Australian Newsagency Blog

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Magazine sales decline 9.5% in Q1 2021 compared to 2019

Mark Fletcher
May 19th, 2021 · 8 Comments

I am close to completing the January – March 2021 versus 2019 newsagency sales benchmark study and am surprised by the extent of decline for magazines.

Magazine unit sales are down, on average, 9.5%. The surprise that only 2 of the 150+ businesses that submitted data reported an increase in magazine sales. What highlights that for me is that 78% of the respondent businesses reported an increase in overall revenue. This is the surprise – the extent of business revenue growth in businesses reporting significant decline in magazine sales.

The trajectory for magazines pre Covid continues.

Note: I am comparing 2021 with 2019 as 2020 for many businesses was an aberration because of lockdown and our channel being open while plenty of competitors were closed.

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Category: magazines

8 responses so far ↓

  • 1 Colin // May 20, 2021 at 8:42 PM

    Mark,

    The flip side of 78% seeing overall increase in revenue is 22% have declining revenues over a 2 year period. Each has an increasing cost base. The same 22% will inevitably close. Terrible!

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  • 2 Graeme Day // May 21, 2021 at 7:10 AM

    The last Quarter in comparison with the past two Y.O.Y. showed a slight increase in many mag sales as well newspapers. it’s thin however other product sales have been much better. Stationery also is so, so.
    Mark I wonder how much of the mag sales are because stock levels? many I visit show a lack of stock. The displays look terrible with empty with pockets everywhere.
    It makes me wonder whether it is a result of no sales or no sales as a result. This could be becasue of cash flow difficulties. Either way as Coiln puts this 22% is going out of business.
    Maybe the newsagent needs help in understanding their problem, where it lies and how to fix it especially if other categories within their shops are doing better in comparison over the same period.

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  • 3 Steve // May 21, 2021 at 9:20 AM

    Spot on Graeme.

    As Mark has been highlighting the decline in magazine publications and therefore sales has presented our channel with opportunities to replace some of our former magazine floor space with higher margin product lines. For us we decreased our magazine floor space over this period by a massive 40 per cent and replaced this space with books.

    Whilst we still sell over $200k of magazines a year our magazine sales have declined by $487 per week (11.6%) in comparison to the same quarter in 2019. On the other hand our book sales ( with a minimum margin for us of 47.5 per cent) have increased by $1,418 per week for the same period due to the increased floor space. Toy & Giftware sales have also provided significant growth. We find books very conducive to cross selling with these 2 product lines and our card and wrap lines I say this to encourage others to embrace the opportunities.

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  • 4 Colin // May 23, 2021 at 11:24 AM

    Graeme – I agree with the stock level issue. I have seen a tendency to reduce pockets yet still have empty pockets or cascades of just a few titles. Many newsagents are being lazy, reducing space allocation should mean the remaining space works harder.

    Some months ago I made a determined effort to buy 2 magazines. I didn’t find either magazine in 4 of the shops I visited, one out of date title was in the 5th. But what really struck me was the lack of depth. I would not visit the 4 shops for magazines again.

    More recently I was gifted a 3 month subscription to one of the magazines. I didn’t renew the subscription but the lesson has been learnt.

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  • 5 Lexi // May 25, 2021 at 8:36 AM

    Hi Graeme, lack of depth. I’ve just owned my newsagency for 19 months, and we just spent the last 6-12 months looking at our range and rearranging the way they are displayed to enable us to move out a mag rack and put other stock there. I have spoken with our mag supplier to find our store was on a Tier 2 level of ordering. We’ve not lost any depth at all, in fact they keep increasing ours! We have many many titles. Even with Covid closing down some of the publications. Maybe worth talking to supplier? Ours told me I could go Tier 1 which would be a copy of every title available plus automatically all new titles, or drop to Tier 3 which would cut back some of the new title issues. I’ve elected to stay on Tier 2 as our sales haven’t changed too much in our area. could be worth looking into though? As yes having not the right titles does put customers off coming back.

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  • 6 Graeme Day // May 25, 2021 at 2:04 PM

    Lexi,
    Thanks for your inflormation I am pleased that you have addresssed the problem of supply and presentation of what sells. I am no longer a retailer newsagent however I do have skin in the industry as a Consultant and Broker. Part of this is keeping up with the decline in the newsagency industry and as to why.
    Mark, on the Blog, constantly place issues before all to look at, so thay can transition the old model into the new future model. Magazines are a low profit, high maintenance product- mainlt wages. therefore it is important to do what you are doing to maximise your sales. However the other cost is the display space (this means more rent per sq. metre in costs of sales) allocated to low Gross Profit items. Magazines CAN take up more display space than necessary for a good return. It may be a good idea to look at how much floor space your display takes up versus alternative display models.
    if you have minimised your display space and maximised your Gross Profit return which in turn pays all the expenses including wages and returns a profit on the investment (area) then you have it right. If not Mark is referrring to alternative product with greater margin for better return. Each store may be different however the rate return per sq metre is the guide to identify the performance of the department servicing te space allocated

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  • 7 Shayne // May 25, 2021 at 4:49 PM

    In 14 years of owning a newsagency, I have never heard the term “Tier 1, 2 or 3” from Gotch. Thats a completely new one for me.

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  • 8 Lexi // Jun 7, 2021 at 10:08 PM

    Graeme – always a work in progress 🙂
    Shayne – I only got told it when I pushed for how they know what to send me as their algorithms that if a magazine doesn’t sell they wont send it, was working in reverse and I felt flooded!! Seems not many know about the Tier program….

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