Australian Newsagency Blog

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

Landlords continue to change traditional newsagency businesses

Mark Fletcher
September 4th, 2019 · 2 Comments

Every week I hear from a different landlord (or two, or three)pitching a tenancy, or tenancies, if their centre that would be ideal for a traditional newsagency. When I ask what they think a traditional newsagency sells they almost always say: papers, magazines, lotteries, cigarettes and lollies. Pushed, they will add cards and phone recharge.

Some say they would not permit a newsagency to sell gifts while others say yes to gifts but no to homewares or toys.

Landlords of shopping centres are a problem for our channel. They are living in the dark ages.

These shopping centre landlords do not want newsagencies of 2019 and beyond. No, they want convenience stores offering categories that we either have left behind or managed to a small footprint as we chase new traffic and higher overall GP%. Which is okay. There is a place for those businesses, the businesses that offer papers, magazines, lotteries, cigarettes and lollies as their core.

So, in addition to Australia having more retail space per capital than most other countries and our retail space priced higher than most others, we also have to content with landlords who guide retailers to setup businesses that are focussed on the past more than on the future.

They get people agreeing to this. I heard from someone last week who had just signed a lease for a new 30-shop centre being built in regional Australia, in an economically affluent area. They had agreed to a 150 sq m newsagency that would sell papers, magazines, lotteries, cigarettes and lollies. Oh, and cards and small gifts (under $20).  This would be their first retail business and they wanted help to create it. They thought they were on a winner, based on projections from the landlord.

I suggested they get the projections in writing and ask the landlord for people to speak to, to guide the creation of the business. The landlord refused, saying the projections were guidance only and not  to be relied on. In talking abut how they planned full the shop they figured it as 33% magazines, 20% cards, 25% lotteries and the rest in convenience products and management.

I asked they has created a cashflow projection model for the business. They had not. They referred back to the landlord projection on  how good a newsagency would be.

And landlords wonder why some traditional newsagency businesses go broke.

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Category: Ethics · Social responsibility

2 responses so far ↓

  • 1 Jonathan Wilson // Sep 4, 2019 at 8:29 AM

    All too often a landlord (especially in a smaller centre) will seek to limit what a newsagent (or some other business) can sell in order to protect other businesses in the centre.

    For example stopping a newsagent from selling gifts to protect another retailer already selling gifts (which may well be one of those “tobacconists” that happen to sell smokes alongside a whole pile of gifts and licensed crap and other things).

    Or stopping a fish & chip shop from selling burgers because they have a burger joint in the centre as well and don’t want the fish & chip shop to complete.

    3 likes

  • 2 Graeme Day // Sep 4, 2019 at 9:06 AM

    Jonathan, this is the traditional way and sometimes that style of landlord still may try to enforce this.
    Today under competition aws you can range up to 25% of a competitors type of specialty retail store product.
    i.e. Gifts in a newsagency versus a Gift stor.
    Also Shopping Centres Big and small use what ever suits them whenever they feel like it as you can see thay have no compunction in openeing one specialty concept against another i.e. two Bookshops. any unlimited number of Cafes.
    It’s a case of deregulation of anything goes especially when you see the example that Mark gave the other day re Bookshops and socks.
    In Pacific Fair Book Face have a Coffee and Cake outlet on the lease line facing the mall and yet there are literally dozens of cafes wihin short walking distance. the situation of restriction is very challengeable.

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