IN August, 2021, Quinn’s Foodstore and Newsagent, Ardmore, Co. Waterford, posted a notice in their window that took their customers by surprise.
“We wish to advise that... we will no longer be selling newspapers or magazines,” read the note. “This is due to the high cost of delivery which is now €152 per week, amounting to €7,900 per annum. It is not sustainable any longer.”
When contacted by Retail News, coproprietor Bernadette Quinn declined to comment. But other independent retailers who we spoke to were largely supportive of the store’s radical decision. An annual hike in Carriage Service Charges (CSC), they claim, has made the business of stocking and selling newspapers and magazines unsustainable.
“At one time an increase in petrol prices put [CSC] up,” said Tom McDermott, owner of a Londis store in Clonmel, Co. Tipperary. “When petrol slid back in price, they never came back down again. The distributors say their labour costs have gone up, but so have those of newsagents. We just can’t keep paying these charges. It keeps going up and up.”
”Alan Maher, who runs a separate Londis store in Clonmel, said his newspaper margins have been on decline for a few years. “Before, you’d have 26% margin on newspapers,” he told Retail News. “Now it’s around 21%.”
Two separate organisations look after newspaper and magazine distribution in Ireland: EM News, owned by UK company Menzies, and Newspread. Newspread distributes publications such as the Irish Independent, The Irish Times and the RTE Guide, while EM looks after The Sunday Times and Irish Sun, amongst others.
Valerie Boggan, who runs Boggan’s Londis in Rosslare, Co. Wexford, gave Retail News a comprehensive itinerary of her costs. Her CSC fee from Newspread, she alleges, has gone from €54.22 in 2018 to €68.47 in 2021. EM News charges, she alleges, have risen from €45.53 to €48.75.
“On average, between Newspread and EM News, a margin of approximately 23% is gained,” she said. ”Going on our sales figures for 2021, which is deemed to be the busiest year in history for Rosslare retailers, I have calculated the net margin after costs.”
For 2018, her margin worked out at 10% after costs. For 2021, she calculated her margin after costs as 10.5%. Boggan includes the cost of labour in preparing her weekly newspaper and magazine stock. Magazines for all papers, except for the Irish Independent and Sunday Independent, are delivered separately, she said, which is heavily time consuming.
“EM News give retailers a handling allowance of 0.025c per paper,” she said. “If you calculate inserting two magazines into 100 Sunday Times, the retailer gains €2.50. However, the handling charge is not given to you if the paper is returned to them unsold.”
She added: “We have to input the barcode of each paper into our computer system every morning. That is time consuming too.” Labour is also required for returns - i.e. newspapers that have not been sold.
Vincent Jennings, CEO of the Convenience Stores & Newsagents Association (CSNA), said that distribution charges are unfairly proportioned: “There’s a bottom line charge, if you’re doing a minimal amount of newspapers and magazines, but that doesn’t go up in a graded fashion. Someone buying more newspapers will pay a lower price per copy than someone buying the minimal amount. It would be more equitable were it to be charged per copy.”
Other distribution services build their delivery price into the wholesale price, said Jennings. This makes newspaper distribution appear out of step. “It is so difficult because people don’t pay delivery charges for any other product. Quite rightly, retailers are upset with this,” Jennings explains.
Perhaps the biggest gripe among retailers we spoke to was a lack of communication from distribution services. Boggan, McDermott and Maher claim they have not seen a representative from either company. They claim they don’t have renewable contracts and are not given detailed rundowns of payment structures for newspaper / magazine distribution.
Jennings said that EM and Newspread “are obliged under codes of practice to make people aware, one month in advance, of Carriage Charges being changed. They do that. They will also make you aware of your rate.”
Valerie Boggan said a lack of communication has heightened tensions. “Over the past two weeks, we have been trying to contact a distributor to talk to a manager or rep to ask if there is a way to reduce the weekly cost. The customer service representative referred us to the accounts department who failed to return our call. After another attempt, a person rang back and advised us that the customer service department deals with all issues on costs. Back to square one...”
These retailers contend there is a solution to rising CSC: to have a tender process for a single distributor to distribute print publications in Ireland. This would half costs for everyone.
Jennings said that CSNA has approached the Department of Enterprise about this alleged duopoly. “There is no justification whatsoever for having this duplication,” he said. “I know that goes against the model of capitalism. But in the UK, the primary titles come up for biddingin a five or six year distribution cycle. We don’t have a competitive environment because we’re forced into paying twice for what is effectively one delivery.”
An environmental issue is also at stake, he argued.
Under the government’s Circular Economy Bill, the country will need to rethink supply chains. Retailers we spoke to said they received newspapers every morning from a single courier who services both EM and Newspread. However, Jennings claimed that some retailers around Ireland received two separate deliveries, which increases carbon emissions
Ultimately, retailers - like publishers and distributors - face a market in which print sales are declining. National and local news is considered a fundamental cornerstone of democracy - perhaps more important now than ever before - so solutions and communication must be found. “Newspapers are vital as part of the bulwark against fake news,” noted Jennings
And while some retailers applauded the radical decision of Quinn’s in Ardmore to stop stocking newspapers, they all doubted that a wider boycott will happen.
“I haven’t the courage to do it,” admitted McDermott.
An EM News spokesperson said: “EM News is committed to its ongoing role in the newstrade end-to-end supply chain, delivering service excellence and sustainable routes to market for its newstrade customers. If a retailer has any queries, we ask they reach out to our dedicated Customer Service Centre.”
The same spokesperson had the following comment on the company’s commitment to sustainability: “Sustainability wasn’t a recognised imperative when we started out in 1833, but we were designing sustainable routes to market even then. With the use of our intelligent network, our reverse logistics solution eliminates unnecessary transportation, reduces demand for excess raw materials and reduces the overall carbon footprint. Every year we recover and recycle 26,000 tonnes of material, preventing it from going straight to landfill, and drive more than 260,000 emission free miles delivering to our customers.”
Newspread did not respond to our request for comment by the time of print.
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