Newsagents are more likely than other businesses to review employee hours to keep wages within budget in response to the wage rise announced by Fair Work Australia yesterday..
The Fair Work Australia decision assumes that businesses have the levers with which to respond to increased costs.
Newsagents do not.
Think about it:
- Much of what a traditional newsagency sells is at a fixed price, with a fixed margin. Newspapers, magazines, lottery tickets, bus tickets, phone cards, phone recharge, greeting cards.
- Some key products have experienced a cut in margin – phone recharge for example.
- The price of some key products have not kept pace with inflation. Newspapers,some magazines, some lottery products.
- With close to half of the products in a typical newsagency newsagents have little genuine control over costs they incur related to those products. Magazines, newspapers, greeting cards.
- Rent and other business expenses are rising faster than CPI.
I do not begrudge employees fair pay for their labour. However, such increases must come within a framework which enables the employer to respond in a proactive way.
Yesterday’s decision reinforces the need for newsagents to evolve their businesses so that they have more control over their businesses. This means more products selected by newsagents, products for which they can set their own sale price.
I do think that some newsagents will respond to the wage decision by cutting hours from the roster. No one wins from that but I can understand the necessity of it.
Since the intro of the minimum shift hours we have had to let go 3 after school kids because we did not have the shifts available and now with the increase in wages we will look at reducing our weekend staff first and then weekdays, it is bulls$#t that the govt raves about the low unemployement rate but if they added the disability and parental pensions ( a lot of these that could work but choose not to) into the figures it jumps to well over 10%, which means every worker has to pay more to support the country. But still they say we are all better off, try telling that to the kids that no longer have a job here Julia. But maybe because they are at school they will not count in the figures.
MMM 40 cents an hour wow this really proves how sad this industry is.If you can’t pay it then should you really be in business??
Newsagents have long had a reputation for being grumpy old men and this sort of post just proves the sterotype is true.
Cut the hours to save you that 40cents and work longer yourself.Great Idea.
Mary you’re as entitled to your view as anyone. I’d urge you to look at the broader view of the post and it is not about 40 cents an hour. Read what I have put in bold.
Mark well said. We do need to evolve but at the same time we need more consideration from all parties who freely attack our cost base while leaving us restrained in other parts of our business.
pay rises are not the problem , workers are faced daily increases just like everyone else rent goes up food goes up petrol goes up so why shouldn’t wages . The PROBLEM is our suppliers be it papers magaznes or lotto etc this is the problem to be fixed not under pay wages . by underpay i mean why should someone be penalised just because they work for a newsagent
Your right Shaun, people who work in a newsagency should not be penalised but it is ok for the owners to be penalised?
Our costs are going through the roof but our profits are staying level so something has to give, if staff want extra shifts then they need to justify it by bringing in extra sales, gone are the days when workers simply clocked on and clocked off without having to justify their employment. I pay my staff above award wages but with that I work them hard, I am not a not for profit organisation so will make money by cutting costs as I cannot increase the price of a mag, paper or card. That may make me a grumpy old newsagent Mary but at the end of the day my family is feed by this grumpy old newsagent.
Mary
you are so unrealistic. A couple of facts about our business.
We have 23 employees. Do the maths on 23 x $19.60. Our average margin is 22%. This means we need to generate additional sales of $2250 to recover the cost of the increase. Should we wave a magic wand ?
It is a known fact in our local community how friendly and welcoming my wife and myself are. We are here from 530 am until 6pm every day with huge smilkes on our faces.
We have some full time shop staff (our Marys ?) who refuse to start before 8am, refuse to work Saturdays and they also want a PDO every week. They start every day in the surliest possible mood and it takes either a litre of Red Bull or a rocket from the boss before you see even the slightest spark of a smile.
Do we think they deserve a pay rise?
kmc if they are not doing the job why are you paying them , replace them
Mary, my wife and I work combined hours of 10-120 hours a week. Things are so tough at the moment that we frequently take home $500 between us for a week. Do the maths and it is not hard to understand that something must give and unfortunately it has to be staff hours. I do not expect this to last forever but as a small business I could easily go under if action is not taken promptly to suit business conditions. My staff understand this and are very supportive. I am not a penny pinching, grumpy old man, just a business person ensuring that I have a business in the future so that I can survive myself and give some employment to locals into the future. You need to be in our position before you comment on issues such as this.
KMc, Brendan
Hear bloody hear!
Either Mary is on wages or her long suit isn’t maths.
its easy to criticize when you have a set amount to take home every week isn’t it whether the business makes money or not…..
walk a mile in our shoes…..
i’d rather be a grumpy old fart than a misguided critic.
I made the choice to buy or open each newsagency I own and therefore own the situation. That said, I blogged about this to open discussion for others and to make the case that 1. we need to diversify (duh!) and 2. those making decisions on our costs need to take on board the situation of businesses with fewer business levers than others.
The newspapers reporting the wage rise are part of the problem since they block newsagents charging a fair price for good service.
I don’t mean to sound as negative as I did in my previous post. We are doing plenty to change the face of our business and it is working. What we really need is this retail slump to end then I expect the changes we have made to prove worth the effort. New departments and less reliance pon low margin products is the way to go.
By the way, did anyone else note the ill informed article in the Herald Sun critising retail mark ups. Beside some figures being incorrect, they showed a total lack of understanding of the cost of running a retail business.
KMc,
Surely you are not leaving your own business in the hands of permanent staff who
” refuse to start before 8am, refuse to work Saturdays and they also want a PDO every week. They start every day in the surliest possible mood and it takes either a litre of Red Bull or a rocket from the boss before you see even the slightest spark of a smile”.
Do not let this continue !!!!
( ps what is a PDO ?)
i would like to hear from Mary about her situation. does she own a newsagency, does she work in one, if not what industry are you in.
i would like to hear how she is informed, and how she came to her views
H & Shaun S
Thats good advice ! Of course the process (eg 3 warnings etc) to do this is underway. But thats not the point. I am more interested in showing that as newsagents we are committed business people who have to pay unredeemable increases to people whose attitude is more motivated by a misguided sense of entitlement than anything else.
Actually Mary’s comment has been an unfortunate distraction to what Mark’s post is really about. Events such as this payrise should focus us on the need to push our principals and suppliers to enable us as the retail operators to have more control over our revenues and margins. And to find new products that we can sell profitably. For example our goal is to add one new line every month for the next 12 months. Not all will turn out to be feasible but those that are will add value to our business.
Peter read post 9 ,
Although Mary comes across uniquely at times, she shows business owners the other side of the coin.
Employees are also stuck in the cost of living spiral.
When Brendan indicated that at times his wife & him struggle to take home $500 a week it did upset me and things do have to change.
If we are to survive small or big we must diversify away from Print where 25% does not pay the bills.
We must look closely and its not the Mary’s that we should be irritated at, it could be the overheads we are carrying, Legalised crime such as outragous Rent & Utilities are waying heavily on small business ability to achieve a reasonable return, you add these against the deal we have with print and you should see why we have a big problem.
Staff can be an assett, if they are not working under your own KPI’s most will not put in and add to the business daily. Maybe Mary could enlighten us on what business owners should expect from their staff and how to achieve this and what should business owners do if staff are helping the business achieve.