There used to be a time we could ignore the $2 shops and similar as the quality of what they sold was poor, their layout akin to a junk shop and their customer service left wanting.
Things have changed. Discount variety stores in Australia have lifted their game.
The changes we are seeing here are in-line with what is happening overseas. You could call it the Aldi effect where price does not compromise quality as it once used to. It is far more than the Aldi effect. In categories related to us there are plenty of overseas deep discount businesses challenging in cards, wrap, gifts, stationery and more.
The photo is from a discount variety store I saw in Canberra last week. This terrific display of wrap is a metre from the lease line. The main message to shoppers is we have the range. This is backed with at a price you will love.
This shop is the type of business newsagents would often disregard as a $2 shop or a junk shop while, in fact, their offer is more comprehensive, better situated and more satisfying to the shopper than the average roll-wrap display in a newsagency.
We have to look at shops like this as competitors, businesses we need to understand and compete with, businesses we need to be challenged by. Ignoring this type of shop would be folly in my view.
Wrap is in play, as are cards – as the year on year sales data is showing in newsagencies across Australia. The challenge from discount variety is part of the reason this is happening, not all, but certainly part. They have lifted their game. We need to lift ours.
We need to look carefully at where wrap is placed. We need to consider our value proposition. We need to make shopping easy. we need to make impulse purchases easier.
My advice to newsagents is do not underestimate discount variety stores, treat them as a well-resourced professional competitor. To do otherwise could see you lose sales you might otherwise have won.