Growth of Wal Mart bad for papers

From the Chicago Tribune:

"Wal-Mart and stores like them don't simply advertise in newspapers the way traditional department stores do," said Paul Ginocchio, a Deutsche Bank Securities media analyst and the report's chief author. "Most troubling for newspapers is that this isn't going away. It's actually accelerating."

Since the early 1990s, as big-box stores expanded from small and midsize towns into the suburbs of major U.S. cities, they have changed the face of retailing. By extension, their success cut away at the advertising revenues of newspaper companies.

Wal-Mart, said Deutsche Bank, spends 0.3 percent of its sales—$259 billion worldwide in 2003—on advertising and allocates 3 percent of that budget to newspapers. By comparison, traditional department stores spend 4.6 percent of their sales on advertising, and most significant, appropriate 85 percent of that to newspapers.

"The newspaper community has been dealing with this for a number of years, especially the past three to four years," said Jim Conaghan of the Newspaper Association of America. "When a Wal-Mart comes into a market, the effect on local retail and local advertising is pretty apparent."`