WH Smith cuts Telegraph stock in stores amid dispute over sales margins for retailers

Retailers are in dispute with The Telegraph over its decision to delay passing on the benefits of its latest cover price hike by six months.

WH Smith has stopped selling the Telegraph in a number of its stores across the UK, while the Co-op has also reduced how widely the broadsheet is stocked in its stores, although it said this was due to “a fall in sales”.

Telegraph Media Group put the cover price of the Daily Telegraph up by 25 per cent from £2 to £2.50 at the start of February.

The Saturday edition went from £2.50 to £2.80 and the Sunday Telegraph from £2.20 to £2.50, increases of 12 and 13.6 per cent respectively.

Press Gazette understands the publisher told retailers the price rise was “critical” so it could continue to invest in its journalism and improve its supply chain with a subscriber-first strategy.

The Telegraph has set itself a target of reaching 10m registered users and 1m paying subscribers by 2023.

It told retailers that subscriptions account for about 65 per cent of all copies sold and sought to reassure the businesses that subscribers mean “guaranteed, long term revenue and footfall for the retail trade”.

“Our subscriber-first strategy provides a fantastic opportunity to work together to drive further value for your business and real value back to the customer through working together to sell print subscriptions, supporting your business long term and sustainably supporting circulation,” it said.

But the Telegraph also said it would maintain its current pence-per-copy margins until 1 August, when they will increase by 15.5 per cent overall.

Retailers will then get 51.25p per copy Monday to Friday, 57.4p on Saturdays and 51.25p on Sundays, more than at present, it is understood.

The annual renewal cycle for subscriptions means it takes 12 months for cover price rises to fully transfer to Telegraph subscribers, with the title opting for a six-month delay in giving retailers their share.

The FT has reported that about 120 WH Smith stores at UK railway stations no longer stock the Telegraph, believed to be in response to the dispute.

The retailer previously had a long-running partnerships with the Telegraph to give it away with bottles of water but this was also dropped last year.

The Federation of Independent Retailers (NFRN) said the six-month delay on increasing sales margins was “disappointing” but acknowledged benefits for shops that help TMG bring in subscriptions.

The group’s national president Stuart Reddish said: “This move will obviously be disappointing to many news retailers and the NFRN does not and cannot endorse margin reductions, particularly when our members are operating under such financially challenging operating conditions.

“However, we have held discussions with the Telegraph to explore ways in which we can work together to increase sales and we have identified some clear benefits for members prepared to support the newspaper publisher’s subscriptions-first strategy.”

The NFRN said many of its member retailers had been participating in a Telegraph offer since early last year that gives them £50 for every subscription they secure. They have obtained 272 to date, bringing in £13,600 for those involved.

In February last year the Telegraph raised its cover prices but kept the pence per copy margin it paid to retailers the same for several months, prompting objections from the NFRN.

The retailers’ body called the changes “completely unacceptable” but managed to secure a compromise by securing an agreement from the publisher that it would make a “sizeable” sum of money available to invest in its members’ businesses.

A Co-op spokesperson said: “We regularly review the sales of all products in stores to ensure they are stocked to meet customer demand.

“The Daily Telegraph remains readily available at thousands of Co-op stores but some allocations have been reduced to account for a fall in sales at some locations.”

Spokespeople for the Telegraph and WH Smith declined to comment.

TMG pulled out of the ABC newspaper circulation audit last month after deciding it is no longer a “key metric” for its subscriber-first strategy.

The Daily Telegraph had an average circulation of 317,817 in December while the Sunday Telegraph was on 248,288. Both saw a 12 per cent decline year-on-year.

The title said it had 213,868 digital subscribers and 209,443 in print in December, and claimed it had a “very healthy” average revenue per subscription of £194.

Topics in this article : Telegraph Media Group