Menzies Distribution Consolidation
businesses out of his store in Paisley. Des readily describes himself as a “long term supporter of Menzies because they do a good job and give good levels of service” but says he feels increasingly disillusioned by the distributor’s lack of willingness to work with retailers to tackle the challenges ahead.
“The question I keep asking myself these days is ‘why?’,” says Des. “Why are Menzies taking the consolidation approach and shutting down Cambuslang when it’s not 10 years since they opened these superhubs? We all know business is tough but I’ve been really disappointed by the fact that Menzies haven’t been battering down the door of the NFRN, and battering down my door as a retailer, to try to come up with a strategy to help us get through this together. But what have we had from them? Nothing.”
UP FOR THE FIGHT? With 34,000 news retailers across the UK and news and magazines still a massive business, despite falling sales, Barr expected a lot more fight from Menzies than he’s seen. He is also concerned that the real reason Menzies hasn’t put resource into developing a strategy to tackle falling sales is because it has shifted its focus onto other areas. In other words, it has already accepted defeat but can’t or won’t admit that to its customers for fear of damaging its own business.
SLR made several requests to speak directly to Menzies Communications Department, but was not granted an interview. “I’m genuinely concerned that
Menzies is taking its eye off the news distribution ball and is shifting its gaze onto its growing Marketing Services division because it sees a longer future for that side of the business,” explains Des. “And as a businessman myself, I accept that decision and I see the sense in it and I can understand why they might be doing it – but as a customer of theirs I still have to put myself first and ask why they
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“IT SEEMS TO ME THAT EVERYTHING MENZIES ISDOING AS A BUSINESS IS FOR THEM AND NOTFOR ME.” DES BARR, PAISLEY RETAILER
aren’t doing more to work with me and every other news retailer in Scotland to help us protect and develop our businesses.
“It looks to me like we’re simply being used as the cash cow that will be used to help fund Menzies’ own strategy for the future, which doesn’t appear to include me or my business, so I think I have every right to be asking difficult questions.”
WHAT DOES THE
CAMBUSLANG CLOSURE MEAN TO RETAILERS?
Q Cambuslang branch closed and the majority of its operations transferred to Linwood branch in Renfrewshire
Q A number of customers in Falkirk, Stirling and Ayrshire have had newspaper distribution transferred
Q Affected
customers have had their delivery routes reviewed and many have been changed
Does he feel let down by Menzies in recent years? “Yes. Everything they’re doing as a business is for them and not for me.” At the heart of the issue is whether the decline of newspaper and magazine sales is realistically reversible and, despite the prevailing weight of sentiment, there are several poignant examples of markets where sales are either in much slower decline, or are not in decline at all. The Canadian market for instance, where distributors and retailers haven’t lost faith in newspaper and magazine sales, has fallen at a much slower rate and, indeed, has seen fairly significant increases in sales in recent years. This is mainly down to retailers retaining faith in news and magazines and devoting key space to it in-store. Another example, and one closer to home, is Des Barr’s own store. His May 2012 sales are higher than in May 2011. Yes, he’s had to work harder to achieve that, and he’s had to take a hit on margins, but he’s managed it all the same. So you can understand why he’s so frustrated that Menzies seems to have thrown in the towel when the fight’s only in the middle rounds. “The real problem is that, because
Menzies has a monopoly and is such a vital player in the market, if they do show that they’re losing interest, they could take the rest of us small guys down with them,” says Des.
The NFRN in Scotland takes a more upbeat approach with Scottish NFRN Chairman Robert Baillie content that Menzies has been open and approachable about the Cambuslang. “Menzies Distribution consulted with us regularly in the run up to the closure and in the short time since the
depot closed they’ve intensified that contact to let us keep our members fully informed on developments,” says Robert.
“There have been teething problems and you’d expect that, but so far they’ve dealt with all problems efficiently and we can only hope that continues.” The one issue where the NFRN has had problems reported is in late deliveries. “It’s been a problem for a while and having one depot fewer means we’re expecting the problem to get worse before it gets better,” he says. Spar Scotland wholesaler and retailer CJ Lang has been affected by the closure of Cambuslang but Newstrade Controller Gordon Wilson says he hasn’t had any major problems since the depot closed its doors. “We probably have 20 to 30 stores that could potentially be affected in a major way and they were all contacted directly by Menzies but so far, so good,” says Gordon. At a national level, the NFRN has secured an agreement with Menzies Distribution to ensure that any future consolidation of branches into hub operations is as seamless as possible and to ensure that retailers are kept up to date on any future changes. As well as securing a commitment that the NFRN would be kept fully informed of developments in Scotland, the wholesaler agreed to a series of further requests from the Federation. These included a number of key operational issues including copy allocation, credited processes and standing order request issues. Menzies also agreed to improve and enhance the i-Menzies customer website, an issue that Des Barr feels has been a bugbear for some time. “The website is a good example of
how Menzies has refused to invest in the retail trade,” he says. “The site is critical to retailers yet it’s very poor by modern standards. It’s functional, yes, but it needs an awful lot of work to bring it into teh 21st century. It’s symptomatic of the lack of drive at Menzies to work with retailers to ensure there’s a future for new retailing beyond the next five years or so.”
JUNE 2012 | SLR 15
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