The NFRN says: “Whilst the NFRN has been quick to condemn publishers who have reduced retailer margins, we are happy to respond with equal speed to give praise and support to the Financial Times that is increasing its Monday to Friday cover price from £2 to £2.20 from Monday 17th October and is increasing retailer margins pro rata, boosting pence per copy terms by 4.8p per copy to 48.8p.
Whilst this is very warmly welcomed by retailers, there is a potential sting in the tail since the FT is considering the long term future of flat-rate margins and is seeking meetings with retail representatives to discuss the potential for activity-based margins that could see a fall in the current base rate margin of 22.2% to allow for better incentives for retailers that engage in voucher handling, home news delivery, local promotions/ canvassing etc. Notwithstanding that, it is pleasing to hear that the Financial Times has listened to the message we have been saying to all publishers that we would like to be consulted before decisions are undertaken affecting retailer margins, rather than just being faced with a fait accompli.
NFRN National President Kieran McDonnell said: “Whilst I have no hesitation in applauding the cover-price increase with pro rata terms and urge the support of NFRN members, that message must be tinged with a hint of caution until we have had an opportunity to meet the FT and discuss its intentions over future margins. Whilst I welcome the principle of rewarding retailers who provide additional services, I am aware that the FT’s margin at 22.2% is hardly generous. The FT needs to consider that many small retailers are losing 10% or more of their margin in carriage charges and a similar amount in operating costs. This suggests there is little or no scope for reducing the base margin below 22.2% before retailers decide they are no longer making a profit on the FT and decide not to sell it. However, I am keen that we should not pre judge this and I welcome the chance to meet with the FT to discuss its ideas as the earliest opportunity.”
