"Subscription strategy takes customers away from us"
Peter Rutishauser, Head of Valora Wholesale, on the critical relationship between subscription and retail prices.
Peter Rutishauser, Head of Valora Wholesale, on the critical relationship between subscription and retail prices.WW Most newspapers are increasing the subscription price as of 2004, but leaving the EV price unchanged. Is this the right move from the K-Group's point of view? Peter Rutishauser Yes, we are fighting for this. The subscription prices are around 40 to 50 percent lower than the EV price and are therefore very attractive for consumers. The publishers' aggressive subscription strategy is taking customers away from us. We have therefore already asked ourselves whether we should buy several thousand subscriptions from the publishers instead of individual copies and sell them to our sales outlets. That would probably give us a better margin. But that's hypothetical, of course (laughs).
How do you assess the development of EV prices over the last few years?
The price increases were very moderate. Blick, for example, raised its prices in October for the first time in around nine years. There was more room for maneuver. Our internal logistics costs, for example, are constantly rising. So if publishers are considering EV price increases in the coming years, this is certainly in our interest. But there should be a reasonable correlation between EV and subscription prices.
Of course, I would like to see both prices at the same level, but that hardly corresponds to the publishers' strategy. That's why I can't answer that specifically. But a difference of up to 50 percent is clearly too big.
The publishers explain that returns, newsstand posters and special transportation are additional costs and justify the difference.
But why up to 50 percent? With subscriptions, the publishers also have costs for early delivery or for the post office. And returns are not produced by us alone. Publishers themselves sometimes want larger quantities to be distributed, which in turn causes return costs that we have to bear. Our total returns are very, very high at over 40 percent.
How big is the difference between the two prices in Germany, where the law stipulates that the difference between the EV price and the subscription price must not exceed 15 percent. However, publishers get around this and entice new subscribers with attractive starter gifts such as coffee machines or irons.
Interview:
Markus Knöpfli
How do you assess the development of EV prices over the last few years?
The price increases were very moderate. Blick, for example, raised its prices in October for the first time in around nine years. There was more room for maneuver. Our internal logistics costs, for example, are constantly rising. So if publishers are considering EV price increases in the coming years, this is certainly in our interest. But there should be a reasonable correlation between EV and subscription prices.
Of course, I would like to see both prices at the same level, but that hardly corresponds to the publishers' strategy. That's why I can't answer that specifically. But a difference of up to 50 percent is clearly too big.
The publishers explain that returns, newsstand posters and special transportation are additional costs and justify the difference.
But why up to 50 percent? With subscriptions, the publishers also have costs for early delivery or for the post office. And returns are not produced by us alone. Publishers themselves sometimes want larger quantities to be distributed, which in turn causes return costs that we have to bear. Our total returns are very, very high at over 40 percent.
How big is the difference between the two prices in Germany, where the law stipulates that the difference between the EV price and the subscription price must not exceed 15 percent. However, publishers get around this and entice new subscribers with attractive starter gifts such as coffee machines or irons.
Interview:
Markus Knöpfli
