Australian Newsagency Blog

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

Some green shoots in December quarter sales data for Australian newsagents.

Mark Fletcher
March 2nd, 2018 · 28 Comments

I have just, finally, completed analysis of the benchmark data provided by newsagents as part of my regular channel business performance study.

The October – December quarter sales data indicate a better result for magazines in Australian newsagencies with the rate of sales decline falling.

Benchmark headline numbers.

  • Magazine unit sales declined 9.5%. What is interesting is the weeklies. The average decline there was 6.9%. This is good news in that the decline has slowed.
  • Greeting card revenue was flat. However, one reported year on year growth of 17% with plenty at close to 10%.
  • Lottery revenue declined 1.6%.
  • Newspaper unit sales declined 12.5%.
  • Gift revenue increased by 15%. This is good news for those strong in gifts.
  • Toy revenue increased by 8%. This is good news for those strong in toys.
  • Plush revenue increased by 11%. This is good news for those strong in plush.
  • Stationery revenue declined 10%.

The above percentages reflect the overall performance of the 168 newsagency businesses in this benchmark study – large small, city country, in groups and solo.

The results for magazines represent the best quarter in the 2017 calendar year.

OVERALL PERFORMANCE DATA.

  • Customer traffic. 72% of newsagents report average decline of 4%.
  • Overall sales. 43% reported an average revenue growth of 3+%.
  • Basket depth. 46% report a 1.8% increase in basket size.
  • Basket dollar value. 49% report a increase in basket value of 4%.

THE MOST IMPORTANT DATA FOR NEWSAGENTS

This benchmark dataset provides newsagents something to compare with. The more important analysis is for newsagents to do your own comparison for their own business for these comparative periods. We are our most important competitor.

If your numbers are not as good as you want, things must change for if they do not change the trajectory will continue.

What is your intention for your business?

I urge you to ask yourself daily, what have I done today to reach a new shopper, someone who does not know we exist? This is what successful businesses in the benchmark study are doing and doing well.

BENCHMARK GOALS

I am often asked for benchmark goals newsagents ought to aim for. Here are some benchmarks I have developed in my work with newsXpress and through Tower Systems:

  1. Gross profit: this is the goal gross profit for all product sales not taking into account any revenue or costs related to any agency business. The traditional newsagency average sits at 28% to 32%. For a newsagency focused on the future, the goal has to be at least 45%.
  1. Ratio of Gift revenue to Card revenue: 50% minimum. The goal ought to be 100% or more. If you do $100K a year in cards, target to do $100K in gifts, or more.
  2. Revenue per employee – $250 an hour minimum not including agency revenue. This is a contentious KPI. If you think it is not for you, work the numbers back and see what your number needs to be based on each labour hour in the business.
  3. Revenue PSQM $4,500 – $8,500 depending on country vs. city / high street to shopping centre and depending of product mix. Higher GP lower revenue required.
  4. Overall revenue mix percentage targets: Cards: 25%; Gifts/toys/plush: 25%; Stat: 10%; magazines/newspapers: 20%; other: 15%.
  5. FLOORSPACE ALLOCATION: Cards: 25%; Gifts/toys/plush: 25%; Stat: 8%; magazines/newspapers: 15%; other products: 15%; office/back room / counter: 12%. It’s rare you make money from an office or store room.
  6. Mark-up goals: Stationery: 125%; Gifts 110%; plush: 110%.
  7. Occupancy cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation.
  8. Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. (See above).
20 likes

Category: Newsagency benchmark · Newsagency management · newsagency of the future · Newsagency opportunities

28 responses so far ↓

  • 1 Michael // Mar 2, 2018 at 8:22 AM

    Thanks again for these insights Mark it is much appreciated.

    We are finding ourselves in a weird unexpected situation that has gotten us rethinking our work here. Our magazines and newspapers actually showed an increase (Likely the result of Coles closing in the shopping centre) yet our cards and stationery are dropping heavily.

    We got ourselves into the gift department heavily last year with targets of 450% on last year and very nearly achieved that goal. This year we are looking to achieve 200% growth.

    Is it worth while in anyones opinion to chase $1.00 card sales as we have about 5-8 shops in the mall with cheap card spinners out the front where we only offer quality items.

    0 likes

  • 2 Colin // Mar 2, 2018 at 8:46 AM

    Mark …. what does the following actually mean “Overall sales. 43% reported an average revenue growth of 3+%”

    – 100% of participants had growth of 3+% with 43% above that number.

    – 43% of participants had growth of 3+% with 57% all below 3% and the overall % not stated.

    – 43% of participants had average growth of 3+% with other 57% well below this number and the overall % not quantified

    0 likes

  • 3 Mark Fletcher // Mar 2, 2018 at 9:21 AM

    Michael, for me the question is what does my business stand for. In my case it is about brands. This takes me out of the value (discount) space, it takes me away from $1 cards. I have a Reject shop next door, they are better at that.

    We can’t be everything to everyone.

    1 likes

  • 4 Mark Fletcher // Mar 2, 2018 at 9:25 AM

    Colin: 43% reported revenue growth with the average growth 3+%. It is the style of reporting I have always used in these reports.

    0 likes

  • 5 Colin // Mar 2, 2018 at 9:19 PM

    what did the other 57% report and what was the number for 100%

    0 likes

  • 6 Mark Fletcher // Mar 2, 2018 at 9:27 PM

    The overall average sales position considering all who provided data for the benchmark was a decline of 4.8%. This is product revenue, not agency.

    The headline is the gap between those with growth and those without.

    0 likes

  • 7 Colin // Mar 2, 2018 at 10:00 PM

    Allow me to fill in the gap for A + B = C

    A. 43% had growth of +3%
    B. 57% had growth of negative 11%
    C. 100% had growth of negative 4.8%

    You can check the maths.

    If I was reporting on overall sales growth the headline figures, from my perspective, would have been B or C, certainly not A, which was your choice.

    3 likes

  • 8 Mark Fletcher // Mar 3, 2018 at 7:26 AM

    By all means Colin, gather the data, analyse it and share the results. I’ve been doing it for many years and have found newsagents more engaging when they see opportunity, when they see what can be.

    The short-form results that I publish here, while interesting are there primarily for one reason, to compare with the results of their own business as it is the year on year comparison in a business that matters most, as I have said here many many times.

    Go look at your business results.

    0 likes

  • 9 Colin // Mar 3, 2018 at 10:17 AM

    Mark,

    Believe me, I am anal about my statistics, analysing and understanding them. When I see green shoots from successful initiatives, I investigate and chase.

    What I do not do is select stats that make me feel happy and ignore the red ink.

    When you report revenue growth at 3% and the reality is negative 4% with the majority of participants at negative 11% you are doing 2 things.

    Firstly you are misleading the audience by cherry picking numbers that are not representative of the true situation.

    Secondly you are opening yourself up to the accusation that true picture is only seen by you.

    I appreciate your reports should highlight success and positive developments. But not by being evasive about the big picture. If your narrative is distorted then the numbers may no longer provide a reliable benchmark. That would be a big loss to all of us who look forward to seeing them.

    5 likes

  • 10 Mark Fletcher // Mar 3, 2018 at 3:38 PM

    Colin, the complete picture is only seen by me as only I have the full dataset, as the collector of data data, for each report and for the fifteen years I have done this.

    People reading the reports know the negative side, they can see it in the data.

    There was a time I reported with more of a focus on negative and I received more criticism of that with people saying they thought there was no hope.

    I can’t please everyone.

    As I encourage in every report: look at your data as that is what matters most.

    3 likes

  • 11 Jon // Mar 3, 2018 at 4:53 PM

    Colin by Mark giving the numbers he does it shows what growth is possible. If you read into the overall numbers yes it can look depressing but while some struggle others are thriving.

    4 likes

  • 12 Graeme Day // Mar 3, 2018 at 6:30 PM

    Col,
    i see your big picture and it’s an industry one however Mark quite rightly points out that the few and there is only a few (compared again with those that don’t) that have grabbed hold of transition and in their individual ways and stores are making it work.
    It’s hard and sometimes still means sales drop however if the G.P. is above then you are in front and it is G.P that counts. Sales are odious ask Myer and David Jones.

    2 likes

  • 13 Mark Fletcher // Mar 4, 2018 at 7:29 AM

    Taking this a step further, I think we have around 30% of the newsagency channel now actively engaged in product categories that have not been traditional for newsagencies for the last, say, 25 years.

    4 likes

  • 14 Factory Worker // Mar 4, 2018 at 9:48 AM

    In the last 25 years what percentage would the Newsagency channel reduced by? 50%?

    Those who survived that will undoubtedly thrive from here on in.

    1 likes

  • 15 Andrew T // Mar 4, 2018 at 12:01 PM

    Not according to ‘Bad Newsagent’

    2 likes

  • 16 Jason // Mar 7, 2018 at 4:46 PM

    “Colin, the complete picture is only seen by me as only I have the full dataset, as the collector of data data, for each report and for the fifteen years I have done this.”

    So basically what you’re reporting is “trust me. Only I’ve seen the numbers”

    2 likes

  • 17 Graeme Day // Mar 7, 2018 at 6:15 PM

    Jason,
    irrespective of Colin’s comments your answer “trust me”
    Really is that an answer?

    3 likes

  • 18 Mark Fletcher // Mar 7, 2018 at 10:45 PM

    I get it ‘Jason’ you have an agenda. My benchmark reports have been challenged and scrutinised and found to be accurate. If you don’t trust me, stop coming by this place.

    4 likes

  • 19 Colin // Mar 8, 2018 at 9:14 AM

    Trust derives from Truth.

    “The truth, the whole truth and nothing but the truth” … note 3 parts

    I don’t dispute the facts individually but the whole picture ? We have parts one and three, but by Mark’s admission we do not have part 2, the Whole Truth.

    I get it that in a blog situation Cherry Picking the facts is what we all do. A disappointing reminder I will live with in all future posts.

    3 likes

  • 20 Graeme Day // Mar 8, 2018 at 8:56 PM

    Colin,
    You are smart enough to understand the big picture and present the negative overall.
    Mark understands that, He is not dumb, however the lesson that comes from this is he is saying that those who transition their business can do very well.
    He points that out which is intended to appeal to the negative that this can be achieved.
    “Cherry Picking” sure in reality it is isolating the performers versus the non performers.

    Yes it can be done and is being done by a few unfortunately too few it’s up to those that are failing to find out how they are doing it.

    4 likes

  • 21 Mark Fletcher // Mar 8, 2018 at 10:55 PM

    Colin you are obsessing about the wrong thing and missing the point. I think you are doing it to be disagreeable, to dilute interest in my core message here in this place. That is your right.

    At my workshops and in thousands of posts here I have gone into extraordinary detail. Today, however, detail is irrelevant. Urgent, sweeping change is key and the headlines are what matter.

    There are newsagency businesses in decline and newsagency businesses in growth. Growth is possible. No, I am not going into to detail on how to achieve that as the blog is not the place for it.

    If you don’t like how I put things or the detail, stop trying to bend me to do it your way. This is not your blog.

    6 likes

  • 22 Colin, Malvern SA // Mar 9, 2018 at 9:04 AM

    Mark,

    You call it obsession, I call it distortion.

    Do as you wish in your blogs. I would advise you reconsider your approach outside of here. There can be legal consequences for Cherry Picking data in business forums, especially if statements and data influence others business decisions.

    2 likes

  • 23 Mark Fletcher // Mar 9, 2018 at 9:17 AM

    Colin, You’ve been to a couple of my forums. What I present is complete, accurate and based in facts. It is unfortunate that you, yet again, seek to suggest it is otherwise.

    I have never cherry picked data. Your attachment of this label to the discussion here is without foundation.

    3 likes

  • 24 Colin, Malvern SA // Mar 9, 2018 at 9:38 AM

    Look up the definition then read your growth bullet point.

    2 likes

  • 25 Graeme Day // Mar 9, 2018 at 7:58 PM

    Colin,
    I really don’t know what you are driving at, the industry or Mark.
    It is clear even in definition that ” Cherry Picking “is being selective Selective of good versus not so good or bad. In this case it’s called separating Data.
    I think it a good thing data collected can be shared to explain this.
    The good is some newsagents are doing this. The bad is a lot more than should be for there own good, and they are not.
    Is your implication of Marks truth personal to the extent that you think he is saying that he is the only person with the answer by joining NewsXpress?
    If it is and frankly I doubt that this is his aim, it doesn’t alter the results that he published.
    I find no “spin” with his presentation, a bias to the obvious fact that most newsagents, yet some good few (and growing) are transitioning well maybe there but it is a fact. therefore not necessarilary personally biased.
    Pleae bare in mind that not all data comes from newsXpress members. Many people contributing to this blog have no affiliation with newXpress, me included.
    Perhaps you coud contribute in a more positive way as you seem to be very analytical and clever enough to adapt.
    The industry needs, irrespective of personal competitveness, all the input it can get.
    Once we do this we will move forward and each will benefit from the growth.
    There is no growth in division.

    1 likes

  • 26 Mark Fletcher // Mar 9, 2018 at 9:57 PM

    Not even half the data comes from newsXpress businesses. There are plenty ty out there pursuing and enjoying success.

    0 likes

  • 27 Colin // Mar 9, 2018 at 11:03 PM

    Graeme,

    I reckon you are a “Troll”.

    I see your vested interest “BPB-BPBROKERS are specialist newsagency brokers”.

    It’s not in your interest to advertise that 57% of newsagents have falling sales, you are vendor focused. You need to focus on those with green shoots, without them nobody would buy a newsagent.

    I never mentioned other organisations. My agenda is simple and honest, the accurate presentation of data. What’s your agenda.

    3 likes

  • 28 Graeme Day // Mar 10, 2018 at 7:57 AM

    Colin,

    I don’t need to “troll” for business just have a look for yourself to see how many newsagencies are on the market.
    The truth is that I couldn’t really see the base or reason for your argument. You have just confirmed that there isn’t one.
    It’s petty

    0 likes

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