Retail
Magazine
Growth
The truth about
magazines, consumers...
and retail profits
#1
Myth:
Reality:
The magazine category is too small to impact my bottom line.
Selling magazines can boost your total store profits.
Magazines rank in the top 10% of retail category revenue, generating
over $4.5 billion annually.A
Magazine buyers spend $67 per weekly market basket — that’s 71%
more than non-magazine buyers.
Magazines generate inventory 17.4 turns, more than double the number
of turns generated by the total store.
Weekly Market Basket
No Magazine Purchase
$39
$67
With Magazine Purchase
Source: MSA
Inventory Turns
5-Year Trend in Media Usage: Fall 2004 - Fall 2008
8.5
Total Store
Magazines
Magazines
Total TV
Frozen Foods
Radio
Dry Grocery
Newspapers
GM/HBC 2.5
Outdoor
2004
+5.7%
17.4
2008 % of Growth
+4.8%
10.3
+2.9%
6.4
-.9%
+4.7%
Source: Retail Experience Study, Northwestern University
+22.2%
Internet
Source: Mediamark Research & Intelligence (MRI)
#2
Myth:
Reality:
People don’t read magazines anymore – especially the youth market.
Magazine readership is growing among all targets.
More than 85% of Americans read magazines.
Magazine readership grew over the last five years — with audience growth
up more than all other media except the internet.
The average number of issues read by an adult increased 4% since
2004. For 25 –34 year olds, the growth rate was 11.5%.
5-Year Trend in Media Usage: Fall 2004 - Fall 2008
+5.7%
Magazines
+4.8%
Total TV
Radio
-.9%
+2.9%
Newspapers
Outdoor
+4.7%
Internet
Source: Mediamark Research & Intelligence (MRI)
For more information go to www.magazine.org/retail.
+22.2%
#3
Myth:
Reality:
Candy and Gum are the main drivers of profits at checkout.
Magazines generate more sales and profits than any other
category at checkout.
Magazine profits per unit are higher than any other front end category
including snacks, gum, candy, and carbonated beverages.
Magazines deliver 35.7% of total checkout profits.
58% of consumers would miss magazines if they were gone from
the checkout.B
Magazines are the #1 checkout favorite for women ahead of candy,
gum, and mints.
Share of Checkout Profits — by Category
Magazines
35.7%
Beverages
13.1%
Gum
14.0%
Candy
14.7%
Magazines
35.7 %
Candy
14.7
Gum
14.0
Beverages
13.1
Mints
5.5
Batteries
4.5
Film/Cameras
3.4
Snacks
3.0
Razors/Blades
3.0
Other
3.8
Source: Front End Focus
Magazines provide higher true profit per unit than other
front end categories (in dollars)
.58
Magazines
Snacks
.34
Gum
Candy
.27
.12
Carbonated Beverages .08
Source: Willard Bishop Grocery Super Study, 2007
#1 Desired Item at Checkout
Women ranked magazines #1 when asked “at the checkout in a store, what do you like to see there?”
Magazines
80%
73
Candy, Gum, Mints
Snacks
56
51
Personal Care Items
Beverages
50
Household Items
43
Newspapers
43
Gift Cards
34
Base: U,S, Adults 18+
Source: WSL Strategic Retail, Magazine Publisher Survey, 2008
For more information go to www.magazine.org/retail.
#4
Myth:
Reality:
Magazines make no difference in my store.
Consumers say that magazines enhance their shopping
experience — helping to differentiate your store and
encouraging the sale of other products.
One third of consumers who don’t find the magazine they want will go to
another store to buy it.
Consumers perceive checkout times to be shorter when magazines are
available at checkout.B
Magazine recipes, beauty tips, product reviews, and advertisements have
been proven to drive traffic and product purchases.B
#5
Myth:
Reality:
Magazines are more hassle than they are worth.
Other products require much more labor than magazines.
In-store magazine service including delivery and merchandising is
provided by magazine wholesalers rather than retail store employees.
Dollar for dollar magazines deliver more than double the “average”
store true profit margin.
Direct Labor Per Unit
Magazines $0.019
$0.086
Grocery
GM
$0.102
$0.137
HBC
Source: Willard Bishop Grocery SuperStudy, 2007
True Profit Margin (by percent)
Adjusted Gross Margin
True Margin
Magazines
31.2%
18.0
Grocery
26.6
11.4
Total Store
30.9
8.6
Note: Profit after all Activity Based Costs (including direct, in-direct labor, occupancy, transportation and overhead)
Source: Willard Bishop Grocery SuperStudy, 2007
Additional Sources: A – Nielson, 2006. B – WSL Strategic Retail, Magazine Publishers Survey, 2008.
Magazine Publishers of America (MPA)
and International Periodical
Distributors Association (IPDA)
For more information go to www.magazine.org/retail.