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

Basket penetration in Australian newsagencies: traffic rich, efficiency poor

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We have been collating and analysing data from around 8,000,000 shopping baskets collected from newsagencies covering January through May this year and for the same period in 2004. This data is enabling us to get closer to some industry benchmarks.

The table above reflects preliminary analysis of the data in terms of sales where items purchased came from a single category. For example, sales including, say one or two newspapers. Sales where a newspaper and a magazine are purchase would not be counted.

This data suggests a serious imbalance in newsagency basket penetration. To have 75% of a product category, a very high volume product category, sold alone is unhealthy at best and dangerous at worst. This data demands newsagents and their suppliers urgently work together on deepening cross category basket penetration – for the efficiency of the retail channel, to strengthen the viability of the channel and to broaden the appeal of newsagencies.

The categories which need urgent work are newspapers and lotteries. These generate excellent traffic for Australian newsagents yet suppliers rules dictate where their product is located and whether other product can be co-located. Further, they dictate how newsagents can co-promote. These rules stifle retail creativity and restrict greater basket balance.

In the data I see traffic rich businesses. However, the traffic travels on freeways from entrance to product selection point, to the counter and out. No meandering around the store, no exit ramp to other categories for browsing. This has to stop for the future of the channel and therefore for the future benefit even of these high traffic generating categories of products.

We are preparing to present the data to the newsagents who participated and to workshop efficiency growth strategies.

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