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Inside non-foods.

Having produced $1.2 billion in supermarket sales last year, publications can certainly claim big business status. But there are concerns whether it can maintain that status due to claims of reduced interest in reading.

The New York Times challenged the assumption about reading in a recent front page article titled: "Americans in Electronics Era Are Reading as Much as Ever." The article cited information from various sources that per capita book sales among people of reading age rose to 4.89 in 1980 up from 2.75 in 1970. It also noted that library circulation has grown twice as fast as the population during the last four decades, and that women are reading more than men.

Marvin M. Gropp of the Magazine Publishers Association was quoted saying 90% of Americans 18 years or older on average read at least one magazine a month, a figure that has remained constant during the last five years. Gropp estimated that more than 6 billion copies of magazines are sold in a year.

Despite these statistics, the claims remain that magazine unit sales are languishing. Alex Urban, retail marketing manager for TV Guide, says he thinks these claims are greatly exaggerated. "I think it's a lot of hot air about whether or not magazines are coming back," he says.

"We'll always have some publications going up or down at a given time, but we're talking about a huge, dynamic marketplace, selling over 100 million units every week and new publications in special interest fields that capture customers' interest in today's changing world."

While publishers battle the notion that their market is shrinking, they also battle each other for checkout space. The latter conflict has led to eyebrow-raising placement monies. Frequently they are on an upfront or prepaid basis and sometimes seem to overshadow the more standard Retail Display Allowance--money paid by most publishers to qualifying retailers--usually 10% of the cover price of copies sold.

An RDA consultant tells of the reaction a chain vice president had after hearing about a publication's offer for high-placed display positions at every checkout in all of the company's stores. The offer was for $42,000, with about $16,000 to be paid upon completion of the reset--before even one copy was sold. The executive said: "If my buyer turns that down, his replacement won't!"

Yet some publishers believe retailers taking such offers may be short-sighted. Says one executive, "Retailers are overlooking the possibility that they may have to displace another publication which to displace another publication which to displace another publication which provides even more profit during the year through its sales and RDAs."

One wholesaler adds, "Getting money without selling anything may sound great, but retailers are in business to satisfy customers. If they kick off the checkout a publication that has a good following, they're doing their customers--and themselves--a disservice."

RDA consultant Mike Kessler disagrees, saying it's "sour grapes" for publishers with established checkout positions to complain about the special-payment tactics newcomers use "to get their shot." "It's time and trouble to make changes and while the result may be tremendous for the title, for the retailer the sales gain, if any, is not very significant in the overall scheme of things. So he needs something to arouse his interest." He adds that new titles have to prove they can sell.

Another RDA consultant, Bill Lee, says the retailer shouldn't look at placement allowances alone, but in combination with unit sales, dollar gross and both RDA and placement allowances. He suggests that if racks had more flexibility built in, changes could be made without reracking. "That way you could add a title or two and get the placement allowances without displacing a proven regular. Also, you could change titles without a lot of trouble."

On another front, Conde Nash has produced a 10-minute videocassette tape covering the "basic rules of magazine merchandising." Conde Nast loans the film to retailers and magazine wholesalers.
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Title Annotation:selling publications in supermarkets
Publication:Progressive Grocer
Date:Aug 1, 1984
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