When rent is 13% of your turnover, if you own a newsagency, you’re in trouble. Given that newspapers and magazines (60% of what you sell) have a fixed price and GP (between 20% and 25%) the challenge is to sell better margin product and increase sales overall. Consider the 25% for a moment. 13% goes in rent, 11% in wages, between 3% and 5% in theft and 3% to 6% in operational overheads. No one factor creates the challenge but unless you get your rent right your foundation is weak. This has been on my mind as we absorb another 4% rise. This is on top of the 17% last year. Traffic in the centre is flat at best yet we’re being asked to pay more. The price of most of what we sell (newspapers and magazines) has not kept pace with inflation over our ten years owning the business. Wages have risen at a rate well above inflation. So, we’re being hit on several fronts.
This is why newsagents, especially in shopping centres, are challenged. Operating alone, it is difficult to address the rent, range and management issues. At least by getting together through groups like newsXpress we’re able to leverage numbers in our favour in dealing with landlords and suppliers.