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PROTECTING THE ROUTE TO MARKET - WHEN RETAILERS WANT TO TAKE CONTROL

PROTECTING THE ROUTE TO MARKET - WHEN RETAILERS WANT TO TAKE CONTROL. Sally Cartwright HELLO!. CIRCULATION 502,679. Source: ABC July – December 2000. THE COST OF POSTAGE NO TIME ADVANTAGE THE AVAILABILITY OF NEWSAGENTS. HELLO! SUBSCRIPTIONS. HELLO! RETURNS 18%. 25%. 34% UK INDUSTRY

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PROTECTING THE ROUTE TO MARKET - WHEN RETAILERS WANT TO TAKE CONTROL

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  1. PROTECTING THE ROUTE TO MARKET - WHEN RETAILERS WANT TO TAKE CONTROL Sally Cartwright HELLO!

  2. CIRCULATION 502,679 Source: ABC July – December 2000

  3. THE COST OF POSTAGE • NO TIME ADVANTAGE • THE AVAILABILITY OF NEWSAGENTS HELLO! SUBSCRIPTIONS

  4. HELLO! RETURNS 18%

  5. 25%

  6. 34% UK INDUSTRY AVERAGE

  7. THE ENVIRONMENT AND THE MAGAZINE

  8. USA/UK/GERMAN MAGAZINE MARKET COMPARISON

  9. UK MAGAZINE MARKET RETAIL GROWTH Source: Wessenden Marketing, JM \ SD \ WHS wholesale data

  10. UK RETAIL MARKET SHARES 1993 - 2000 New Entrants have gained Significant Share at the expense of the traditional sectors.

  11. UK MARKET DYNAMICS - PUBLISHERS/DISTRIBUTORS • Retail market value growth slowed to 1.5% from 10%. • Number of Consumer titles grown by 45% in last decade to 3,200. • Industry unsolds costs now $230m. • Publisher/Distributor consolidation. • Subscription sales still only 11% of market • Internet “bubble-burst” means investment back into printed media.

  12. UK MARKET DYNAMICS - WHOLESALE • Wholesaling is a relic of the former dominance of the local newsagent. • Market value growth over the past ten years has supported profitability. • The wholesale sector will continue to concentrate.

  13. UK MARKET DYNAMICS - RETAIL • Outlets selling Magazines grown by 30% in 7 years • New sectors growth • Supermarket sales growth will slow • Multiple retailer frustration • Independents are intrinsically marginal businesses.

  14. WHAT’S HAPPENED IN THE LAST 12 MONTHS? • Tesco/WHS announced “National Direct” in March 2000 • PPA/NPA fought back • Tesco dropped ND in October 2000 - consensual industry approach • WHS dropped ND in Dec 2000 • Industry “8 point plan” agreed • WHS announced planned sale of Wholesale arm in Feb 2001

  15. RETAIL REQUIREMENTS FROM BLUEPRINT IMPROVE CONSUMER OFFER REDUCE WASTE SIMPLIFY SUPPLY CHAIN INCREASE MAGAZINE SALES

  16. Printers Publisher/Distributor Retail HQ Central Unit Publications THE BLUEPRINT - A NATIONAL SERVICE OFFER Regional Wholesalers Retail Store

  17. CPU ELEMENTS • Allocation system, including SBR system. • Information Warehouse. • Central invoicing and cash collection facility. • Central customer service facility. • Simplified in-store handling systems

  18. SUMMARY • Magazines doing well • Facing up to major challenges • Diversifying successfully • Print on paper will be major revenue stream for many years to come …and to close…just look at two new sectors

  19. 2,030,498 EVERY MONTH

  20. 7,900,000 EVERY MONTH Source: ABC July – December 2000

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