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

Year: 2022

Where else in the world does a government owned retail network compete with local family-owned small businesses?

The Australia Post Back to School catalogue has been delivered and, once again, we have government owned retail shops leveraging their protected status to chase business that otherwise could / should go to private enterprise, including local small business retailers like newsagents.

I have no issue with privately owned Licenced Post Offices. My only issue is with the government owned Post Offices. In my view, the government have no place owning businesses that compete with established private enterprises in this way, especially since the private businesses were in this pace first.

Any politician who cares for local small business would try and do something about this issue. But, as we have seen for decades in Australia, they won’t.

I first started writing at this Newsagency Blog about the issue in 2006. back then, I had a government owned Post Office directly opposite my business, in a Melbourne shopping centre. Here is one of my posts from then:

IS SIR HUMPHREY APPLEBY WORKING FOR THE GOVERNMENT?

On September 26 I wrote to, among others, Federal Minister for Small Business, Fran Bailey about Australia Post and the unfair advantage their Government-owned Australia Post stores had and how they were specifically targeting small businesses, specifically newsagencies. In my letter I said, in part:

When farmers talk of the impact of droughts the government steps in with assistance. When auto makers talk of the impact of cheap imports the government steps in and helps. When newsagents talk of the impact of Australia Post the government ignores us.

Australia Post is our drought. For many years now it has been draining newsagencies of revenue.

Yesterday, I received this reply from the Minister. While I appreciate the response, it is meaningless. The letter says, in part:

The Australian Government recognises the importance of newsagencies in our communities and is committed to creating a fair trading environment for all small businesses.

It also makes the claim that Australia Post is permitted to:

…carry on any business or activity that is incidental or relates to the supply of postal services.

This morning I have responded with this letter to the Minister. How can the Government consider Music CDs, Chess sets, Radios, Puzzles and Cookbooks to meet the criteria under the Act? Why will the Government not take steps to have the Australia Post breach of its obligations under the Act investigated?

The Government is conflicted beyond its ownership and regulation of Australia Post. As my letter to the Minister today says:

For decades, newsagents were profitable while they had a monopoly on the distribution of newspapers and magazines. In 1999 the Government facilitated the deregulation of the distribution of newspapers and magazines. As we have lost the benefits of exclusive traffic as a result of this deregulation, Australia Post has increased its range of newsagent type lines and thereby very successfully leveraged its continued exclusivity to more effectively compete with us.

I am not calling for a wind-back of newspaper and magazine deregulation. Rather, I am calling for the Government to get out of the business of competing with independent small business.

I was in a Government owned Post Office yesterday and was confronted with a big display of plush product – soft toys. Where in the Act are provisions permitting Australia Post to enter the soft toy space? Their entry into this category this Christmas season will affect sales in my newsagency.

I am disappointed that the Government will not even for a moment contemplate that they are wrong on this and that the actions of their Corporation are harming a small business channel which is vital to the community.

Yes, Sir Humphrey Appleby is alive and well and writing letters for the Government.

I suspect the only time the federal government will exit owning and running shops through Australia Post is when they can make a chunk of money selling the retail shops to some big business mate.

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Australia Post

Happy New year: News Corp. announces 13.6% price increase for daily newspapers

News Corp. sent this notice to newsagents yesterday:

10 January 2022

Cover price rise for News Corp Australia publications

Dear Retailer,

Effective Monday 17 January 2022, the Monday to Friday cover price of the following publications will increase by 30 cents to $2.50.

  • Herald Sun
  • The Daily Telegraph
  • The Courier-Mail
  • The Advertiser
  • The Mercury
  • NT News
  • Geelong Advertiser
  • Gold Coast Bulletin
  • Townsville Bulletin
  • Cairns Post
  • The Chronicle

A full list of all relevant News Corp Australia publication covers prices, retailer commissions and prices to account as at 17 January 2022 is provided below.

We ask that you notify customers of the price change and ensure your systems are updated on the effective date to reflect these changes.

We thank you for your continued support and look forward to continuing to partner with you in driving new sales opportunities.

Newsagents make 31.25 cents from selling one of these papers. The space the a single title newspaper takes in the shop can cost between $500.00 and $1,500 a year. The labour cost of handling the a newspaper title can cost around $3,500 a year if there are no issues – this does not include the cost of selling them. Other costs for the papers (theft, insurance, tech etc.) can cost around $500.00 a year. So, at the high end, that’s roughly $5,500.00 in costs, or 17,600 newspapers sold.

An average newsagency in a good suburban situation will sell 65 papers a day. That’s 23,660 a year, or $7,393.75 in gross profit, from which to fund the costs noted above. That leaves $1,893.75 to cover the cost of selling the papers and dealing with issues, like short supply or late papers.

By deregulating newspaper supply, the money newsagents make from newspapers has been slashed, making them borderline economically valuable in a newsagency business. But, we keep them.

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Newsagency challenges

What’s it like for local small business newsagents in a community impacted by Covid

Thanks to inaction by government on containing Covid and the opening up of the country and it’s population to the virus, local small business retailers like newsagents are now daily dealing with significant consequences, and we are doing this with minimal government support or understanding.

Staffing is difficult with more virus around. There are newsagencies operating on reduced hours, some have had to close. Some owners are working 100 hours a week as they have no staff available – because of Covid infection, lack of access to childcare or because of fear – and their small regional community relies on the business for plenty of essentials. The staffing challenges are distressing many.

Customer anger is up, way up. The anti-vaxxers have a louder voice than ever, emboldened by recent capital city protests, and they are happy to use it in a shop enforcing mask requirements. Some anti-vaxxers vent in the shop or at the front door while others take to social media, posting bad reviews – and good luck to retailers trying to get those bad reviews taken down.

Rapid Antigen Test access is a big problem. Many newsagents were selling Rapid Antigen Tests tests last year. Backorders have been cancelled because of late government action on access to the tests. This is adding to stress for those running newsagencies and local communities relying on them for test supply.

Overheads are up. There are masks to buy as well as more cleaning supplies and other requirements necessary in these new settings.

Sales are all over the place. In plenty of newsagencies, sales are down because people are self regulating in the absence of government regulations, and isolating – but this time with more fear than when lockdowns were imposed. Whereas in 2020 and 2021 almost every newsagency in Australia saw double-digit growth, the let it rip approach pushed by NSW and now accepted nationally (except for WA) has resulted in more fear in the community and this fear keeps people home and not willing to spend. This happening in an economy with no business support settings is a new set of challenges.

Government support has disappeared. While dealing with Covid costs local small business retailers like newsagents much more than over the last two years, support from government is non-existent. So much for their care and concern for small business.

Whereas in 2020 and much of 2021 there was federal and state government clarity on rules and settings. Today, it’s a moving feast. The rule changes are hard to keep up with. Some don’t make sense. Some place us at more risk, letting people into the community when they may still be infectious. This adds to stress in the community and being local community hub businesses, newsagents feel it, every day.

2022 has not started off as anyone expected.

While the challenges are considerable, newsagents are doing their best, opening as much as they are able, providing as safe a retail setting as they can and offering their community support.

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Social responsibility

What a difference a supplier makes to gift packaging revenue in the newsagency

A suburban newsagency business sold $2,953.88 worth of gift packaging in 2019. In 2021, that same business sold $8,449.89 worth of gift packaging.

Revenue for the business is up, overall, by 59% in 2021 versus 2019. The gift packaging growth is 286%.

The stock weight / investment / space allocation is unchanged. The only change is the supplier.

What a result.

Retailers can’t bank promises or a supplier rep or merchandiser friendship. We can only bank over the counter results. This result is excellent for the business, and for the supplier to the business.

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Newsagency management

Newsagents discuss Omicron related challenges

It was terrific to host a meeting on Zoom Wednesday (live and recorded for those unable to join on camera or on audio by phone) in which we caught us with how Omicron was impacting the safe and effective management of newsagency businesses around the counter.

We talked for an hour, comparing notes, sharing ideas and offering encouragement.

The meeting brought together newsXpress members from around the country in a broad range of retail settings. The diversity of situations is helpful in developing a good understanding, because Omicron is playing out differently in different parts of Australia.

Beyond the challenges of navigating opening hour variations because of limited staff availability, there was good discussion about products that work in this situation and more.

Zoom continues to be a useful tool for connecting newsXpress who might otherwise not have been able to so easily connect – sharing experiences, ideas and opportunities.

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Newsagency management

GNS update on Rapid Antigen Test access for newsagents

GNS issued a statement this morning regarding access to Rapid Antigen Tests:

Dear Customers,

As you would be aware from press reporting, consumer demand for rapid antigen tests (RATs) has been unprecedented in recent days.  GNS sold out of these items (GNS codes 84779 and 84780) on 29 December and has been taking back-orders since, anticipating further supply being made available by our local supply partner based in Melbourne.

We were advised yesterday by our supplier that our expected delivery of RATs (due 5 January) was no longer to be supplied to us, as a result of Government action to seize RAT supply at point of import for public health purposes. Our supplier is currently waiting on an allocation of stock to be supplied from a new shipment due this week, although GNS has not been provided with a firm ETA at present.

In view of the uncertainty of supply, we have stopped taking orders for these products until we are confident we can fulfil existing demand. Please note, an allocation process will be in place to ensure a fair distribution for all back-order customers of that stock we are able to secure.

Future supply, and the terms on which supply may be made available, will be communicated to those customers with back-orders in due course.  If you wish to cancel your existing back-order(s) please contact Customer Service who will be able to assist.

Thank you for your understanding in what has been an incredibly challenging supply market, and apologies for any inconvenience caused.

Kind regards,

Adam Wedge
Head of Merchandise

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Social responsibility

6 local retailer resolutions for a more enjoyable 2022

  • Touch data less. Every time you touch data, entering an invoice, entering accounting data, it’s an opportunity for mistake or, worse, fraud. 
  • Manage stock in one place. If you sell online and in a physical shop, manage your stock in one place. Double handling is fraught, and it wastes time.
  • Add a revenue stream. Seek out new products or services. Broaden the appeal of your business. Broader appeal = stronger foundations.
  • Leverage you. It’s likely your knowledge and passion are a key difference for your business. Share it. Your competitors can’t compete with you.
  • Copy less. Big retailers advertise loyalty programs to trick shoppers to think points are a reward. Be different, run an honest loyalty program.
  • Be authentically local. When you buy local, talk about it, celebrate it and, show shoppers with the local message on products tags and more.
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Newsagency management

How to do a magazine relay in your newsagency

I first shared advice on how to relay magazines to drive growth in sales back in 2006. Over the years I have shared updated advice here.

While magazines are not as important as they were, and some newsagents don’t have the category at all, I revisited the advice. I share the revised advice below. This is one of 200+ articles on the newsXpress member knowledge base.

In editing the advice, I did a relay two weeks ago in the business I just bought, which does close to $300,000 a year in magazine sales. I read the earlier advice, did the relay and edited the advice. I mention this to make the point that I am writing from current experience. The relay in this business was the first step. next, coming soon, is a trimming of space taken by magazines, to reduce their occupancy cost and thereby improve their profitability. But, the relay had to be the first step.

How to do a magazine relay in your newsagency

A magazine relay is the process of recasting, improving, the layout of magazines in your business, with the main goal of increasing sales and a secondary goal of improving retail space efficiency.

Typically, a relay of 1,000 magazine pockets can be completed in 4 hours. This time investment can add 5% and more to sales. (I did this recently (December 2021) in a shop that had never had a magazine relay.)

In an older version of this advice we advised what to place where. That is not what we consider best practice today. No, today’s approach is more organic, more what you want for your business.

Think of it as starting with a blank canvas and no plan as to what the final art will look like.

DO IT YOURSELF, DO IT ALONE.

A magazine relay is a statement about the business, a marketing and management activity. It sets the tone and says this is who we are, what we do and what we stand for. Doing it yourself is a leadershipstatement. Doing it alone means less conflict, less noise. And remember, the relay is not a destination … because regular change in magazine layout is essential.

PLACEMENT.

Magazines are best located on a wall of the shop, and not in a centre fixture taking up premium retail space best allocated to higher margin and business differentiating products.

VISUAL NOISE.

Magazine covers are colourful. Adding more noise, such as product headers, can detract from the products. Consider a less is more approach, allowing the products to speak for themselves.

FULL FACING OR NOT.

Full facing is a term used in 2 ways: where 100% of the cover of a magazine is shown (true full facing) and where you have 1 magazine title per pocket in a tiered magazine fixture.

If you have the space on a wall and have less than 500 magazine titles, true full facing, showing 100% of the cover, can deliver best results.

In tiered fixtures, while full facing, one title per pocket works best, fitting 2 or 3 titles in a pocket can work with low volume special interest titles people will seek out.

BEACON BRANDING.

This is the process of using magazine mastheads to draw attention to a category of magazines. Use the top 2 or 3 pockets for a single title, allowing it to draw attention.

OWN THE RELAY.

There is no right or wrong. In our experience doing relays in. many different situations, the best approach to a relay is to start … just start. You will soon find your groove and see decisions you can make.

DOING THE RELAY.

Start at one end of a fixture. Take off all the titles for between 3 and 6 columns and rebuild, with purpose, to draw attention, tell a story and drive sales.

As you build up a column, take off magazines from another 1 – 3 columns, always keeping empty space between where you are working and the old layout.

Look ahead, read the categories on display and think about where you are at compared to where you are headed.

ADJACENCIES.

This is a bit of secret sauce. It is where you can make editorial decisions, business decisions to guide your shoppers. What works best with what. You don’t know, not for sure at least, how can you. Ok, there is basket data you could read … but that only tells you what is happening. What about what could happen? Who knows. Experiment!

For example, should you put model plane magazines next to flying magazines? Or, should model plane magazines be in a distinct section of all model titles?

Do puzzle shoppers shop by brand or puzzle type. Publishers want you to layout based on their brand whereas your shoppers are, in our opinion, more likely to shop by interest. For example, all sudoku titles could work better together, or all large print titles could work better together.

ADJACENCY SUGGESTIONS.

Here are some adjacency suggestions. They are not rules. They are shared here to help you think of your own.

  • Cricket, golf and swimming go well together. Wrestling, boxing and buff-type fitness go well together.
  • Soccer is not rugby or AFL. Don’t mix them together.
  • Classic car titles need to be distinctly separated from regular car titles.
  • Classic car titles work well with classic trucks.
  • Car lovers do shop by brand. Place branded magazine titles together.
  • People interested in home renovation could be interested in any renovation title.
  • Creative arts go well together: painting, writing, craft.

EASE OF SHOPPING.

If you have a tall fixture, think of your customers. There is no point placing titles targeting older shoppers up high or down low as reaching or bending could be challenging for them.

WORKING THE RELAY.

Work your way down the fixtures, creating the placement and adjacencies that you want.

Ideally, get it done in one session.

So people know you are focussed, put headphones on. Ignore everyone asking you questions.

Get it done.

HAND OVER.

Once you are done, walk the new layout with others working in the shop. Explain your decisions. Given them a response for customer comments. Make sure that everyone in the business is on your page.

WATCH AND MEASURE.

Next, watch shoppers and listen for feedback and, after a couple of weeks, look at the sales results. The results could guide adjustments, or not.

BE READY TO DO IT AGAIN.

If you have more than 300 magazine titles in your shop, a relay at least every year is a good investment … because magazine shoppers are usually loyal and that loyalty can benefit other, higher margin, parts of your business.

If you have made it this far, thanks for reading.  Magazines really are a point of difference which we need to work harder at embracing – despite the challenges of the distribution system.

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magazines

2021 vs. 2019 in Aussie newsagencies: new benchmark study launched

I have emailed newsagents yesterday morning calling for data for a 2021 vs. 2019 newsagency sales benchmark study.

I am collating data for a benchmark study, comparing sales covering 2021 vs. 2019.

To best understand 2021, it’s best to compare to 2019, a more stable trading period.

I need your emailed report ASAP please.

How to participate.

  1. Please run a Monthly Sales Comparison Report for 01/01/2021 – 31/12/2021 compared to 01/01/2019 – 31/12/2019.
  2. Tick the category box. IMPORTANT.
  3. Tick to exclude home delivery and sub agent data.
  4. DO NOT tick the supplier box.
  5. Preview the report on the screen. Save as a PDF.
  6. Email these reports direct to me at mark@towersystems.com.au.
  7. Read the report yourself and see what it shows you about your business.

I will email the results to all participating newsagents and publish the results on the Australian Newsagency Blog as a service for all newsagents.

I am keen to see how the numbers stack up. Early indications are terrific.

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Newsagency benchmark
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