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RETAIL NEWSAGENCY SALES BENCHMARK JANUARY – MARCH 2015 vs. 2014

The January through March quarter was tough for plenty of newsagents. Key traffic categories magazines and newspapers experienced further declines. To balance this, cards and stationery did okay. New traffic areas such as gifts and plush in engages newsagencies did well.

Here are the headline numbers:

  • Customer traffic. 68% of newsagents report average decline of 1.7%.
  • Overall sales. 63% reported an average revenue decline of 2.9%.
  • Basket depth. 61% report a 2.1% decrease in basket size.
  • Basket dollar value. 21% report an increase in basket value of 2.4%.
  • Discounting. 23% of respondents using a structured loyalty offer.
  • Circulation. Newspaper and magazine sales continue to decline.

It is not possible to declare the performance of the channel as uniform. The gap between those in decline and those growing is greater than ever.

Benchmark results by key departments:

  1. Magazines. 71.4% of newsagents reported an average decline (in units) of magazine sales of 6.15%. Weeklies, food and fashion lead decline.
  2. Newspapers. 87.3% reported average decline of 4.6% in unit sales. A state by state analysis reveals a worse situation in NSW and VIC, especially for Fairfax titles.
  3. Greeting cards. 61.3% of newsagents reported average growth of 2.9%.
  4. Stationery. 57.3% of newsagents reported an average increase of 2.3%.
  5. Ink. 38% of stores report ink separately. 54% reported growth of 3%.
  6. Gifts. Of the 80% offering gifts, 83.3% reported average growth of 7.6%.
  7. Tobacco. Of the 58% with tobacco, 62% reported a decline of 4.6%.
  8. Confectionery. 66% of stores reported an average decline of 5.7%
  9. Toys. Of the 27% with toys sales, 78% reported growth of 5.2%.

The strong are getting stronger and the weak are getting weaker. There is no geographic or demographic trend to this.

Product mix shift. The shift in product mix I have seen over the last three quarters is continuing. Ranges are expanding as is the average price point. Suppliers ought to take note of this.

I have not included my newsagency in this study as my numbers are outside the average and I did not want them to skew the results. I don’t mean this to sound arrogant.

My numbers all off a good base, are: Cards up 23% with Everyday Counter up 21% and it accounting for 56.09% of all sales, Gifts up 126%, Magazines up 1.8%, Women’s Weeklies magazines (New Idea, Who, Woman’s Day, Famous etc) up 3%, Stationery up 11%, Plush up 4% and accounting for 12.48% of overall sales and Toys up 95%. This business does not have lotteries and does not sell tobacco products.

Traffic is down 2%. Average sale value – up 17%. Average items per sale – up 2%. Overall average GP – up 14%. Each of these measurement points compounds on the other, delivering a very strong result for the business.

This growth is as a result of pursuing what we stand for. This newsagency is in an outer suburban Westfield centre in Melbourne with around 300 stores including majors, a nextra newsagency, two Coles supermarkets, Wild, Typo, several large card shops and twelve gifts shops. Competition is strong.

I include my data for comparison and to show that I walk the walk with newsagents.  I put my money where my mouth is.

What we do in this business any newsagent can do. Growth is achievable.

Newsagencies are good businesses to own. It would be wrong to say that the declines reported in this study reflect badly on the future of the channel. I think the results reflect badly on some operators, newsagents not chasing change.

The best type of newsagency to own is 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.

The most important advice I have for newsagents has not changed: Run your business today as if today is your pay day. Too many newsagents continue to run their businesses as if their pay day is when they sell. This will not happen.

This year on year same-store newsagency sales benchmark study is an analysis of basket data from 151 newsagencies: city and country, shopping centre and high street, banner groups (Newspower, Nextra, newsXpress) and independent. To be included, a newsagency must have been using the industry standard Tower Systems newsagency software for both analysis periods and be compliant with industry data standards.

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Newsagency benchmark

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  1. Bruce G

    So Mark if 3% of newsagents in the survey reported a rise of 2.9% for GREETING CARDS does that mean that 97% reported a decline. A small decline was it? We struggled with cards in that quarter but M Day was good

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  2. Mark Fletcher

    Bruce 61.3% reported an increase in card sales. The number first published was a typo. The written report sent to all participants yesterday had the correct number (61.3%) in it. Sorry about the error.

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