As the economy continues its downward spiral, consumer spending is dropping, and retailers are bracing for a dismal holiday season. That's bad news for magazines, where ad pages are basically in free-fall, with the declines accelerating from month to month.
As of July, the total ad pages of approximately 210 leading weekly and monthly magazines were down 6.4% for the year-to-date, according to MIN Online. However, by November, the year-to-date decline had widened to 8.5%. A 10% cumulative decline by December is not inconceivable, given worsening economic trends.
On Oct. 28, the Conference Board announced that its consumer confidence index had plummeted to an all-time low of about 38 out of 100, a drop of over one-third from its level of 61.4 in September. The expectations index--which evaluates consumer sentiment about the future--went even lower, dropping from 61.5 to 35.5. Lynn Franco, director of the Conference Board's research center, said the decline in the confidence index was "the lowest reading on record" since the index began tracking consumer attitudes in 1985.
Just a few days later, the Commerce Department said consumer spending slid 3.1% in the third quarter--the biggest drop since 1980, while the economy contracted by 0.3% in the third quarter. A survey of purchasing managers showed the biggest drop in inventory purchases since 1968 in October; the Institute for Supply Management said its index tumbled to 37.8%, exceeding all 58 forecasts assembled by Bloomberg News. That is significantly lower than the level of 56.7% at the beginning of the recession in 2001. The 50-point level marks the dividing line between business growth and contraction, according to Bloomberg.
Retailers are already cutting back on advertising in a big way. According to Ad Age, Macy's said it will eliminate all magazine advertising in the first half of 2009, although its holiday marketing budget is still largely intact. Subsequently, The New York Times reported that Neiman's specialty retail segment--including Neiman Marcus Stores and Bergdorf Goodman--saw sales tumble 27.6% in October, while Nordstrom is down 15.7%, and Target fell 4.8%.
New York Palace Brings In Cooking Light Menu
The New York Palace Hotel is about to debut an exclusive menu from Cooking Light magazine covering breakfast, lunch, dinner and dessert. The menu was created by the magazine's executive chef, Billy Strynkowski, along with James Staiano, the executive chef of the New York Palace.
Even More Layoffs
The magazine business is not done chopping, according to Gawker.com, which said Thursday afternoon that M. Shanken Communications, publisher of Wine Spectator and Cigar Aficionado, is laying off 20 staffers. The New York Times also reported that Eric Schurenberg, the managing editor of Money, was let go as part of Time Inc.'s 600 layoffs. He will leave the company after completing Money's December issue.
Family Circle to Debut TV Show
Family Circle will air a national half-hour TV special called "Ready, Set, Celebrate!" that is sponsored by Ferrero Chocolates. The program, set to air on Nov. 15 on the WE Network, will be hosted by author and lifestyle expert Katie Brown, according to Linda Fears, editor in chief. It will deliver party-planning tips along with easy recipes presented by the magazine's food editors, while following one family's hectic party planning.