Australian Newsagency Blog

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Q3 2018 newsagency performance benchmark results

Mark Fletcher
November 23rd, 2018 · 3 Comments

Core categories in trouble. New categories growing.

This newsagency sales benchmark study reflects sales results as tracked in 147 retail newsagency businesses in Australia for the third quarter of 2018 compared to the same period in 2017. Only businesses with accurate data are included.

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

In assessing results at the category level, I have only included data for each category businesses trading in that category.

OVERALL BUSINESS PERFORMANCE METRICS.

  • Customer traffic. Down 3.5%
  • Overall sales. Down 3%
  • Basket depth.No change.
  • Basket dollar value.Up .5%

CORE PRODUCTS.

  • Newspapers. Unit sales. Down 11.5%.
  • Magazines. Unit sales. Down 10.5%.
  • Greeting cards. Revenue. Down 5%.
  • Stationery. Revenue. Down 12.5%
  • Lotteries. Revenue. Down 3%
  • Tobacco. Revenue. Down 15%.
  • Agency. Parcels, gift cards, betting account top-up. Down 6%.

SPECIALTY PRODUCTS.

  • Gifts. Revenue. Up 4%
  • Toys. Revenue. Up 5%.
  • Plush. Revenue. Up 7%.
  • Collectibles. Revenue. Up 5%.
  • Craft. Revenue. Up 3%.
  • Coffee. Revenue. Up 17%.

What does this mean?

It was a particularly tough quarter with all traditional, core, categories declining. Also, the gap between businesses at either end of the performance spectrum is wider than ever.

New traffic should be priority #1 in every newsagency business. By this I mean, traffic for products the business is not traditionally known for. This is hard work as it involves the whole of the business: buying, pricing, display, in-store engagement and out of store marketing … all of which needs to be done under the name of the business but in a way that keeps this connection in the background.

I think a crucial data point that would be interesting to gather and discuss internally is…

How many unfamiliar faces did we see today?

Track this as much as possible. Pursuing a goal starts with accurate base line data.

The GP challenge.

At the core of chasing new business is the need to lift the profitability of the business. A key way for doing this is making more from each item you sell. That does not necessarily mean selling everything at the highest possible price., A better approach could be to sell more items with a higher overall average GP.

If you were, for example, to decrease revenue from papers and magazines and increase revenue for gifts, you could see overall business GP grow in that the GP% of gift can be double or more than of cards.

The supplier challenge.

The mix of suppliers to the channel is changing. As a supplier learns what they could make from newsagents, they tend to seek to engage with more newsagents. This is something to be wary of as the point of difference you may have once had an as early adopter can diminish once late bloomers latch on to something.

This is a reason for change in the supply mix. While for sure there will be everyday core lines, the reality is that change for at least a third, especially in gift, is important.

Final words.

It is easy to wallow and roll around in the challenges and negativity. That will not fix anything in your newsagency business. That is 100% ion you. Take a step, no matter how small, every day, toward a brighter future. Do something, anything, that moves you beyond the current trajectory if you are unhappy with the current trajectory. Wallowing, complaining … they are not beneficial steps and usually serve to make things worse.

Own your situation and own your obligation to improve it. Do this and there are many in the channel who will help.

Mark Fletcher.
Email: mark@towersystems.com.au  Website: www.towersystems.com.au  Blog: www.newsagencyblog.com.au
M | 0418 321 338

10 likes

Category: Media disruption · Newsagency management · newsagency of the future · Newsagency opportunities

3 responses so far ↓

  • 1 Colin // Nov 23, 2018 at 8:19 AM

    I concur with comments on changing suppliers. At any one point we have several suppliers or brands we are phasing out. Often we have identified a quite similar item to replace it. Our top seller home fragrance range 2 years ago is currently being supplanted by another with a very different look, but basically the same product. Change is essential and needs to be constant.

    1 likes

  • 2 Jim // Nov 25, 2018 at 4:34 PM

    Interesting that you have lotteries revenue down 3%. My zone is up 15% financial ytd and a lot of that strength was in the Sep qtr. Either regional qld is outperforming significantly or your data is questionable. Just saying.

    0 likes

  • 3 Billy B // Nov 26, 2018 at 9:03 AM

    Our SE Qld zone also showed around a 15% increase.

    0 likes

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