Australian Newsagency Blog

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

Covering up best selling magazines?

Mark Fletcher on June 10, 2018 5:10 AM

I got to a Hudsons News Friday at LaGuardia airport and smiled on seeing the cover they place over their more raunchy titles. I suspect they have the titles in the wrong location as the weeklies seem to be better sellers in this store.

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A confronting armed robbery

Mark Fletcher on June 9, 2018 12:49 PM

Staff at newsXpress Silver Sands in Western Australia were challenged in an armed robbery earlier this week. Here is the story of the confronting attack:

I was talking to a local butcher last week. They went cashless around three years ago. They commented that one reason they did this was to reduce the risk of robbery. It is an interesting discussion for retailers to have.

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Promoting Knit & Stitch launch issue

Mark Fletcher on June 9, 2018 5:34 AM

The launch issue of this new part series should sell out thanks to the TVC. The best way to leverage this is with front of store promotion. Basket data indicate partworks shoppers are more likely to purchase other items than regular magazine shoppers. Here is the TVC:

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Embracing the Win A Car opportunity to drive magazine sales

Mark Fletcher on June 8, 2018 1:01 PM

The Win A Car promotions from Pacific Magazines always work for us, driving traffic and sales. We leverage the opportunity with a terrific in-store display, which is matched by out of store marketing pitching the display so people visiting the centre have an opportunity to recognise it.

I encourage all newsagents in Nexus, the Pacific Magazines newsagent marketing program, to promote Win A Car.

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How could the Amazon decision to block overseas sales to Australia play out?

Mark Fletcher on June 8, 2018 6:55 AM

Amazon recently announced they plan to block the sales of goods from its overseas sites to Australian shoppers because of new GST rules that apply from July 1, 2018, to items purchased overseas.

I think this issue will take time to play out. I say this based on Amazon being essentially a landlord for many businesses on its Marketplace platform. Those suppliers stand to miss out the most in that Amazon itself is already locating in its new Australian warehouse the items it is likely to ship from its own inventory.

Amazon Marketplace acts as a landlord with supplier pricing similarly structured to what we see from shopping centre landlords. There is a cost to place products on then platform and layers of other costs depending on services you leverage. However, it offers even more services.

For example, an Amazon Marketplace supplier can provide Amazon products for fulfilment by Amazon from Amazon warehouses.

The Amazon announcement that they will block purchases from overseas could result in overseas located Amazon Marketplace suppliers moving inventory to Australia for local fulfilment. That would be a win for Amazon as local fulfilment is a fee for service offer.

I expect that plenty of Amazon Marketplace suppliers are agitating Amazon re their announcement. If sufficient do complain, the company could address its apparent tech barrier to collecting the GST imposed by the Australian government. If these suppliers do not want to locate product at the Australian Amazon warehouse and if the business is important enough to them they will find another solution. If that solution cuts revenue Amazon wants, it will find a way to solve the problem.

Regardless, what actually happens will be driven by Australian consumer demand. The higher demand for a product the more likely it will be purchased by Australians through Amazon.

Amazon is a pragmatic, commercially driven, business. While their announcement last week was at first glance a shock, I can see ways this plays out well for the company, possibly helping it make more money without Australian consumers missing out on anything.

What does this have to do with newsagents? Plenty. This whole topic is at the heart of business discussions among large and small retailers today given the important of online in the retail mix. If the discussion feels foreign to you, there is much to learn about online and how it is impacting event consumer facing business around the world.

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A breach of trust: the theft of a newsagency business

Mark Fletcher on June 7, 2018 6:04 AM

A long term newsagency family with two businesses was finding things tough. They had been trying to negotiate a solution to an expensive lease in a shopping centre, relying on help from an advisor with whom they had had a commercial relationship for such matters.

With each offer rejected and cash reserves perilously low, they decided to close the business. The landlord agreed.

They were shocked to discover a close business associate of their advisor, someone well connected with the company their advisor is part of, signed a lease for a newsagency business for the space they vacated, a considerably better lease than they were advised the landlord would agree to for them.

Their many years of work building goodwill for the business was lost when they gave up the tenancy. That goodwill is the gain of the party stepping into what was their space.

While I am no lawyer, here are questions one could ask the advisor, the business they are part of and the landlord:

  1. How do you explain your associate getting a better rent deal than the newsagency family, who are also business associates?
  2. When was the first discussion with the landlord about a possible change of tenant?
    1. Who instigated the discussion?
    2. What specifically was discussed?
  3. Did you disclose the details of all discussions between yourself and the landlord with the newsagency family? If not, why not?
  4. Why did you not ever disclose that another party, also a business associate, might be interested in the business of the newsagency family?
  5. What are your financial dealings with the associate who has not got the tenancy?
  6. Is the associate who has not got the tenancy in a commercial relationship with your business similar in nature to that the newsagency family had with your business?
  7. How many other times when you have been negotiating on behalf of a business associate has the landlord rejected their offer only to subsequently accept an offer from another party with whom you are associated?
  8. What are your qualifications to represent any tenant in negotiations with landlords?
  9. What are your qualifications to represent the interests of the newsagency family?
  10. How was the transaction but to Tatts? What specifically did you or your associate represent to Tatts?

I would also seek access to all correspondence, written and electronic, between landlord representatives, the advisor, the now new tenant and any related parties.

This could be a case worth litigating as I see it happening too often. It would only be through litigation that the matter could be properly and fully explored. However, our channel being what it is, individual newsagents rarely litigate.

Note: To avoid litigation against me and to protect those involved, identifying details of this story have been necessarily left out.

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→ 13 CommentsCategory: Ethics · Retail tenancy

My thoughts on 2018 so far for retail newsagency businesses

Mark Fletcher on June 6, 2018 6:08 AM

Here is a video I shot a few days ago where I explore the state of our channel an categories at the core of many businesses in our channel.

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Have you been overloaded with Frankie magazine?

Mark Fletcher on June 5, 2018 11:59 AM

Several newsagents have reported being overloaded with Frankie magazine in recent months. Here is data from one store. Outside of the Christmas issue bump, the numbers are clear. The oversupply for issues 83 and 84 is obvious. Whoever is in control of setting supply, the publisher or Gotch, owes an explanation.

Other magazine publishers take note – oversupply like this gets newsagents cutting magazine space allocation. Based on the history for this business I’d say supply of 40 to 50 copies is reasonable. 115 is bad. 130 for the latest issue is ridiculous.

Newsagents face considerable costs in oversupply situations due to the out of date and broken magazine distribution model.

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What can newsagents do to achieve a better retail tenancy occupancy cost?

Mark Fletcher on June 4, 2018 5:59 AM

The usual go-to place for any discussion about reducing occupancy costs is the landlord. Retailers, including newsagents, blame their landlords for high occupancy costs.

The thing is, we all sign our leases. We all agree the terms of our leases. While leases from years ago can be problematic today, the challenges of our channel were obvious ten and more years ago.

Here is a list of things I think newsagents and other retailers could do to improve their occupancy cost situation where occupancy cost is the ratio of all lease related costs to revenue for products (and commission from agency lines). You should also assess it as a ratio of GP.

There are many steps one can take to improve the occupancy cost situation:

  1. Negotiate with the landlord. I place this first as it is the usual go-to place for retailers. If you plan to seek a better deal, make sure you have a strong commercial case, a case backed by evidence. However, also know that a rent reduction does not provide long-term, growth like, benefit.
  2. Grow your overall GP%. Do this through broadening your product mix with a focus on sought-after higher than average GP% for your business items. It depends on the suppliers from whom you purchase and the extent of point of difference you leverage in what you sell.
  3. Increase foot traffic. Do this through ranging more diverse products and promoting your business outside the business. Success with this depends on the range of inventory you offer and how this is promoted outside the business. It depends on the reasons why you attract people to your business.
  4. Increase basket depth per transaction. Do this through shop floor engagement, sales counter product placement, key traffic freeway disruption and your business format.
  5. Increase GP for everyday items over which you have pricing control. Plain and simple – increases your prices. Success with this depends on thoughtful adjustment where you know it can be done without reducing unit sales volume.
  6. Broaden the appeal of your business. This idea picks up on some thoughts above but adds more. Here is what I mean – your business up to today attracts shoppers for a set range of reasons / purposes. Note those down. Now, contemplate adding sought-after considerably higher than average GP for your business products and / or services that are genuinely new for your business and that are not satisfied by a nearby business. Each new product / service reason, if successful, improves your occupancy cost situation.

These are items you can action right away, regardless of your occupancy cost situation. Items 2 through 6 and tasks that should be core business activities you pursue relentlessly.

The cost of retail space is Australia is higher than most countries in the world. It needs to reset. However, the level of reset necessary will not happen as long as people keep signing leases that are not viable.

Here is how the opportunities I have outlined above can play out. I have two scenarios for you:

  1. Traditional newsagency. Shopping centre based. Average GP% between 28% and 32%. $1M revenue (product revenue plus agency commission). Occupancy cost of 25%.
  2. Transitioning newsagency. Shopping centre based. Average GP% 45%+. $1M revenue. Occupancy cost 25% – but closer to sustainable because of higher GP%.

My core point here with this post is that as retailers we can take steps to buttress our businesses against high occupancy costs. However, to do this we need landlords to agree flexibility with what we sell as it will likely need to be outside the old-school permitted use clause for a newsagency.

There are those in this place and in our channel more broadly with strong opinions about what will work and what will not. Some even tell those in businesses and claiming success that what they claim is not possible. The thing is, we all live our own truth. For some, that is in what has happened in our businesses publicly while for others it is what we see happen daily without public disclosure.

Newsagents can run sustainable businesses in shopping centres as long as they have the right opportunities in their leases, the right approach to managing a retail business today and a love of change.

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→ 32 CommentsCategory: Newsagency challenges · Newsagency management · newsagency of the future · Newsagency opportunities · Retail tenancy

Winter marketing ideas for newsagents and other small business retailers

Mark Fletcher on June 3, 2018 7:24 AM

These months between Mother’s Day and Father’s Day can be challenging in retail businesses that rely on seasons. Here are some easy and cheap to implement ideas for promoting retail in these cold months:

  1. Run a sunshine themed art competition. Get people drawing bright pictures and sharing photos of sunshine.  Create a wall of brightness for people to see and embrace.
  2. Cook a tasty winter slow cooker dish and invite people to taste it. The small will make the shop more appealing and, hopefully, help you sell the book the recipe is from.
  3. Run a SHARE THE WARMTH PROMOTION where you encourage customers to send a card to a friend, loved-one or a family member just because … to share warmth with them. Warm a heart this winter.
  4. Contact any local quilting, knitting and sewing clubs, clubs that engage in winter-themed crafts – invite them to do a craft display. If you execute this well they will tell their friends who will come in and check out what’s on show. Offer some hospitality for their engagement.
  5. Call your discount voucher coupons (on the bottom of your receipts) WINTER WARMER CASHsave money with $$$ savings off your next purchase. Thank you for shopping with us.
  6. Run a HIBERNATION SALE – themed for winter. Offer products your customers can hibernate with at a discount. It doesn’t have to be much. This sale is more about getting them to look at items you have that they would not usually buy.
  7. Contact local businesses and offer FREE DELIVERY for all stationery orders for the next two months to introduce them to your competitive range of stationery. Promote it as a SAME DAY DELIVERY SERVICE.
  8. Give team members WINTER THANK YOU COUPONS. These could be, say, 10% off. Each staff member could give away a set number each day to someone they help on the shop floor to spend above a pre set trigger point. The goal here is to get your team engaging with shoppers and rewarding shoppers who respond by buying more.

None of this is brain surgery or all that innovative. Some of the ideas have been pitched here before at different times. My point is that right now, in the middle of Winter, we need to act to drive traffic, to make our shops warmer and more appealing … to get our communities talking about us.

Embrace Winter as something to celebrate. Give shoppers near your business a reason to visit.

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News Corp. shows the future of news access is digital

Mark Fletcher on June 2, 2018 6:59 AM

Check out the ink and paper being invested in in the Cairns Post promoting the digital news delivery channel, as seen Tuesday this week.

On the front page…

Pages 10 and 11…

In the sports pages…

For the record, the publisher is doing what I would do if I were them. The circulation level for the paper along with a drop in ad revenue and increased production and distribution costs mean the question of closure of print is a discussion of timing only.

Newsagents need to be running businesses that do not rely whatsoever on newspaper customers and revenue for success.

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Lottoland claims it is the only lottery for Aussies on Friday

Mark Fletcher on June 1, 2018 8:09 AM

Their latest Facebook ad in which it calls its product a lottery and transaction bets:

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VANA claims responsibility for Tatts possible movement on remuneration

Mark Fletcher on June 1, 2018 6:40 AM

Several newsagents forwarded me n email sent to them by VANA yesterday in which the Victorian association claims the Tatts move is a result of their efforts.

Not one newsagent who contacted me was complimentary of the VANA email.

Dear Retailer,

Recently you would have received communication from Tatts outlining the possibility of “a comprehensive and holistic review of the remuneration” received by retailers.

We are thrilled that our lobbying efforts, at state and federal levels, has outlined the detriments of monopolistic behaviours and has allowed Tatts to focus on redressing the remuneration model. Without a doubt, the unintended consequences, if the Interactive Gambling Legislation Bill is passed, will further entrench a monopoly in the lotteries space.

Keep in mind, Tatts decided almost 2 months ago that there would be no commission growth after months of deliberations in Victoria.

It is obvious from this concession by Tatts that none of this would have been possible if we did not take a strong and unified stance. Showing leadership and purpose for a more equitable remuneration/revenue share model which has now elicited from Tatts a welcomed response. It is only through having a complementary product in the lotteries space that will redress the power imbalance currently at play and provide the competitive tension that is needed.

Unlike others, we did not seek to be compromised as a committed and dutiful representative body, who fears no one and battles for our small business sector. Why would you expect anything less?

By aligning with overseas entrants, whose product does not compete with Tatts and whose customer base is made up of novelty punters, we were able to create competitive tension in the market, which ultimately has led to Tatts recognising the value of a “shared future”.

If there is no intent to change the model, then the only future that we could see evolving was one where their online sales would grow towards 25% putting undue pressure on the channel in a stressed retail environment.

It’s important to also note that revenue which comes in from lotteries goes into consolidated government revenue. From here, it is the government who ultimately decides where to spend lotteries revenue. It is the government that builds hospitals and schools, not lottery organisations. When these organisations donate to charities then we applaud them all the way and we applaud Tatts for making these valuable contributions to our communities.

It should also be noted that VANA has ACCC accreditation and can, on behalf of its members and the wider industry seek ACCC involvement if need be. We also support a tax framework that taxes betting on overseas lotteries and the obvious consumer protections around this. We believe the point of consumption tax being introduced will redress any shortfalls.

There has been talk of “Trust”, well it’s ironic that words such as this and a “shared future” are now part of their vernacular. We would argue that the competitive pressure from VANA and our sister organisation in NSW / ACT NANA, has been able to bring about the stated possible concessions which we hope will construct a future online revenue share model.

As your representative body, we will never give up the fight and we will only trust those whose actions align with our members/industry interests. Representative bodies must always put their members’ interests before those which inadvertently align with a strategy to erode physical lottery sales.

Deliberations with the Victorian State Government have added to the narrative, where our industries pain points are taken into account by Tatts. We applaud the recent notice from Tatts and can see a genuine purpose from them to address the imbalance as their online lottery sales grow.

We received a letter from Minister Kairouz outlining her government’s recognition of our concerns pursuant to schedule 4 of the license. She has further added that it is her expectation that Tatts will review comprehensively the remuneration available to distributors.

VANA is not only encouraged but thankful for the Minister’s input and efforts to ensure our industry is treated equitably with respect.

Newsagents / Lottery agents need strong leadership to fight on their behalf, not roll over when tough decisions need to be made.

VANA is confident that as we work through these issues with Tabcorp/Tatts, there will be positive outcomes not only for the franchisor but also for the franchisee retailer.

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Newsagency sales benchmark results: Core categories in retail newsagencies challenged while specialty categories grow.

Mark Fletcher on May 31, 2018 6:16 AM

This newsagency sales benchmark study reflects sales results as tracked in 149 retail newsagency businesses in Australia for the January through March quarter of 2018 compared to the same period in 2017.

Only businesses with accurate data are included in the study.

With under 3,000 businesses in this channel, the number of participants is considered as a good indicator of overall channel performance. In collating data, I have removed businesses at the extremes where other factors are at play such as major construction shutting a street or a newsagency in a centre with two newsagencies where one closed and thereby giving an unnatural boost to the other.

Each data point is the average, mean, of all data for the data point.

In collating results, I have only included data for each category businesses trading in that category.

OVERALL BUSINESS PERFORMANCE METRICS.

  • Customer traffic. Down 3%
  • Overall sales. Down 4%
  • Basket depth. Flat.
  • Basket dollar value. Flat.

CORE PRODUCTS.

  • Newspapers. Unit sales. Down 9.3%.
  • Magazines. Unit sales. Down 8.8%.
  • Greeting cards. Revenue. Down 2.7%.
  • Stationery. Revenue. Down 7.6%
  • Lotteries. Revenue. Flat.
  • Tobacco. Revenue. Down 16%.
  • Agency. Parcels, gift cards, betting account top-up. Down 6%.

SPECIALTY PRODUCTS.

  • Gifts. Revenue. Up 2%.
  • Toys. Revenue. Up 9.2%.
  • Plush. Revenue. Up 3.1%.
  • Collectibles. Revenue. Up 2.4%.
  • Craft. Revenue. Up 3.1%.
  • Coffee. Revenue. Up 11%.

What does this mean?

These core products numbers reflect continuing challenges in the core for newsagency businesses. This is not news given the benchmark results for years now.

In my opinion, the decline in newspapers, and magazines to a lesser extent, impacts the results for other products in the core such as stationery and cards. If this is true, it reinforces the importance of having other traffic drivers in a retail business, giving shoppers other compelling reasons to visit.

The occupancy cost challenge – a note for landlords.

Landlords want newsagency businesses in their retail mix. They want the store with papers, magazines, lotteries and other core items for the channel. Often, they restrict the space available for non-core, imposing a low gross profit model on businesses, thereby increasing occupancy cost.

Newsagencies today cannot sustain occupancy costs of more than 15%. The goal must be 11% for the business to be profitable and able to serve the usual level of debt needed for such a business.

Landlords need to be aware of the changes in product mix, the challenges of low-margin core products and restrictions they place on what businesses can sell. They need to be flexible on rent so newsagency businesses can be sustained and thereby provide the service they want in their centre.

If landlords want a newsagency business they need to price the space to reflect the nature of a sustainable business in that location rather than any premium rent they could get from a retailer with higher margins.

Labour cost – dealing with the challenge and opportunity.

Labour cost for an average newsagency sits at 16% of revenue where revenue is product revenue plus agency commission.

On a pure benchmark analysis, this is too high. However, the right labour invested in the right location in-store generates a good return. For example, a skilled person working the shop floor in high margin product categories can deliver valuable benefits whereas the right person working newspapers or magazines is less valuable.

When it comes to labour investment and management the core focus must be on customer-facing. That means having the maximum labour time possible situated to be accessible to customers. You do this by shifting to the shop floor as much work as possible – pricing, returns etc.

Newsagents need to manage their roster carefully and manage employee hours to be customer facing focused and engaged on a shared goal of driving revenue from each customer visit. Sharing information with employees is key to achieving this.

The specialty opportunity.

It is easy to say to newsagents get into one or more of the specialty areas. There are suppliers who will pitch products in these areas. The challenge is how you drive success. Getting the right product is part of the story. Visual merchandising, employee training, shop floor engagement and out of store marketing are all important factors. These all require relentless focus. Putting a category of products on the shelves is not sufficient.

Specialty products are rapidly evolving, presenting more opportunities over time. Keeping yourself informed of the opportunities, especially ahead of any wave, is key.

Mark Fletcher.
Email: mark@towersystems.com.au  Website: www.towersystems.com.au  Blog: www.newsagencyblog.com.au
M | 0418 321 338

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→ 33 CommentsCategory: Newsagency benchmark · Newsagency management · newsagency marketing · newsagency of the future · Newsagency opportunities

UK survey claims WH Smith worst high street store

Mark Fletcher on May 30, 2018 6:54 AM

Which?, a 60 year old consumer survey and advocacy business ran a recent survey that resulted in WH Smith being named the worst high street retailer in the UK.

The challenge is that the survey results are not based on large numbers and the survey process itself is not ideal.

What is interesting to me is the considerable defence mounted by news outlets. Of course, they are conflicted in that WH Smith is a major retailer of their products.

In my own experience, WH Smith stores on the high street are uninteresting. They are destination stores for magazines, newspapers, books, greeting cards, candy and stationery. However, there are more interesting specialty retailers in each of these product categories.

The old department store approach of WH Smith has no future in retail today on the high street. In transit I think it has a place. On the high street,. however, supermarkets other specialty retailers and online have all made the old general store or mini department store uncompetitive and, as I noted, uninteresting.

All of us in retail need to have a unique selling proposition, USP, that draws shoppers in, something we stand for that is compelling and interesting. While some might argue that a USP is less relevant where convenience is a factor, on the high street convenience is not what it once was given the blurring of lines between retail business channels and online.

The other aspect of WH Smith that is uninteresting for me is the shop floor experience. There is little experience from what I can see. The stores are formatted and run for destination shopping. This sees less shopper interaction. The tone is set especially strong in  stores with self checkout. The subtle message of these is do it yourself because we are not here to help you.

There has been considerable media coverage in the UK about the survey. This is good as it leads to a discussion about the role of WH Smith and, by association, newsagency businesses. While some discussion I have seen has been uninformed, there have been interesting points from which those interested can learn.

For me, the survey is a reminder of the importance of … creating fresh and engaging shopper experiences, providing genuine and personal shop floor experiences, respecting your customers and being known as a destination store for products people like. This is not a complete list FYI.

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Tips for managing casual employees

Mark Fletcher on May 29, 2018 5:43 AM

Casual employees are important in the employee mix in retail businesses. The nature of the work, being casual, can challenge consistency of service. Here are some tips for making the most of casual employees:

  • Roster early. The greater certainty you offer about the roster the more encouragement for certainty from your casual team.
  • Train. Everyone in retail needs good training and regular training.
  • Set expectations. Be clear as to what you expect each shift.
  • Delegate responsibility. Each person on a shift including casuals, should have tasks (and goals) for which they are responsible.
  • Reward. If you pay the award expect expect award (average) engagement and results. Paying a bit more, once earned, shows appreciation beyond the average.
  • Change the roster. Being casual, this is important. Roster to need. If someone’s roster does not change, they could be more suited as permanent part time.
  • Team. Make sure casual employee feel welcome and part of the team.
  • Listen. Casual employees who are not in the business every day can provide you fresh-eyes insights.

The best casual employees who want to work and who want their time with you to count for something. Since we hire, train, motivate and fire we can influence this.

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Is the new Australia Post ship direct to China shop a breach of competitive neutrality?

Mark Fletcher on May 28, 2018 6:13 AM

Australia Post has opened a shop in Chatswood NSW where shoppers can select items for direct to China shipment. The store is aimed at Chinese personal shoppers, providing them an easy ship service that other Australian retailers struggle to achieve thanks to Australia Post inefficiencies for online retailers.

This is where I wonder if Australia Post is breaching competitive neutrality obligations it has as a government owned business. It appears to be giving its own business benefits that it does not give other retailers chasing online sales.

From Treasury:

Competitive neutrality requires that government business activities should not enjoy any net competitive advantages simply by virtue of public sector ownership. This allows market competition to drive the efficient production of goods and services by the lowest cost business.

This latest Australia Post, like so many in their corporate stores, leverages their government ownership and protection for competitive advantage.

The other issue here is the direct to China route opened for selling baby formula, product that can be challenging for Australian families to buy from Australian supermarkets. This is another aspect of this new Australia Post business that warrants discussion.

I am grateful to a regular visitor to this blog who pointed me to the story. Their concern related to the milk issue and the evolution of Australia Post – that baby formula is in short supply in particular.

Australia Post is straying further from its charter, leveraging its government ownership and protection to compete with commercial businesses.

The federal government listens to the Murdoch family when they complain about government owned ABC  commercial enterprises harming their commercial interests, why do they not listed when small business newsagents and other retailers complain about how the government owned Australia Post leverages its protection and government ownership to hurt them? Because small business only matters at election time.

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→ 2 CommentsCategory: Australia Post · Competition · Social responsibility

The extra step is worth it in the newsagency

Mark Fletcher on May 27, 2018 7:19 AM

I was thrilled to see the royal wedding magazine counter pitch at one of my stores Thursday just passed. Sure, the magazine placement for impulse purchase of what we had available was good. It was the wedding cards next to them that excited me. This placement is all about maximising the impulse purchase opportunity within the theme of the broader placement.

Success in our businesses today is more about these small steps, many of them, pursued relentlessly.

What you pitch at the counter is key. It needs to be relevant, fresh, engaged and regularly changed.

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News Corp. papers continue pressure on Tatts and small business newsagents with Lottoland report

Mark Fletcher on May 26, 2018 7:24 AM

The Weekend Australian today runs what to me reads like another Lottoland press release, continuing the News Corp. support for Lottoland.

Dirt campaign, really? What Tatts did is provide newsagents with resources to use if they wished, resources that reflected what Lottoland offers in terms of products. Tatts did this at the urging of lottery retailers. Click here to see part of the Tatts campaign. This is hardly dirt.

In the article, there is also mention of the Lottoland focus on ALNA, the body representing newsagents nationally in the fight against the Lottoland betting business.

Mr Brill earlier this month said he believed the government had been misled into believing that ALNA represented the views of 4000 newsagents nationally, when its membership was 707 paid members.

ASIC documents, he said, raised questions about ALNA’s ability to operate as a going concern, let alone to represent the interests of its members.

“Rather than address the shocking state of its financial affairs, ALNA has inexplicably taken part in a $5m lobbying campaign to convince the government to ban online lottery betting, which will leave newsagents at the mercy of a Tabcorp monopoly,” the Lottoland chief said.

All the money in the lobbying campaign was spent prior to the $11 billion merger between Tatts and Tabcorp, which was completed late last year.

In a letter to NSW Racing Minister Paul Toole, also obtained by The Australian, Mr Brill says Tatts had funded a $5m national campaign to eradicate Lottoland as a competitor and to preserve its market power.

Lottoland is the company that launched chef in Australia attacking newsagents, all newsagents, mocking us, belittling us, all to sell what was pitched as a lottery product when, in fact, it was a betting product.

While I can no longer find the first ad they aired as it is no longer on YouTube, this one is still available:

They ran their ads mocking newsagents relentlessly. We were their first and prime target for more than a year. Back then there was no talk of wanting fairness for Australians or offering of support for newsagents. No, they only did that when federal parliament got closer to banning their model.

I complained to the advertising standards council and ACMA about their ads, without success. It think there was a standards issue with their actions. There was success by others against Lottoland on standards.

The report in today’s paper reads like it was written by the Lottoland PR people as it lacks genuine reporting and it lacks balance in my opinion.

The NSW Public Lotteries Act says a licensee has to be of “good repute, having regard to … honesty and integrity”.

Disciplinary action can include sanctions and suspension of licences. Tatts subsidiary NSW Lotteries Corp holds three licences in NSW.

Lottoland, which takes bets on overseas lotteries, offered news and lottery agents across Australia a profit-sharing arrangement, under which newsagents would receive 20 per cent of profits generated from every bet on overseas lotteries that they referred to Lottoland.

Where is the question of integrity and honesty in terms of Lottoland and what they have done to the newsagent channel. For most of their time in Australia they waged a successful campaign turning traffic away from newsagency businesses. Where is News Corp. on this? Why is this not a story?

Non Australian tax paying Overseas betting agency wages war on small business family newsagents.

Where is that headline in the News Corp. newspapers?

The Lottoland PR machine is good. It has the right connections and it has apparent easy access within News Corp., which itself could benefit from investigation. It is being aided and abetted by state based VANA and NANA support. As I noted yesterday, this maintains a decades-long split in our channel.

While federal politicians go through the legislative process, lottery retailers need to be focussed on their over the counter pitch.

My view that newsagents have nothing to gain from a relationship with Lottoland has not changed.

But back to business. On October 11, 2016 I suggested on this blog ways lottery retailers could, through their actions, push back on Lottoland. here they are again as I think actions over the counter are what are needed still:

  1. Ensure your lottery customers receive excellent customer service every time. Excellent customer service is:
  2. Always smile.
  3. Never sit behind the counter.
  4. Never charge a credit or debit card surcharge.
  5. Always have the youngest person working at the lottery counter.
  6. Provide free breath mints at the counter for staff.
  7. Provide hand sanitiser for staff and customers to access at the counter.
  8. If anyone behind the counter wears reading glasses, take them off when talking with customers – do not leave them on and look over them.
  9. Blokes should not wear cardigans or jumpers such as what we see in the Lottoland ad.
  10. Be cheerful when paying out a prize on tickets purchased elsewhere.
  11. Be cheerful when people say the same thing over and over. The alternative is having no one in your shop at all.
  12. If you sell candy of any sort, every so often offer a free tasting. Look for more ways to add value to the shopper visit.
  13. In winter offer free soup at lunchtime.
  14. In summer offer access to cups and filtered water.
  15. If you are on the high street, have a bowl of water for dogs.
  16. Celebrate all wins in-store on your noticeboard as well as on your business Facebook page.
  17. Run a second chance draw and actively encourage every customer to engage with this. Be generous with the prize.
  18. As an alternative for a second chance draw, host a BBQ event in the shop for the prize draw. Di this once a year, quarterly or six monthly with the prize commensurate with the frequency and business size. For example, in a shop with $250,000 in lottery commission, second chance draw prizes should value at least $10,000 a year. In fact, if it were my business, I’d be more likely to go with $24,000, $2,000 a month. Yes, you have to be that bold I think.
  19. Establish a community noticeboard and welcome free notices. Somewhere on the board have a subtle sign: Your support of this business helps us support your community.
  20. Share links to news reports about data security breaches by hackers with comments like: shopping in-store is safer or Our shop is a hacker free zone. Print the stories and place them on your community noticeboard.
  21. List every local community group you support on the noticeboard with a certificate.
  22. Thank community groups you support with a note on Facebook like: We are grateful for the opportunity to support the work of xxx community group.
  23. Ensure your staff understand what Lottoland is and isn’t and are able to explain why purchasing lottery products from your business is better for them and the community.
  24. From out the front of your shop make sure it looks appealing to passers-by.
  25. As people step into the shop make sure the pitch is fresh and enjoyable. Get rid of anything that looks or feels like an old-style newsagency.

All newsagents selling lottery products need to urgently ensure their businesses look nothing like the Lottoland depiction. You have to distance yourselves from the Lottoland depiction.

This work is urgent. No one will do it for you. Tatts appears asleep at the wheel on Lottoland. Or, as I suspect, they like the idea of educating people to move online.

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→ 1 CommentCategory: Competition · Ethics · Newsagency management · newsagency marketing · Social responsibility

NANA weighs in on Tatts move on newsagent commission

Mark Fletcher on May 25, 2018 9:55 PM

NANA sent out this email earlier today. I’ll let it speak for itself:

Lotteries announcement – no surprises – let’s watch the leopard change its spots
The announcement earlier this afternoon from Tabcorp/Tatts Group Lotteries comes as no surprise. The competitive pressure caused by alternate online wagering products, in NANA’s opinion, is having an impact on the shoddy treatment that Tabcorp/Tatts Group has dished out to lotteries franchisees for too long.

Remember, Tabcorp/Tatts Group is currently and has been for some time, directly competing against lotteries franchisees in the online space. Their 31 December 2017 financial reports emphasise they had already achieved 16 1/2% of total sales online. There is every likelihood that figure is now higher as their attempts to redirect sales to online continue.

NANA is not sure how “the Lott” can do anything regarding a remuneration model. “the Lott” doesn’t have any commercial relationships with Newsagents in NSW and ACT. “the Lott” is a branding exercise. In NSW and ACT your lotteries franchise is with NSW Lotteries Corporation Pty Ltd.

Just about every day the outlet survey program interrupts your business and raises often insignificant and almost pointless matters which require correction. NANA received a referral from a Member Newsagent today. His shop was visited by a NSW Lotteries area manager on the day before a site survey inspection. The area manager said all was good. The survey resulted in a breach notice. If the full time staff of NSW Lotteries cannot get things right, why should Newsagents then be disadvantaged? The survey staff are not Newsagents or lotteries agents. Many appear to be part-time students or backpackers. NANA recently had cause to request that one surveyor be taken off the account – they turned up in joggers, tracksuit pants, a t-shirt and baseball cap. The only thing missing was the “hoody”. The same surveyor refused to correctly identify themselves. Surveyors are taking photographs of your shop which are in direct contravention of the method specified on Retailers Web. Their habit of taking a panoramic photograph from each of the corners of your shop gives them a total floor plan. This is a security issue. It is also in direct contravention of the stated standard from NSW Lotteries. They know it, NSW Lotteries know it, but nothing changes.

The strong identification by Tatts Group of one newsagency group is clear evidence that the “quid pro pro” for blindly supporting Tatts Group’s $5M campaign to deny Newsagents of another income stream is being delivered. Unless you as a lotteries outlet are prepared to turn your terminal off or starve Tatts Group of income from sales, collective bargaining under the guise of an ACCC endorsement is a ruse.

Neither Tatts Group Lotteries, Tabcorp nor NSW Lotteries Corporation Pty Ltd creates public infrastructure like hospitals, schools and sporting groups. They bought a license from the NSW Government. They pay a license fee. If the NSW Government held onto the business themselves (like in Western Australia) they would still have the income. License fees are paid and the NSW Government accepts fees into consolidated revenue and then it decides how to spend the money, the same way as it decides how to spend any other money it receives. They could be using the money for anything, there is no way to tell.

Tatts Group and the other entities may donate money to good causes. That is different to what they claim. If they do donate, that’s good news.

How much aggro have the recent changes to Powerball caused you? They were warned but appear to have done nothing in advance to address obvious concerns raised by Newsagents..

How does a leopard suddenly change its spots.

NSW Lotteries Corporation Pty Ltd could have extended the moratorium on selling lotteries products in chain supermarkets. They have been asked to extend it by the NSW Government as a show of support for Newsagents and other lotteries outlets. There has not been an extension.

NANA looks forward to working with Tabcorp/Tatts Lotteries and NSW Lotteries Corporation as we enter a new age of positive engagement. NANA also looks forward to working closely with VANA, our sister organisation in Victoria as we work together to ensure that the largest combined block of Newsagents in Australia get a fair go from the lotteries franchisors.

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→ No CommentsCategory: Competition · Ethics · Lotteries · Social responsibility

New remuneration model for lottery retailers

Mark Fletcher on May 25, 2018 4:00 PM

The Lott communicated to newsagents today about work on a new remuneration model. ALNA has communicated on this too:

Dear licensed lottery outlet owner,

the Lott and ALNA including the LRA are working together on a new remuneration model 

For more than a century, Australia’s official licenced lotteries have forged a close working partnership with valued small business owners, like you, across the country.

A mark of trust 

During this time, your customers have come to know and trust your local lottery products. In Australia, State and Territory Government’s decide whether or not to issue lottery licenses. Analysis is done by each individual Government to determine the most sustainable structure, and what is in the best interest of the community before awarding lotteries licences to organisations that have a demonstrated track record of conducting lotteries in line with strict regulations and community standards.

More recently, Australians have come to appreciate how the Lott – Australia’s Official Lotteries play an important role in helping to support Australian communities with over $1.1 billion available for hospitals, schools and sporting groups. Australia’s Official Lotteries also support Australian small businesses with over $340 million in commissions paid to retailers last year.

Our shared future 

The Lott have advised their focus remains on how we can work more closely with our retail network to forge a stronger future. They understand there are concerns that need to be addressed and actions that need to be taken and that’s why the Lott are committed to working alongside our retailers and industry bodies, such as Australian Lottery & Newsagents Association (ALNA).

In conjunction with ALNA (Australia’s only ACCC authorised national lotteries industry body), we are well progressed with a comprehensive and holistic review of the remuneration received by our retailers, including commissions across retail and digital channels, fees and other future-reward mechanisms.

The Lott and ALNA are already in discussions and have our next meeting scheduled on 4 June 2018 to review and discuss a proposed new model. We look forward to seeking feedback from and keeping our retailers informed through regular updates on the progress with these key initiatives.

With the Lott’s portfolio of games continuing to grow and evolve, they see a great opportunity for our retail network to continue to share the benefits of being part of Australia’s official lotteries.

I look forward to updating you again soon. In the meantime, please continue to email membership@alna.net.au or call 02 9978 3400 to share your thoughts and questions.

Warmest regards

Adam Joy

Chief Executive Officer

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→ 8 CommentsCategory: Lotteries

Broken newsagent representation as VANA and NANA continue to pitch for Lottoland

Mark Fletcher on May 25, 2018 6:13 AM

State based associations VANA and NANA are pitching for Lottoland as the company considers a High Court challenge to the parliamentary threat to its ability to trade in Australia as News Corp. outlets reported.

Victorian Association for Newsagents general manager Chris Samartzis and Newsagents Association of NSW and ACT chief Ian Booth both support Lottoland. They say the legislation before parliament will stop increased competition in lotteries, hurting small businesses.

“It will create a monolithic monopoly in Australia, which is not in the interest of small business,” Mr Booth said.

That Aussie newsagents are not represented by a single voice on national issues weakens representation in my opinion.

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→ 3 CommentsCategory: Newsagent representation

Lottoland has not slowed its advertising

Mark Fletcher on May 25, 2018 6:07 AM

In TV and on social media platforms, including this ad…

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Lost Herald Sun sales yesterday

Mark Fletcher on May 24, 2018 6:11 AM

The distribution newsagent did not provide the royal wedding insert for the Herald Sun yesterday. Time was wasted chasing. Customers were frustrated, and bought their Herald Sun from supermarkets in the same centre. They don’t have their newspaper supply meddled with by a petty minded distribution newsagent.

It is experiences like this that move one closer to quitting papers from the business.

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→ 3 CommentsCategory: Newspapers · Ugh!

Go figure…

Mark Fletcher on May 23, 2018 7:33 PM

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→ 2 CommentsCategory: Ugh!