Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Crikey publishes News Corp Aussie newspaper financial info

Mark Fletcher on August 20, 2014 3:35 PM

Crikey has today published hitherto unknown information about the performance of the News Corp. Australian newspaper business. The numbers are sobering for a publishing business that invests considerably in criticising rival Fairfax for poor performance:

Crikey can reveal that, amid a forest of negative brackets, revenue from News Corp’s Australian newspapers fell 14% to $1.9 billion in 2012-13, with circulation revenue dropping 5% and advertising revenue falling 18%, while operating income fell 67% to $94 million.

Foxtel and realestate.com.au are key the Australian business, apparently effectively propping up loss-making print businesses.

The profit drop in newspapers was only partly offset by growth in other operations like REA Group and Fox Sports, with total operating income falling 38% to $221 million. After income from investments including Foxtel, the group recorded a total profit before interest or tax of $367 million, down 28%.

I expect there will be a backlash against Crikey from News about this reporting.

Newsagents see the financial pressures News must be under through subscription deals and deals with supermarkets where newspapers are being bundled for free with supermarket spends above a set figure.

Updates:

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How does the ACCC set its priorities?

Mark Fletcher on August 20, 2014 9:02 AM

mbeerThe ACCC chairman has been all over the media this week touting a victory over Maggie Beer and what the ACCC says is misleading labelling.

I don’t see how any shopper considering purchasing Maggie Beer products could have been misled. The products are conceived and developed in Maggie Beer’s kitchen in the Barossa Valley. That alone makes the labelling accurate in my view. There is no claim the products are made there.

What a waste of public money.

It surprises me that the ACCC has time and money for this yet no time or money to investigate newsagent claims that they are treated so differently by magazine distributors that it holds back our ability to be competitive against the supermarket duopoly.

Complaints I have heard of being made to the ACCC about this are met with sorry we’re not pursuing the complaint, consider civil action if you think the treatment is unfair from the ACCC. If they researched such complaints thoroughly, they would discover a magazine supply model that gives the supermarket duopoly an extraordinary competitive advantage that could ultimately disadvantage consumers.

Shame on you ACCC.

The image is from the story on the ABC website.

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→ 2 CommentsCategory: Ethics · magazine distribution · Magazine oversupply · magazines · Newsagency challenges · Newsagency management

Where else can you try before you buy?

Mark Fletcher on August 20, 2014 5:52 AM

Further to my post a couple of days ago about welcoming magazine readers in my newsagency, I have been thinking about businesses where the try before you buy approach is vital to their success:

  • Car dealerships. Who buys a car without a test drive for a day or more.
  • Clothing. They encourage you to try on shirts, suits, dresses – almost anything.
  • Chocolates. Haighs drives sales with tastings – Darrell Lea stockists used to do this as well.
  • Wine. Indie wine shops regularly offer tastings to drive sales.
  • Book shops – online and offline. You can read before you buy.
  • Music shops. You can listen to a CD (if you still buy CDs) before you buy.
  • Cheese. Good retailers often offer tastings to drive sales.
  • Toys. Toy shops have toys out for kids to play with to encourage sales.
  • Paint. You can get sample cards and even tins to try a paint prior to purchase.
  • Cards. People want to read the words and see images before they purchase.
  • Body lotions. Stores like Aveda and L’Occitane give away samples to drive purchases.
  • Hair. For wedding bookings you can often get a trial run for free or a discount.
  • Coffee. Coffee shops let you smell their tasty brew to get you purchasing.

Another version of try before you buy is the money back guarantee where you can get a product at home and use it and then return for a refund if it’s not what you want.

Opening your doors to a shop where products are on the shelves and not locked away is an invitation for customers to interact with what you sell. This is what our newsagency businesses are and should be like.

The browsing experience in a newsagency is different to supermarkets, convenience stores and petrol outlets. We ought to embrace this rather than shutting it down.

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Being transparent with newsagents on magazine performance

Mark Fletcher on August 20, 2014 5:47 AM

magsalesThis image shows year on year magazines sales performance for one of my newsagencies for the April through June quarter in 2014 compared to 2013.

I am publishing the data here as proof of the sales growth we are achieving. This is necessary to counter a comment reportedly made by a magazine publisher recently that they did not believe our figures.

The data in this report will stand up to any scrutiny.

I suspect the publisher’s representative has been trying to discredit my claims of significant year on year sales growth because it does not fit a narrative that suites their business need.

What we are doing in this business is nothing special other than focussing on promoting the whole of the business and managing magazines with genuine care.

All the moves I make in relation to magazines are covered here for others to see and consider for their own business.

Magazines are important to this business and all newsagencies. Sure they are challenged. But we can grow sales if we engage creatively and with a view to our local customers. The most effective tactics and those from within your business.

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Newsagent support of Daffodil Day ignored

Mark Fletcher on August 19, 2014 7:15 PM

Newsagents have been sent packs of products to sell to raise funds for Daffodil Day with a request we put them at the counter – the most expensive and sought after location in store. Many newsagents have removed high margin products from the counter to support the fund raising for a good cause.

Unfortunately, the Cancer Council does not recognise newsagents for their valuable support. They thank Gordon & Gotch, the distributor of the fund raising products to us but not the newsagency channel of retailers promoting the event.

It’s disappointing since Coles gets a big rap and the cost to us is probably greater than what Coles is doing.

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Keeping magazine oversupply survey open

Mark Fletcher on August 19, 2014 10:19 AM

I am keeping the survey for you to record details of magazine oversupply open for a while. List specific details, by title, details of recent oversupply experiences. Data needs to be  in a specific format with one line per title. Here’s he survey link: https://www.surveymonkey.com/s/JCHT3H8 You can response more than once if you have more oversupply experiences.

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The art of attracting new shoppers to your newsagency

Mark Fletcher on August 19, 2014 5:53 AM

kidsplayIt’s an art attracting shoppers to any retail business let alone to an Australian newsagency where the old-school shingle encourages wrong assumptions and out of date expectations about the business and the products it sells.

I prefer to play down the shingle and attract shoppers based on product placed specifically for that purpose.

The knitting sand we have been selling this year has been excellent for attracting shoppers who might otherwise not have shopped the newsagency. The photo shows one group playing with the sand last Saturday. In a half hour period this sand was played with by these boys, a couple well into their 70s, a mum and her daughter and a thirty-something guy.

Some purchased, some didn’t. Some wandered into the shop beyond the sand after being attracted to the business. As some played, others with them came across to see what they were doing.  This is where the sand works a treat for us – luring people from the mall who then step further into the business.

The sand acts as our shingle to these shoppers. It sets an expectation of what to find inside. In this case, it’s more valuable than the shingle itself as it has less boundaries than a business brand or a dingle like newsagency.

It’s a thrill when people browsing the shop express surprise that they are in a newsagency.

We have to do more of this, much more. The old school newsagency of papers, magazines, stationery, cards and lottery products is over. That model does not work for us, the landlord or our suppliers. The successful newsagencies today are those playing outside the old-school model, those attracting shoppers for non-traditional reasons – like to purchase sand.

It is an art attracting new shoppers. There are few rules and many challenges. The key is to be out there trying, outside the boundaries of the old-school shingle.

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→ 3 CommentsCategory: Management tip · Newsagency management · newsagency marketing

Phantom comic shoppers are the best

Mark Fletcher on August 19, 2014 5:47 AM

collectorphantomCustomers, mainly guys, who collect Phantom comics are valuable to us. They are loyal not only to the title but also to the shop. Every few visits, when they have a need, they purchase something other than the next issue of the Phantom magazine. Indeed, the Phantom magazine shopper is an ideal habit-based shopper, one we need to cultivate.

The biggest challenge, however, is consistent supply. The distributor did not have us down to get this Phantom Replica Series No. 2 even though our Phantom sales are strong. Some glitch apparently. There are too many of these ‘glitches’. It’s frustrating as it makes us look bad to Phantom collectors. At least Phantom collectors are forgiving is you are late getting stock.

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→ 1 CommentCategory: magazines

Military Watches partwork popularity strong

Mark Fletcher on August 19, 2014 5:40 AM

partwcollectThere is continued strong interest in the Military Watches partwork. The coverage of World War 1 related stories heading into next year’s anniversary are part of the reason. We promote the title so it’s seen by people who will purchase on impulse.

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Make sure the discount you get is real

Mark Fletcher on August 18, 2014 6:35 AM

Comparing buy prices with a newsagent recently we discovered two different wholesale prices for the same item. The comparison came about because they said a supplier gave them 15% off wholesale while I am getting 10% off wholesale for the same item.

I pay $10.80 at a 10% discount off wholesale while the other newsagent pays $11.22 after a 15% discount. Both prices are ex GST as the wholesale is ex GST.

The 15% is off an inflated wholesale. I’d say its is inflated to enable them to be told they are getting 15% discount.

This is no discount at all.

Where you are offered a discount, make sure it is off a verifiable (preferably published) wholesale price that applies to everyone. A discount off an inflated wholesale price does not help your business.

Footnote: beware of those who argue against this as they could use smoke and mirrors to defend you being charged more in real terms.

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Share your magazine oversupply evidence

Mark Fletcher on August 18, 2014 6:10 AM

I have created a survey for you to record details of magazine oversupply. List specific details, by title, details of recent oversupply experiences. Data needs to be  in a specific format with one line per title. Here’s he survey link: https://www.surveymonkey.com/s/JCHT3H8 You can response more than once if you have more oversupply experiences.

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Welcoming magazine readers

Mark Fletcher on August 18, 2014 6:03 AM

peoplereadIt’s usually guys who sit on the floor of the newsagency to read magazines or crouch in aisles to read magazines.

On the weekend I noticed a lady crouched down looking through our cross-stitch magazine titles. It made me smile.

I like seeing customers engage with magazines like this. I’m happy for them to read. I’m happy for them to sit and read. If I had more roomI’d have a reading couch or stools.

Most readers purchase a magazine or two. Those who don’t purchase don’t harm the business. I’m happy for them to be in the store.

Compared to supermarkets, convenience and petrol outlets, newsagencies offer the best magazine browsing experience. It’s a point of difference more of us should embrace.

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Sneaky editorial promotes newsagencies

Mark Fletcher on August 18, 2014 6:00 AM

sneakyeditorialCheck out the editorial in the issue of Sneaky magazine we received last week to sell with 100% gross profit. It explains why the free magazine is now available for purchase through out channel – because people could not get access to a free copy.

Given the unique nature of the title it would be helpful for newsagents to be provided better information on the customer and what else they could purchase.

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Frankie stands out again

Mark Fletcher on August 18, 2014 5:57 AM

magsfrankieaug2014We have another stand-out issue of Frankie magazine on the shelves of newsagencies. Its soft blue cover is a stand out in the sea of colour in the magazine department – making it the title you notice first in a busy aisle.

Frankie is one of the most important titles we carry because of the shoppers it attracts.

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Record your magazine over-supply stories

Mark Fletcher on August 17, 2014 8:18 AM

I have created a new one-question survey on magazine over supply. I’d like you to list specific details, by title, details of recent oversupply experiences. I am keen for the data to be in a specific format with one line per title. Here’s he survey link: https://www.surveymonkey.com/s/JCHT3H8

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Sunday newsagency marketing tip: run a good old a-thon

Mark Fletcher on August 17, 2014 6:17 AM

Back in the 1970s a-thins were all the rage. It’s when walk-a-thons took off in Australia. Then there were swim-a-thins, spell-a-thins, read-a-thins … all to raise money for charities.

Why not stage an a-thin at your shop or in your shop window? Choose something that connects to your business, something fun but with social and community engagement at its core. Connect with a local community group for participants and this will get them promoting the event for you.

Here are some suggestions:

  1. Knit-a-thon. Get all your knitters in to make a long scarf and your customers pledge donations per metre knitted.
  2. Crossword-a-thon. People pledge donations based on crosswords completed.
  3. Read-a-thon. Participants read from newspapers and magazines from your shelves and money is pledged per hour of reading.
  4. Crossword-a-thon. Bring in the biggest crossword your suppliers can get and get pledges for each hour spent completing it.
  5. Love-a-thon. Get people to send a card to a loved on and make a gold coin donation to a local charity when they do it. You should match this as a way of saying thank you for the business.
  6. Write-a-thon. Get participants to write a list of everything they love about the local area – on pads you provide using pens you provide. Get pledges   for each hour they write or each page they write.

Where there are some logistical challenges to these types of events – such as them running for longer than your usual opening hours – they can be a lot of fun and get people thinking about your business differently and that is the key.

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Sunday newsagency management tip: are you open the right hours?

Mark Fletcher on August 17, 2014 6:11 AM

When was the last time you assessed sales by time and particularly at sales revenue at the start of the day and at the end of the day?

It could be that you are opening too early or too late or that you are closing too early or too late.

What does your data show?

Use your newsagency software to assess sales at the fringe of the day for, say, the last six months. Look overall and then for each day of the week. Good newsagency software should allow you to do this level of reporting. Work out the slew revenue per hour, apply your overall gross profit percentage and then deduct the hourly cost of being open.

If, for example, your average revenue is $30 for an hour at the start of the day and you have staff working this time and they don;t have much else to do those days and you have the industry average GP of 32%, your GP is $9.60. Once you pay wages for the hour you are losing money. If the customers are not regulars it could be that you are better off closing.

If, on the other hand, your sales are $100 or more in the first hour, it could be that opening earlier could win even more business.

Only you can make the assessment of what is right for your business.

My tip today is look at your data and make sure you are open the right hours for the best possible financial outcome for your newsagency. I’d suggest doing this assessment annually.

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Robin Williams cover drives Who sales

Mark Fletcher on August 17, 2014 6:07 AM

magswhowilliamsLike most newsagents I guess I could have sold double or triple the allocation of Who magazine. Interest has been strong because of the Robin Williams cover. The sales are reminder of the role a print magazine plays in a big news story.

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New survey: magazine oversupply stories

Mark Fletcher on August 16, 2014 6:21 AM

I have created a new one-question survey on magazine over supply. I’d like you to list specific details, by title, details of recent oversupply experiences. I am keen for the data to be in a specific format with one line per title. Here’s he survey link: https://www.surveymonkey.com/s/JCHT3H8

I’ll publish all the results here next week.

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Presentation is everything in retail

Mark Fletcher on August 16, 2014 6:16 AM

presentationI love this display of fresh fruit in front of the sandwich bar at a cafe I was in earlier this week. It’s different to a usual sandwich display. Take the fruit away and you have a sandwich display. Add the fruit and your attention is grabbed by colour and freshness.

This terrific example of retail theatre underscores how presentation is everything in retail. Instead of an everyday sandwich display this retailer is telling a more compelling story.

Inspiring.

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100% commission for Sneaky magazine

Mark Fletcher on August 16, 2014 6:12 AM

magssneakSneaky magazine has been introduced to newsagents with a 100% commission offer for our first issue. Several newsagents I’ve spoken with were surprised about this. It would have been good to have better information prior to the stock arriving – especially given the target shopper for a title we need to find new space for. I’d love to hear from others on how they are handling the title.

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InStyle challenging to display

Mark Fletcher on August 16, 2014 6:10 AM

instyleThe photo shows how the latest issue of InStyle magazine looked in a newsagency I saw earlier this week. The gift with the title makes the offer look trashy when you place the usual volume of stock in a pocket. It’s hard to know the alternative that would drive sales as a good gift does. I think in this instance the gift is too big to stick on or in a magazine for the retailer to easily manage.

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Superheroes are in

Mark Fletcher on August 16, 2014 6:07 AM

superheroesWe are having terrific success with superhero themed products from plush to figurines to cards to pillows. The male-skewed superheroes such as Superman, Batman and Spiderman are particularly popular for us.

What works especially well is placement in locations to interrupt destination shopping. This drives impulse purchases.

Leveraging popular superheroes has been a terrific way to grow plush and toy sales for us.

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Would you close your newsagency to take a break?

Mark Fletcher on August 15, 2014 7:31 AM

smallbusinessbreakA small business music and DVD store near where I live closed for ten days in March so the owner could take a break, his first in ten years. I like the notice the posted on the door to the shop in advance of the break.

I figured newsagents who run a single person business don’t have the opportunity to close like this given the nature of what we sell. A newsagent I was talking with during the week did close recently for a break. They had worked every day for five years straight and had a family wedding to attend. So they closed and crossed their fingers that suppliers would not penalise them.

The high cost of labour compared to other first world countries is a factor that results in plenty of newsagents running single person operations. An adult costs upwards of $21.00 an hour here with a three hour minimum. In the US, adults in department stores are plaid around $7.00 an hour with no minimum. Plus they can be sacked on the spot. There is no point in complaining about the cost of labour as many newsagents went into business knowing the figures.

How do you handle taking a break from your business? that’s the key question I;d like to ask with this post. I know some newsagents who take four to six weeks a year without fail while others are lucky to get a break every few years. Would you close your shop to take a break?

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Newsagents concerned about another News Corp. supermarket deal offering free newspapers

Mark Fletcher on August 15, 2014 5:11 AM

News Corp. has announced a 30 day campaign at Ritchies supermarkets offering a free newspapers to customers who reach a minimum spend.

News ran a similar promotion recently that resulted in one supermarket I heard of giving the Herald Sun away to any who wanted – without requiring a minimum spend. I can’t see how such customers could consider the paper of any value. I also feel for the nearby newsagent who struggled to sell newspapers when the nearby supermarket was giving the main paper away for free.

Here is the News Corp. letter announcing the latest promotion.

Ritchies promotion

Dear Newsagent,

HWT in partnership with Ritchies is running a promotion in all Ritchies IGA and SupaIGA outlets commencing on the 13th of August until the 9th of September.

As the delivery newsagent, you will receive your normal commission for each copy sold in your territory. This commission will be calculated and applied to your account as normal during this period.

HWT will increase orders for Ritchies outlets. Please delivery quantities as per the label provided.

Returns should be collected as normal and entered on the iServices website.

If you have any queries regarding this promotion or feedback during the promotion, please contact your Area Customer Manager.
Thank you for support.

Kind regards,
Retail Customer Development Team

Some in News will complain that I am writing about. Not to me, no they would not engage. Their complaints are internal and to some newsagents.

I think newsagents have very right to question this latest supermarket promotion. It is another example of FMCG people influencing News Corp marketing activity to what newsagents would say is detriment of the newsagency channel.

Wake up newsagents – take note this promotion, that a product you value and sell could be given away at your major retail competitor for nothing. How does that serve your needs? How does it play into your future?

With more and more FMCG experienced people working for key suppliers to our channel newsagents have every reason to be nervously watching.

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