Australian Newsagency Blog

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

Newsagency sales benchmark results: Core categories in retail newsagencies challenged while specialty categories grow.

Mark Fletcher
May 31st, 2018 · 33 Comments

This newsagency sales benchmark study reflects sales results as tracked in 149 retail newsagency businesses in Australia for the January through March quarter of 2018 compared to the same period in 2017.

Only businesses with accurate data are included in the study.

With under 3,000 businesses in this channel, the number of participants is considered as a good indicator of overall channel performance. In collating data, I have removed businesses at the extremes where other factors are at play such as major construction shutting a street or a newsagency in a centre with two newsagencies where one closed and thereby giving an unnatural boost to the other.

Each data point is the average, mean, of all data for the data point.

In collating results, I have only included data for each category businesses trading in that category.


  • Customer traffic. Down 3%
  • Overall sales. Down 4%
  • Basket depth. Flat.
  • Basket dollar value. Flat.


  • Newspapers. Unit sales. Down 9.3%.
  • Magazines. Unit sales. Down 8.8%.
  • Greeting cards. Revenue. Down 2.7%.
  • Stationery. Revenue. Down 7.6%
  • Lotteries. Revenue. Flat.
  • Tobacco. Revenue. Down 16%.
  • Agency. Parcels, gift cards, betting account top-up. Down 6%.


  • Gifts. Revenue. Up 2%.
  • Toys. Revenue. Up 9.2%.
  • Plush. Revenue. Up 3.1%.
  • Collectibles. Revenue. Up 2.4%.
  • Craft. Revenue. Up 3.1%.
  • Coffee. Revenue. Up 11%.

What does this mean?

These core products numbers reflect continuing challenges in the core for newsagency businesses. This is not news given the benchmark results for years now.

In my opinion, the decline in newspapers, and magazines to a lesser extent, impacts the results for other products in the core such as stationery and cards. If this is true, it reinforces the importance of having other traffic drivers in a retail business, giving shoppers other compelling reasons to visit.

The occupancy cost challenge – a note for landlords.

Landlords want newsagency businesses in their retail mix. They want the store with papers, magazines, lotteries and other core items for the channel. Often, they restrict the space available for non-core, imposing a low gross profit model on businesses, thereby increasing occupancy cost.

Newsagencies today cannot sustain occupancy costs of more than 15%. The goal must be 11% for the business to be profitable and able to serve the usual level of debt needed for such a business.

Landlords need to be aware of the changes in product mix, the challenges of low-margin core products and restrictions they place on what businesses can sell. They need to be flexible on rent so newsagency businesses can be sustained and thereby provide the service they want in their centre.

If landlords want a newsagency business they need to price the space to reflect the nature of a sustainable business in that location rather than any premium rent they could get from a retailer with higher margins.

Labour cost – dealing with the challenge and opportunity.

Labour cost for an average newsagency sits at 16% of revenue where revenue is product revenue plus agency commission.

On a pure benchmark analysis, this is too high. However, the right labour invested in the right location in-store generates a good return. For example, a skilled person working the shop floor in high margin product categories can deliver valuable benefits whereas the right person working newspapers or magazines is less valuable.

When it comes to labour investment and management the core focus must be on customer-facing. That means having the maximum labour time possible situated to be accessible to customers. You do this by shifting to the shop floor as much work as possible – pricing, returns etc.

Newsagents need to manage their roster carefully and manage employee hours to be customer facing focused and engaged on a shared goal of driving revenue from each customer visit. Sharing information with employees is key to achieving this.

The specialty opportunity.

It is easy to say to newsagents get into one or more of the specialty areas. There are suppliers who will pitch products in these areas. The challenge is how you drive success. Getting the right product is part of the story. Visual merchandising, employee training, shop floor engagement and out of store marketing are all important factors. These all require relentless focus. Putting a category of products on the shelves is not sufficient.

Specialty products are rapidly evolving, presenting more opportunities over time. Keeping yourself informed of the opportunities, especially ahead of any wave, is key.

Mark Fletcher.
Email:  Website:  Blog:
M | 0418 321 338


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

33 responses so far ↓

  • 1 Colin // May 31, 2018 at 10:16 AM

    Excellent stuff!

    Stationery is a conundrum. For me the downturn is dramatic but has not tracked the magazine & newspaper downturn. It really kicked in over last year.

    Coffee is very intriguing. Has anyone seen the Relay chain in Madrid


  • 2 Andrew T // May 31, 2018 at 11:16 AM

    Newsagents are now Baristas? WTF.


  • 3 Mark Fletcher // May 31, 2018 at 11:17 AM

    I know of newsagents who are into second and third gen of their coffee offer, and loving it.


  • 4 Billy B // May 31, 2018 at 3:55 PM

    We too are suffering a sharpish downturn in Stationery;but it only started about 12 months ago. Before that it was holding ok. Our mags are still dropping where I expected a plateau. Also papers.


  • 5 Andrew T // May 31, 2018 at 5:06 PM

    So I’m queuing for my lotto but have to wait because you’ve ordered a skinny mocha tuna latte.


  • 6 Mark Fletcher // May 31, 2018 at 6:21 PM

    Go troll somewhere else sad Andrew.


  • 7 Factory Worker // May 31, 2018 at 7:11 PM

    Hi Mark, re your comment at 3, what does “gen” refer to?


  • 8 Mark Fletcher // May 31, 2018 at 8:20 PM

    Factory: gen = generation.


  • 9 Factory Worker // May 31, 2018 at 8:32 PM

    I don’t think I am understanding what a generation is. To me a generation is 30 years.

    Are you suggesting that some newsagents have been selling coffee for 60 or ninety years?


  • 10 Mark Fletcher // May 31, 2018 at 8:53 PM

    Factory, generation is a term often used in business to reflect iterations or versions. Nothing to do with human generations.


  • 11 Lance // May 31, 2018 at 8:55 PM

    FW, catch up……
    ‘Gen’ in that meaning is the next step forward.
    eg: Mitsubishi Pajeros and many other vehicles are designated ‘Gen 1,Gen 2, Gen 3 and so on as things evolve…..
    Have a quick look here to help you understand what I’m saying 😉


  • 12 Ken Wilson // May 31, 2018 at 9:05 PM

    The occupancy cost challenge – a note for Mark.
    Are you able to share with us your total rent, marketing and outgoings % of your sites in Westfield centres?


  • 13 Mark Fletcher // May 31, 2018 at 9:17 PM

    No, Ken. it is none of your business.


  • 14 Factory Worker // Jun 1, 2018 at 6:51 AM

    What is an example of 1st gen coffee versus 3 gen coffee offering?

    New machine? Increased seating space?


  • 15 Mark Fletcher // Jun 1, 2018 at 7:01 AM

    Factory it depends on the business and where they start. For one it could be 1: drip, 2: push button, 3: barista. If you own a newsagency and are interested in coffee, ask your marketing group for advice.


  • 16 Graeme Day // Jun 1, 2018 at 7:10 AM

    Occupancy Costs.
    The occupancy cost ‘at best’ KPI that Mark presented in this survey 11%-15% range is fair call although hard to achieve it is what is necessary.

    In conjunction with this I do all my costs as a percentage of G.P. i plit the costs into categories Occupancy, Gross Wages for Staff, Owners Drawings (operational) Loan repayments, and Others.(includes M.V. Ex. Accounting, Bank charges, Insurance etc.
    Gross Profit is everything -Sales are cash flow 100% focus with the aim of at least returning 40%-45% G.P. mininmum.
    Gross Profit pays the bills and the return on your investment. Sales provide the means for this.

    This latest survey (alove) is “spot on” as a retail reflection for the past quarter in newsagencies and probably retail as a whole in different categories of course.
    I would like to point out as Mark does that Occupancy cost is what we have got and it neeeds addressing whenever one can address it and the figure expressed as desired are what you should be negotiating for.

    Ken, whatever we are paying now for occupancy is Historical contractual crap. It has nothing to do with what is needed except to use this as a comparison to see how their own situation is and what could be expected to help them make their business model work.
    Being personal is only insulting the survey itself.


  • 17 James // Jun 1, 2018 at 12:24 PM

    Surely the elephant in the room is rent. What is being paid now might well be historical crap, but having been through a recent lease renewal, anticipating that a compassionate landlord will hear your well presented, argued logic on base rent and annual escalation on a new lease is expecting pigs to fly. Large shopping centres need rent roll escalation year on year to increase the value of their asset. Pure and simple.

    Even if as a newsagent you are doing 40% to 45% gp, and with any sort of newspaper/magazine offer I think this is difficult to do, if 20% of your turnover is being swallowed up in rent (and escalating at 4% to 5% p.a.) , then the equation doesn’t seem to add up to me.

    No, rent (particularly in shopping centres) is the BIGGEST deal. All of the recent retail collapses and franchise failures in shopping centres can in large part be sheeted home to the portion of turnover that is swallowed up in escalating rent in challenging retail sales environements.


  • 18 Mark Fletcher // Jun 1, 2018 at 12:36 PM

    I’ll have more to say abut rent on Monday.


  • 19 Ken Wilson // Jun 1, 2018 at 12:56 PM

    James, well said, its good to share real experiences in place of a wish list. I’d suggest occupancy costs in a shopping centre ( and Westfield are amongst the highest) will be eating anywhere from 20% to 25% no matter who you are. Premier Investments have hundreds of stores but they say they have no power to negotiate therefore their only option is to vacate. The failures you have mentioned are all businesses that have a first GP of 70%. NO indepenant retail business in a shopping centre is financially viable with a margin of 45%.


  • 20 Ken Wilson // Jun 1, 2018 at 12:59 PM

    Factory worker… Don’t be sceptical of coffee, I know a couple who split their store into two and made 50% a cafe, it was very successful. Oh, then they realised how crap the other 50% was so they converted that too.. Successful transition!


  • 21 Graeme Day // Jun 1, 2018 at 1:01 PM

    James, I have no problem with what you say I am saying the same thing I refer to today’s rent percentages and that they can’t relate to the percentages we need to survive and as Mark says we have to increase our G.P. to do this. Ken asked Mark to share with hime what he pays at Westfield. Even if Mark did the comparison is “crap” as it won’t fit the proposal in the example, which I agree is what we should be able to achieve.
    I therefore advocate that rent compared as a percentage of G.P is better as G.P. pays the rent. anyway re read the post as it’s not crap rent we pay the example of comparison is not realistic=crap. Obtaining reality in negotiation with these landlords may be as you say crap as well. let’s see what other contributors have achieved in this area. i know some that have achieved 12 months free rent new fit our F.O.C. and starting rent a reasonable rates (just because it suited Centre Mangement) the 4% and 5% fixed base rent increases on these shopping centre leases have to go and a strating point in hese negotiations has to be on affordability data not sales data. This is my experience.
    you are correct with all you sale especially 20% of Turnover is not going to work.
    the thing is what percentage of Gross Profit do you need?


  • 22 Mark Fletcher // Jun 1, 2018 at 1:56 PM

    Overall business GP% is key is any assessment of occupancy cost, unless you are doing a traditional channel comparison in any retail channel.


  • 23 Graeme Day // Jun 1, 2018 at 2:00 PM

    The margin of 45% is on product sales only plus the lotto commissions and you can have a total G.P. over 70%. or better put $800k G.P.
    $500k G.P. product and $300k on Commissions and rebates.
    GROSS RENT or OCCUPANCY @$200k p.a. is $25.00% of G.P.
    This is being achieved in a Shopping Centre in today’s market.
    it is unusual however with all the right KPI’s it can be done.


  • 24 James // Jun 1, 2018 at 3:33 PM

    I have no doubt that it can be done, but you need to a very skilled competent retailer with all conditions predictable and favourable. In the top 5% of the channel.

    Im thinking $200k rent per annum, in a Westfield or Metro Major, might get you somewhere between mid 100 and 200 sq metres depending on how long ago the lease was signed up.

    $300k annual Tatts Commission is a top 50 outlet which means your Lotteries management is top tier. There are plenty of Tatts in major centres outside the top 50.

    $500k GP at 40% means $30k weekly product sales and if papers and mags are a meaningful part of the basket, your other goods offer would have to be stellar to make up the gap. It means every single sqm has to turn over 6K per year.

    So yep its doable, if you’re really really good and everything runs according to plan.

    Now if you don’t have Lotteries.

    Now if your shopping centre undergoes a refurb and the whole traffic flow of the centre gets turned on its head.

    Doable, but very very tough Id argue.


  • 25 Graeme Day // Jun 1, 2018 at 5:14 PM

    James you got it. The G.P. is 44.5% the lotto is in the Top range and it is 200 sq m. If lotto goes boy so do a lot of staff. I don’t see that happenning for some time meanwhile make hay while te sun shines and prepare for a rent increase when renewal time arrives. This is what this post is about-Occupancy and it’s a killer.-Metro Major is also correct.


  • 26 Mark Fletcher // Jun 1, 2018 at 7:36 PM

    As I noted, I will have more to say on this on Monday. I think the key to success in a centre is to not have any agency lines like tickets or lotteries. This gives you greatest flexibility over floorspace, which helps you maximise business GP%. I say this as someone with two long term Westfield businesses without lotteries and without any external prop-up of the businesses.


  • 27 Factory Worker // Jun 2, 2018 at 5:47 AM

    Mark of the 149 retail newsagencies who participated in this survey how many have coffee as a line?

    Also since when have you started collating information about coffee sales in newsagencies?


  • 28 Mark Fletcher // Jun 2, 2018 at 7:16 AM

    Factory, three for a period of time useful for this type of comparison.

    I have been tracking coffee and other out of channel categories for years.

    There is much innovation the channel, which is driving success. I often refer to this when commenters here question or denigrate my point that we can run successful growing businesses that we identify as newsagencies or being at least part newsagencies.


  • 29 Graeme Day // Jun 2, 2018 at 7:53 AM

    I know of one newsagency that does just over $60k p.a. in coffeee only no food @ 60% min G.P. Plenty of early morning tradies. They also do the same amount in gifts. The store is evolving all the time and looks great. It’s in shopping strip (Country) not a centre. There are plenty out there trying however as you point out many are not and they are going down.


  • 30 Ken Wilson // Jun 2, 2018 at 10:35 AM

    Can everyone on this subject suspend their input as Mark has told everyone twice now that he will be bringing more wisdom on Monday… Only 2 sleeps!


  • 31 Mark Fletcher // Jun 2, 2018 at 10:47 AM

    Ignore Ken everyone, all comments welcome, as usual.


  • 32 SUNNY // Jun 2, 2018 at 4:36 PM

    Thanks for Mark’s works. I would like to express my concern on the newsagents’ ability to practice on category management in face of change from customers and industry.

    Take stationery as an example, most of newsagents rely on GNS’s teams for planogram. GNS had a great merchandising team, the manager spent 3 days for relay my stationery display in 2012. He left, then GNS rep had spent 3 days for relay my display 3 years later. and She left.

    The stationery sales drops 20% immediately after 1st relay, and rise 40% in 6 months, same thing happen for the 2nd relay.

    There are two things. Firstly, the manager and rep has not asked for our shop’s sale data before his/her relay , and the change of position may confuse the customers, make the initial drop of sales, but based on their industry experience, they create a unique planogram based on our existing stock, and pin point the missing SKUs. Overall they improve the sales of stationery considerably.

    Secondly, this shows repeat failures of myself in managing stationery retail. It show s that I has no big picture of all subcategories, haven’t has definition of the destination subcategories which draw the customer in store. Furthermore, I haven’t work with GNS and other suppliers to take action on these destination subcategories.

    Since then, I had read some books on category management, I had asked many colleagues which category management software and planogram software are use?
    I surprise to find out that most of colleagues has not use any of the software. Their (or key staff members’) experience make their operation successful.

    But if our newsagents have holidays, or sell the shop, or lost the key staff member who in charge of stationery retail, the operation will be impacted.

    If stationery sales has a sudden drop, how we will take rapid reaction?


  • 33 Mark Fletcher // Jun 2, 2018 at 4:41 PM

    Sunny, in retail today, in stationery especially, planagrams are redundant in my view. Your own data is your best guide of what your shoppers want and what, you therefore, place where. Use your sales data. Run your own GP% return on floorspace calculations that are part of your newsXpress training. be guided by the results of that analysis. These processes work.


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