The past 30 years have seen hundreds of wholesalers shut down. Seventy-four of them signed the 1994 National Newspapers Code of Practice - today just four remain. Even the two biggest wholesalers, Menzies Distribution and Smiths News, are coming under pressure to deliver the goods.

In August, Menzies Distribution revealed its sales had fallen from £683.8m to £673m in the six months to 30 June, with operating profits down by 5.5% to £13.7m over the same period. Like-for-like newspaper and magazine sales dropped 3.2% and 4.9% respectively. Smiths News painted a similar picture, with a July trading update showing that, although on track to report a rise in full-year pre-tax profits, its like-for-like sales were down by 2.8% in the 19 weeks to 9 July.

Both wholesalers are keen to broaden the scope of their business beyond newstrade. Earlier this year, Smiths News said it was "actively exploring acquisition targets in specialist distribution", and in June it paid £20m for the remaining book business of the now defunct newstrade wholesaler Dawson News.

The deal will increase sales at its existing book business Bertrams by a third and will come as a welcome boost for Bertrams in July, Smiths revealed like-for-like sales were down 7.5%. Menzies Distribution, meanwhile, is moving further into travel publishing. In July, it added Media on the Move to its existing Menzies Travel Media and the Reed Aviation businesses it bought last November. Costs have been cut elsewhere to accommodate these acquisitions. Menzies is hoping to save £4.5m by rationalising its operations in Greater London closing two sites and opening another.

"We will continue to develop our business model to mitigate declining sales, while pursuing new revenue opportunities for long-term sustainable returns," says chairman Iain Napier.

Focus On Newspapers & Magazines