The Federation of Independent Retailers (The Fed) has voiced its anger and disappointment over Telegraph Media Group’s (TMG) decision to defer profit margins once again as part of increases to the cover prices of its titles.
From Monday (29 June), all Telegraph titles will increase in price by 50p in the UK and by 50 cents in the Republic of Ireland. However, despite this, the adjusted percentage margin for retailers is not applied at the point of sale and is instead deferred until December 2026.
Commenting, Fed president, Hemanshu Patel, said: “It’s very disappointing that TMG has again chosen to defer the effective payment of retailer margins to its independent retail partners for a further six months.
“Retailers don’t operate on the basis of cash through the till - like all businesses, we work on percentage margins and return on investment, and it’s those margins that determine whether a category remains commercially viable.
“In reality, there is no genuine uplift in margin at the point of sale. Instead, what’s being applied is a temporary reduction in retailer return, with the margin subsequently reverted after six months. This has been repeated over a number of years, meaning that on an annualised basis retailers are receiving less than the stated percentage margin.
“Over time, what was once an industry norm has effectively become a deferred margin structure. However, repeated use of this mechanism erodes trust and creates uncertainty for independent retailers, particularly when cover prices increase immediately but margin benefits do not.
“TMG continues to justify this position by linking it to subscription renewals. However, retailers have previously been told that corporate circumstances restricted movement on this issue. Those circumstances have now changed, and that argument no longer carries weight.
“The big question is why TMG cannot pay retailers in advance for subscription sales. After all, they have already taken the money from the customer up front.”
TMG has agreed to a meeting with Fed representatives to discuss the matter further and to attempt to find some common ground.
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