Australian Newsagency Blog

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

Newsagency performance analysis highlights the value of pursuing change

Mark Fletcher
May 3rd, 2014 · No Comments

Here’s a report I did for a newsagent recently assessing the performance of their rural business. This is an interesting newsagency business because of the transition path they are walking their business through and the wins they are achieving as a result.  here is what I wrote to them:

Overall, the figures are good despite their being a revenue decline as you are transitioning the business to a higher margin offering as evidenced by your excellent growth in gifts.  It’s important you see these results as the next step with more steps to go.
Your overall traffic is down 7% yet your revenue is down 5%. This reflects an 11% increase in items per sale. The key to growth in profitability for a newsagency today is growth across a range of measurement points: traffic, items in the basket. GP per sale, operating cost per $ earned and labour cost per $ earned.
Based on the data in your reports there are several ideas I’d work on if I were you:
  1. Weekly magazines. These account for 42.55% of all magazines you sell and they are down 9% year on year – not far off your overall traffic decline. I can see you started discount vouchers recently. I expect that this will help lift weekly magazine sales. The program usually takes three months to settle in. That said, you need to look for more that you can do to drive weekly magazine sales: make sure they are located in a couple of locations, engage in a front of store promotion, use your other marketing tools to pitch the category.
  2. Other magazines. Look at what you can do to drive these so that you are not as reliant on weeklies. For example, are your men’s titles well located and well promoted. Do men have their own area? they like that.
  3. Lotto. Your growth is excellent. Are you doing anything to leverage lotto traffic for other product categories to drive efficiency from the lotto shopper? What do they see on the way in and on the way out? What do they see at the counter?
  4. Gifts. You’ve gone from selling 92 last year to 412 this year. Stick to your patch, keep expanding based on what is working. But use small steps to stay within budget.
  5. Ink. Your entry into this category is an excellent start-up success. 106 cartridges in your first three months shows you can expect to have sales of $15,000 a year or more from this category. Take care with buying – to stay within the brands that are working for you.
  6. Drinks and confectionery. Your sales growth is excellent and this makes me wonder about a margin opportunity. Could you increase your prices of selected popular items slightly to make the convenience of your offering more valuable to you?
  7. Stationery. This appears to be a transitioning department for you with a significant sales fall. Or, are your eyes off the ball?  Take a look at the numbers and see what you can do to lift. Location? Range?
  8. Plush. Wow. A new product category and you;re doing over $100 a week. As a ratio of plush to cards – you’re in good shape. I suspect you have plenty more growth ahead.
  9. Cards. Your data suggests more work is needed to settle the recent changes in. Is the range ideal? Do you have good price points? Are your staff well trained in selling cards?  Have you considered promoting cards off-location – i.e. to your excellent lotto and magazines traffic?
You should be proud of how 2014 has started for you. I think you have an excellent rest of the year ahead for you.
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Category: Newsagency benchmark · Newsagency management · newsagency marketing · Newsagency opportunities

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