Publishers blast Asda editorial demands

by Alison Donnelly, Marketing 29-Jul-08, 17:00

LONDON - Asda has waded into a row with publishers over its plans to plans to force magazines to give the grocer free editorial or advertising in return for shelf space.

Asda has emailed a number of magazine distribution companies requesting two pages of editorial or advertising space each month, as well as a request for £2,500 for shelf space for each new Asda store opened. The supermarket company is also asking that any new title distributed in its stores will be subject to an ‘item set up' charge of £2,464.

An industry insider told Marketing that Asda's plans showed a 'shocking lack of understanding of the costs of producing a magazine.'

He said,‘With the rising cost of paper, many of these retail demands are totally inrealistic and highly unprofitable for specialist publishers.'

A spokesperson for Asda said that the email was a starting point for discussions. ‘The email sets out a number of proposals aimed as a starting point to begin discussions. As with any negotiation, both parties have a wish list which will quickly change as middle ground is sought and an agreement that suits both parties is found.'

Asda is also asking the publishers ‘hurdle rate' for new titles carried in stores, which means if sales of the magazines are 20% less than forecast the supermarket will be compensated with the difference.

Comments

Mike Ridgway - 30/07/2008

This is a further example of the appalling abuse of power of the major retail multiples who have little or no understanding regarding the costs of manufacturing anything!!

Alison Donnelly - 30/07/2008

I agree. Should Asda (and any other retailers) uphold these demands it will spell disaster for the independent publishing sector, who are already struggling in the face of soaring costs. Retailers squeezing the life out of smaller suppliers is worringly looking more likely by the day.