Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

News Corp. gives Woolworths a competitive advantage over retail newsagents

Mark Fletcher
December 29th, 2016 · 6 Comments

News Corp has announced that Woolworths, like Coles, will no longer be required to process the returns of newspapers.

If News Corp. was genuinely supporting of small businesses it would implement this change for all retail outlets that comply with scanned based trading requirements and not just its big mates / advertisers.

The less friction for retailers in handling newspapers the longer they are likely to support the sale of newspapers.

Scanned based trading is key to this implementation. This is something smart newsagents have been able to offer News Corp for years.

Here is what News Corp. has announced:

Changes to the Supply of Newspapers in Woolworths Stores.

What is happening?
The physical returns of newspapers is being removed from Woolworth’s stores. Agents/distributors will no longer be required to collect and process returns for any Woolworths Supermarkets

This includes not processing the figures into iServices.

This process will be similar to Coles – whereby no returns are collected or processed by agents.

When is this happening?
This change is effective from Monday , 16th January 2017.

The week ending January 15th, 2017 will be the last week agents/distributors will be required to process returns on behalf of Woolworths Supermarkets.

Why is the change being put in place?
The returns process adds complexity and cost in a low cost retail environment. It adds cost to both Woolworths and delivering agents and distributors.

This step in the process is being removed to reduce that cost and complexity for both Woolworths and you.

Will the distributing agent’s commission change?
The commission rate for distributing agents will remain unchanged.

What happens to unsold papers?
All unsold papers should be placed in Woolworths recycling (paper and cardboard).

How will returns be calculated?
Woolworths are providing News Corp scan sales by store, by day and by title. This scan data will be used to derive a return figure – or”un solds” – by deducting the actual scan from the allocated amount. This data will be used to calculate agents/distributors commissions.

Is scan sales now accepted by audit
AMAA will accept scan sales as audit compliant.

News Corp. in its papers calls out what it considers to be the unfair practices of politicians and businesses. But they will not publish about this unfairness. This move is another reason for retail newsagents to get out of newspapers. Maybe that is what News Corp. wants.

13 likes

Category: Competition · Ethics · Newspapers · Social responsibility

6 responses so far ↓

  • 1 John Fitzpatrick // Dec 30, 2016 at 1:22 AM

    Mark,

    This would be an easy decision for News to NOT include Newsagents. They are dealing with only 2 companies, both would have fully compliant POS systems.

    Now lets look at us – Newsagents, about 8 software vendors (couldn’t get exact number as iServices “Stop/Start” tab failed as usual, when will News fix this problem – how can News have a website, “iServices”, whose Stop/Start tab fails almost everyday and they are incapable of fixing the problem? It seems as a user they are totally uninterested in fixing this.

    Back to the article!

    From the G&G recent decision on not requiring physical returns, how many Newsagents managed to make the “Gold” XIT standard – about 350?

    Why would News even consider going down this path with Newsagents? Eight or so systems, maybe 20% Gold standard XIT compliant.

    Until all Newsagents are XIT Gold standard, I think any chance of following Coles & Woolies is a long way off.

    I suspect it needs to be all in or all out.

    Plus consider the income News receives from recycling newsprint, do they want to give up the income stream?

    Happy New Year to everyone (and yes also News, G&G, Fairfax and IPS people) and if you’re out delivering newspapers on Sunday morning- be careful.

    John

    3 likes

  • 2 Mark Fletcher // Dec 30, 2016 at 10:03 AM

    John there are only four viable software companies in my opinion. That number could shrink as the channel shrinks. But this is nothing to do with software companies. It has to to with two things:

    1. The ethics of those running the business.
    2. Data integrity.

    It should not matter how many accounts there are.

    News Corp in its papers talks up small business and tells the government to rein in the budget yet as a corporate citizen it pays far less tax as a % of revenue than most small businesses and it makes decisions that make small business newsagents less competitive.

    This is an ethics and social responsibility issue.

    11 likes

  • 3 ted // Dec 30, 2016 at 6:03 PM

    I might be more upset if I was only a sub agent but as an agent who also distributes I don’t mind the commission from the increased sales. The connection between the Woolworth promo and the tax News pays seems a stretch.

    1 likes

  • 4 Brendan Mason // Dec 30, 2016 at 8:30 PM

    Ted I am a sub agent for papers and they would have to be loss making for me. It’s a race to see what happens first, will newspapers stop printing before I have the confidence to stop selling them. Either way they have a short life expectancy.

    0 likes

  • 5 ANDREW // Dec 31, 2016 at 6:16 AM

    how long till they bypass newsagents all together?

    0 likes

  • 6 Mark Fletcher // Dec 31, 2016 at 9:02 AM

    The connection between the Woolworths move and the tax News Corp pays goes to ethics and social responsibility.

    Big companies have an obligation to pay their way. Even more so when the big company constantly tells us what to think and do.

    1 likes

Leave a Reply

Your email address will not be published. Required fields are marked *

Reload Image