Newspapers and magazines have been hitting the headlines themselves lately, with the ongoing debate over territorial supply and carriage charges, not to mention the regular wrangles over inserts and returns.
Not surprisingly, then, many retailers, independents in particular, might be left wondering whether the category is worth the hassle – and the space. Well, figures from the IGD suggest that it is, with the news category the fifth most important product in terms of sales contribution to company managed forecourt stores, with 7% of total sales.
Spar’s news category manager David Walker agrees that the sector is worthwhile. He says: “News and magazines are a very important part of a forecourt offering given the relatively high cover price of magazines complementing the fuel purchase.
“Newspapers are a great footfall driver but magazines in forecourts will be browsed by passengers and consumers will be more likely to pay £3 or £4 for a magazine when they are already paying £20 or £30 on petrol.” He adds: “Over a quarter of magazine buyers buy five or more other products in store making the basket spend of magazine buyers one of the most profitable.”
And Martin Bull, Musgrave-Budgens Londis trading manager, says: “Profits on newspapers run at 22% and magazines at 25%. They’re reasonably profitable, but can be a hard category to manage well.”
Spar’s Walker agrees that the sector is demanding. “As an independent trader the news and magazines category is incredibly difficult to manage with no control of what stock you receive, the quantity you receive, little or no practical help in what you should receive and confusion over what your news wholesaler should and should not do,” he says. “Wastage for this sector is a great risk and another reason why so many retailers carry only a small range of titles – it’s easier to manage.”
Of course, help is offered to retailers that are part of a symbol group. Londis for example, offers retailers special deals on equipment through its recommended supplier, while Spar has a core range of mandatory titles, which it says improves availability; and both offer merchandising advice.
Guidance is also available to non-symbol retailers through wholesalers and distributors in the form of promotional clubs. WHSmith News is the largest wholesaler and its Premier Club is specifically for independent retailers. There are more than 200 promotions a year and retailers also receive point of sale material and display units. The club is free to join and WHSmith News says that members’ sales increases are generally more than 50% higher than other independent retailers on promoted titles. However, to qualify for membership you need to achieve average weekly magazine sales in excess of £400 – and you also need to commit to support the promotions and display the titles provided.
So what type of forecourt does well with the news category? Spar’s Walker says: “Forecourts that invest in the category, both in terms of fixtures and time. The location is less important than having a well-merchandised, well-ranged fixture with good titles that cater to local tastes – with over 3,000 titles available to put on your fixture, from Heat to Poultry World.”
Forecourts sell nearly 50 million magazines a year, amounting to more than £84m in value terms, according to WHSmith News. And much has been happening in the world of magazines lately – and retailers that keep up with the changes will reap the benefits.
Auto Trader remains the top-selling magazine in forecourts, although the ‘buying and selling’ category now ranks fifth in terms of value. The mighty women’s interest sector earns forecourts the most money of any segment (accounting for 30% of market share by value compared to 26% for motoring and motorcycling, the second-largest contributor), and sales of women’s magazines are increasing whereas sales of motoring titles are decreasing.
However, one of the most notable changes has been in the men’s fashion/interest sector, which is now the third most profitable sector through forecourts having increased by a massive 117% in volume and 33% in value year on year. This can be attributed to the appearance of men’s weekly titles, such as Nuts and Zoo, which have really taken off and fit in well with the forecourt profile.
Spar’s David Walker says: “Over the past year Zoo and Nuts have without doubt been the best thing to happen to the magazines category for a while. We’ve experienced a great year in the children’s and motoring sectors, however, in 2005 the women’s market will be the biggest fighting ground with a plethora of new launches already taken place or planned.”
Forecourts are also an important retail outlet for ‘top shelf’ or adult titles, which, with their high cover prices, rank fourth in terms of value.
For forecourts that see lots of commercial vehicles, stocking magazines targeted at commercial drivers makes sense. Commercial Motor, for example, is a weekly road transport industry magazine while Truck & Driver is a monthly title.
Publisher RBI says that the motorway service area groups have been increasing sales of these titles for a while now, but forecourts have not. An RBI spokesperson says: “Commercial Motor and Truck & Driver readers are constantly in and out of petrol forecourts, so there is an opportunity for forecourts to put additional revenue in the till.”
Newspapers have long been an important part of the forecourt offering, and more than 280 million newspapers are sold through forecourts each year, according to WHSmith News. Moreover, with forecourts having seen a value growth for newspapers year on year by 6.7% – the biggest value increase of any retailer except the supermarkets – it seems that consumers increasingly expect to find newspapers at their local forecourt site.
Data from WHSmith News also shows that forecourts take 62% of their newspaper retail sales value from dailies, but a big chunk – more than one-third – from Sunday papers.