Source Closure Hits Mag Newsstand Sales Hard

Until it closed in June of this year, Source Interlink Distribution was one of the country’s largest magazine wholesalers, supplying around 30% of the magazine retailers, and its closure left publishers scrambling for new delivery providers.

The result of this supply disruption was a major hit to magazine sales in the third quarter, according to MagNet, which published some gloomy figures this week.

MagNet found that total retail sales volume dropped by 27% from 417.9 million in the third quarter of 2013 to 346.6 million in the third quarter of 2014.

In dollar terms, total retail sales fell 20% from $676 million to $543 million over the same period. This steep decline compounded weak sales performance in the first and second quarters, when retail sales volumes fell 10% and 14.3%, respectively, resulting in an overall drop of 17.1% for the first nine months of the year.



There was some good news concealed in these figures, MagNet noted, as third-quarter sales actually improved at the 43,800 retail stores that didn’t suffer from a service disruption, with dollar sales increasing significantly in the second half of the quarter; celebrity weeklies posted strong increases following price hikes earlier this year.

In another piece of good news, by October, 99% of stores that had previously been supplied by Source were receiving magazines from another wholesaler.

However, the demise of Source Interlink Distribution only served to aggravate a long-term trend of declining newsstand sales. Recent years saw a 10% decline in newsstand sales in the first half of 2012, according to the Alliance for Audited Media (formerly the Audit Bureau of Circulations), followed by an 8.3% drop in the second half of 2012, a 10% drop in the first half of 2013, and an 11.1% drop in the second half of 2013.

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