Month: April 2013

The announcement yesterday by General Motors Holden that they will cut around 500 jobs is another reason for us to question the value of the massive handouts from successive governments to auto companies. Holden has apparently receives two billion dollars over the last ten years.

As I tweeted yesterday…

What’s the ratio of small business redundnancies to govt support VS auto mfr redundancies to govt supt? #holden #auspol Journalists pls ask.

Seriously, small businesses, like newsagencies, receive little in government subsidies. I suspect that redundancies across our channel are lower than for the auto industry this year. So, the amount of government support ‘spent’ per redundancy in our channel is far lower than in the auto industry.

We small business newsagents have to stand on our own in the face of extraordinary change in our channel and in an economy brimming with complex challenges. These much bigger businesses with many more shareholders continually put their hands out for cash.  It has to stop.

Politicians of all sides agree to subsidies and other financial support out of fear. I think it’s a massive con with the Australian taxpayer the victim.

Yes these big business employee people on which we rely in our businesses. But small businesses employ people too. We tend to hang onto people longer.

Politicians need to take a more whole of the economy view of their engagement with and support of small businesses. Not just newsagents but all small businesses. More support for us could drive much needed economic growth.

While there is no doubt that big manufacturing is important to the economy, the Holden announcement is a reminder that investing too much in one sector or one business can be risky. A similar investment across many businesses could be more economically beneficial. Unfortunately, Australia has not had politicians with the leadership nor vision to pursue this for decades.

The Holden announcement sucks. It ought to be a wake up call to all politicians. Stop giving away money to big businesses, especially foreign owned big businesses. Focus on small business and get smarter at leveraging the efficiency, entrepreneurship and community value of small business.

I am concerned about the move by some suppliers to support the convenience channel over the newsagency channel.  In Victoria, for example, Myki (transport tickets) were available in 7-Eleven ahead of newsagents and now Myki tickets feature in 7-Eleven ads.  Tatts completed a direct to point of sale integration with 7-Eleven when they told me that they could not do any such integration because the government agreement precluded it.

It is concerning to see 7-Eleven get such arrangements in place ahead of newsagents. We were the natural home of each of these products.  Now, 7-Eleven has a better and more relevant offer for convenience shoppers. This, coupled with their significant expansion in fuel, makes them our strongest competitor in this convenience space.

In the magazine space 7-Eleven is ahead of us too. They have control over their product mix and quantity.  I suspect they are paid a promotion fee for counter offers.

In the telco recharge space I suspect they are treated differently too but I con’t be sure.  Better margin maybe?  Rebates?  I am confident they are on a deal with Apple on their vouchers.

Does any of this matter? That depends on whether you see your newsagency as a convenience business or a destination store.  I’ll be covering this fundamental question in the Newsagency of the Future series.