We are promoting the new AWW cookbook – Sweet Things – and pitching the free copy of Gratins and Bakes available with any purchase with this feature display near our newspapers and next to our cookbook range. We also have the titles in a second location.
The latest newsagency sales benchmark report delivers mixed news on the performance of the newsagency channel. Traditional products deliver poor news while newer product areas deliver good news. The bad news is that the results are not uniform. The gap between newsagencies continues to widen, making it difficult for suppliers to transact with the channel uniformly.
Here are the results:
Overall newsagency sales decline. 51% of participating newsagencies reported a decline in revenue. This is an improvement on the previous quarter. Of those reporting a decline, the average was 5% – also an improvement. Of those reporting growth, the average was 5%.
Traffic. Customer traffic was down for 50% of newsagents recording an average decline of 2% in the number of transactions.
Basket depth. 48% of newsagents reported a decrease in basket size (items in the basket) with an average increase was 1.8%.
Basket value. 57% of newsagents reported an increase in basket value – with an average of 3.2%. While newsagents are selling fewer items, they are selling more expensive items.
Product mix. Traditional newsagency lines – newspapers and magazines – suffered the most, again. This should be very concerning to newsagents and their suppliers.
Discounting. The decline in discounting identified in the last quarter remains evidence for this quarter with only 27% of participating newsagencies reporting discounting of any significance.
The gap between the performance of the traditional newsagency and one chasing change is more evident than ever. The traditional newsagency is the type of business reporting the most significant decline whereas the newsagency pursuing new lines is the type of business reporting growth.
This newsagency sales benchmark study is based on an analysis of sales basket data from more than 150 newsagencies – city and country, shopping centre and high street, banner group and independent.
Benchmark results by key departments:
Magazines. 83% of newsagents reported an average decline (in units) of magazine sales of 6.3%.
Women’s Weeklies is the category reporting decline in more stores with 89% of all newsagencies in negative. The average unit sales decline for the category was 7.6%. With Women’s Weeklies accounting for, on average, 25% of all magazines sold, the scope of the decline is a concern. We have to ask ourselves: what are we doing about this? While it is easy to blame the products, we must also look at how we treat the category. Maybe doing the same today as what we did ten years ago is part of the problem here.
In the 11% of newsagencies reporting growth I specific categories driving this. For example, in one newsagency, partworks sales are up 300%, delivering 18% of all magazine sales. In another newsagency, craft title sales are up 11% and food titles up 13%. Talking to some participants achieving category specific growth, they put it down to strong local interest and specific attention by the business in this.
In a couple of newsagencies reporting magazine growth undertaking a whole of department magazine relay was put up as the reason for success.
Too many newsagents are bystanders with magazines. They do the bare minimum. While the magazine distribution model to newsagents is unfair and puts us at a competitive disadvantage, there are growth opportunities for newsagents. It takes work. The rewards are worth it.
Newspapers. 83% of newsagents reported an average decline of 6.7% in newspaper sales. Regional newspapers did not suffer as much as the capital city dailies.
Greeting cards. 43% of newsagents reported average growth of 5.1% revenue growth. Of the 57% reporting a decline, the average was 6% with some as high as 22%. If you’re reporting a decline in card sales you need to work on how you display the product, refreshing your offer and engage your staff with the category.
Stationery. 57% of newsagents reported an average decline of 3%. This continues a trend in newsagencies in relation to stationery. It feels like businesses are giving up.
Ink. 44% of stores participating in the study separate ink sales data allowing further analysis. 42% of these stores reported ink sales growth of 5%.
Gifts. 61% of the newsagents in the study have a separate gift department. Of these, 89% reported average year on year growth of 7%. A year ago I suggested that gift revenue should equal around a third of card revenue. Today, I see this as a benchmark, but one that should be passed if you’re more well-established in gifts.
Plush. 10% of newsagencies report on plush sales in a separate department. I recommend this. A reasonable sales benchmark for plush is revenue equal to 25% of card revenue. In stores reporting on plush, sales are up on average 19%.
Tobacco. 73% of stores with tobacco products reported a decline.
Confectionery. 53% of store reported an average decline of 2%.
Toys. 82% of stores with the department reporting growth of 5%.
Newsagencies continue to be good businesses to own. They respond to attention. There is good evidence of this in individual store data I have seen. The average newsagency with a retail model 10, 20 and 30 years old is the type of business in trouble. It’s unlikely to be doing anything to insulate against the changes we see impacting traditional lines.
The best type of newsagency to own continues to be the one where you have the most control over what you sell.
We create our own luck, now more than ever.
ABOUT THIS STUDY. This study is based on sales data collected from more than 146 newsagents across Australia. These newsagents represent five banner groups as well as independent operators. The only common thread among the newsagencies is that they all use the Tower Systems newsagency software. Around 63% of newsagents with a computer system use Tower. I have eliminated data from businesses where I knew that unique local factors impacted on the sales data.
Another Sunday and another pitch by the Herald Sun to our customers to stop buying their newspaper from us … and doing this by covering up the newspaper masthead and the lead story of the day.
Customers don’t like these stuck on ads. I don’t like them. They disrespect the product.
Confectionery is the most common product available for purchase at the counter in most Australian newsagencies. This is how it has been for decades as we have copied others with a last minute impulse purchase of a chocolate bar, chewing bum gum or mints. Since we’re copying everyone, margin is not ideal, indeed, it’s below the average margin we need and should be relentlessly chasing.
Too often, newsagents are stubborn in considering breaking free from confectionery at the counter. I put this down to fear that an alternative might not work and laziness in that they don’t have to think about alternatives. The reality is that plenty of newsagent suppliers offer good alternatives, higher margin alternatives, alternatives that could replace just some of the space taken by often under performing confectionery.
The glitter twist bangle in the photo is a good example of an ideal counter line that is better than confectionery. It’s purchased on impulse, has an excellent margin and moves your store away from a me-too counter.
Newsagents can be lazy when it comes to their counter. I know I have been. If what you are doing at your counter today is what you were doing a year ago, two years ago, longer – step back and reconsider your position. Is it the best you can do? Does it serve your business needs? Are the products delivering the margin, return on space and return on investment you need? Do the products reflect a point of difference?
Make a decision about what you want your customers to do at the counter, what you want them to buy on impulse. Be a retailer and manage the counter for your success.
Sometimes we complain that our customers don’t recognise our businesses from others. This is our fault. We control how different opur businesses look – outside mandated shopfits such as lotteries of course.
With retail and the traditional newsagency model changing more rapidly than at any time in our channel’s past, we need to reach out to new customers. I urge newsagents to set it as their goal to reach out to new customers every week. Whether it is through a personally delivered to a business, an approach to a community group for a co-op campaign, letterbox drops in a single street or some other activity, reach out to at least some one new every week.
If we don’t get more people onto the conveyer belt carrying people to our businesses then one day we will find that conveyerbelt not sustaining us.
Vodafone has terminated all retail product distribution arrangements, leaving retailers without easy access to Vodafone products. I’m told they plan to establish direct with retailer relationships. In the meantime? Nothing. This is leaving retailers, including newsagents, up the proverbial creek. The obvious gap in customer service is set to hurt Vodafone network numbers and customer perception even more than it has been hurt over the last year or two as the company shed many customers. It’s another brick for Vodafail.
I have now been contacted by several newsagents with many Vodafone customers. they are all asking if I have any ideas on future distribution arrangements. I contacted the company directly but that’s a challenge as the regular customer service entry point was a waste of time and my contacts are no longer with the company.
Beyond poor network service, another way to kill a telco brand is to cut off support for your customer facing retailers who have actively supported your brand and have been a point of purchase for recharging prepaid phones.
Changes by Network Services around the handling of supply of and backorders for the James Bond DB5 partwork are causing newsagents and their customers considerable frustration, lost time and, in some cases lost money. And the company appears to care less about it.
For some time now we have had issues on backorder to address undersupply issues. Around two weeks ago, network advised that they had cancelled all backorders. We called customer service and they advised that we would have to reorder issues and that they would be firm sale. We were also told that as our orders had been cancelled by Network and reorder would place us at the bottom of the queue.
Regulars here would know that I am a big fan of partworks. These flip flops and poor customer service from Network challenge that commitment. Their ineptitude in relation to the James Bond DB5 make us look bad. For a meagre margin it’s not worth it with this title.
Being able to stop and start the home delivery of newspapers is a long-held feature of the Australian newspaper home delivery model. I was surprised when someone asked me if I had herds, as they had, that Fairfax was planning on stopping the suspension service in a couple of months.
Of course, it could be that Fairfax will allow the suspension for the delivery but not an extension of the subscription period. This would allow the company a financial gain. Customers would be unhappy if it is the case.
So, has anyone heard anything about this?
We’re participating in a promotion where customers can get a free 600 ml Coke if they purchase any four participating magazines from Pacific Magazines in a set time period.
This promotion links well-known magazine brands with the best known beverage brand in the world. It’s also a point of difference for us compared to other Coke retailers in our shopping mall.
Promotions like this are important, especially when they are connected with the best-known brands.
For a good laugh, check out the article at Cracked.com on three very funny, and dangerous, do it yourself projects published in magazines many years ago. The things magazines publish! Cracked was a humour magazine from the US. I preferred it to Mad magazine.
I am almost done collating and analysing the sales data for the March quarter from newsagents participating in the latest newsagency sales benchmark study. I’ll release the report here Monday. One thing is for certain, the days of the traditional newsagency are over.
Check out this tweet telling people in the UK to get news about the passing of Margaret Thatcher online rather than by going to the local newsagents.
I was surprised at the news this week that we may not have a fast rail network established in Australia for thirty or more years.
For decades, federal and state politicians have let us down on major infrastructure projects, very fast rail being just one of them.
We ought to be ashamed that it takes longer to travel by train from Sydney to Newcastle than the time it takes to travel by train between Beijing and Nanjing in China, a 900km trip I did last year.
While I accept the extraordinary difference in population size and government of Australia and China, the need for and value to be gained from major infrastructure projects like fast rail is the same.
I am certain that if we have a fast rail connection between, say Sydney and Melbourne, Sydney and Canberra or Melbourne and Canberra years ago then today we would have a broader fast rail network.
The announcement of the latest report into fast rail in Australia released this week piqued my interest as I have just got back from two days in China. Yesterday, in the China Daily newspaper, they had a feature on their fast rail. 98,000 km of tracks, 85% of wood and crude oil shipped by rail, 4 billion tons of cargo transported annually … the numbers roll on.
If we had in Australia what China has we could get from Melbourne to Sydney in three hours and Sydney to Brisbane in four hours. Indeed, we could get from Melbourne to Perth in just six or seven hours. And we could do this in more comfort and with less stress than air travel.
Major infrastructure projects like fast rail can economically focus and define a generation. While I am no expert, it seems to me that this is the case in China.
Having such a network in Australia could reduce the cost of doing business and make Australia a more appealing destination for tourism and economic migrants.
Sure, we need to undertake projects like this within the scope of our population and economy. However, we will only grow and prosper as much as we challenge ourselves to.
It’s on infrastructure opportunities that we have lacked leadership in Australia for decades. I don’t want to wait thirty years.
I have announced dates for more Newsagency of the Future workshops. I’ve added dates for Cairns, Gold Coast, Albury, Geelong, Hobart, Darwin, Canberra and Newcastle.
This workshop series is based on entirely new content, relevant to what we find in 2013, based on what we learnt last year.
Newsagents, would be newsagents, newsagency employees and suppliers are welcome to attend. Access is free.
This workshop is designed to get everyone owning their future. We can’t rely on any supplier or association to deliver it to us. We also can’t rely on the newsagency shingle to deliver any upside.
I’ll look at the very latest retail trends, agency business versus retail, why size does not matter and how we can thrive in this world of change.
This two hour workshop will present a roadmap for those who want a roadmap, insights for those who want insights and hope for those seeking hope for the future of the newsagency business.
Last year, the Win a car promo from Pacific Magazines saw and average increase in sales of 11% for Pacific’s monthly magazines. This year’s promotion starts next Monday, April 15. A shopper will win a car and a newsagent will win a car. I love that the nexus website has our targets already setup – this gives us specific sales goals. I like that success is tied to sales growth rather than displays or other branding activity.
The participating titles are: New Idea, that’s life! WHO, FAMOUS, Better Homes and Gardens, marie claire, Women’s Health, Men’s Health, InStyle, Home Beautiful, Feast, Your Garden, Prevention, K-Zone, Total Girl, Girlfriend, Practical Parenting, Bride to Be, Diabetic Living.
We’ve put together a range of products to leverage what we have discovered is continuing interest among our customers in the Keep Calm and Carry On propaganda message from World War II.
These items are on a feature gift table facing into the mall. They attract shoppers as I saw first-hand Wednesday afternoon. One shopper purchased a gift after being drawn to the display while walking past our store.
I love it when we make a sale to someone attracted to us for products that are not traditional newsagency products. we all need to achieve more of this.
The Victorian Appeals Court has sentenced former Bill Express CFO Peter Couper to jail, saying the initial suspended sentence was ‘‘manifestly inadequate’’.
While this is good news, I wish that newsagents could achieve justice for the tens of millions of dollars they poured into Bill Express and associated businesses with nothing of value left to show for it.
The SMH has more on this story. For those new to the newsagency channel click here for some history as it unfolded.
With the announcement that award-winning journalist David Marr has joined a growing stable of respected journalists, The Guardian is showing its commitment to quality journalism in advance of its launch here later this year. While Fairfax has been shedding many quality people, here’s The Guardian picking some up.
The implication for newsagents and others selling newspapers is that The Guardian represents another news outlet not relying on retailers and distributors to get news in the hands of consumers.
My newsagency software company has organised an open forum discussion (April 16 @ 4pm) opportunity for newsagents. What is discussed is completely up to participating newsagents. There is no agenda. Any newsagent can participate. All you need is a computer with broadband access and a phone for a toll free call for audio.
There will be no advertising, no technology training or pitch, no suppliers, no associations. If you want to network with other newsagents without having to leave your shop, book now.
The photo shows the front of one of my newsagencies – facing into the mall. It’s from late last week. This is our pre Mother’s Day pitch.
As the photo shows, stock was already thinning, just a few days after setting these displays up.
On the left we have gifts targeting older shoppers while on the right we have impulse items mixed wi items targeting younger shoppers. In the middle we have products for NRL and AFL fans.
Out of shot and to the left we have plush which trails back into the store to our plush department.
We have far more success at attracting new traffic with this type of display than the more newsagency-traditional display. What’s particularly interesting is that people attracted by our gifts tend to walk more of the store than a newspaper or magazine destination shopper. This is a good example of how the gift space can work well for some of our traditional lines.
I’ve heard of some newsagents having magazine returns claims rejected recently. If this has happened to you I suggest you get onto it right away, find out what it’s happened and fix whatever has to be fixed to stop it happening. Whether it’s your newsagency software or your operational processes, complaining to the distributor is not going to resolve the situation since they have data for thousands of newsagents and can point to success among the majority in saying your problem is local to you and just a few others.
We received five copies of The Simple Things last week. It’s a new title for us. Looking through the pages it’s another magazine that is hard to place. It has no obvious category or segment home in our current mix.
As for the five copies initial supply – too many. Two would have been a good start at this price.
The announcement yesterday by General Motors Holden that they will cut around 500 jobs is another reason for us to question the value of the massive handouts from successive governments to auto companies. Holden has apparently receives two billion dollars over the last ten years.
As I tweeted yesterday…
What’s the ratio of small business redundnancies to govt support VS auto mfr redundancies to govt supt? #holden #auspol Journalists pls ask.
Seriously, small businesses, like newsagencies, receive little in government subsidies. I suspect that redundancies across our channel are lower than for the auto industry this year. So, the amount of government support ‘spent’ per redundancy in our channel is far lower than in the auto industry.
We small business newsagents have to stand on our own in the face of extraordinary change in our channel and in an economy brimming with complex challenges. These much bigger businesses with many more shareholders continually put their hands out for cash. It has to stop.
Politicians of all sides agree to subsidies and other financial support out of fear. I think it’s a massive con with the Australian taxpayer the victim.
Yes these big business employee people on which we rely in our businesses. But small businesses employ people too. We tend to hang onto people longer.
Politicians need to take a more whole of the economy view of their engagement with and support of small businesses. Not just newsagents but all small businesses. More support for us could drive much needed economic growth.
While there is no doubt that big manufacturing is important to the economy, the Holden announcement is a reminder that investing too much in one sector or one business can be risky. A similar investment across many businesses could be more economically beneficial. Unfortunately, Australia has not had politicians with the leadership nor vision to pursue this for decades.
The Holden announcement sucks. It ought to be a wake up call to all politicians. Stop giving away money to big businesses, especially foreign owned big businesses. Focus on small business and get smarter at leveraging the efficiency, entrepreneurship and community value of small business.
The latest issue of Modern Wedding has three extra titles bagged with it. In fact, the package is so fat that we can only fit one copy in a pocket in one of my newsagencies.
It sucks that our space is used like this. In supermarkets, a publisher wanting extra space has to pay for it. In our stores, we are expected to accommodate a fat issue ourselves.
The space an issue occupies is another consideration for newsagents when assessing whether to early return a title.
The May issue of Better Homes and Gardens is one of the top selling issues of this popular title according to the publisher. We have a display at the front of the magazine department (next to weeklies), placement with newspapers and a waterfall display in the usual location for the title.
The $10,000 in Spotlight gift card prizes make it an enticing purchase.