Australian Newsagency Blog

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Report published by News Corp. says newsagents will be gone in five years

Mark Fletcher
March 25th, 2014 · 24 Comments

Michael McQueen, writing for news.com.au in a report published this morning says, among other things, newsagents will be gone in five years:

Newsagencies were once a gold-plated business. They had a bulletproof revenue model centring on the exclusive rights to distribute and sell the magazines and newspapers we all purchased on a daily basis. Then came 1999 — the year of deregulation. From this point onwards, newsagents no longer enjoyed the protected market they once did and business began to get tough.

Today, newsagents have one remaining cash cow — lotteries. With increasing noise from governments that lotto could also be deregulated in the coming few years just as it has in other countries, this may be the last nail in the coffin.

It is entirely likely that the only newsagents still standing in five years time will be those who have diversified to the point where their business model is almost unrecognisable by today’s standards.

I have written here many times over many years about this – the need for diversification, the need for new traffic generating products and services as well as the danger in relying on a single product or service like lotteries.

The stronger newsagent retailers are more likely to not have lotteries as they do not have the considerable labour, space and capital demands that come with this.

I know of newsagency businesses today that are growing. Maybe News could publish some reports about these.

I am optimistic, not out of desire but out of what I see some doing. Our channel will continue to shrink but those remaining and those entering will be stronger and more successful.

29 likes

Category: Newsagency challenges · newsagency of the future · Optimism

24 responses so far ↓

  • 1 James // Mar 25, 2014 at 3:31 PM

    The article also says Cabs, Tailors, and mortgage brokers will be gone and is written by someone who believes the internet is the future of all commerce.

    What we know is that the internet exposes businesses to the maximum competition for the lowest return. The shared driver model in the US is already experiencing this after being hailed as the death knell of the taxi industry.

    Whilst the internet has a role to play and no doubt is disruptive to traditional models, I think its bold to call the complete demise of a raft of industries.

    4 likes

  • 2 Carol // Mar 25, 2014 at 3:50 PM

    but does not help those of us wanting to sell our businesses.

    2 likes

  • 3 allan wickham // Mar 25, 2014 at 4:34 PM

    Im not trying to sound like I`m pissing in my own pocket here but since doing our new shop fit last August I am so glad we focused on higher margin lines like gifts and gave them the space they deserve. My gift and Ink sales just continue to climb through the roof every week. Sure, traditional lines like mags are still a very important part of my business but I needed to look ahead. When we opened the new store a lot of comments were along the lines of “Is this still a newsagency”? Something I was very proud to achieve.

    I always wondered in amazement that some Newsagencies could survive in a shopping centre without lotteries but I can see now how that could be achievable.

    I cant solely take benefit for our growth in new categories such as gift, ink and plush and need to give a fair bit of credit to newsXpress for their guidance and supplier deals they have bought to the table. This is not an ad (nor a love in) for newsXpress but I must give credit where its due. It would also be remiss of me not to mention my fellow network of peers in this industry (they know who they are) who have also been a huge part of my growth and hopefully me of theirs. We get together a lot and are always discussing ways to improve our businesses.
    When I first came to this industry I thought it was a lot like the secret service but now after building a great network of people I feel like I am a million miles ahead of my competition and very well placed to face any challenges that our industry may face in the future.
    We can choose to listen to the likes of Michael McQueen and the doomsayers out there or we can grab the game by the short and curlies and build “bulletproof” businesses. It is up to us.

    I for one arent worried about the future of my business, are you?

    20 likes

  • 4 ted // Mar 25, 2014 at 7:54 PM

    Not disagreeing with you Mark but since when did an article by one bloke become deserving of the status of a “report”?

    1 likes

  • 5 Jenny // Mar 25, 2014 at 7:56 PM

    Carol, it’s really frustrating and depressing trying to sell a business, you are in limbo and can’t make plans or move on.

    I think you have two choices when no one wants to buy your business, the first is walk away when your lease is up, this probably is not practical financially but if it is you wear the loss and get your life back.

    The second option is stay and make changes. After 3 years trying to sell we took this option, yes I am working harder than ever, but I am making more money from my shop now, just like the good old days.

    However the most important change for me is that I am in a better head space, I accept that things haven’t gone to plan and I am making the best of the situation.

    It bothers me what these big companies and the internet are doing to retail but apart from the occasional winge, I am focussing on changing my business for the better.

    I believe we are in a far better situation than many other small retailers, we have our home deliveries, we have our lotto and magazines, and on top of that we can sell whatever we want to all those customers who come thru, or past our door.
    Jewellery shops can’t sell slippers, customers only go there to buy jewellery, toy shops can’t sell home wares, customers only go there when they want a toy. No one goes to Strand Bags and comes out with a wallet and a magazine but they come to my shop and leave with a magazine, a wallet and maybe some plush.

    I still want my shop to look like and be known as a newsagency, I love the fact that newsagencies are such an important part of our local communities, but from what I am learning from newsXpress and other newsagents I feel more confident to give anything a go.
    My old attitude of ‘who would buy that’ has certainly changed!

    Who knows, just maybe in five years time, newsagencies will once again be sought after businesses.

    11 likes

  • 6 Mark Fletcher // Mar 25, 2014 at 8:01 PM

    Ted I’m using the term report here maybe incorrectly. It’s an article in a newspaper and sometimes I call reports articles.

    1 likes

  • 7 Dave // Mar 25, 2014 at 9:26 PM

    We’re seeking opinions here. We’re pretty much on the same path as Jenny. We’ve changed our offer considerably and it’s working for us. However to display and stock all the things we’d like to to we need more space, like we need to double it. Our current shop has been in the same place for over 30 years and has a very loyal customer base providing a consistent footfall. We can get a much bigger space on a main road (with much more passing trade) in the same suburb, but we are wondering if our customers will move with us. Access, egress and parking will still be easy and convenient. Has anybody considered the same type of move,

    4 likes

  • 8 Lance // Mar 25, 2014 at 9:30 PM

    Dave, that sounds like a great topic for discussion in it’s own thread.
    Mark ?

    Good luck with your considerations, whichever way you go ;-)

    1 likes

  • 9 Jonathan Wilson // Mar 26, 2014 at 8:20 AM

    I wonder how many newsagents in big shopping centers have had problems with landlords trying to limit what they can and cant sell…

    1 likes

  • 10 allan wickham // Mar 26, 2014 at 8:48 AM

    There is an easy way out of that Jonathon. Complain to your landlord that another shop (make it a major) is selling something you sell. They will more than likely come back at you with “there is no exclusivity on products”. This happened to me a few years ago, it was the best thing the landlord ever said to me in writing….LOL!

    4 likes

  • 11 david // Mar 26, 2014 at 8:50 AM

    In Qld newsagents are selling strong but the price has to be right still the best businesse the old 4 times is gone

    1 likes

  • 12 david // Mar 26, 2014 at 8:52 AM

    He does have a book to sell as for taxi going are you going to get in to some strangers car at night

    1 likes

  • 13 Mark Fletcher // Mar 26, 2014 at 9:45 AM

    Jonathan I’ve been in shopping centres for 18 years. It’s much easier now than years ago. It takes a careful approach.

    0 likes

  • 14 Angelo // Mar 26, 2014 at 10:08 AM

    Jonathon same here. I took over a last century type shop and started diversifying from day one to a lot of complaints from some tennants who wanted us to remain an old sleepy shop.
    I used to get visited by the landlord and asked to cease and desist however after careful explanation of the changing nature of newsagencies, the installation of a huge Woolies and determined resistance from my end they eventually changed their view and now actually support me with it.
    The more we become retailers and stop thinking of the business as the golden handshake if and when we eventually sell it the better as those days are long over. I think the focus needs to be on what I get out the business right now.
    I don’t agree with one persons view that it is a channel that will no longer exist. Rather it will morph by necessity into another type of retail business that doesn’t rely on news and magazines so much as it does on other product and service yet still remains a destination shop.

    3 likes

  • 15 Brendan // Mar 26, 2014 at 2:25 PM

    We had written into our lease that we can stock any products provided by GNS our our marketing group so this has left it wide open. We still show some consideration to other stores but this is based on how viable we feel it is to compete on certain products and if they are a good fit with what we currently sell.

    0 likes

  • 16 Anon // Mar 26, 2014 at 4:05 PM

    So glad we sold out of this industry. Even watching our local agent die a slow death should be a warning to all. The times they r a changin’

    2 likes

  • 17 KMc // Mar 26, 2014 at 4:17 PM

    http://www.theaustralian.com.au/media/news-corp-beefs-up-sales-force-by-tapping-farjami/story-e6frg996-1226864743157?sv=4f2d7b9ee1fdf156729ae1ea667bab78

    In today’s Australian another dimension relevant to the same issue.

    3 likes

  • 18 Mark Fletcher // Mar 26, 2014 at 5:53 PM

    Anyone selling has to run their business efficiently, looking sensational and overall appealing. While the report in the News Corp. press is disappointing, newsagencies that rely on one or two traffic generating streams are challenged.

    0 likes

  • 19 Carol // Mar 26, 2014 at 6:10 PM

    I have changed into gifts and am thinking of going into Officesmart and possibly NewsExpress. We are fairly remote and have the Freehold so we can’t walk away and the bank still owns us. Ian is 69 and has had health issues so I have been trying to get him out of the business but everytime it looks like he can have a few days off a staff member leaves. If I can capture more of the stationary markert I can employ more staff. You all know the storey. it means more work for me whatever.

    3 likes

  • 20 stacey // Mar 26, 2014 at 6:12 PM

    Sometimes I wonder how this isn’t a no brainer for newsagents.
    I am completely fresh and green to the industry in that I’ve only 15 months experience however I run my reports and in the past 6 months I’ve made more GP out of the 10 sq m that I have available for gifts than the 55 sq m that is covered with bulky magazine fixtures. I’ll also note that 15 months ago when I took over the business there was no gift dept. It certainly makes my shop fit planning easy! I have no intentions of looking like a newsagency and intend to rebrand away from this but that is largely due to my demographics. As consumers we are now well accustomed to global brands and their clean cut visual merchandising. I now believe that to remain successful in retail my store needs to be able to hold it’s own next to any commercial brand and for this reason have worked with a visual merchandiser in the shopfit plans. If I wasn’t in this demographic and had no experience in retail I’d probably consider a buying group as it offers the uniformity and clean cut image.
    Mark your blog has probably been what gave me the head start in that I came into the industry questioning the old fashioned mentality of the industry rather than trying to replicate it. As you say, are you a newsagent or a retailer? I know I’ll be thriving in 5 years as I am a retailer ;-)

    9 likes

  • 21 Steve // Mar 26, 2014 at 7:39 PM

    If there are no newsagencies in 5 years it wont because we’ve all given up, it will be because there are no newspapers and who wants their shop named after a defunked industry. I’d note the article was on news.com.au and not in a physical paper. I mightn’t call myself a newsagent in 5 years and hopefully by then my shop doesn’t look so much like one, but I’ll still be here. Well hopefully I’m still here.

    1 likes

  • 22 Mark Fletcher // Mar 26, 2014 at 9:35 PM

    News Corp. hit Twitter with a link to their article earlier this week. I just noticed it tonight. I am shocked that no one responded on behalf of newsagents. I have now responded with links to this post so that the newsagent responses are accessible.

    I am frustrates as the ANF should be on top of this stuff rather than acting as a promoter and a business partner!

    The brand under which many in the channel trade is being trashed by this article and by News promoting as they are.

    6 likes

  • 23 Anon // Mar 27, 2014 at 6:47 PM

    Exactly who at the ANF has ownership of trending situations/articles? Quite often on this blog there is ranting and raving about the ANF but who exactly do u target your frustrations at.

    1 likes

  • 24 Mark Fletcher // Mar 27, 2014 at 7:54 PM

    Anon, the Board and CEO and those who report to them. I wouldn’t call my comments here ranting or raving – that’s not how I feel when writing.

    5 likes

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