Dropping Like Flies
By Chris Blasinsky

Remember the days of kicking back to your favorite eight-track or waiting to hear your favorite song on the local AM radio station? My how things have changed. Sure, some of us may harbor an eight-track collection for nostalgia, or even a transistor radio, but in today’s multimedia climate, delivering infor­mation moves faster than it used to.

With information coming faster than we can absorb it, why would anyone be surprised that print newspapers and magazines are moving to a life lived only virtually? National newspaper circulation figures from the Audit Bureau of Circula­tions show that daily weekday circulation of the top 100 newspapers in the United States has dropped more than 7 percent between March 2008 and March 2009.

Many of the national newspapers found on convenience store racks are suf­fering: USA Today’s print circulation de­clined 7.5 percent, The New York Times dropped a modest 3.4 percent and The Los Angeles Times dipped 6.6 percent. The only national newspaper to see an in­crease in print circulation is The Wall Street Journal, although by a paltry 0.6 percent. Sadly, a small uptick is great news for an industry that’s falling apart.

For magazines, particularly news publications, the outlook isn’t great ei­ther. “2008 may be seen as the year when the traditional mass audience model fi­nally collapsed,” according to the 2009 State of the News Media, an annual re­port on journalism by the Pew Project for Excellence in Journalism,

So should convenience stores give up on print newspapers? And what about magazines? Unless the publica­tions industry can turn itself around, there may not be much choice.

Dying Breed
The news for newspapers isn’t good. Warren Buffett, billionaire, investor and chairman of Berkshire Hathaway, re­cently said at stockholder meeting that the future of the industry is bleak, that most newspapers in the United States shouldn’t be purchased at any price, ac­cording to The Wall Street Journal blog MarketBeat.

So far, the biggest print newspaper “death” came from Colorado’s 150-year­old daily, the Rocky Mountain News, which shut its doors on February 27.

Boston-based Christian Science Mon­itor published its last print edition on March 27, moving to an online format, and the Hearst Corp. recently stopped print production of Washington state’s 146-year-old Seattle Post-Intelligencer in favor of an online-only edition. Conde Nast is ending print publication of Michigan’s Ann Arbor News and cut back weekly print circulation at its newspapers in Flint, Bay City and Sag­inaw to three days a week.

Out With the Old
As today’s newspaper industry strug­gles to reinvent old ways of thinking and revamp antiquated business mod­els, where does this leave the retailer?

“We will continue to sell newspapers as long as there is a demand for them,” said Fran Duskiewicz, senior executive vice president at Nice N Easy Grocery Shoppes in Canastota, New York. He noted that in 2008, certain local news­papers were being sold at Nice N Easy at a loss because of added fuel surcharges. “When we stickered them at a higher re­tail, people complained and we directed their bile back at the publisher. The sur­charge was dropped. If our returns — with all the accounting problems they create — significantly outnumber what we sell, I think we would have to con­sider dropping them,” he said.

As for magazines, Nice N Easy is out. “We have already dropped all other pub­lications because of the poor [return on investment] of space to sales and the ac­counting nightmares,” said Duskiewicz.

But for some retailers, magazines are not a lost cause. “It’s the publishing mod­el that needs to change,” said Beth Clark, senior planner at Follett Higher Educa­tion Group, a family-owned bookstore provider that manages more than 800 bookstores nationwide and provides support services and used textbooks to more than 1,800 independently managed bookstores. She agreed that periodicals are hurting, but consumer demand is still relevant for certain categories.

“In 2008, there were 697 new launches for magazines — 196 of them with a fre­quency of more than four issues a year. The hottest categories are epicurean, crafts, sports, home and entertainment. During tough economic times, the de­crease in discretionary spending is evi­dent. However, there continues to be a market interested in periodicals,” she said.

Like many newspapers, news maga­zines such as U.S. News & World Report are moving to an online-only format, according to the 2009 State of the News Media research. Another trend favors “elite readership,” where even in a dif­ficult year for both the industry and the

U.S. economy, “magazines such as The Economist, The New Yorker and The At­lantic” experienced an increase in readership.

“Periodicals still matter — print isn’t dead,” added Clark, noting that many periodicals have begun to “hyper target consumers, which is the future and the way to survive,” suggesting that leading periodicals are resilient as long as they continue to evolve and meet market ex­pectations.

You’ll Miss Me When I’m Gone
Publication readers are loyal customers, but the print newspaper or magazine will risk failure by operating on a “be all things to all people” business model.

“Print newspapers cannot be ‘news­papers for everybody with everything’ because they will end up as newspapers for nobody,” said Juan Antonio Giner, a partner at international media consult­ing group INNOVATION in Pamplona, Spain, in the Newspaper Association of America’s April 2009 Presstime feature, “Don’t Stop The Presses!” (Incidentally, Presstime folded after its April issue, due to budget cuts.)

However, it’s hard to deny that this in­dustry is at a crossroads, and for now, con­sumer demand may be the wild card that prolongs its demise in convenience stores.

At Nice N Easy, local newspapers have done well when selling strategies include in-store specials or promotions. However, the “sink or swim” issue comes down to profitability.

“We’ve done a free newspaper with a coffee, sponsored by the Syracuse pa­pers, and that has done well,” said Duskiewicz. But the margins, “when everything is perfect, are so small that newspapers are a truly marginal con­tributor. When you factor in delivery check-in issues, fuzzy return policies and the amount of time and space re­quired for unsold papers, you start to think, ‘Eh? Is this worth it?’”

No doubt newspapers and magazines are hurting, but the hard copy appeals to customers who prefer to receive infor­mation that way — particularly as a sup­plement to online daily news formats. But even though consumers are drawn to convenience stores for their daily newspaper, changes within the current operations of the newspaper and maga­zine industry are necessary. If not, retail­ers such as 7-Eleven, where customers rely on its stores for a newspaper and morning cup of coffee, may reconsider the value of stocking publications.

“Sales dollars are up but units are down,” said Gregg Willmeth, 7-Eleven project manager, merchandising, about newspaper sales. “What concerns us is the deterioration of gross profit dollars through the current wholesale distribu­tion system and the addition of delivery charges.” As for magazines, he contin­ued, “unless this business is restruc­tured…this category might not have a big future in our stores.”

Throw in The Towel?
Although times are tough, don’t ignore your customers who rely on your store to pick up their daily newspaper or favorite magazine each month. These customers are going inside and typically purchase other products, whether it’s a cup of cof­fee, fountain drink, packaged beverage or breakfast sandwich.

For some retailers, removing publi­cations from store shelves could create customer angst. According to Larry Lindquist, USA Today circulation senior vice president, in the July 2008 NACS Magazine: “[P]eople know they can go to a convenience store in their neighbor­hood and get a local newspaper...For some, it’s a habit that will be there for a long time.”

So ask yourself this: Do you have 100 SKUs of magazines sitting on your shelves when only 10 to 15 titles are ac­tually selling? If so, due diligence and working with your vendor can help eliminate waste and put money where it belongs — and you can keep a core group of customers happy.

“We are open to suggestions from the newspaper companies on bundling and fully funded programs,” said Will­meth. “We also know that the magazine publishers and wholesalers have to work together with us to fix the distri­bution system and optimize the prod­uct assortment in order for there to be a future.”