Magazines Linger in the Aisles
Thousands of Southern Californians are missing out on the juicy details of Britney’s wedding disaster, the Paris Hilton sexcapades and the latest trends in Hollywood manicures.
Blame it on Southern California’s supermarket strike. With pickets keeping shoppers out of Vons, Pavilions and Albertsons stores for more than three months, sales of tabloids and magazines such as National Enquirer, People and Glamour have slumped about 20%, publishers and wholesalers estimate.
“It’s bad,” said Jade Waters, newsstand director for Los Angeles Magazine, which is owned by Indianapolis-based Emmis Communications Inc. “Everyone is taking some big hits.”
Though most magazines are available by subscription, about half of all magazine sales in the U.S. are through supermarkets, industry experts say. Fashion magazines, gossipy tabloids and lifestyle periodicals, in particular, are prominently displayed at checkout lines, to snare readers with catchy headlines and provocative articles.
Food stores unaffected by the labor dispute are probably selling more issues than ever. But analysts say a slight pickup there hasn’t been enough to make up for lost sales at the big supermarket chains.
“Customers are not shopping the way they normally shop,” said Connecticut publishing consultant John Harrington. “It’s wreaking havoc.”
The United Food and Commercial Workers union struck Safeway Inc.'s Vons and Pavilions stores in Southern and Central California on Oct. 11. Kroger Co.'s Ralphs and Albertsons Inc., which are bargaining jointly with Safeway, locked out their union employees the next day. The union pulled its pickets from Ralphs stores Oct. 31, but last week union leaders said the pickets would begin returning at selected markets.
Vons and Albertsons officials declined to say how much magazine sales were down in their stores. Magazine publishers say they are still tallying the full effect of the strike on November and December sales. Harrington speculates that regional advertisers might have started pulling their ads in the glossy publications that traditionally have sold so well in grocery stores.
“They are probably trying to sell some cheap subscriptions quick to make up for the losses,” he said, adding that publishers have been talking with wholesalers about reducing the number of copies being shipped to this region.
Lost sales in the huge Southern California market will dampen the bottom line of even the nation’s largest magazine firms, such as Conde Nast Corp., Hearst Corp. and Time Inc., the Time Warner subsidiary that publishes such titles as Time, In Style and People magazines.
“That market is probably somewhere around 6.5% of our sales,” said Drew Wintemberg, executive vice president of sales for Time Inc. Distribution Services. “This is definitely having an impact.”
However, analysts say, it’s the distributors and wholesalers that are hurting the most. That’s because they operate on the thinnest margins, selling magazines to retailers for just a slight markup.
Sources say Knoxville, Tenn.-based Anderson News Co. -- which stocks supermarket shelves at Vons, Ralphs and Albertsons stores -- is considering laying off employees at more than six distribution centers between San Diego and San Luis Obispo. Anderson officials declined to comment.
“Wholesalers have been losing money for several years in Southern California, and the strike has hurt them dramatically,” said Russ Warner, president of Warner International, a magazine distributor in Alta Loma. “It’s going to be interesting to see what happens in the next 30 days.”
Publications such as Los Angeles Magazine would appear to have the most to lose, because regional magazines don’t have a substantial market outside the strike zone. But Waters, the magazine’s newsstand director, said that was not the case.
The bulk of Los Angeles Magazine’s sales -- about 86% of all issues -- are through subscriptions.
Still, Waters said, the strike has been painful.
“Everybody I talk to is just frustrated. We are trying to reallocate copies, but in the end everyone will see some serious shortfalls.”