High occupancy costs for magazines

With recent discussion on magazines, newsagents may like to calculate back their occupancy cost of magazine retail space.

Determine the cost of the space magazines occupy in your store for a month or a year and divide this by your total magazine sales for a month or a year.  The percentage returned from the calculation is your occupancy cost.

In one store I did this for yesterday the occupancy cost for magazines was 20%. leaving 5% for wages, shrinkage, operating costs and newsagent margin.

The space allocated to magazines in the store is a function of history both of this store and the channel more widely. The solutions are to reduce the space and magazine range without killing sales an to try and address thecost of space.

The challenge is the processes in place (or not) with magazine distributors relating to achieving this and the difficulties in negotiating better rent deals.

Given the margin and operating costs of a newsagency, an occupancy cost goal ought to be 11% in a shopping centre situation.