publisher announced this week that a temporary price reduction for the Daily Star (Monday-Friday) from 35p to 20p had achieved sales increases of 26% (151,000 copies a day) year on year.
In a statement which echoed News International’s words when making a similar price cut on The Sun two weeks ago, Northern and Shell said: “We have reviewed the promotion and have no current plans to revert to 35p, so the national cover price is 25p from November 30.” Retailers' margin remains at 24.2%.
National Federation of Retail Newsagents (NFRN) president Suleman Khonat called the Star’s move “circulation suicide.”
“Without anywhere near the volume sales strength of the Sun, the Star is expecting continuing support from retailers, who may now be reconsidering whether the display space that they give in their shops is generating sufficient profit to warrant its position,” he said.
“Retailers will also no doubt have their calculators busy in working out, in pro rata terms, what carriage charge and operational overheads they have to pay in order to receive supplies of the Star and sell it in their shops, and deciding whether or not they are now making any profit at all.”
Khonat added that the Star was throwing away a golden opportunity to work with retailers who were angry at the cut in cash margin by the Sun. “Instead, the Star has also stuck a knife in the newsagents’ back,” he said. “Whilst many retailers might find that the high volume sales income from the Sun is impossible to resist, I don’t know a single retailer who would go out of business if they didn’t sell the Star.”
Brian Webb, a newsagent in East Anglia added: “The Star could have benefitted from Sun’s decision, but it has decided to follow the same route. Unless independent newsagents make a serious stance against this move, other publishers will follow.”