Daily Mirror starts red-top cover price war

An aggressive price-cutting initiative from the Daily Mirror has ignited a cover price war across the red-top market and resulted in a sharp drop in its share price for the Daily Mirror's parent company, Trinity Mirror.

The News International-owned The Sun reacted instantly, matching the Mirror's 12p price cut and leaving the traditional rivals both retailing at 20p.

Express Newspapers' Daily Star went even further as it sought to defend the circulation increases it has made over the past two years. The Daily Star slashed its cover price by 20p to undercut all other titles at only 10p.

The round of red-top price slashing resulted in a 6.16 per cent drop in Trinity Mirror shares to 434p after Monday's papers - the first under the new prices - hit newsstands.

The Daily Mirror's price cutting is understood to have been budgeted into the £20 million marketing initiative, announced to back the paper's relaunch last month. Trinity Mirror has supported the relaunch, which built on the more serious editorial stance taken by the paper's editor, Piers Morgan, since 11 September, with a TV campaign through M&C Saatchi.

The Daily Star's drastic cut will arguably prove the most difficult to maintain, especially since Express Newspapers has already launched an aggressive price-cutting strategy for its mid-market titles. Last month, the Daily Express' 15p reduction to 20p undercut not only its rival the Daily Mail, but also the entirety of the red-top market.

The Mirror received no obvious boost from its relaunch and marketing drive in the ABC circulation figures for April, posting a 0.37 per cent circulation decline month on month to 2,108,530. The Sun's circulation fell 0.83 per cent to 3,351,648 over the same period, while the Daily Star posted a 2.74 per cent increase to 667,899.

- Perspective, p14.