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

How small business retailers can manage and be prepared for the increase in labour cost

The Fair Work Commission decision to increase award wages yesterday is being reported in some media outlets as a blow to small business owners.

The increase in wages is still less than the increase in rent. I mention that solely as a reference point – given that retailers sign leases with those increases locked in.

To deal with rising business costs, it’s appropriate that businesses increase what they charge where they can. Here are some things newsagents can do:

  • Cards. review the average sell price of cards you stock and consider whether your supplier could help you stock more expensive cards without negatively impacting sales.
  • Photocopying. Most newsagents undercharge for this. It’s a convenience service. Charge as such.
  • Stationery. The common mark up is 100%. Consider increasing that to 105%. In many newsagencies, stationery sales are convenience based. Charging a convenience premium is fair.
  • Gifts. Your target gift revenue should be at least 3 times your card revenue. This is a category over which you have more control on price. Reach beyond what you have been doing.
  • Be serious about a loyalty offer. The more people purchase in a visit, the more valuable the visit. It takes work, but can easily fund itself and enhance the bottom line.
  • Review the roster. An hour trimmed each week funds 20 hours of the increase.

This list is a start. Smart newsagents will already be doing these things and more.

On balance, the actions need to include increasing margin where you can, getting existing shoppers spending more, attracting new shoppers and driving total floorspace efficiency. These are all retail management 101 steps, all achievable. Those focussed as agents may struggle, but that is the lot of an agent. retailers, engaged retailers, will be in good shape.

Talk to your marketing group, seek their advice. They should already be onto this with you.

Any local retail business managed well can digest the modest hourly rate increase without missing a beat.

This is an opportunity for us to show some business journos and some in big business retail trade groups that dealing with the wage rise can be done successfully in local small business retail.

Newsagency management

Join the discussion

  1. Steve

    Inflation is a curse that needs to be brought under control. In the US it is now at its highest level since 1981. Sadly the RBA have been very slow to react. As interest rate and prices increase consumer discretionary spending can only decrease. Anything we do to improve our cashflow will become more and more important.


  2. Peter

    The business owners they have on the news talking about the payrise makes us all sound like complainers. I like your list Mark. Commonsense there.


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