In a move with far-reaching ramifications for the entire newsagency channel, several Coles petrol outlets in Victoria are about to commence a trial selling Tatts lottery products.
It’s expected that the product mix will be similar to the Tatts products currently sold at 7-Eleven. When 7-Eleven got Tatts products newsagents were told it was about incremental business – business not won through the then current network. That has not been the case. 7-Eleven has marketed the products well, especially at jackpot time. I have no doubt that their consistent offer and marketing have seen some traffic diverted from newsagencies to their network.
I’m told the trial will be in seven Coles petrol locations. I expect it will expand beyond this in Victoria once the trial is completed and into other states as local hurdles are overcome. I’d expect Woolworths to follow in the Caltex outlets they acquired some time back. I can’t see Woolworths letting Coles get Tatts products and them not.
An additional 2,000 lottery outlets could open around Australia over the next two or three years. If this happens it will negatively impact on lottery driven traffic and sales in newsagencies with lottery products.
Newsagents facing Tatts mandated shop-fitting need to take this increased competition into account when planning for the capital investment. The capital investment must be responsible. Tatts cannot make you invest uneconomically. Indeed, I would have expected Tatts to disclose their longer-term intentions so that newsagents can make fully informed decisions.
Expansion of Tatts products into supermarket controlled petrol outlets would add strength to the perfect storm we are experiencing – migration from print to digital, migration of product sales to other channels, shoppers buying online products we’d usually sell, a soft economy, growing diversity around the newsagency shingle and its value and more retailers chasing the traditional newsagency shopper.
While Coles and Tatts can do what they like, newsagents could consider complaining to the ACCC. Rod Sims, ACCC Chairman, has the supermarket duopoly in his sights as he has noted several times since taking on the role. This move by Coles ought to interest him as it is a grab for greater market share by one of the two major supermarkets.
The geographic spread of newsagencies and other lottery outlets indicates, to me at least, that consumers are well served. More outlets does not necessarily mean more competition or better customer service. No, more outlets in petrol locations controlled by one or both of the supermarket duopoly businesses will, ultimately, lead to less competition.
So, I’d hope that newsagents and those who represent them take this issue up with the ACCC. I’d also like to see it taken up with politicians in the lead up to the election – calling for a halt to the growth of Coles and Woolworths. We need legislation to do this and this lottery move by Coles is a good reason to prosecute that case.
Now is not the time to worry about the reaction from Tatts if unified action against the Coles move is taken. Put your interests ahead of fear of reprisals.
Newsagents cannot afford for Tatts products to get into the petrol outlets controlled by the supermarkets. Newsagency businesses would suffer and the communities in which they serve would suffer.
Before anyone goes off about the ANF on this issue I’d note that it came to their attention a few days ago and that they are working on it.
Footnote: over the last six weeks, at the Newsagency of the Future workshops I talked about Coles and Woolworths, observing that they must want lottery products in their petrol outlets because of what 7-Eleven has achieved. I predicted that the supermarkets would pursue Tatts.
I made this observation without any inside information. Indeed, the dots have been there for several years for all of us to connect.
I connected the dots for hundreds of newsagents to underscore the importance for newsagents to assess whether their future is as agents or as retailers.
This has been on the cards for years, I’m surprised it didn’t happen earlier. Mark, shouldn’t you rename your Newsagency of the Future workshops, plush stores, gift stores or coffee shops of the future?
Peter is has been on the cards for years but many have considered there were barriers – such as the moratorium in NSW following the purchase of NSW Lotteries. What’s happening in Victoria is real. Newsagents need a plan.
This is a worry, hopefully the ANF will fight this strongly on behalf of newsagents.
Bit by bit we lose the very things that we paid so much goodwill for years ago. I don’t believe we have much goodwill in our businesses but this will certainly kill what little we do have left.
There are 4 Coles petrol in our 3 towns each employing only 1 counter staff at a time, how long will people now have to queue to pay for petrol if they also have lotteries?
In one of these towns Coles is the only petrol station and they took gas out because it creates queues, so no gas for country drivers.
This duopoly has been allowed to kill small business and it will be too late if and when any government ever takes notice.
If the ANF knew about this a few days ago why has it been left up to Mark Fletcher to break the news ? Good work Mark.
From a position of strength we are committed to:
•protecting members interests
•a communications philosophy that deals with fact not rumour
•strategy to improve the industry profile at corporate and public level
This is the ANF Mission Statement, maybe a rethink is required on the points.
Cause i am rethinking our membership.
To be fair to the ANF, they are bound by process and governed by a board. I have no such restrictions on what I publish here. This means I can move faster on issues. That said, I think associations should go to market sooner on issues. I am a member of an association for another channel where they do with and earn kudos from members for it.
SA Lotteries have had Lotto outlets in “selected on the run outlets” which are
the BP outlets for a year now.
So far I haven’t noticed any impact on our
lottery sales.
Having said that I still don’t agree with it but it is a locomotive charging through us
at present. Every segment of our industry is under attack and we are simply powerless to stop it.
Diversification is one important ingredient but my optimistic approach is that all retailing goes through these cyclical changes and that “our day will come again”.
I think there will be lots of issues with fraud online (heard a long segment this morning on radio about it) and the customers will return to where they are
known and respected – to us.
My husband thinks I am an idealogue but
I prefer to think positively about the future rather than negatively.
Adding to my previous post – SA Lotteries has now been sold to Tattersalls
so they are probably getting feedback from them about their progress into the SS sector.
I am upset about this. I’ve been a Tattersalls outlet since the terminals were first introduced. I’ve supported the brand and done everything to grow their business. Now they do a deal with one of my biggest competitors. What about loyalty? What about the money I’ve just spent on the fit?
Mark I don’t always agree with you but this time you’re right on the money. To use your words – what are we going to do about it?
This decision like our other major supplier (Magazine) shows us how we are thought of not at all. We are told to invest in both spaces for little return. Yet both are still not happy with what we give to there brands and greed drives them.
If nothing is done by Newsagents against this supermarket duopoly and it is allowed to roll on regardless of the carnage it will be a sad day for all.
David
What are we going to do about it?
What we always done!
NOTHING
If the ANF had any intestinal fortitude, they might consider posting a comment on this blog. I won’t hold my breath. Their lack of perceived action is the exact reason I forfeited my membership. C’mon ANF give me a reason to re-join.
I can say 100% if the ANF don’t comment I will drop my membership forever.
In Newcastle NSW we have seen in the past 3-5 years NSW Lotteries products introduced into 7eleven, but also into independantly owned service stations under the banner of BP and Liberty.
I recently quizzed the regional rep about this, as in NSW there is supposed to be a moratorium stopping such instances.
Those service stations purchased (at a fire sale price) fixturing and “territory” from Newsagents who had gone broke. To get around the moratorium, the service stations were advised to sub-lease a part of their store and create “a newsagency” with a new opening. The two businesses could not be joined or linked by an opening door.
Where there are rules, there will always be loopholes.
I think the best course of action is to complain to the ACCC about market share of the supermarket duopoly.
Everyone needs to stop expecting someone else to ‘fix’ these problems and do something yourself to get your business into a position where as little impact as possible is felt. Change and adapt with the market, don’t just whinge about it! Yes I beleive what is happening is unfair, unjust, anti-competitive etc, but its happening, so do what YOU can, to protect your business.
Well said Nerissa. yes complain to the ACCC but invest the majority of your energy in managing your business.
From what I gather QLD is safe untill 2025 from this happening .
Mark – I fully understand your comment about taking this problem to the ACCC, but do you really think they care about the lowly newsagent who singularly voices his thoughts about this particular decision. To be honest the ACCC cannot (or chooses not to) control the duopoly relative to fuel prices, liquor outlets and other pricing situations. They have said plenty in the past and very little action has been taken. I truly believe this is a situation where any move should be made by a body representative of all newsagents. It is blatantly obvious that even the Government does not intend to interfere. Although I must admit, Xenophon, Katter and Wilkie held a press conference yesterday relative to the duopoly’s ability to control and manipulate pricing.
As you are aware I made a complaint to the Office of Small Business Commissioner relative to the oversupply of magazines by one of the distributors and where I am sure the Commissioner saw my problem, apart from a tele-conference with the magazine company hierarchy (where I was told they would make some adjustments to my supply), I did see some reduction for a couple of months, but am back again to receiving more than is required.
I must admit I am cynical when it comes to a ‘small fish’ fighting a ‘shark’. Perhaps a class action by Slater & Gordon or the like on behalf of newsagents would have a better result.
I actually had a very interesting brief discussion with the Shadow Minister for small business about this when he came into my shop on a walkaround with the local LNP candidate a couple of weeks ago. He actually seemed to unerstand the issue we have with cash flow and the issues around the big two affecting our businesses negatively. Funnily enough he said he had actually worked in a Newsagency back room when he was younger looking after the magazine returns. There may be some hope here as he’s the one who is pushing the new unfair contract legislation which would also possibly apply in this particular case. Who knows we may actually get a politician that really understands something about the importance of small business to the economy.
Ross what an inspired idea,none of our representative bodies seem to want to fight anything like this,surely somewhere in the franchise act we are afforeded protection against such actions,why has the lottery agents assoc also been so quiet,they are the biggest toothless tiger of them all,what a waste of money,(AS AN ASIDE WHY ARE THOSE FEES PAID AUTOMATICALLY TO TATTS TO PAY THE ASSOC,SO MUCH FOR AN INDEPENDANT BODY MAKING TATTS ACCOUNTABLE WHEN THE TAIL WAGS THE DOG)we pay our fees to receive glossy photos of them in the newsletter schmoozing at tatts hq instead of busting their chops getting us a better deal which is what we pay them to do, so a class action where each retailer can choose to participate or not is a ripper idea,while they look at that they should also look at tatts licence to run lotteries,id also love to hear the legal interpretation of tatts ability to be a retailer(online)and wholesaler,im led to believe the licence is really only a wholesaler licence,actual or implied,it would have great benefit if we could get access to online sales,something else the assoc didnt have the balls to question or fight for us
Helen, There is no doubt that the agreement under which retailers access Tatts products points to routes that could be used to dispute. It begins with aggrieved retailers making a complaint.
Can anyone tell me when a ‘trial’ ceases to become a ‘trial’. I haven’t been able to find anything that provides a definitive start and finish timeframe for this proposal. This suggest to me this is approach is a backdoor entry to the desired outcome and we need to see it for what it really is and that is not what they are saying it is!!
The Lotteries Companies have it all over our Weak Governments ( State and Federal)(so do Multinational companies and the big 2 supermarkets – how else could they get big or be multinational?)
We all need to start to vote for government representatives with the guts to stand up to the status quo in any number of areas. We cannot be sheeple any more. Should be easy to fix in a small flexible country of 23 million people.
Make your vote count, let your representative know what is broken and that you want it fixed. If you are not enrolled to vote do it on Monday, things move pretty quick in Canberra and we may have a busy news week coming up.
We the people should rule our own country, but we have to speak up to do so.
Shaun… where did you get your information on saying you think we are safe in qld to 2025??
Thanks
Daniel, nope I got it wrong .