Price cuts ‘won’t halt’ paper slide
National newspapers face a gloomy and uncertain future dominated by declining circulations and advertising revenue, says a new report by Mintel.
Despite ferocious price cutting which helped newspaper sales volumes grow by two per cent in 1994, Mintel says there is no evidence that the long-term decline has been reversed.
The report, to be published later this week, values consumer expenditure on newspapers at 2.9bn in 1994. This represents a ten per cent slump in expenditure since 1989.
Despite this, the cost of promotions continues to rise. In the year to September 1994, 53.6m was spent on above-the-line campaigns.
With the cost of newsprint also threatening margins, Mintel is questioning the ability of some titles to survive. It says the Sunday broadsheet press and daily mid-market newspapers are the most competitive.
This coincides with fevered speculation that News International and United Newspapers are poised to merge printing and distribution operations.
United, which owns the Daily Express, Sunday Express and The Daily Star, has been under pressure in all of its key markets. Despite denials from News International about a deal with United, fears remain that Rupert Murdoch is set to increase his grip on the UK market.
More detailed analysis of the Mintel research suggests that interest in special supplements is a more important factor affecting purchase than price-cutting. However, the number of entertainment guides and travel sections has dwindled since 1992.
