The Fed demands answers

The Federation of Independent Retailers' newly elected National President Mo Razzaq is demanding answers from the publisher of The Daily and Sunday Telegraph after letters sent out yesterday (June 20) advised of substantial rises to the cover prices of all three of its publications and an accompanying cut in retailers’ terms.

According to the letters, from Monday June 24, the price of weekday editions of the Telegraph will rise to £3.50. Saturday editions will rise to £4.50 from Saturday June 29 and from June 30, the Sunday Telegraph will cost £3.50.

What the letter fails to make clear is that the percentage margin that retailers receive for handling Telegraph titles has been frozen for six months, added the Fed. This will be followed in December by a 1 per cent cut in the margin on weekday and Sunday editions and a 0.5 per cent cut on Saturday editions.

Mr Razzaq, who was elected as National President at the Fed’s annual conference in Birmingham on Tuesday said: “Does the Telegraph want to kill the printed copy? I say this because every time a newspaper title increases its cover price, many readers decide to stop buying the paper, plain and simply because it costs too much, and they cannot see any added value to the product to justify such a move.”

He added that fewer customers coming into stores to buy the Telegraph would mean that spending on secondary products could dry up too, hitting retailers’ finances even further.

“In a marketplace where sales are declining, such action is totally unacceptable,” Mr Razzaq continued.

“How can the Telegraph consider it to be a partner of the Fed when no discussions have taken place. I honestly thought we had seen the last of these freezes and cuts to our percentage margin as they are already currently at an all-time low.”

Mr Razzaq continued: “In my speech to members at this week’s Annual Conference, I urged them to remember our heritage and continue to support the printed word. In return, we expected greater support from publishers and wholesalers.

“With retailers facing challenging trading conditions and rising costs, the last thing we need is for the Telegraph to aid the closure of even more local newsagents’ shops.”

To justify its actions, the letter from the Telegraph said: “The annual payment cycle of subscriptions means any cover price rises we make do not immediately transfer to subscribers - it takes over 12 months to fully capture the price rise benefits. As subscriptions are The Telegraph's leading source of newspaper sales, it is important that retail margins are aligned with the subscription renewal structure. For this reason, we will be maintaining the existing pence-per-copy margins for a period of six months.”

Responding, Mr Razzaq said: “While subscriptions account for nearly 70 per cent of the Telegraph’s sale, there are still many of its readers who prefer to purchase their newspaper in the traditional manner. It is incredibly unfair to expect their retailers to wait six months for the money that is, rightly, owed to them now.

“Such actions will no doubt lead to far fewer sales and only plays into the hands of other suppliers who are keen to gain custom and space for their products in stores and who want to work in true partnership with Fed members.”