COLES DUMPS PRINTED CATALOGUES IN ONLINE SWITCH

In a bolt from the blue the weekly Coles letterbox catalogue will move to digital-only from next month, leaving a hole in the IVE heatset schedule from the loss of the 10 billion pages a year print job, one of the biggest in Australian print.

IVE has been printing seven million catalogues a week for the Coles catalogue at its sites in Melbourne and Sydney. Coles will continue with a catalogue, but in a dramatically smaller print run – which IVE will print – that will see it only placed inside its stores.

Speaking to Print21 Matt Aitken, CEO at IVE, labelled the move as “disappointing”. IVE will take a $35m-$40m hit from the loss of the contract, representing around five per cent of its revenue. The IVE share price fell by 22 per cent on the news, it is currently trading at 62c.

Geoff Selig, executive chairman of IVE said the business moved early when Covid-19 first hit, and “is in a strong position to mitigate any revenue losses due to the Coles announcement”.

In his statement to the ASX he also said, “The group remains committed to supporting the continued strength of the printed catalogue as an important component of an integrated communications mix to a diverse national consumer base.”

Ovato has the Woolworths catalogue contract, printing similar volumes of print to that of the Coles job. It will now be the undisputed largest print job in Australia. Woolworths has said it has no plans to ditch its catalogue, although its pagination has been cut by 30 per cent since the virus emerged, going from 40pp to 28pp.

Coles CEO Steve Cain cited environmental motivation and the desire to provide up-to-the-minute pricing and offers through its digital platform. The reality though is paper products have a lower carbon footprint than digital catalogues. Coles will save a significant sum of cash by not printing 10,000 tonnes of paper a year. IVE sources the paper for the Coles job from the Opal Australian Paper mill in Maryvale, Victoria, and from the Norske Skog mill in Boyer, Tasmania.

Giving the reasons for leaving print behind Cain said, “The one-size-fits-all, catalogue in the letterbox is no longer as relevant as it once was.” He added, “We’re committed to being Australia’s most sustainable supermarket and reducing our reliance on paper by prioritising digital channels like Coles&co is a significant step towards that goal.” Cain said its new Coles&co offering will be ‘more personalised’ and could in the future include daily content tailored to consumers.

He said, “We will be investing more in digital content and capability for customers and suppliers, as well as better value by lowering the cost of breakfast, lunch and dinner, and improving our sustainability by reducing our reliance on paper.”

Heatset giants IVE and Ovato are already battling a shrinking magazine market, with issues closed and paginations down.  Changes in the market in the last few weeks have seen Australia's two biggest publishers Bauer and Pacific become one company, and now owned by Mercury Capital, which also owns Webstar NZ. Ovato prints Bauer titles, with IVE printing what were Pacific magazines.

IVE is a diversified marketing communications business, with various divisions. Ovato is almost all print, with catalogues, magazines and books.