Publisher Reach has slashed its retailer margins across all its titles to an all-time low of 18.5%, effective from 2 January.
The news came as dmg media, publisher of the Daily Mail and Mail on Sunday, announced new year cover price increases for both titles, accompanied by margin cuts.
In a letter to retailers, dmg’s Head of Circulation Shaun Jones blamed “market conditions” on the move.
Responding to the news, NFRN National President Jason Birks said: “Scrooge is officially live and kicking in the offices of both Reach and dmg media.
“Such penny pinching at a time usually associated with giving is despicable. Times are incredibly tough for independent retailers, amid the cost-of-living crisis, supply issues and soaring energy bills yet both Reach and dmg media are showing their miserly colours by taking money from the Tiny Tims of the industry who need pro rata terms to simply stand still.
Describing the cuts as “a massive kick in the teeth,” Birks said the Fed’s members want to actively promote print to their readers but must be properly rewarded for doing so.
“Reducing margins to a measly 18.5% will simply speed up the decline of the industry, as news retailers downgrade newspaper displays in their stores and look to other categories that demand less work but where there are greater rewards,” he added.
The effects of the cuts will come under the microscope at the Fed’s next newspaper summit on 11 January. Birks called for attendees to come prepared to identify solutions to improve the plight of the category, both in-store and for home-delivered copies.
Meanwhile the Financial Times and National World both announced new year rises that will be accompanied with pro rata retail terms.
Birks concluded: “The Fed will continue to support those titles that show a clear intention to work with us to grow sales.”
