The NFRN (National Retail Federation of Newsagents), the trade body which represents over 16,000 independent newsagents in the country, has hit out at the Guardian following its increase in cover price by 20p, from £1 to £1.20 for the weekday paper and £1.90 to £2.10 for the Saturday edition.
The NFRN was expecting the Guardian to maintain the newsagents' 25% margin but the title is reducing retailer margins from 25% to 24%, claiming its own costs have gone up.
This means retailers are losing out on 1.2p for every copy of the Guardian sold.
Paul Baxter, chief executive of the NFRN, has written to Guardian editor Alan Rusbridger and Andrew Miller, the chief executive of GMG (Guardian Media Group), the parent group of the Guardian, asking them to overturn the margin cut.
The NFRN has also written to 27 of the Guardian's key advertisers, including B&Q, Halfords, DFS, Laura Ashley and Samsung, claiming newsagents could hit back at the Guardian by "providing a less advantageous display" and "refusing to insert additional material".
According to sources, Miller responded to Baxter about the NFRN chief's decision to write to the advertisers.
GMG is not backing down on the margin increase but has suggested, as an alternative, a joint commercial activity between the two parties, such as some sort of Guardian promotion running in newsagents.
There is no suggestion that advertisers are pulling ads from the Guardian. Halfords, for instance, said it would continue to advertise in the newspaper.
Separately, sources have told Media Week that the price rise of the Guardian has to date had minimal impact on the circulation of the paper.
The national title's circulation – which averaged 241,287 in August on Friday (27 September) – is understood to be down just 1% down on the previous week, when it was priced at £1.
The Daily Mail and the Daily Express also cut newsagents margins earlier this year.
A Guardian News & Media spokesperson, said "Guardian News & Media's head of sales and marketing is in regular dialogue with the NFRN. In a letter sent to the NFRN last week from GMG's chief executive Andrew Miller, we outlined the rationale for the move, and emphasised both the desire to work constructively with the retail trade and the fact that retailers will see a net benefit from the change.
"GNM's terms still compare favourably to those available from the rest of the quality daily market. Retailers will now receive an additional 3.8p per copy of the Guardian sold during the week, up from 25p to 28.8p. This margin is substantially higher than others in our market, with the nearest being 25p from the Times."
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