Australian Newsagency Blog

As a result of single incident, decades-long newspaper delivery practices in there Sunshine Coast region have been uprooted with delivery drivers being told they cannot enter premises and drop bundles. At a few hours notice newsagents were told to organise locked boxes on the street or to be present for the 2asm (or thereabouts) delivery from tomorrow morning.

Nuts.

While the coronavirus situation in Australia is serious, it is not at a level where the government has issued specific operational advice for businesses such as retail. Click here for their current advice. Fears relating to the virus are being expressed in shops and retailers have wondered how they might respond.

Retailers can take some steps to encourage confidence in those entering the business.

1. Keep the counter clean and tidy.
2. Wipe the counter down with anti-bacterial wipes several times a day.
3. Have pump dispensers of anti-bacterial hand sanitiser easily accessible to customers and to team members.
4. Remind team members to use hand sanitiser regularly.
5. Ensure that any team members with a cold are not at work.
6. Do not make jokes about the virus.
7. Do not comment about customers who are wearing a face mask.
8. If customers do comment about the virus, have a plan for discussion.
9. Play cheerful music in-store.
10. Consider hosting a fun event that plays to your strengths.
11. Keep abreast of news about the virus.
12. If any team members have recently returned from China, be aware of the 14 day incubation period and advice for schools that kids returning from China are advised to stay away.

While this list may seem like an over reaction, it is better to be prepared and proactive than needing to be reactive.

I first shared this idea seven years ago. It is even more relevant today given this bushfire season.

Embrace the love theme of Valentine’s Day but focus on your community. Cut out hundreds of hearts and ask your customers to write what they love about your town / community.

Put the hearts on show – so people can read the messages. Create a display in or on your window or create a tree-shaped frame onto which the hearts can be placed as leaves.

The completed tree or display, hopefully overflowing with heart-shapes with notes of what people love about their community becomes an inspiration for you and everyone who participated and looks at the finished art.

Let your council, chamber of commerce, community groups and schools know. Maybe invite a gold coin donation for each heart for a local charity. Let the local paper know as this is the type of local community story they should love.

There is no commercial goal here. No, this is a marketing idea designed solely to deepen the connection between your business and the local community.

The Australian today has the story from Leo Shanahan about Bauer Media asking the ACCC to approve the PacMags acquisition.

Bauer Media boss urges ACCC to permit merger with Pacific
Bauer Media’s Australian boss has pleaded with the ACCC to allow the takeover of Seven’s ­Pacific Magazines in the interest of the struggling industry, pointing to growing unregulated online competition backed by the findings of the watchdog’s own digital platforms inquiry.

The call by Bauer ANZ chief executive Brendon Hill comes in a week that The Australian revealed the German-based media conglomerate lost a private equity suitor after Mercury Capital pulled out of a reported $150m offer to buy the Australian arm of Bauer Media. The buyout would have proceeded only had the Pacific deal gone ahead, but last year the competition watchdog released a discussionpaper outlining several possible barriers to the $40m merger, voicing concerns over possible price rises and declining quality of the titles.

Although the ACCC statement of issues recognised online competition as an issue, Mr Hill said he was dismayed the watchdog viewed competition between Woman’s Day, New Idea, That’s Life and Take 5 as “the market”, given it recently completed a landmark review into the effect of digital platforms of traditional media.

At an industry function last year, just after the proposed acquisition was announced, the CEO of Bauer announced to those attending that no magazine titles would be closed as a result of the acquisition.

I don’t see any public benefit in the ACCC blocking the proposed transaction.

From a newsagent perspective, magazines are not as critical to our future as they were, say, ten years ago and their relevance is fading. They continue toe as important but are no longer critical to the success of many in the channel. This is why I say, from a newsagent perspective, there is no reason to block the acquisition.

I think changes like single day delivery and greater focus on mass retailers like supermarkets (to the detriment of newsagents) will come regardless of the proposed acquisition. I say this considering that supermarkets pay for magazines they sell and not net sales based one sale or return. Newsagents would benefit from such an arrangement. Instead, we have to live with sale or return and ourselves carry the cost of shrinkage. This advantages supermarkets – hence my concerns about an even stronger relationship with them.

We made the decision to not open today. Historically in many major shopping centres, like where my own shops are located, the Australia Day public holiday is soft, break even at best as people embrace the last holiday before the school year starts.

Since we don’t have the obligation of lotteries we decided to not open. While we have magazines and papers in 2 of my stores, the sales and margin are not sufficient to support the penalty rate cost.

2020 is set to be an exciting year and having a day off like today at the start of the year is beneficial in terms of energy. It is also useful focussing on profitable days as they are far more useful than break even days.

Apropos of nothing, I tried these Lamington chips today. They are disgusting. They are a perfect example of a product the world did not need and would be better off without. However, there must be enough interested for Smith’s to invest in creation and production. FYI I like potato chips. These, however, are truly awful.

Comparing newspapers today. One is a newspaper covering the news of the day and the other is a billboard for another product owned by the newspaper publishing company. People buying The Saturday Paper often comment appreciatively about it.

On Wednesday I shared this video about developments in the Amazon Go counter less, cashless, staffless conveyance retail model. Since sharing, several newsagents have contacted me with questions they did want to put their name to here. I agreed to note them and respond. Scroll down…

What is the estimated cost of the technology per store? My rough guess is around $500K, maybe more but not likely to be less at the moment. The cost will fall.

Do you expect to see this in Australia? Yes. I’d be surprised if operators like Coles and Woolworths are not advanced in planning.

If so, when? This year. If not, 2021.

Is this something an individual retailer could do? It’s not practical on a single store level given the role of data and the benefit of sharing labour cost across multiple close proximity stores.

If not, is there an alternative lower labour cost model we could work on? Yes. This required tighter management of inventory mix. That means less stock. Smaller retail space. A store that is focussed on convenience and not only convenience for part of the shop. It requires configuring the business for speed of shop and speed of transaction – not for part of it but all of it.

Where do newsagents fit in this? In the current c-store space in Australia, not that well because those in the space tend to struggle with letting go of being newsagents at their core.

What is your software company doing in this convenience space? I’ll announce more on that at another time.

In a further challenge to the Papyrus card brand, even though that falls under different ownership, the owner of the Papyrus greeting card shops in the US filed for bankruptcy over night.

Schurman Fine Papers files for protection from creditors, listing assets of as much as $50 million and liabilities of as much as $100 million.

• Company affiliates include Papyruschain of stationary stores

• Also operates or holds rights to the NIQUEA.D, Paper Destiny, Carlton Cards and American Greetings retail brands, per website

  • Schurman has said it will close all of its Papyrus stores, Retail Dive reportedlast week

• The case is Schurman Fine Papers, 20-10135, U.S. Bankruptcy Court District of Delaware

As I mentioned here a week or so ago, it is important we are transparent about funds raised in the name of bushfire relief and recovery. We made our donation a two days ago and shared the receipt on social media and in the shop. We chose the Red Cross because they are non denominational and non political.

The social media post itself is simple and appreciative. We followed the same approach with the Black Saturday fire fundraising. Customers appreciated it.

Footnote: Our only frustration is the news Wednesday afternoon that they will bank some donated funds for future disasters. I expect they will be under pressure to review this decision – I have certainly contacted them about this.

Papyrus announced yesterday that it was closing all of its 260 US stores. Retail Dive has the story.

In a letter to employees, Dominique Schurman, COO of Schurman Retail Group, which owns Papyrus stores, said the company would close its doors. The company has hired liquidation firm Gordon Brothers to assist with the going-out-of-business sales, according to the letter, viewed by Retail Dive.

…

The company acquired the American Greetings and Carlton retail banners from American Greetings Corporation for $6 million plus equity in 2009. As part of the deal, Schurman sold its wholesale business to American Greetings. American Greetings Corporation — which last year was acquired by private equity firm Clayton, Dubilier & Rice — today makes Papyrus and the other brands that fill Schurman’s retail stores.

There is no coverage in press reports so far about what the move may mean, if anything, for the Papyrus card brand. That said, the store closure move will impact the card brand.

Yesterday, The Australian reported that a proposed sale of Bauer Media has fallen through. Before it was put behind a paywall, I accessed the article:

Magazine issues ‘scupper Bauer Media sale’
Private equity firm Mercury Capital is understood to have walked away from its plan to buy Bauer Media.

The decision comes after the competition regulator stymied local magazine consolidation last month.

People familiar situation told The Australian on Wednesday that Mercury is no longer pursuing the deal, although it is unclear what the Australian Competition & Consumer Commission’s part has played in the decision.

Last month, the ACCC raised concerns over Bauer’s proposed $40m acquisition of Seven West Media’s Pacific Magazines business, saying it could expose readers to higher prices or lower quality magazines.

The landmark deal to combine Australia’s largest magazine publishers would see competing titles Woman’s Day and New Idea, as well as Take Five and That’s Life, come under the same roof.

The ACCC’s concerns came on the same day that Seven West’s $64m takeover of Prime Media failed because of resistance from the regional TV broadcasters major shareholders, rival regional media players Antony Catalano and Bruce Gordon.

In a bid to salvage something from the deal, Kerry Stokes-controlled Seven West acquired a 14.9 per cent stake in affiliate partner Prime on the same day, December 19.

This follows a report in the Australian Financial Review from November

Private equity suitor likes the look of Bauer Media’s magazines
The surprise bid comes only three weeks after Bauer signed a $40 million deal to merge its local arm with long-time rival Pacific Magazines, owned by Seven West Media.

Private equity firm Mercury Capital is in advanced talks to buy Bauer Media’s Australian and New Zealand publishing business, which is home to magazines including The Australian Women’s Weekly and was once the backbone of the Packer family’s Australian Consolidated Press.

Street Talk can reveal Mercury Capital is seeking to win Bauer Media’s approval with a $150 million offer, which would end the German media company’s difficult seven-year stint in Australian publishing.

The surprise bid comes only three weeks after Bauer signed a $40 million deal to merge its local arm with long-time rival Pacific Magazines, owned by Seven West Media, in an effort to shore up its future. That deal is scheduled to complete before the end of this year.

Mercury Capital’s offer would value Bauer Media’s publishing business at about six-times annual earnings of $25 million, with the synergies expected to be “material”, lender sources told Street Talk.

Click on the link above for the full story.

A few days ago I got to visit a new Amazon Go outlet on 42nd Street in New York. Here is a 10 minute video I shot yesterday about that experience and what I think it means for convenience retail.

With supermarkets and discount variety stores offering cheap imported products – green and gold flags, stubby holders and similar – we are taking a more cerebral approach of celebrating the day with simple collateral that is not jingoistic.

For years, we copied with green and gold but no more. It’s a mugs game.

We have gone for this simple and celebratory message to counter the challenges of recent weeks.

We’ve all seen the headlines, because news outlets tend to like the drama of retail closures and challenges. Terms like retail apocalypse and retail armageddon have appeared in stories in recent weeks on the back of a series of challenging news about retail.

News outlets are quick to run stories forecasting doom and gloom. Often, the stories skate close to the surface without much analysis as to the reasons for closures. This bothers me as understanding the details can be helpful for context, and for mental health for those in retail.

Here are some of the stories from this year with notes from me offering context:

Harris Scarfe is closing 21 stores. They have been in trouble before. It is a second tier department store with  modest critical mass. It found it hard to be competitive in a marketplace;axe that does not favour depatrment stores. I think their problems are due to department stores overall being in trouble and that they are a small group and therefore less able to weather changing times.

EB Games is closing 19 stores as a first step in an international review of physical store retail. I expect there will be more closures. There has been a fundamental shift in how games are sold. {physical stores are not as important as they used to be.

Bardot is closing 58 stores. This is a fashion brand that has not maintained relevance.

Curious Planet is planning on closing 63 stores. Ever since they list the Australian geographic branding the future has been in doubt.

Jeanswest is in administration and is reportedly likely to close 146 stores. Jeanswest sells discount jeans. The biggest group of jeans consumers are looking for more engaged brands than Jeanswest offers. Their differentiation was minimal. They as a business had not kept with the times.

Bose is closing 119 stores. They have figured out the commercial benefits of direct online engagement. Offering a 30 day no questions asked money back guarantee and costing shipping and other challenges, the company will make more money by closing 199 stores (leases, labour etc) and investing some of that into stronger online marketing.

The Bose move is what we should expect to see more of from international brands consumers trust. They will make more from direct relationships. We have plenty more to discuss in this topic is people are interested.

Rather than being drawn to the doom and gloom, which is a natural human response on reading reports like these, our time and energy is better spent on ensuring our retail businesses are relevant today.

How do we do that?

Yeah, it is the million dollar question … for which there is no one size fits all answer for every situation.

Here are some tips that I do know work:

Be the boss. It’s your business. You choose what you sell, who works there, how the business looks and how the business is marketed. Make those decisions like you are in charge.

Be relevant to today’s shopper. It’s likely the shopper is not like you. Too many stores stock what the owners and staff like. That is not a model for the future.

Be different. The more your shop looks like others the less it will stand out.

Provide solutions. It is much harder to convince someone to buy something they do not need, do not like, do not want or do not understand. It is much easier to get them to buy what they like, want, need or understand.

Embrace change. Know that what works today will be different tomorrow.

Treat data as cash. Small business retailers are notoriously bad at managing data. This leads to poor business decisions, which put businesses at risk. Treat data as a valuable asset and make better decisions as a result.

Sure there is tough news out there about retail. There is plenty of good news too.

Homewares are proving to be a good fit in the transforming newsagency, from small single items to large sets to furniture. Given that we are known for homewares related magazines, taking the extra step with products is a natural move.

The challenge is in sourcing products with K-Mart and others dominating the ‘value’ proposition, differentiation is essential – to make comparison harder.

I know of several newsagencies where more than 50% of their floorspace is now homewares. With GP at 50% and above for most sales, it is a valuable category, one worth investing in.

A Victorian newsagency is preparing to close and have put remaining stock on a deals website, including magazines at 25% off. One person posted some interesting comments:

Dedbny on 12/01/2020 – 09:22
Magazines? I think they are those things at the supermarket checkouts.

BewareOfThe Dog on 12/01/2020 – 09:37
Regrettably, one of the reasons newsagents are closing down.

Dedbny on 12/01/2020 – 09:57
The only time I read magazines is at check out or sneak a look in the magazine section at the supermarket or at the doctors waiting room. I don’t think I have bought a magazine for years. Also as a true OZber we have free library access to them online. Although having said that it’s still not as good a just flicking through the pages in a physical one. Yes I was thinking Newsagents are on the way out. They have to supplement their income – Tatts tickets, dry cleaning, & sell smokes. I don’t even know if its worth them doing the newspaper deliveries, but they still do.

OK, Amazon. We see you pic.twitter.com/8rCGqpRfHs

— Mashable (@mashable) January 10, 2020

Beyond the lives lost and the buildings destroyed, the bushfires of recent weeks will most likely impact the economy and indie retailers for plenty of time ahead. We know from what followed on from the devastating Black Saturday bushfires of 2009 (179 dead and 2,029 homes destroyed) that the impact will be felt way beyond the local communities in which the fires occurred.

There are logistical challenges with several key trucking routes significantly impacted. This is being felt already with deliveries on the east coast impacted as well as between east and west.

There is the mindset impact where people outside of direct personal impact are concerned enough to delay or stall regular spending. I anticipate many retailers will see this. All the bushfire relief appeals will further reinforce this mindset. While the appeals are important and valuable, they play into the narrative of fear, which impacts spending.

There is also the knock-on economic impact. Some economists are talking of a bushfire led recession. The mere mention of that will be enough for some to pause or slow discretionary spending.

How do you cut through this? It is tough. I think the best approach is to be the best you can be at what you do on a regular basis. That is, to not promote a sale in response to the bushfires. Rather, trade as you would normally but with leveraging opportunities for fun and relaxation, where people get a break from tough news. People are in the mood for respite. You can give that to them.

People still have birthdays and anniversaries. Help people celebrate their loved-ones. People are going back to school and back to work. Help them with stationery.

At the core of much consumer behaviour is the desire to buy what you like. The key for us as retailers is to stock what shoppers like. There are many categories in transformed and transforming newsagencies that are working well and that lend themselves to promotion in this new economically challenging time in which we find ourselves in right now.

There will be people who need encouragement. Consider a display of products, cards and gifts, that help express encouragement – without making the display bushfire related.

What has happened and is happing with the bushfires is dreadful. The reach is extraordinary. I would caution you to moderate your engagement with a focus fixed on what works best for your business, because you can’t help anyone if your business is not successful.

ALNA late yesterday announced details of a fund go support bushfire affected newsagents:

As many of our small businesses are feeling the effects of the devastating fires and the flow on impacts of the loss of properties, sales, cashflow, and tourism, and through stock and power interruptions, ALNA has announced today the creation of a News and Lottery Agents Fire Assistance Support Fund and we invite you to participate.

The fund will provide much needed financial assistance to those newsagents, lottery agents and newspaper distribution agents in our industry whose businesses have been directly impacted by the devastating bushfires.

Newsagents are a mainstay of thousands of communities that on an average day are visited frequently by one in three Australians. However, as fires rage and damage buildings, relocate customers, cut spending, interrupt stock, impact tourism, and most tragically bring a loss of life, our sectors small businesses are deeply affected.

Small businesses like our newsagents and lottery agents and their staff are particularly vulnerable to the impacts of this loss. And this comes at the peak trading time for many of our regional businesses, when they traditionally do most of their big trading days in busy tourist and holiday areas.

As a result of this, ALNA has set up this support fund and is receiving donations to help those members of our industry who normally support us through their busy businesses and who are currently in need.”

ALNA Chairman Stuart Kilborn said: “Retail is tough enough and our hearts go out to these business owners and their staff who have been affected. As an industry it’s an opportunity to come together and to support each other through this difficult time.”

ALNA is pleased to have also been offered the assistance of the Victorian Association for Newsagents (VANA) to help promote and support the fund. ALNA and VANA are asking all participants in our industry like yourselves to get behind the initiative and to support it, to help those members of our industry who normally support us through their businesses and who are currently in need.

VANA Chairman Chris Pecora said: “Our industry nationally is united in purpose, in this time of need.”

Details:

ALNA has collaborated with Rural Business Tasmania Inc (ABN 43 790 148 538) to establish the News & Lottery Agents Fire Assistance Support Fund. Rural Business Tasmania is a registered charity and is endorsed as a Deductible Gift Recipient (DGR), so all donations will be covered as a tax-deductible donation to the News & Lottery Agents Fire Assistance Support Fund.

Affected businesses will be able to apply for funds, and a process coordinated by ALNA will determine the distribution of funds to those businesses that have demonstrated impact by fires. The running of the fund and the administration of financial assistance to affected businesses will be coordinated by ALNA, and in addition to a donation by ALNA, suppliers and fellow newsagents and lottery agents are also being asked to support it with donations where you have the capacity.

ALNA has created a charitable GoFundMe payment gateway for online donations to the fund, (to avoid leaving a tip to GoFundMe, please change this to other and enter $0) .

We are developing the application form to be available on our website soon for applications for assistance.

Tax deductible donations can also be made direct to:

News & Lottery Agents Fire Assistance Support Fund.
ANZ Bank
BSB:  017 542
Account No: 474 134 297

For your donation to be tax-deductible, please include your name as reference.

Please email firesupport@alna.net.au to request a tax-deductible receipt for your donation.

Katy Koala is being made by Ty Inc as a fundraising tool in a truly global campaign to raise money for koala rescue and recovery following the devastating bushfires in Australia.

Ty Inc and their their Australian distributor, Big Balloon, are donating 100% of profits. newsXpress corporate is Alsop donating 100% of profits as are the corporate newsXpress stores. I anticipate many locally owned newsXpress stores and other Beanie Boo retailers will do the same to maximise the fundraising.

Here is a more complete release announcing this unique global campaign:

“PLEASE SAVE THE KOALAS,” URGES TY WARNER, RELEASING NEW BEANIE BOO TO AID AUSTRALIA

All profits from Katy Koala donated to organization that saves Australian wildlife

OAK BROOK, Ill. – Ty Warner has created Katy Koala to help the endangered Australian wildlife. 100% of all profits from the original sale will be donated to WIRES.

“Hopefully, this special Beanie Boo will raise awareness around the world about these devastating fires raging through Australia and will provide help to all wildlife affected by the tragedy,” said Ty Warner, CEO and founder of Ty Inc. About Ty Inc. Ty Inc. is the largest manufacturer of plush in the world. Katy Koala will be available worldwide. For more information, visit Ty.com

About WIRES (NSW Wildlife Information, Rescue and Education Service Inc.) WIRES is Australia’s largest wildlife rescue organisation and has been rescuing and caring for native animals since 1985. It officially launched as a not-for-profit organisation in March 1986 with its mission to actively rehabilitate and preserve Australian wildlife and inspire others to do the same. WIRES has 28 branches and over 2500 volunteers who are involved in the rescue and  care of wildlife in NSW and they assist many thousands of sick, orphaned, injured and displaced animals every year. The WIRES Rescue Office operates 365 days a year so the community can report sightings of native animals in distress.

Wires are supporting the relief network Nationally.  While a focus is NSW as that is their home, they have done national work so for some time, and are the largest wildlife relief NGO in Australia.  They have over 2,500 volunteers working around the country.

Below is a link of the statement from their CEO. Wires is supporting wildlife nationally. Below is a link to a statement from their CEO recently: https://www.facebook.com/164290389749/posts/10158332029059750/?substory_index=0

Also, as some background why Big Balloon and Ty chose WIRES, we contacted the Koala Foundation and number of other wildlife non-profit organisations.  They all recommended WIRES purely because they have the greatest national reach and resource, which a lot of the other state bases right now can’t handle due to the enormity of the situation.

Important notes:

1. Ty Inc globally will donate 100% of profits from the original sale of Katy Koala.
2. Big Balloon will donate 100% of its profits from the sale of Katy.
3. newsXpress corporately will donate 100% of its profits.
4. We urge all newsXpress members to do this, thereby enabling a clear statement to consumers.

Katy will be in store in March.

Stories have been doing the rounds in some towns of retailers collecting bushfire relief funds and not being transparent about what they do with the money. My advice is:

1. Be clear about the charity for which you collect.
2. If collections, deposit donations regularly.
3. Get a receipt for each deposit you make and post the receipt in store and on your business social media pages.
4. Choose a charity that is known and understood locally and one that is not engaged with any agenda that may concern some – like any church organisation.

We took this approach following the Black Saturday bushfires in Victoria and found our customers appreciated the transparency.

The other point about this is to maintain a business as usual approach as much and possible. I say this as the everyday needs you serve in a typical newsagency or newsagency like business are still there. Serving these needs and not having your attention diverted (as much as practical and possible based on your location) makes sense.

Hey magazine publishers, watch this new video from me…

Here is the full announcement:

Tabcorp to donate more than $1.5 million to bushfire relief

Monday 13th January: Tabcorp has announced that it will donate more than $1.5 million to bushfire recovery on behalf of its brands TAB, Sky Racing, the Lott, MAX and Keno.

All of Tabcorp’s proceeds from the regular Saturday Lotto draw on 25 January will be donated to the bushfire relief effort, which is expected to be in excess of $1.5 million. The draw will be known as the Bushfire Benefit Draw.

“We offer our deepest sympathies to the many Australians that have lost loved ones, homes or their livelihood during this national crisis,” said Tabcorp CEO David Attenborough.

“The Australian spirit has been truly inspirational throughout this ordeal and the Tabcorp Group is pleased to play its part in supporting the recovery effort.”

Tabcorp has also provided financial relief to hotels and clubs that have been directly impacted by bushfires and relief operations.

This comes in addition to the $100,000 donation made by Tabcorp’s Keno brand to assist Team Rubicon in late 2019 in their efforts to clean and rebuild bushfire affected communities, particularly those who have lost property in Northern New South Wales.

Tabcorp is also dollar matching donations made to bushfire relief charities by its 5,000 employees, as well as amending its existing volunteering policy to provide open-ended paid leave for volunteer firefighters and reservists throughout this time.

“Many of our own people have been deeply impacted by these bushfires. We have partners in pubs, clubs, newsagents and retail outlets across New South Wales, Victoria, Queensland and South Australia that have been devastated and we’re committed to providing as much support as we can during this difficult time,” Mr Attenborough said.

Tickets in the Saturday Lotto Bushfire Benefit Draw, Saturday Lotto draw 4019 on Saturday 25 January 2020, are available at the Lott outlets across Australia (excluding Western Australia), online at thelott.com or via the Lott app.

ENDS

This is terrific news.