Why Wal-Mart Cut 1,000 Magazines

After months of speculation by wholesalers and publishers, Wal-Mart is moving ahead with cutting close to 1,000 magazines from its shelves, and it appears the company’s recent commitment to being "green" is a factor.

Representatives from the Bentonville, Arkansas-based company did not respond to calls and e-mails seeking comment. But according to industry sources with knowledge of Wal-Mart’s plans, the company’s Sustainability Committee—and its commitment to reducing waste—played a key role in its decision.

According to one Sustainability Committee member, the formula Wal-Mart used to determine the cut list was based on a ranking of magazine titles by sales. Any title that was not in the top half of sales in any Wal-Mart store was cut from the list.

Another source says that of the 1,000 magazines, the number of active titles cut was closer to 800—representing three percent of copies sold by the retailer. Wal-Mart accounts for more than 15 percent of total U.S. magazine retail sales.

According to the New York Post, the cuts affected virtually all of the major consumer magazine publishers. Meredith Publishing, which as recently as December had denied rumors that it was being cut out of Wal-Mart, was hit particularly hard, with Better Homes & Gardens and Ladies Home Journal being shown the door.

Other axed titles include Town & Country, Home and Metropolitan Home (Hachette), Cookie, The New Yorker and W (Conde Nast), the Robb Report (CurtCo Media), The Economist, BusinessWeek (McGraw-Hill), Forbes and Fortune (Time Inc.), as well as a number of niche titles such as Boar Hunter Magazine, Spirituality & Health, Cabin Life and Log Home Living, according to the paper.

Long-Time Coming

The cuts should come as no surprise. As far back as in October of 2006, Anderson News, the largest distributor to Wal-Mart, began telling publishers it intended to cut the draw on some of the magazines it distributes by up to 25 to 30 percent.

At that time, Anderson said it had “analyzed sales performances by title for every individual retail store and calculated the appropriate allocation for each store to support sales and minimize returns.” The stated goal was to cut its financial losses by reducing the number of magazines with low unit sales, low efficiencies and/or low cover prices.

According to one industry expert, out of the 4,000 titles on the newsstand today (including annuals and one-shots), wholesalers say they lose money on at least half of those titles.

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COMMENTS: 5

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don't believe everything that you read

Submitted by seng on Tue, 01/22/2008 - 15:15.

this article is certainly a "sign of the times" piece. I wonder how much more is to come? one small caveat, however. It says in this article that Log Home Living was cut from the stands - I happen to know (from a reliable source) that they are NOT on the cut list and will continue to be sold from wal-marts.

Wal-mart cuts 1000 magazines

Submitted by Ricky Casino on Wed, 01/23/2008 - 08:22.

Well, there you go! Wal-mart's niche is like top 40 radio - play the big hits, and forget about depth and varitety as they count for only a small fraction for the total sales volume. It is sad that there is so much variety in magazine titles to choose from, and wal-mart will not be giving them the shelf space. My guess is that they have allocated those precious parts of their square footage (btw square footage in walmart is like gold) to another higher volume item. So, it really isn't about magazines at all ... they are just trying to find something that will fill the space and sell faster at a higher profit margin. If you take 20 linear feet of rack space in the store and convert it into twice the sales and triple the profit. My guess is that they will expand with the "as seen on TV" section... probably add some more snack and drink sales opportunities or other impulse items and take it to the bank. The real winners in this saga will be Barnes and Noble, Books a Million and some of the other "niche" marketers. They will become more the player in intellectual properties -and the added boost in sales that they will attain from those who are looking for those titles will be much more appreciated... and their book sales will probably grow because of it. Nobody can do everything well. So Wal-mart will play the hits... and for the rest of us that burned out with hearing the same song over and over and over again... well, we will flee to quality at Target and the better class niche retailers.

Hmm...

Submitted by Feronia on Wed, 01/23/2008 - 11:11.

"So, it really isn't about magazines at all ... they are just trying to find something that will fill the space and sell faster at a higher profit margin." That is what having a business is all about, isn't it? Although I'm not a fan of Wal-Mart, it's hard to criticize this move. Philanthropy is neither their strong suit, nor is it easily measured on the bottom line.

Well...

Submitted by Anonymous on Thu, 02/07/2008 - 14:30.

Not to be 'judgy', but I can't imagine that Town & Country, Home and Metropolitan Home, The New Yorker, W, The Economist, BusinessWeek, Forbes or Fortune would pull big numbers at Wal-Mart. That isn't their market segment, to say the least.

...the real loser in all this

Submitted by Shocko on Thu, 02/07/2008 - 17:24.

...is our democracy. I rack magazines in a family bookstore, and publish one, so I work on both sides of this. Magazines are labor-intensive to manage and aren't particularly profitable. But if major retailers and distributors wish only to sell the biggest and most profitable titles, the net result will be that smaller titles -- the ones with ideas, say -- become increasingly less possible to publish or to find. Yes, that's Darwinian capitalism at work. But at some point business has an obligation to do its part for our society, as well. A good magazine rack draws people into stores, and good magazines ON that rack keep them coming back. Maybe you don't sell 50% of every magazine. But if all we have is the same bland mediocrity of top-40 radio, we have no ideas. Nothing whatever to fuel the dialog we must have as educated, functioning members of a participatory democracy.

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