INDUSTRY INSIGHTS

2014 Newsstand Sales Results



The newsstand magazine business "recovered" somewhat in the fourth quarter of 2014, following the demise of Source Interlink Distribution at the end of May, which significantly impacted second and third quarter magazine sales at newsstand. Second half 2014 dollar sales across all titles declined at a similar rate as the audited titles, about 14.2%.

As stated in our last Business Insights newsletter, MagNet estimated newsstand sales in the third quarter, 2014, using several different measurements, due to the fact that in some cases product on sale when Source ceased operations, was never returned to the new servicing wholesalers. We also estimated sales for June, 2014 in our second quarter numbers. For that reason, we will only provide a deeper analysis of the numbers for fourth quarter 2014 compared to the same period previous year, in order to ensure the accuracy of the information.

Taking into consideration the service disruption that began in June, 2014 that is just now approaching full recovery, we estimate that if 2014 would have been a normal year, annual dollar sales would have been about $2.845 billion, about a 7.16% dollar decline compared to 2013. That's a smaller decline than the industry endured in 2013 compared to 2012, when dollar sales dropped by 9%. As we reported in our last Business Insights newsletter, in stores that did not experience a disruption in service when Source went out of business, third quarter dollar sales declined only 2.25%. We believe that one of the factors in the fourth quarter decline of 9% in dollar sales is fewer copies being printed by some major publishers for newsstand consumption. That decision can be partially attributed to a larger focus on lower priced subscriptions and digital sales, as well as wholesaler subsidy programs which makes newsstand sales more costly to publishers.

Q4 2014 VS Q4 2013 ND COMPARISON


This analysis of National Distributor sales and market share for the fourth quarter, 2014 considers billing only sales, and does not segment sales by marketing company, for publishers who are billed by one National Distributor but marketed by another. 
Q4 2014 VS Q4 2013 TOP 20 CHAIN COMPARISON

Top 20 chains in alpha order are: Ahold USA Inc, Albertson's LLC/HQ, Barnes & Noble Inc HQ, Books A Million Inc, CVS Health, Delhaize America Inc, Dollar General, Hudson News - Terminal, Kroger Co/HQ, Loblaw Companies LTD, Meijer/HQ, Paradies, Publix Super Mkts. Inc/HQ, Rite Aid Corp HQ, Safeway Inc/HQ, Target Corp, Wal-Mart Canada HQ, Wal-Mart Stores/HQ and Walgreens Co HQ.

Two of the top ten chains, Kroger and CVS, actually had higher dollar sales compared to the fourth quarter, 2013. The major sales decline in the top ten chains was driven by Wal-Mart and Safeway. The other six chains performed better than the average dollar sale drop of 8.3%.
Q4 2014 VS Q4 2013 PUBLISHERS TOP 20 RANK

 


 

Time, Inc and AMI dollar sales declines were lower than the industry average, assisted by the cover price increases they implemented earlier in 2014. A number of the major publishers who had larger dollar sales drops than the industry average falloff, cut their newsstand print orders and increased their low price subscription offerings to drive circulation. Publishers less dependent on subscription sales, outperformed the rest of the business.

Q4 2014 CLASS OF TRADE COMPARISON
    
Supermarkets and supercenters actually increased their SOM in the fourth quarter, 2014 compared to 2013. In 2013, they represented 48.1% of the business, compared to 49.8% of the business in the fourth quarter, 2014. Drugstores bookstores and terminals also grew market share compared to 2013, fourth quarter. Convenience stores and discount stores lost the most market share points in the fourth quarter of 2014.
*All sales are represented in millions
All sales are based on issues off-sale in the period described. All data is based on actual wholesale O&R records and reflect all returns processed as of 2/15/2015. Any questions or additional information requests should be submitted to businessinsights@magnetdata.net.