There is plenty of gloomy news out of the US overnight which relates to categories important to Australian newsagencies.
US stationery retailer Office Depot reported a sales drop of 18% last quarter. The Wall Street Journal says this is due, in part, to newcomers in the stationery field. Most newsagents reported a drop in stationery sales in the last quarter based on my sales benchmark study. Those achieving growth produced excellent numbers. Newsagents ought to be growing in stationery in the marketplace as consumers pull back on their visits to the bigger outlets where they know they will buy more. The WSJ article is interesting in this regard.
American Greetings (owner of John Sands) reported a 14% fall in sales for the quarter. The tough US conditions are making people think twice about card purchases according to a Forbes. Cards are another tough category. Some newsagents do very well with cards while others are experiencing poor results. The key appears to be direct engagement. Newsagent who ‘own’ their card department are more likely to produce better results based on the data I am seeing. Our small businesses are more able to respond to conditions than the nationals.
Time Warner has reported a sharper decline in magazine advertising revenue than forecast. We are seeing this here. There was mention in the Australian Financial Review yesterday of this impacting PMP results. If advertising revenue continues to fall through the year we will feel an impact in newsagencies on several fronts.
While these reports read like bad news. They ought to encourage us to exert more control over our businesses, to be more versatile and be on the move. I am meeting more newsagents bucking the trend and producing good results be refusing to let stuff happen around them. They are cutting their own path, taking risks and, often, enjoying good success. For example, one newsagent cut 30% of magazine space and increased overall magazine sales. Another went from three card companies to one and increased sales. Another got on his bike and chased stationery business outside his four walls and trebled stationery sales in six months.