Unable to sell their newsagency, Lance and Barb Barrett decided to close their business, the only newsagency in downtown Coolum.
While not commenting on these specific circumstances, I’d note … The challenges facing newsagents in Australia are not new. All of us need to act on the challenges, as early as possible, putting our needs ahead of the demands of suppliers. The saleability of any newsagency and the price it achieves is a function of its real profitability.
OfficeMax, the US owned stationery business which is growing its presence in Australia, in part aided by some newsagents buying from them, is focusing more on small business customers with plans to open of a smaller format store in Chicago according to the Chicago Tribune.
While it may not be evident yet, the stationery category in Australia is in play in my view. Newsagents are losing more school booklist business, more newsagents are buying from US wholesalers – Staples and OfficeMax, Staples is strengthening its direct to consumer reach and the nature of stationery being sold is changing with the greater embrace of digital.
Newsagents tell me plenty of customers were disgusted with the ad stuck over the photo of one of the insulation installation victims on the front page of The Courier Mail yesterday.
Here is front page of The Courier Mail with the News Limited ad promoting home delivery subscriptions stuck over a photo.
The placement almost looks deliberate. It’s disrespectful in my view. I am surprised no one at News Limited noticed this.
Here is the front page of The Courier Mail without the News Limited ad. You can see the photo of one of the insulation installation victims.
What’s happened here illustrates how News Limited regards news versus advertising. Their action damages their brand.
As a retailer I don’t like the trash from these stuck on ads. As someone who’s been told by publishers for years that the front page of the newspaper is the best selling tool I say what gives now? As a consumer of news I say these ads make me less respect the newspapers that use them.
Fairfax in Tasmania appears to be taking the migration of newspaper home delivery account management away from newsagents sfurther than News Limited has done so far in its own migration moves thus far.
Fairfax appears to be requiring newsagents to give up, without compensation, newsagent developed intellectual property around run delivery details including layout and sequence.
As with the imposition by News Limited of an 80 cent a copy fee on The Adelaide Advertiser being delivered in the Port Lincoln region, I wonder if the Fairfax move in Tasmania is a trial of a possible national approach.
Fairfax is taking complete control of newspaper home delivery of its products and apparently cutting newsagents out of everything except for being a courier service delivering product as directed. However, the fairfax moves only address fairfax titles. Some drivers will have other titles. My information is that some drivers will go from one run handling three titles using a single consistent approach managing the delivery in three different ways. The time and OHS issues here are considerable.
Today, customers receive one account for multiple titles. Fairfax will bill separately and in advance – a move affected newsagents say will hurt sales.
Whereas today newsagents handle stops and starts in one system, the system they operate, there will now be two systems – one for Fairfax and one for everything else.
Whereas with migration in South Australia the newsagent continues to manage the sequence of each delivery run, with the Fairfax Tasmania moves the publisher seems set to seize this responsibility for themselves, considerably altering the business activity of the newsagent.
This move, if my understanding is correct, could dramatically cut the value of delivery newsagencies.
Further,from what I can see, Fairfax is directing home delivery customer payment traffic away from newsagents.
Another question here is what will happen with News Limited product delivery? How will newsagents handle this. Today, they magazine titles from multiple publishers into a cohesive run for each geographic territory. The Fairfax Tasmania moves appear to block this approach – unless News in party to any such move to centralise managing newspaper distribution runs.
Is what we see happening in Tasmania being contemplated for elsewhere. This is the same question I have in relation to the 80 cent a copy surcharge by News Limited in South Australia on The Adelaide Advertiser for the Port Lincoln region.
Newsagents should have the latest issue of Australian Property Investor magazine with newspapers, at the counter or some other excellent location since this issue has been subject of good coverage on Today Tonight on the seven Network earlier this week. I always see a surge in sales when this magazine features in a news or current affairs report. We find placement next to newspapers works well – sometimes with a reminder it was on TV.
Click here for a link to the 612 ABC Brisbane website and and the interview I did with them yesterday. It was wide ranging and went to the heart some of the challenges and opportunities before us. They also tweeted key points from the interview. I’m told there was plenty of talkback on the topics covered.
ABC TV in Brisbane had scheduled an interview yesterday on the same topic but they decided to not run with the story at the moment.
Periodical is one of several startups that are reducing the barrier to entry for those wanting to get into publishing magazines and books. Periodical and these other sites extend the disruption to print beyond print titles offering digital versions as it opens publishing for digital platforms to a new world.
This is very exciting for content creators and challenging for others with businesses rooted firmly in print.
Further to my posts about the ATO handling of the tax pack matter, here is the text of a complaint lodged by one newsagent with the ATO:
I am a newsagent – you have, without consultation, added 100’s of hours to my working schedule. In doing that you intend to compensate me $8.00.
Many of my customers don’t have a PC.
Many of them don’t understand the Internet at all.
They do not want to spend an hour on hold waiting to ask for a tax pack to be sent to them.
Your move is out of step with community needs, your compensation is below minimum wage and is insulting in the extreme, your decision to do this without consultation and at the last minute is offensive.
You have placed my staff and I at the forward edge of angry customers, your actions are directly affecting my businesses reputation and potentially a percentage of its earnings.
I am disgusted, I am angry, I am appalled at your treatment.
I need 1000 tax packs
or
I need some significant compensation for the 100s of hours of work, calming customers and explaining the new procedures to them.
Sums it up very nicely I think.
I have just pre-recorded a long interview with Steve Austin of the morning program on 612 ABC Brisbane today. We covered News Limited’s T2020 trial, the 80 cent price hike for the Adelaide Advertiser, the ATO Tax Pack situation, Australia Post corporate store competition, politician engagement and the migration of print to digital.
One of Steve’s questions was what’s the future of the newsagency? It’s a tough question, one I feel optimistic about as regulars here would see.
If you’re in Brisbane try and catch the program. I am not sure when this morning the interview will run. I’ll look for a link later in the day.
I was moved to write this open letter to John Stanhope, Chairman of Australia Post, after reading the article in The Australian Financial Review yesterday on page 22.
Dear John,
The feature article about you in The Australian Financial Review yesterday says that a big part of your job is persuading politicians that the rules around Post’s obligations need to be loosened – to align with a world in which “there is a younger generation, many of whom wouldn’t have written a letter, let alone post a letter.”
Really? You want the rules changed because the world has changed? You want your shareholder to protect you even more?
Hmm, let’s see how this goes – you go talk to your sole shareholder, the federal government, and ask them to change the rules to suit you, so you can pay the dividend they require. The conflict is obvious.
I am surprised you want regulatory change as that has not stopped you doing what you want in the past.
It’s a changing and unfair world John. As your organisation has though your actions in opening retail outlets close to newsagents and expanding into non post related traditional to newsagency products, taking revenue from small family businesses and leveraging your government protected brand to achieve this.
I say Australia Post has abused its protected position to compete with small business newsagents through your corporate stores. Ink, book, cards, gifts – all sorts of items being sold by the post office. I have written about this here many times.
One of my own newsagencies faced stiff competition from one of your government owned stores. We were price compared by your public servants on more than one occasion for the purpose of competition. This government owned and protected retail business was trying hard to take sales from us.
And now you say the rules need to change to protect you.
The rules should not change, not in isolation. You can’t have it both ways – protected when you want and given more flexibility when you want. If there is to be a review of the rules under which you operate your whole engagement with the act needs to be assessed and publicly debated.
But before we have that debate we need to look at your ownership. Having the government owned business competing with commercial businesses is unfair. You need to get out of retail – sell them to local newsagents at a price that accounts for the damage you have done over the years. You need to sell off your commercial courier business.
The government should only own and operate services that are not otherwise commercially viable yet which are considered an essential services for the community.
I accept you have challenges with the old print post model. They’re not new, they have been coming for ten years at least. I’d say this is why you have targeted newsagents in your corporate retail businesses over the last six to eight years. We were a soft target and you got away with taking our customers by using your monopoly.
John, what you have is a bloated retail network getting special treatment because of government ownership and taking special treatment by, in my view, operating outside the Act. It’s not a level playing field comparing the treatment of a government owned Australia Post shop and a newsagency in a shopping centre.
It frustrates me that the AFR gives you such excellent coverage when the backbone of retail in Australia, small business retailers, struggle to get issues of concern to them exposed in the media.
I hope the politicians refuse to change the rules under which you operate.
If you want to talk about this call me on 0418 321 338. I’d welcome the opportunity.
Mark Fletcher
I was happy to see Vintage Made magazine arrive in-store as it’s another magazine connecting with all things vintage – like Vintage Caravan magazine.
What is interesting about these vintage titles is that we have access to gift and homewares products that serve the same shopper. These are opportunities for us. In fact, this is a good example of where magazines can help us grow other parts of our businesses.
When I hear a newsagent saying there is no future in magazines for newsagents I shake my head at the ignorance of the statement. Indeed, in our magazine sales data we can be guided on gift purchasing and calendar purchasing. From these two categories we lift the overall GP of the business. Vintage is hot right now and Vintage Made and Vintage Caravan can help us connect with that interest.
A video of the latest Newsagency of the Future workshop has been completed and loaded. It’s a 45 minute version of the workshop I have just completed running around Australia.
I do these sessions to get newsagents thinking about their future in the context of known and unknown challenges. We have to own our situation.
Check out the advice provided to newsagents about the changes to handling of Tax Packs this year. The Australian taxation Office expects us to put up a sign, hand out flyers and answer customer questions. Imagine the response from one of the major supermarkets, petrol outlets or convenience stores to such a request.
The $8.00 payment by the ATO is an insult. It is a pittance for the time we will spend, for the cost of employee time in answering these questions. The payment is below minimum wage – this from an organisation that polices us to ensure we fulfill our tax obligations. Indeed, the ATO is effectively taxing us to do this work for them. This is not fair ATO.
It disgusts me that the ATO treats small business newsagents in this way. I’m complaining to my local federal member to ensure my complaints are heard.
Check out the ad running on large screens in a major shopping centre on the weekend promoting the $50 million OzLotto jackpot. Neither of the Tatts outlets in the centre were promoted in the ad – only Tatts.com. That’s a clear indication of the focus of the company. With the requirement on retailers to support corporate branding I’d expect Tatts to connect with their supporting retailers with this in-centre advertising.
While Tatts could argue that this is a branding campaign and that any retailer in the centre with their branding will benefit, I’d say it’s a call to action campaign and a supportive supplier would have promoted the outlets nearby where a $50 million jackpot ticket could be purchased.
I was disappointed to see this display for Symply Too Good cookbooks in the pharmacy right next to one of my newsagencies.
While Annette Sym has been a supporter of newsagencies and our channel has been a supporter of her products, this apparent move to pharmacies will challenge the relationship. The price point is odd – $15.00 as advertised makes these more expensive than in newsagencies.
The Australian is reporting that Shop Til You Drop is moving to fortnightly publication in October. This could be a good move, one I am some other publishers will be watching.
Newsagents may find the column in The Daily Telegraph penned by Lizzie Renkert, former editor of madison for Bauer, interesting reading. It talks about giving everything and then some to the company and the magazine, the feeling of being cast aside and opportunities outside.
Following the publication of the results of my survey of newsagents about the change to magazine delivery days I have been contacted by more than ten magazine publishers. None are happy with the change. They all express feeling helpless to impact the change. Several are actively working on a change to distributor as a result.
