Sales were flat in newsagencies in November.
40% of stores reported slight growth, 60% reported a decline in revenue. Magazines continued to be the product category of most concern.
The latest newsagent performance data is from the Tower Systems Sales Benchmark Study. My newsagency software company Tower Systems undertakes these studies on behalf of newsagents. This one month study is based on sales data from 103 newsagencies, trading under four different banners plus independents, businesses in capital city regional and rural situations.
Here are the headline numbers:
- Magazines. 80% of newsagents reported a decline in magazine sales (numbers of magazines sold) with an average decline of 8%. While the decline is reported across the board, the women’s weeklies category has again suffered.
- Greeting cards. 55% of newsagents reported a decline in greeting card revenue with the average decline 4.5% year on year. Of those reporting an increase, the average increase was just under 2%.
- Stationery. 40% of newsagents reported a decline in stationery sales with the average decline 1%. Of the newsagencies reporting an increase in stationery sales, the average increase was 3%.
- Gifts. 75% of the stores in the study have a gift department. 85% of these reported sales increase in gifts.
- Calendars. 70% of stores reported growth in calendar revenue – the average was 2%.
- Newspapers. 80% of participants reported newspaper sales of within .5% of last year’s numbers.
- Overall sales. 60% of newsagencies reported a decline in sales for November 2010 over November 2009. Of those reporting an increase, the average increase was 2%.
- Basket size. 37% of newsagents reported a decline in the number of items in the basket. This suggests that people are seeking out lower priced items.
Newsagents need to consider their space allocation for magazines. Giving the same space today to the department as, say, two years ago would be disadvantaging the business.
Suppliers and industry leaders who care about a healthy newsagency channel will engage on the issues reflected in these benchmark numbers.
The performance of the channel and the tough trading conditions many are experiencing ought to be the top priority topic at any conference, meeting or other newsagent channel gathering. The issues reflected in the numbers I have been looking at for the past week go to the heart of the future of the channel.
As previous studies have shown, newsagencies in rural and regional situations fared better than their city counterparts.
I am concerned by the lack of comment after the release of Mark’s benchmark figures. Each month we see further declines but no apparent dismay. We have today postponed signing a new shopfit contract after many months of planning as we feel we need to take a step backwards and have a good hard think about the ramifications of designing/constructing and paying $$$ for a replica newsagency of the past. We feel our future will be to create more of a Card/Gift shop with gambling papers and mags. we also have reduced our shop down by 85smtrs.
Current rent reviews in most shopping centres give us some frigthening outcomes when you enter into a lease (contract) say for 5/10 years with non negotiable 5% rent increase…has anyone heard of the rule of 72? that is to find out how long someting will take to double so in this case it’s the rent …divide the yearly increase say 5% into 72 =14 years it’s pretty frightening when we have a majority of agents reporting decling sales at the sametime they have operational costs such as rent nearly double the inflation rate??
Michael
Michael this is the perennial problem. As a channel we ignore the obvious. Some of us individually are working this any maybe even a group or two. But not the mass.
On your shopfit, DON’T DO IT! Build a totally flexible store which can be changed without any extra cost.
Mark
Yes great feedback and thankyou for the effort, the Magazine figures amazed me.
Michael – Thought all your post was very good.