This newsagency sales benchmark study is an analysis of sales basket data from 136 newsagencies – city and country, shopping centre and high street, banner groups (various) and independent. To be included, the businesses must have been using the same software for both analysis periods and to be compliant with industry software standards.
To be clear, this is a same store year on year comparison.
Customer traffic. 52% of newsagents recorded an average decline of 3.7% in transactions. 12% reported no change and the rest an average growth of 1.8%.
Overall newsagency sales decline. 63% reported an average revenue decline of 3.6%. Of those reporting growth, the average was 7%.
Basket depth. 48% reported a decrease in basket size (items in the basket) with an average decrease was 1.7%. 26% showed no change. The rest achieved 1.8% growth.
Basket value. 46% of newsagents reported an increase in basket value – with an average of 2.3%.
Product mix. Newspapers and magazines suffered the most, again.
Discounting. The decline in discounting identified in the last three quarters has continued with only 21% of respondents discounting of any significance.
The gap between growing and contracting newsagencies is getting wider. Those growing have a more diverse product offering. The comparison reports show the growing businesses attracting new traffic.
Benchmark results by key departments:
- Magazines. 79% of newsagents reported an average decline (in units) of magazine sales of 9.1% – the same YOY decline as last quarter. 86% of reported an average unit-sale decline of Women’s Weeklies of 9.8%. Women’s Weeklies account for around 25% of all magazines sold in a newsagency. Women’s Interests, Food and sport also performed poorly. Home & Living did well. The worst news was for Special Interest – this newsagency exclusive category is showing an average decline of 6.7%. The number of newsagencies reporting declines above 25% is most concerning. 18% of newsagents reported measurable magazine sales growth, some into double digits. While some grew through local circumstance, others grew by engaging with the category.
- Newspapers. 91% of newsagents reported an average decline of 5.9% in over the counter newspaper sales. Again, regional newspapers did not suffer as much.
- Greeting cards. 58% of newsagents reported average growth of 3.4%. Some are reporting growth into double-digits. Of those reporting a decline, the average was 4.1% with some much higher.
- Stationery. 67% of newsagents reported an average decline of 1.3%. This continues a trend in newsagencies in relation to stationery.
- Ink. 37% of stores participating in the study separate ink sales data allowing further analysis. 52% of these stores reported ink sales growth of 4%.
- Gifts. 44% of the newsagents in the study have a separate gift department. Of these, 72% reported average year on year growth of 8%.
- Plush. 4% of newsagencies report on plush sales in a separate department. I recommend this. A reasonable sales benchmark for plush is revenue equal to 25% of card revenue. In stores reporting on plush, sales are up on average 21%.
- Tobacco. 77% of stores with tobacco products reported a decline of on average 9.7%.
- Confectionery. 62% of stores selling confectionery reported an average decline of 14%.
- Toys. 19% of stores with the department reporting growth of just 4%.
Newsagencies continue to be good businesses to own. They respond to attention. There is good evidence of this in individual store data I have seen. The average newsagency with a retail model 10, 20 and 30 years old is the type of business in trouble. It’s unlikely to be doing anything to insulate against the changes we see impacting traditional lines.
The best type of newsagency to own continues to be the one where you have the most control over what you sell and where you generate traffic for several product categories where average gross profit is 50% or higher.
We create our own luck.
Click here for a PDF of the report.
How should you respond to this study?
Newsagents: look at your business, your sources of traffic, your average GP. Your success will come from many small steps. The most successful newsagencies I see today are run by retailers as retail businesses.
Suppliers: Get smart in your engagement with newsagents. Trust them. Treat them with respect. Share their mission to grow traffic and GP and basket value. Give newsagents complete control over what they sell of your products.
Is anyone able to advise the average transaction sale in Australian newsagencies for 2014
Is anyone able to advise the average transaction $ sale in Australian newsagencies for 2014
Mark I hope to have the latest benchmark results out by the end of this week. I have data from over 100 newsagencies in this latest sample. The average transaction size varies by the type of newsagency. Stronger newsagencies are growing basket depth.
That’s a pretty generalised / broad question to ask… newsagents come in all shapes and sizes, marketing groups, specialist newsagents, strip stores, shopping centre outlets, look-a-likes, convenience, LPO’s…the list goes on…
Kind of like asking what is the average $ Sale in hardware stores…. you will get a figure from Bunnings, a different figure from Masters, and yet another figure form the Home Hardware group, and all the independent stores and smaller groups such as Mitre 10.
And with all due respect to Mark’s report, it is on only 100 newsagents of a possible 3500+ agents….So it would give a more accurate data for newsXpress stores, but not newsagents in general.
Perhaps the question should be more specific! Such as marketing group, type of newsagency, metro or country, strip or shopping centre, size of shopping centre, Tatts or without Tatts.
In my opinion there is NO accurate reporting to give you an accurate figure to generally base the average $sale in ALL Australian newsagencies.
Your assumption about the benchmark group is wrong Amanda.
It usually covers between 130 and 175 newsagencies. It includes Newspower, Nextra, News Extra, Supanews, newsXpress and unbranded businesses. No one banner group dominates.
The quarterly benchmark study which I have been doing for more than ten years is more about trends than the measurement numbers themselves.
Around 41% of newsagents are increasing basket size – average sale value – while 59% are experiencing a decline. For this data I take out lottery sales as they skew basket size.
On the validity of the benchmark as a guide, my results come out before audit results and my results are usually very close to the audit results.
The dollar turnover divided by the number of transactions over a period of time across the total number of newsagencies in Australia would provide a good guide. It would also be very interesting to know what is the retail square metres occupied by this industry. I am surprised that the industry body would not have these figures.
Mark not ll newsagents would know the number of transactions unfortunately. Further, this data is not reported to a single place for the whole channel. Turnover is also tricky given lotteries. For example, some newsagents would not record lotto sales in their computer system while others would.
Hi Mark, thanks for your reply. I was faced with a similar scenario in a different industry previously. If the data is not collated by anyone, then yes I agree with you, there is nothing that can be done. However, I would imagine most newsagency POS systems will have the capacity to identify the number of transactions processed on a daily basis. They will also be able to do this probably by merchandise category. Most POS systems, particularly DS chains in Australia, trap this info to determine $ per Sq.mtr return. A critical element in determining what space should be allocated to maximise $ return per category for existing or potential start up businesses. I do not believe the diversity of the group matters. An example scenario may be that if one is contemplating opening a 200sm. newsagency, if you know that the industry overall benchmark average $ return per transaction is say $25 per transaction, this will greatly assist in determining viability.
How and why would you not include lotto sales in your pos system ?
Shaun, newsagents who do not include lotto sales in their POS transactions are fools.
Mark I’d expect franchise / marketing groups to have this. My benchmark study for the stores participating gets close but not to the psqm level.
PS. 200sqm is going to be too big in most instances today.
Really just do not understand why you wouldn’t include them .
In SA lotteries always had to be kept in a separate till away from shop sales and it
could be audited at any time so we have always kept it separate even though we are now owned by Tattslotto.
To put lotto sales through pos terminals skews your reports because we only get paid commission on lotto so a sale of lotto doesn’t return the same as a shop
sale.
We do separate EOS for lotto and shop.
So what do you do with phone credit and gift cards ?
Phone credit quite small here and we don’t have gift cards so we put phone credit through our pos system.
I know that sounds contrary but it is so small as to hardly make a difference so we do it that way to audit the phonecards daily through EOS