25 August 2000

Only a united front of national newspapers and magazines would dare challenge the might of Tesco, the UK’s largest supermarket group. Fearful that the thin end of a thick wedge is about to be inserted into their corporate door, the nation’s print media plan to mount an unprecedented ad campaign slamming the retail giant for delisting five titles published by Gruner & Jahr [WAMN: 8, 16-Aug-00].

The delisting followed G&J’s refusal to join a new countrywide distribution system jointly owned by Tesco and WH Smith News, the distribution arm of the national newsagent chain. Bertelsmann-owned G&J has already lodged a formal complaint of “coercion” with the Office of Fair Trading.

The imminent ad campaign is timed to coincide with the delivery of an ‘independent’ study on the availability of magazines – the source of the dispute – and will urge the need for them to be “universally available” – in other words, via a choice of distribution channels.

However, the independence of the study could be open to question since, according to The Times, it will be handed direct to the chief executives of Tesco and WH Smith. It posits that scanning data proves that magazines wanted by supermarket customers are available when they want them in 95% of cases.

This, avers WH Smith, compares unfavourably with its own research into the extant time-hallowed distribution system via which magazine availability is only "in the low 70 per cents". According to Beverley Hodson, managing director of WH Smith Retail, waste from unwanted and unsold magazines also results in high administration costs.

Insisting that she could no longer tolerate such an inefficacious supply chain, Ms Hodson described magazine distribution as “one of the last bastions of Victorian supply … more competition will mean better services.”

However, all-out war could still be averted. In a conciliatory move, Tesco says it is willing to review the October deadline for compulsory adoption of its new system and will look at proposals for “a common framework which builds on the existing wholesaler network and delivers its requirements for a sales-based replenishment system”.

News source: The Times (London)