I have just signed an agreement to create another newsagency. I can offer no better evidence for my confidence in a newsagency type of business than doing this. More details soon.

Here is advice I have just sent to another newsagent after a review of their year on year performance numbers.  I am sharing this here with their permission:

Thank you for the opportunity to look at your Monthly Sales Comparison Report. I offer the following comments:

SALES: 6% growth. The downside is that the majority of this is lottery business. While the 104% year on year growth is terrific, it is a significant risk. You need to drive lottery business to include other sales for the future viability of your business.

CARDS: Excellent growth. 12% year on year is a good result. I’d urge you to produce a Card Performance report – your software has this – it’s industry standard card performance reporting. Look at the categories which are performing best. This data will guide other business decisions. I see no reason in your current card performance data to consider introducing cheap cards as you had asked about – your current range is performing well.

CIGARETTES: I am concerned that 20.78% of your sales are not categorised. This makes assessing performance challenging. You need to fix this.

CONFECTIONERY: With gum accounting for 20.85% of your sales yet growth lower than the average for the department I wonder if you could life the profile in some way. Look at where it is and how it is merchandised. Darrell Lea is also a concern – under-performing. I am guessing you have a movable stand. Move it. Try new locations and chase impulse purchases.

GIFTS: Based on your card sales you should be doing at least $3,000 a month in gifts. You seem to focus on cheap and cheerful gifts. I think you could carry more premium gifts. I’d start with one or two collectible ranges: Beanie Boos (selling very well) and Beanie Kids. Look at the TSK range too – they have gifts which could work with and for your male shoppers. You need to work on gifts and know that YOU ARE NOT YOUR CUSTOMER. You need to develop a gift strategy. This should be based on card and magazine sales as your category data from these two departments informs you about interests of your customers.

MAGAZINES: What an awful operator the last newsagent must have been – they sold magazines without scanning them. Dumb! Your crossword titles should be doing better, 1.72% of total sales is too low. Put a column with weeklies, place a new title at the counter or with newspapers. I wonder about your magazine layout too. Is it the same as when you bought the business? If so, change it, urgently. This will help you own the department. With your overall year on year growth of 3% you are certainly influencing magazine sales in the right way.

NEWSPAPERS: With foreign language newspapers accounting for 12.15% of your newspaper sales I wonder if you could lift this even further. This is a segment of news[papers where I am seeing good growth. Chase it. Foreign language newspaper customers are very loyal.

STATIONERY: Sales are down 16%. What’s going on? Why? I hope this is concerning for you. Pens would be where I should start. In your case, they account for only 5.28% of your sales. The average I see elsewhere is 25% of stationery. I bet people use pens in your area. Look at your range and where it is located. Something is not working for you and I bet some changes in-store could fix that. I see fixing stationery as your top priority. GNS could help you with a range review.

TRANSPORT TICKETS: Wow, a big increase. But why? Are yo chasing this convenience business? If so, what’s the plan? Hopefully not for the sake of convenience business itself as that is not a good plan given the slim margin. There has to be companion business. Make sure you have a strategy for that.

Thanks for the opportunity to look at your numbers. You have a good business with growth potential. I’d be wary of chasing too much low margin agency type business without a strategy for leveraging this traffic into purchases of higher margin items. You can do this with professional queue management and bordering this with up-sell opportunities.

Remember that everything you do in your business needs to reflect what the business stands for – your USP. Make sure that you and your team know what this is as it will guide your business decisions and actions.

Hopefully others reading this get value from my comments. I’d welcome feedback.

I have been contacted by some newsagents running Aussie ATM cash dispensers asking if I had heard anything about the company. What I can see online is that the company was put into voluntary liquidation some months ago and that EZEATM has taken control of some Aussie ATM sites. Newsagents affected should speak with the liquidators Korda Mentha or EZEATM to try and sort out where they stand.

I was personally not affected by this since I don’t have an ATM machine in any of my newsagencies. I hope the information posted above helps.

I am scheduling more Newsagency of the Future workshops – for Melbourne and Sydney initially. These sessions will go beyond the recently completed round. I will share data from several stores, showing how they are evolving the newsagency model and helping newsagents explore these and other changes in their businesses. Some newsagents have a lot to show other newsagents about embracing change and what this can mean for a business.

I hope to have dates sorted out by early next week.

My newsagency software company offers newsagents a free newsagency business health check service which provides me an opportunity to look at business data and provide feedback. I have permission from a recent participant to share my feedback to them here. I thought other newsagents may find it interesting.

I looked at 15/2/12 to 15/5/12 compared to the same period for a year earlier.

1. TRAFFIC (CLOSED SALES): Down 3%.
   1. What are you doing to attract new customers and bring existing customers back more frequently.
   2. You need a traffic growth plan.
   3. This can be done even on a low budget.
   4. You have to do something to arrest the decline.
2. SALES: Down 4%.
   1. To have sales fall more that traffic is a worry even by a small amount. It’s a trend you want to arrest.
   2. You need to get shoppers spending more.
   3. Turning browsers into shoppers and getting existing shoppers putting more in their basket.
   4. Again, you need to plan for this.  Every high traffic touch point has to be about getting customers to spend more.
3. CARDS & WRAP. Your results here are worse than the industry average.
   1. I’d get your account manager in and request an immediate range review.
   2. Is your card range current?
   3. Are your cards easily accessible?  Too often newsagents have thinks in front of cards, making the category hard to find and shop.
   4. Do you offer to help customers with cards?
   5. Who puts your cards out? In my shops my staff do this. They learn more about the cards that way.
4. TOBACCO. Slight decline. better than average I am seeing.
   1. While you can’t market the range you can manage it for efficiency.
   2. Make sure you reorder using the software.
   3. Get rid of dead stock.
5. CONFECTIONERY. Bad decline here – below average for the store.  Something is wrong.
   1. When was the last time you refreshed your confectionery offer?  The data suggests it is either tired or being poorly managed.
   2. Make sure that these products are easily seen, well merchandised and under shopper noses.
   3. Look at your category breakdown. Get chocolates, gum, mints and cough lollies right. Look within these categories what products work the best.  Maybe focus on them.
6. GIFTS. Great result.  Good year on year growth.
   1. Your sales of Russell Collection products show what you can sell. I’d focus more on this.
   2. Get products out of MISC. and into more meaningful categories so you can more easily understand what is working and what is not.
   3. I get the feeling you could expand your gift range.
7. MAGAZINES. Good result, within industry average.
   1. Special interest magazines account for 11.79% of your sales.  This is excellent.  These customers are sticky.  Keep at your special interest range.
   2. Have you done a relay in the last two years. If not, get it done. Create a fresh magazine department.
   3. Co-locate to promote ranges shoppers forget about. The categories which respond well to this are: crosswords, food, crafts (quilting, crochet) and hobby / sports like fishing depending on the area.
   4. Always have a magazine offer at the counter – but uncluttered.
   5. Always have a magazine promotion facing the front of the shop to attract customers.
8. LOTTO. Good growth.
   1. What are you doing to leverage lotto sales for other sales?
   2. Do you offer an up-sell to Lotto customers?
   3. Do you reward lottery customers in any way?
   4. Are you promoting any other products at the lottery counter?
9. STATIONERY. Bad result. Sales declining too much.
   1. What is it with all the categories. Way too many.  No more than 20 otherwise you can;t manage.
   2. Ink is your stand our stationery category but it is declining for you. This needs regular external price-focused promotion.
   3. You have a great range of stationery by the looks of it.  Use the ranked sales report to see what you have not sold in the last six months. his could help you cull to something more financially rewarding.
   4. What’s your margin position? If people think you are expensive, are you – maybe you could charge more.
   5. be very careful of some of the old school products which people are purchasing less of. remember, you really need to turn each item five to seven times a year to justify time, space and stock investment.
10. GENERAL.
    1. Do you know your top ten selling products?  If not, find out – use the 10 x 10 report.
    2. Make sure that you are promoting other items with your top sellers.
    3. With newspapers: Better Homes and Gardens for the weekend, AWW for the week it comes out, other titles which you know will sell but which shoppers will not look for – put these next to newspapers.
    4. What’s your counter look like?  Go around to the customer side and try hard to look at it as they look at it. How many messages are there? Do you have any old product there? De-clutter.
    5. Do you have products left over from seasons? If so, why haven’t you quit them?  Okay if they fit in with a regular department maybe. But if, for example, you still have easter specific product in the shop get rid of it.
    6. Consider asking your staff what they would change if they owned the business. Listen to them, consider what they have to say.
    7. No change in a newsagency is permanent, especially in this time of considerable disruption.

What I look for is small steps in traffic, basket size and margin.  These three combined create a health business.

I appreciate the opportunity to look at your data.  I hope this helps.  I’d be happy to discuss any of this with you.

While I see newsagents facing challenges ahead I do think that these present us with opportunities.  It is up to each of us to chase these … aggressively. I really do believe that we make our own success.