Australian Newsagency Blog

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

The challenge of the convenience model for newsagents

Mark Fletcher
September 20th, 2018 · 5 Comments

In addition to my post on this topic earlier this year, here is a video I shot a last week where I talk more about the challenges I see in a convenience model for newsagents:

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Category: Convenience retail · Newsagency challenges

5 responses so far ↓

  • 1 SUNNY // Sep 28, 2018 at 7:17 PM

    Thanks Mark. Well said in your video regarding the challenge facing by newsagents who has focus on convenience model. and thanks for your understanding that some newsagents continuing the paths of offering convenience service and products.

    I had different view of the national brands of convenience stores groups and Coles & Wollies Express formats, and believe that they cannot dominate the convenience world by their marketing budget or greater number of outlets, or Unique Selling Points.

    Firstly, modern retail business is building on customers’ spending, which rely on customer’s credit. In Australia, customer spending in convenience world is not big enough for big players.

    In recently interview of President of 7-11 China, he state that 7-11 China will boost the number of stores to 20,000 in next 5 year, to count the falling in-store traffic, and provide more tailor-made meal solutions (including fruit and veg) and need more man-power in outlets. That will be huge investment in man power, technology, supply chains, which 7-11 Australia might not offer to its 600 member network.

    I had followed the stories of two Chinese new players in China Convenience industry in last 3 years. One of them just failed, with initial 500 stores network doesn’t generate enough income and run out of investors’ funding, despite of its advantage in customer’s apps and interactive in store.

    Secondly, don’t be afraid of Coles and Wollies’s ambition. They receive strong resistance of local communities for the two giants to buy new site and build one express format on it. I had witness their failure in four cases.

    Lastly, in history, UK newsagent has strong groups in convenience world, and 7-Eleven UK failed in 1990s.

    There is no magic bullets, but we should be proud of providing convenience product and services for local communities.

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  • 2 Colin // Sep 28, 2018 at 9:37 PM

    Sunny,

    You need to look at UK more closely. The big chains are rapidly closing in on all sites where convenience can exist. They are particularly successful with forecourt convenience, think OTR on steroids. They have done this whilst combating 3 continental discount chains. They dominate on line sales and home deliveries. Who has lost out…. the independent convenience stores. Most of which survive by working excessively long and unsocial hours.

    The local convenience as an arm of big format supernmarket will arrive. Believe it.

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  • 3 Mark Fletcher // Sep 29, 2018 at 8:02 AM

    Sunny, only time will tell in the debate. For me, as you know from our discussions on this topic, I see no upside in the convenience model for independent and small business retailers, none whatsoever.

    The convenience battle is global as that is what global brands want. It is what they need. It is why there is so much interest in the Amazon cashless model. You should read the many reports saying Amazon will open 3,000 of these outlets in the US. Here’s one story: https://www.fool.com/investing/2018/09/24/why-would-amazon-want-to-open-3000-cashierless-sto.aspx

    Independent retailers can and will do what they choose as being right for their circumstances. That is the beauty of being independent. However, no one has to agree with you, or me.

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  • 4 SUNNY // Sep 29, 2018 at 5:50 PM

    Thanks. Collins. I read a book 2 year ago, One stop, one life by Kevin Threlfall. In his book, he sold his 1000 strong C-store networks to Tesco in 2002. It is time for me to read something current on UK market.

    Mark, I read reports on Cashierless stores in China. 1.8 million users, RMB 38 billion revenue in 2017, expecting 15 million users this year. Major players already in the party.

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  • 5 Mark Fletcher // Sep 29, 2018 at 5:51 PM

    Australia is Australia.

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