I like to take some time on a Sunday to see how my shops are performing. I own 2 in Westfield centres and one on the high street.
They are newsagencies, but they are not. They don’t have stationery, convenience lines or lotteries. One does not have magazines.
The main revenue categories in each are gifts, toys, cards and self care.
I was surprised and happy yesterday morning looking at September results. Comparing 2021 to 2019, each is experiencing significant double digit growth. While I expected the high street business to be doing well, the results for the Westfield businesses is a surprise.
I compare 2021 with 2019 as that provides the best status check on the business today compared to pre-Covid.
One of our Westfield stores should not even be there. Our 7-year lease was up in June this year. In December 2019 I advised Westfield we did not want a new lease. I did this as I saw high street situations as more appealing. Then, Covid hit and the landlord blinked. I negotiated an terrific rent reduction to stay to the end of 2022.
Here’s what’s weird. The massive rent reduction and Covid combined to drive us to ignore the past and to play in this business like there is no tomorrow.
In September 2019, this business did $8,526.52 in card sales. In September this year, the business did $19,741.40 in card sales.
For a product category with a 65% gross profit, this growth is especially valuable. What makes it more valuable is the shopper basket connection between card sales and gifts / homewares. Gift revenue in September 2021 is more than card revenue.
I think it’s our decision to play in the business like there is no tomorrow that has played a role in these results.
With $0 capital investment we created a more Covid appropriate card and gift shopper experience at the same time as splitting from one major card supplier to two. We also completely re-wrote our gift packaging story and re-cast our gift offer.
We also embraced Christmas early and we have a strong sensory toy range, which if you read the article in the Weekend Fin this past weekend you’d know is huge. We’ve been doing well with sensory since early 2020.
Our shops have been open through Covid as they meet the essential retail criteria. The Westfield shops have done it tough because people favour high street shopping over the centres in this pandemic. We knew we had to find a way to make the shop more appealing.
So, using the data in our POS software and tossing out some assumptions and ignoring landlord rules, in June we made the moves I have outlined here.
What’s my point? Why am I writing this?
First up, unashamedly, I am illustrating the value of us, a POS software company, owning retail shops. While your shop may not be the same as mine, retail is retail and I think the closer I and others in my POS software company are to local retail the better the POS software is that we make.
The other reason I want to share the story about the cards was to pitch the experience of playing in the business like there is no tomorrow. It helps us break traditions, find new ways, embrace new opportunities and worry less.
I know of some newsagents who pressure card companies for higher rebates. The thing is, you can’t bank a rebate without sales. The most valuable benefit for a newsagency from cards is sales growth. Rebate is the icing on that cake.
Another reason to share the story is to encourage newsagents to actively manage cards, don’t leave it for the supplier.
Great article. Where newsagents and rebates are concerned from some Major Card companies, the rebates are based on the sales purchased FROM the supplier by the reseller -not the sales purchased by the customer.
Yes, it’s why I remind newsagents you can’t bank a rebate like you can bank sales through the register.