TAMPA, Fla. — Magazines are the top profit generators at checkouts — far outpacing candy, gum and other products — a panel of magazine distributors and publishers said at the annual Retail Conference of the Magazine Publishers of America and International Periodical Distributors Association here this month.
In addition, they called on the magazine industry to put aside competition and get the profitability message out to retailers.
“Our success really depends on our ability as an industry to speak with one voice. We really need to organize our industry around newsstands, and get the retailer to treat this category as high as other consumer products categories,” Drew Wintemberg, executive vice president of sales for Time Warner Retail Sales & Marketing, Parsippany, N.J., told attendees.
“We have to put our egos aside and eliminate the bickering back and forth. If we don't, we are going to lose the space we so richly deserve to other categories,” Wintemberg added.
This comes on the heels of the recently released 2007 Grocery SuperStudy from Willard Bishop, Barrington, Ill., which found that grocers will shrink Center Store space, including magazines, over the next five years. Grocery chains will cut back, despite the fact that magazines account for 6.4% of sales within general merchandise and 16.3% of true profit, according to the study.
“It is more important than ever that we convey the same message, because of some of the challenges we are facing in this industry. This is a call to arms to all distributors, retailers and publishers to sell the category first, and then the title,” said Jay Wysong, executive vice president and chief operating officer for Distribution Services Inc., Delray Beach, Fla.
To that end, Wintemberg, Wysong and other executives gathered profitability numbers of magazines at checkouts, that publishers and distributors can share with retailers.
One of the biggest arguments in favor of keeping magazines at checkouts is the fact that the category generates 35.7% of all checkout sales, according to the 2002 Front-End Focus Study conducted by Masterfoods USA, TDS, Wrigley and DHC.
Magazines generate almost as many sales as the next three categories combined: candy, gum and soft drinks, according to that study.
In addition, magazine purchases represent a higher retail value than other front-end products, with their price tag over $3 each and the volume sold.
“Magazines are productive and efficient in their space. They generate 43% more sales per linear foot than the gum category,” Wysong said.
In addition, magazines remain the most shopped and purchased category at the checkout, according to the 2006 People Envirosell Research. Twenty-six percent of all shoppers interact with magazines at checkouts, and 5% purchase them, the study said.
The panel also called on the magazine industry to educate retailers on where magazines should be placed at checkouts.
“Magazine profitability is best when they are merchandised ‘over-the-belt’ and facing the rear of the store,” Wysong said. Total checkout performance was improved by 10 points in retail outlets that displayed magazines both on racks facing the rear of the store and over-the-belt at checkouts, vs. checkout endcaps only, according to the Front-End Focus Study.
In addition, the People Envirosell study found that most magazine shopping occurred over-the-belt and on the left of checkouts.
“Studies reveal that, regardless of customers' approach to the checkout, the majority of magazine shopping is done on the left,” Wysong said.