Earlier this week I published the latest newsagency sales benchmark report.
The first quarter of the financial year lived up to expectations, delivering challenging sales results for newsagents with key categories reporting sales declines.
There was a considerable difference in results for city versus country newsagents with the latter overall delivering steadier results.
A key take-away from analyzing the data from 143 newsagency businesses is that newsagents who work on their businesses reap rewards. This is reflected in department and category sales data as well as sales efficiency: basket size and sales value. The results speak to the importance of focusing on the three critical aspects of retail: customer traffic, average basket size and, margin.
In the all-important magazine department, there appears to be a greater volatility in sales between categories. This volatility is reflected in two ways:
- Weekly titles. While most newsagents reported declining sales, some locations reported growth – as much as 7% in unit sales. The growth was achieved by these businesses acting in a usual way, in other words – there had not been a store closure or some other unusual event to explain the growth. Eleven percent of the newsagencies in the sales benchmark dataset achieved growth in the Women’s Weeklies category. Their success is something other newsagents need to reflect upon as it shows that growth can be achieved in magazine sales by delivering a sales-focus retail experience.
- Category. The data in this sales benchmark study reflects a shift in shopper interest. Newsagency shoppers deserted Food titles with sales down, on average, 11%. Women’s Interest titles also delivered a sales decline heading toward double digit. Crossword, Home & Living, Men’s Lifestyle and Special Interest all delivered growth in most locations. You can see in the data for some stores the results of categories they like and or focus on. This suggests ready rewards for newsagents who manage magazines for profit rather than as a mandatory product category.
The overall result for magazines in the benchmark study pool is better than I’d expect to see for the channel as a whole because the data is provided by newsagents who care about and understand data. Newsagents who would not even know how to access their own trading period sales comparison data would, in my view, be less likely to care and therefore manage their businesses for sales success.
The group of newsagents delivering the most challenged results, across the whole business, continues to be those in capital city shopping centres. Based on recent closures, it is fair to say that the lure of shopping malls for newsagency businesses is fading. The benchmark sales data shows that achieving the sales growth necessary to stay ahead of the annual 5% (and more) rent increase is challenging. This is made even more difficult by the fixed margin nature of much of what newsagents sell.
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Thanks Mark for the effort in giving everyone a snap shot of what is happenning in the Newsagency Industry.
Glad you were able to distinguish between Rural & Regonal. Interesting regarding Malls & shopping centres also, how hard it is.
I believe you are right, untapped growth in stores by being on top of things can increase or even stablise Print.
The greeting card data was an excellent example of how different Rural & Regional can be. Any idea why this would be?
I was also suprised that Newspapers although showing a decline over a 1 year period appeared in better shape than I thought considering the increased competion they are experienced.
i never seen shops closing more in my life time
To true eric, we are also seeing that when shops close the building is remaining empty for extended periods ( up to a few yrs ) before another business opens. Landlords especially should take note that no business no rent.
With all the doom and gloom around we need to stay positive and constantly look for new income streams to replace the old streams that are beginning to dry up ie mags, cigs, papers and even lotto to a lesser extent.
Luke, its the same here. Buildings empty and stay that way. Our hardware store closed a month ago. It had been there for 40 years or more. The owner had been trying to sell, but ended up just walking out.
On a more positive note, three weeks ago I convinced the other half to get rid of our cigarette counter. It was a unit on the wall behind the middle of the counter. Prime retail space. And we sell less than $5000 of cigarettes per year.
I’ve put up some shelves on slat wall, and now I use it for new stock (gifts mostly) and promotions. I change it weekly. The stuff we have there just about walks out the shop. I put up six Hallmark recordable books and some of their Jingle packs on Tuesday arvo. So far I’ve sold three recordable books. This is great for us. I reckon in the last three weeks I’ve sold in excess of $300 of stock just from those two shelves. And it looks so much better!!
What you have done is spot on Vicky, no point in flogging a dead horse (cigs). We still sell them but have used the space behind the counter to promote new lines and keep the cigs under the counter. while our traditional departments are flat at best or on the drop our new areas are developing nicely to a point that I sell more card/gift lines then mags now, and more DVD’s then stationery.