More advice for newsagents based on their business data

Here is some feedback and advice I sent to a two new newsagents last week who asked me to look at the data for their business as gathered through the Tower newsagency software.  I have their permission to share my feedback here.

A bit of background first. The current owners purchased this newsagency just on a year ago. It is their first newsagency, indeed, their first retail business. They have spent much of the last year learning to be newsagents – we all know what that’s like. Right?!

Here are my comments after looking at your business data.  I’d love your permission to publish this on the newsagency blog without identifying your newsagency location:

It appears from the Ranked Sales Report that you are not scanning everything you sell. 362 stationery items were sold as MISC STATIONERY. This is a concern. In my own newsagencies we scan everything.

I have looked at your data comparing March 1, 2012 through May 31, 2012 with the same period for 2011.  I can see that you increased the number of sales by 2% across the period. While this is good, sales revenue is down 16%. Lotto revenue was up 41% but other departments are in concerning decline.

I have broken down my comments and advice by key departments. Please don’t be offended by the direct nature of my comments.

1. BALLOONS. Sales are down 67%. Is this by choice or lack of attention. I have found that balloons need constant work and that the rewards are excellent for this work.  Done well, balloons can be an excellent traffic generator – especially when you have a display at the front of the store.

2. BOOKS. With sales down 16%, this is another challenged department. I can see from the data that you have switched suppliers. I suggest you look carefully at your sales. I can see kids books are delivering 37.31% of your sales. This is good. What are your kids card sales like?  The two should go hand in hand.

3. CARDS. While revenue is up 4%, unit sales are down 5%.  You have products from seven suppliers in this department with one of these delivering 95% of your revenue. I suggest a cull of suppliers to make your card message clearer. I could be mistaken but you seem to have discount cards in your mix. Is this the right message for you? I am not a fan of discount cards competing with premium cards – I leave the cheap stuff to cheap looking shops.  Your card department is turning over around $100,000 a year. This should deliver to you a rebate of around 25% – check what your current rebate is.

4. TOBACCO PRODUCTS. Sales are down 66%. You’re doing less than $500 a week.  I suspect that tobacco products are loss making for you once you account for space, labour and inventory holding costs. You can use our software to see what else tobacco shoppers purchase. In other newsagencies I have looked at, tobacco shoppers purchased other products less than 30% of the time.

5. CONFECTIONERY & DRINKS. Sales here seem to be a bit all over the place making me wonder if your message is not clear. How are you merchandising gum, lollies, chocolates and drinks? Are you focused on brands. Are you leading shoppers to purchase from you? Also, you have drinks sales in two departments – get them together to provide clearer reporting.

6. GIFTS AND TOYS. With sales up 294% you’re heading in the right direction. Sales are 20% of cards – I use 33% as the base level so you have room to grow before being above average here. Look at your top selling card categories to see opportunities for growing gift sales. For example, if you sell plenty of new baby and kids cards then grow plush but don’t be cheap about it. People are happy to spend on babies and kids. If card sales are strong for women then look at women’s gifts like frames, glassware and the like.  I can see from the list of suppliers you purchase from that you are mainly sticking with traditional newsagency suppliers – break free from this and deal with real gift suppliers.

7. LOTTO. Sales are up 41%. Whatever you are doing keep doing it. You’ll hit $2M in sales in the year – very nice.

8. MAGAZINES. The 14% decline is considerably worse than the industry average. How engaged are you with magazines?  When did you last do a magazine relay? With magazines accounting for close to half all shopper traffic you need to own the department and present a genuine point of difference in how you display and manage them.  The most concerning decline is with weeklies – sales are down 17% year on year. Something MUST change for you to arrest this. Don’t be like some others and say it is a sign of the rimes. With active engagement you can arrest the decline – relay immediately, create a magazine department which is fresh and reflects the pride you have for your business.

9. STATIONERY. Revenue is down 15%. Given that GNS is your main supplier I suggest you request GNS to work with you on a range review and a relay. make sure that you understand why people purchase stationery from you – range and price your stationery to reflect this.  With stationery accounting for 1.82% of revenue it is close to becoming irrelevant to your business. Is this what you want? If you want to lift it then turn to an expert – this is where GNS can help.

You have a sizeable business but don’t appear to be managing this to its potential. I urge you to not be ‘victim newsagents’ – the type of people who say things are happening because of factors outside your control. There are plenty of opportunities for you to take control and own your situation for your benefit.

Being a newsagent today requires you to be a best practice retailer. It’s hard work. The rewards are money in the bank and a newsagency others will want to buy.

I hope the comments are helpful and provide you with actions which do result in you making more from your newsagency.

The feedback from the newsagents I sent this report to was terrific. I note that they were clear – they are not ‘victim newsagents’. Indeed, they are working proactively on their business and this is why they asked for the assessment of their business as reflected in the data.