I feel for a newsagent who supplies newspapers to a local supermarket as a sub agent only to have them give them away to shoppers who spend $5.00 or more in what is not a long-term marketing campaign.
The campaign has reduced the number of shoppers visiting the newsagency for their morning newspaper. There is a knock-on effect on sales in other categories.
The newsagent is powerless to refuse to supply to their sub agent, competition laws being what they are.
It is hard to see a cost-effective campaign the newsagent could offer to compete given the limited range of day to day basic needs a typical newsagency sells.
… and we live in a country where this is legal, thereby giving the impression that it is also ethical. Vale Australia
Mark,
I have a Coffee Club right next door that is doing that exact same promotion with the Courier Mail. As i am a sub agent for newspapers myself i dont even get to deliver them…….although the 1st day of the promotion the main agent delivered The Coffee Clubs papers to me expecting i would take them next door for him…….he didnt get much joy in that outcome !!!!
While the newsagent cannot legally refuse supply (as it would both be in breach of their contract and competition law in relation to setting a minimum retail price), the publisher may be able to (if they could prove damage to their brand).
We are in a small country town and a few months ago we had a situation where Woolworths Supermarket and Woolies Petrol were both giving away free tele’s for a week for any purchase over $5. Both are within 50 metres of our store. Foot traffic was considerably down during that time.
I had the same situation in my Town. I also had the delightful job of delivering them. I then watched my sales and subagents plumet for the days involved. What exactly is news saying to me and my subagents, I know 2 of my Sub agents were most pissed off. News seems to think country towns are a bottomless pit when it comes to extra papers. My experience is there is only so much the Town will purchase. Doing this teaches customers to look out for the freebies and that is a sale then lost. Woolies petrol also tried to get me to top the papers they had not given away. Needless to say they topped them before I accepted any returns.
We had the situation where in one week one our papers dumped 7000 newspapers into 2 Supermarkets. They paid us sub agent equivalent margin for delivering and returning, but it cost us over 2000 of our own sales (with full margin) The impact on floor traffic led to our worst trading week in the history of the business.
If it happens again we will certainly be escalating, via legal means, our efforts to block it.
Mark,
I really think this should be a ‘password’ protected blog. Talking about these issues and how to solve them gives Nationwide prior warning…
Kevin,
My understanding of the situation is that there is no legal recourse and that the actions of the publishers is in no way illegal. I may be wrong, but im confident that while newsagent may not like or agree with the direction that publishers are taking there is neither a breach of contract or trade practices legislation.
This is actually a supermarket promotion … not involving the publisher.
mark, in our case the supermarkets were not initially enthusiastic parties. There were sold into it by the publisher who made them an offer they couldn’t refuse.
Jarryd, we may not have direct legal recourse, but I can hink of quite a few legal “spoiling” activities that we can run – if we’re brave enough.
the bell is strarting to ring
Kevin, yeah I understand that is how is has been for some. In this case it is about the supermarket taking the initiative in making the newspaper a loss leader.
As if a bloody newspaper isn’t already a loss leader!
Y&G,
Especially when you get less than half the commission hey?
The Publishers have their priorities all wrong. For example, a certain fitness chain in Sydney that is giving away papers at the moment has the publisher eating out of its hand. If papers are not delivered by 5am, they leave them in the dock. So if the morning print run is late, the fitness chain deliveries get priority over delivery Newsagents waiting for their delivery papers. In other words, the paying subscriber is not as important as the morning gym junkie requiring a freebie paper!!!
allan, that is true, however full commission wouldn’t come close to any kind of satisfactory situation, either. Not for newsagents, anyway.
Bruce, the publishers’ priorities are clear. They have been since 1999, unfortunately.