Southland Corp.'s 6,000 U.S. 7-Eleven convenience stores will trim the number of magazines it sells, and at the same time put the squeeze on men's "sophisticate" titles at its franchised outlets.
The moves add further momentum to the nationwide consolidation of magazine wholesalers and may hurt slower-selling magazines and start-ups, in addition to titles such as Playboy and Penthouse.
DISTRIBUTION CENTERS KEY
Southland has sought to thin the number of vendors supplying its stores by establishing Combined Distribution Centers, now operating in nine regions. The plan, originally designed to handle milk, baked goods and produce suppliers, was extended to magazines last spring in the Dallas/Fort Worth area.
As part of that consolidation, magazine wholesalers were cut from five to one. This fall, the Denver distribution center began handling magazines and that region cut wholesalers from three to one.
Further consolidation is expected in January in Orlando and the northern Virginia/Washington, D.C., areas. As that happens, 7-Eleven is also expected to trim the number of titles it carries.
"We'll look at the unit movement and the profitability [of each magazine], and eliminate the weaker ones," said Clifford Smith, Southland's category manager of publications.
He added that management is undecided on how many magazines to drop; the 7-Eleven chain currently carries about 195 titles.
Southland has banned the sale of so-called men's sophisticate titles in company-owned stores since 1986, and has recommended that franchisees also stop selling them. But many stores have ignored the corporate guideline.
Franchisees account for about 60% of 7-Eleven's stores.
"So many franchisees still handle the men's magazines that [7-Eleven] franchisees remain the largest retail sellers of both Playboy and Penthouse," said John Harrington, editor and publisher of industry newsletter The New Single Copy.
LOOKS GRIM FOR PLAYBOY, PENTHOUSE
But Combined Distribution Centers will not be allowed to distribute the men's sophisticate titles to either owned-stores or franchisees, Southland's Mr. Smith said, making it significantly harder for those titles to reach independently owned outlets.
That certainly won't help either Playboy or Penthouse, which have only recently stabilized circulation after nearly a decade-long tailspin.
According to the Audit Bureau of Circulations, Playboy circulation declined 4.9% to 3.23 million in the six months ending June 30, primarily because the magazine dropped its rate base 7.4% to 3.15 million in January in response to postage and paper price hikes.
Newsstand sales for the same period were 642,923, a 52% drop from the comparable 1987 period, when Playboy sold an average of 1.34 million newsstand copies a month.
Penthouse has suffered even more, dropping 63%, from 2 million newsstand copies in the six months ending June 30, 1987, to 741,323 in the most recent six-month period. Its total circulation in the most recent six-month period was 1.1 million, a 0.9% drop from a year earlier.
The magazine has not guaranteed a rate base to advertisers since the end of 1993.
Copyright November 1996, Crain Communications Inc.