Magazine article Marketing

Tesco-WH Smith Plans Point Up Current Faults with Distribution

Magazine article Marketing

Tesco-WH Smith Plans Point Up Current Faults with Distribution

Article excerpt

The only interest not taken care of in newspaper distribution is the consumer's

Most of the time people take newspaper and magazine distribution for granted except when the bundles don't turn up. Every year or so a row breaks out which ends up at the Office of Fair Trading, usually about retailers getting access to supplies or being forced to take large numbers of magazines they do not want.

The current row about plans by WH Smith and Tesco to set up a joint national distribution chain and require magazine publishers to use it or be 'delisted' --dropped by Tesco's hundreds of stores -- is well up to best historic standards.

There are threats of legal action, complaints by the publishers to the OFT, and culture secretary Chris Smith has also been dragged into the action.

At first glance, the behaviour of WH Smith and Tesco appears outrageous. The largest players in the industry seem to be getting together to push up their margins and drive competitors and small retailers out of business by blowing apart the system of regional geographical monopolies.

The Periodical Publishers Association fears in this respect were backed up on Monday by a report for the Newspaper Publishers Association.

The problem is that if Tesco, which accounts for about 7% of total magazine sales, gets its supplies centrally, and perhaps other supermarket chains follow suit, the costs of distribution will be increased for everyone else.

Instinctively it is easy to side with the co-operative system that has served publishers well for decades in the face of the threat from the robber barons. …

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