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

ALDI challenges banks on EFTPOS fees

Aldi released a media announcement on Saturday keeping up pressure on the banks over EFTPOS fees. Here is the full announcement:

ALDI calls for proof that banks’ internal costs will increase due to changes to EFTPOS interchange model

ALDI is today calling for Australian banks to prove their net costs are increasing as a result of changes to EFTPOS interchange fees.

Steven Bigg, ALDI Managing Director Finance and Administration says ALDI believes the overall increase in net costs to the banking industry is minimal and is calling for greater transparency of any unjustified cost increase to retailers.

“Any investigation will show the banks will increase their revenue to the tune of tens of millions of dollars each year at the expense of retailers, if all the Major Banks adopt a similar stance to those banks that have already advised their retailers in writing as to the magnitude of the fee increase,” he says.

“We also see the potential for adverse effects on competition due to inconsistencies in how these charges are being applied to retailers, in what is already  acknowledged as one of the most concentrated grocery retail sectors in the world.

“In light of the Federal Court’s judgement that consumers and retailers have been misled, we believe the decision to change the interchange fee structure should be further reviewed in an open and transparent manner, and the changes placed on hold until this review has taken place.”

ALDI has now made a decision NOT to place any surcharge on EFTPOS transactions within its stores.

As I have noted already, it is terrific for small business retailers like newsagents to have Aldi making the running on this issue as they are more likely to get media coverage than us.

For the record, we will not be introducing EFTPOS fees in any of my newsagencies.  We use Tyro broadband Eftpos and appreciate their helpful position on the new fees.  This will help us keep our costs down.

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EFTPOS fees

ACP trialling Sunday on-sale of magazines

As some comments on a recent blog post indicate, ACP Magazines will trial Sunday on-sale of its titles in Newcastle and the ACT.  The trial will commence next Sunday, October 9.  The data from the fixed-period trial will help ACP determine if this is an initiative they could benefit from elsewhere.

The trial will see newsagents, supermarkets, c-stores and petrol outlets receive stock for a Sunday on-sale.  Majors like Big W will not receive stock.

While there are some operational challenges, the trial is an opportunity – especially for shopping centre based newsagents where you are like to see shoppers on a Sunday who you would not see during the week.

Newsagents in high street situations could find that they lose sales as a result.  This will be reflected in data from the trial and should help guide any decisions following the trial.

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magazine distribution

Promoting Pink magazine with AWW

In addition to robust promotion of The Australian Women’s Weekly, we are promoting the annual Pink magazine which is on the back of the current issue of AWW.

We have promoted these as two separate titles in the past with success. I’d encourage all newsagents to do this.

AWW is also on the Pink display to make the connection in the minds of our shoppers.

We will keep promoting Pink for another full week.  There is no doubt that it helps sales of AWW.

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magazines

New Kindle Fire to push tablet market even further

The new Kindle Fire announced last week by Amazon will undoubtedly push the tablet market to new places.  This new device and the almost disposable price of the more traditional Kindle further opens this rapidly growing distribution channel for publishers of print content.

It is vitally important that newsagents are aware of these development when negotiating leases and shop fits.  Given that each is a five-year investment, we need to be committing to what key parts of our businesses will look like in five years.

Flexibility on all fronts is vital.

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Media disruption

Pricing error on Courier Mail challenges newsagents

The Courier Mail newspaper in Queensland yesterday was priced at $1.10 instead of the usual $2.00 for the Saturday edition.  Newsagents had to reprice the newspaper otherwise shoppers could challenge them to sell it at the lower price according to consumer regulations.

While these things do happen from time to time, I know from what several newsagents told me that it was frustrating having to deal with this on a bust Saturday morning when senior people are less likely to be in.

It made the TV news last night in Queensland as well.

The challenge for newsagents is considerable, not only in their own retail sales but in what they supplied to sub agents.  What if they did not provide incorrect pricing advice to a supermarket, for example?  Who is responsible in this situation?

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Newsagency challenges

Another sad day for Australian newspapers

Picked up The Sydney Morning Herald on Friday and was disappointed to see the masthead of this once great newspaper partially obscured by another post-it type stuck on ad.  I feel for the editorial professionals when their advertising colleagues treat them in this way.

Bucks over content … it’s a commentary on the challenges of the print newspaper.

I understand that newspaper publishing companies are businesses and that they need to be profitable.  Chasing revenue by covering your brand does not make any sense to me, especially with a stuck on ad which readers don’t like.

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newspaper masthead desecration

Aldi vs ePAL coverage

There has been considerable media coverage on the Aldi court case against ePAL over the last 24 hours.  Here is just some:  Inside retailing; The Australian; Smartoffice; ABC, AM on ABC radio and ABC news last night.

Also good to see the story in The Australian with news that the Commonwealth Bank will not be passing on fee increases at the moment.

Kudos to Aldi for their court action and in getting this topic onto the news desk.

Today, the world changed for Eftpos fees.  ePAL’s new pricing regime is in place and this means retailers like us could pay more.  Already some banks have made moves.  While we don’t know where it ends up, banks being banks I think that we have a fair idea what will happen.

I and some other newsagents are continuing to lobby politicians on this.  They have the ability to control ePAL through the Reserve Bank.  Unfortunately, all politicians appear to be prepared to do at the moment is to regurgitate ePAL spin on the Eftpos fee changes.  So much for their support for small business.

This is issue has been an excellent opportunity for politicians to put their words of support for small business into action.  We have been profoundly let down.

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EFTPOS fees

Early start to Halloween 2011

It is still a month away and already Halloween products are selling.  We put our stock out Thursday night and sales have been strong since.

While we have an excellent margin on our Halloween 2011 product, we are still beating other retailers with exactly the same Halloween product.  This is another example of newsagents being price competitive – contrary to consumer perception.  We are letting shoppers know through conversation on the shop floor.

We are chasing a Halloween sales bump of 25% on last year and have resourced our Halloween display accordingly.  Being in a busy shopping centre helps as it delivers new shoppers regularly.

Early sales underscore the value of going out early with Halloween and other seasons.  Being school holidays is a key reason for our success these past few days.

I love Halloween as it brings a terrific element of fun to our newsagencies in the run up to the busy part of Christmas.

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Gifts

Great AFL premiership support from Herald and Weekly Times

Kudos to the Herald and Weekly Times for their support for AFL premiership opportunities and communicating with newsagents early about this.  Several days ago they let newsagents know about these traffic building opportunities around AFL premiership activity:

  • Mark Knight Premiers Poster – Monday October 3. The posters will be $2.00 and will be available through Newsagents ONLY.
  • Free Premiers Bumper Sticker – Tuesday October 4. The stickers will be free with the purchase of the Herald Sun and will be available through distribution and retail newsagents and direct relationship outlets such as supermarkets.
  • Premiers Glossy Magazine – Wednesday October 5. A Premiers magazine will be available to purchasers of the Wednesday Herald Sun for $2.00.  This will also  and will be available through distribution and retail newsagents and direct relationship outlets such as supermarkets.
  • Free Premiers Poster – Thursday October 6. A Premiership poster of the winning team will be free with purchase of the Herald Sun and will be available and will be available through distribution and retail newsagents and direct relationship outlets such as supermarkets.

In AFL mad Melbourne it is good to know well in advance about these opportunities.  We certainly plan to leverage the premiership opportunities in my newsagencies.

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Newsagency opportunities

Engaging with the AFL Grand Final

Allan Wickham at newsXpress Eli Waters is a mad, sometimes emotional, Collingwood supporter and has been showing this off with a terrific in-store promotion.  Kudos to Allan and the Eli Waters team for this promotion.

Connecting our personal interests with our shops is a good move as it separates us from the majors.  It’s essential to local community connection as it demonstrates passion which is not on show in soulless supermarkets and convenience stores.

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marketing

Aldi versus ePAL judgement

Click here to see the full judgment delivered by Justice Jacobsen of the Federal Court in the case brought by Aldi against ePAL, the EFTPOS payment scheme operators.

While the judgment represents a comprehensive win for Aldi in their complaint against ePAL, it does not stop the unfair changes to the EFTPOS fee regime which takes effect from next month.

Click here to read the press release issued yesterday by Tyro payments, the little guy in the battle against domination by the big banks plus Coles and Woolworths of EFTPOS processing in Australia.

Newsagents can fight back on this issue by switching off their bank EFTPOS terminals and switching to Tyro.  Tyro has already made a n announcement favorable to newsagents on their handling of fees once the new EFTPOS regime kicks in.

Disclosure: Through Tower Systems I have a commercial agreement with Tyro for the support of their platform in Tower newsagencies.

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EFTPOS fees

Does Officeworks profit from recyclable bags?

Further to my post earlier this week about Officeworks not offering the LOWEST PRICES EVERYDAY, I was surprised at their twenty cent charge for a shopping bag when I purchased too many items to carry loose.

When I queried the person behind the counter I was told it was okay because the money from the bags went to the Australian Wildlife Conservancy.  It turns out that only five cents of the twenty cents goes to this organisation, Officeworks gets fifteen cents.

On querying the fifteen cents Officeworks keeps for the bags the employee had no response.

The bags themselves are designed to promote the green credentials of the organisation.  They could better serve the environment by providing a 100% biodegradable bag … like I do in my newsXpress newsagencies without charging the customers a cent.  Customers love our biodegradable bags.

It feels to me like Officeworks hides behind the fund-raising pitch to make their bags a profit centre for the company.  Their stationery prices are not that cheap, they certainly have margin capacity for funding bags for shoppers.

Newsagents who provide bags for free, especially biodegradable bags, have something else they can pitch as a point of difference to Officeworks.

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Environment

75% sell-through for Smith Journal magazine launch issue

We have achieved a 75% sell through for the launch issue of smith journal at one of my newsagencies.  Nine copies sold out of twelve copies supplied … and the title have only been out three weeks.

Sales of smith journal are tracking well for us, in line with stablemate magazine frankie.

Why newsagents would have early returned this new title, especially prior to billing cutoff for this month is beyond me.  Dumb.  I have banked just over $26 in gross margin in three weeks, easily paying for the space and labour.

Last night at one of my newsXpress Knox City newsagency I got to experience first hand how easy smith journal is to sell.  A couple in their late twenties were browsing.  She asked some questions about frankie while he was looking at music magazines.  As they were leaving I asked if they had seen smith journal, the magazine for guys from the publisher of frankie.  After browsing smith journal for a couple of minutes the guy purchased it.  Another $11.95 sale by engaging with a customer on the shop floor.

I don’t have much time for newsagents who have all manner of excuses for not doing this themselves.  As retailers we owe it to ourselves and our suppliers to be knowledgeable about what we sell and to work our shop floor at every possible opportunity.

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magazines

Promoting the launch issue of Women’s Health bump magazine

We are promoting the launch issue of Women’s Health bump magazine with prime position placement in our pregnancy segment as requested by Pacific Magazines.

bump is a good looking fresh magazines for the pregnancy segment, an area which could do with an overhaul and some time in the spotlight.

We will be supporting bump next with some co-location time with our weekly magazines – to get it in front of more shoppers.

I love magazine launches and the opportunities they provide to show off a broader range of titles to our shoppers.

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magazines

Bringing the latest crossword magazines forward

With two new issues of Lovatts titles out this week, we pulled them forward so that they are at the front of our Lovatts crossword display.

Too often I see newsagencies where titles are replaced in the pocket in which they were situated.  In a category like crosswords, especially with Lovatts titles, it is important to bring forward the latest issues so they are the fresh hero of the section of the magazine display.

Yes, this takes time.  It is what we need to do if we are to be seen as magazine specialists.  Daily attention to the magazine department is what can separate us from supermarkets and others selling magazines.  I put our sales growth down to the attention we provide.

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magazines

Selling The Australian Women’s Weekly

We have been promoting the latest issue of The Australian Women’s Weekly with this tactical placement at the counter, next to newspapers, in its usual location at the entrance to the women’s magazine aisle as well as on an impulse unit located at the front of the newsagency.  We do all this because the title responds to the activity, especially in the first week when we expect to sell between 60% and 75% of what we sell for an issue.  We will pull back mid next week from the counter positioning.

AWW continues to be a popular redemption title in our Magazine Club Card promotion.  I like this as it gives our magazine shoppers a specific free magazine goal which they clearly like and work at achieving.

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magazines

Aldi wins in case against EPAL

Judgment in the case brought by Aldi against EPAL around their communication regarding the likely impact of changes to EFTPOS fees has been handed down this morning in Aldi’s favour.  EPAL has been required to publish corrective communication.  Costs were awarded to Aldi.

While this does not address the impact of the new fees levied by EPAL (big banks plus Coles and Woolworths), it does require a more accurate statement on the impact of the EPAL decision to raise fees.

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EFTPOS fees

News Limited changes in SA for IGA and Foodland outlets

News Limited has announced changes in accounting processes for handling supply of their newspapers to Foodland and IGA outlets.  Newsagents will no longer invoice Foodland and IGA for newspapers, News will do this direct.

The announcement says that there will be no change to newsagent commission arrangements and that the current settlement discount, something which I understand to the South Australian specific, will remain in place for the duration of the current agreement.

While the announcement from News appears to be fairly straightforward, it has naturally unsettled newsagents who are waiting to hear from News about the future of newspaper home delivery, not just in South Australia but nationally.  Some newsagents expect n News to abandon home delivery while others expect a new contract offer.  Until there is certainty newsagents, distribution and retail, will remain concerned for their future involvement with newspapers.

Given the uncertainty which is challenging sales of businesses, capital investment and other moves, I would have preferred News to not make any changes until they tell newsagents what their future in home delivery looks like.  That said, I appreciate that they will have their commercial reasons for acting now.

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Newsagency challenges

Express Publications offers newsagents 75% margin on re-launch of Truckin Life

Offering further evidence of a shift in magazine publisher engagement with the newsagency channel, Express Publications is today announcing to newsagents that for the first two issues of the re-launched Truckin Life magazine newsagents will receive 75% margin – this is three times what we receive for most magazines.  This is a smart move by Express, one I wholeheartedly endorse.

The newsagent communication from Express is straightforward, it contains the key information we require including an explanation of the scale out model for the re-launch.  Information like this is tremendously helpful:

The magazine is being promoted to truckies across the country.

Our research shows the title appeals to drivers of small and large trucks, not just the heavy truck drivers.

Place the magazine prominently in your motoring and 4WD sections.

For the best results place the magazine near your counter or in a high traffic area.

So every agent can share in this opportunity any agent not currently receiving the title or agents who receive only 1, 2 or 3 copies will receive 4 copies in October and November.

Every agent who currently receives 4 or more copies will receive an additional 1 copy

Smart newsagents will use the margin bonus to give the title prominence when it goes on sale later in October. The goal has to be to  uncover shoppers who not only purchase the title on re-launch but to come back again and again for it.

Newsagencies are perfect businesses for habit based shopping.

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magazines

Promoting the frankie 2012 diary

We are promoting the frankie diary for 2012 next to the current issue of the magazine.  We ordered stock of the diary last week and are thrilled to have this available for our customers – given the continued growth in sales of the magazine.  While the frankie diary is not an ideal fit in the magazine fixturing, it is the perfect placement if we are to reach the shopper most likely to purchase.  We will maintain this placement as long as we have and can get stock.  Newsagents wanting to order the frankie diary ought to contact Gordon and Gotch.  Have your frankie magazine sales numbers handy to use as a guide in ordering.

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Diaries

Making English magazines more accessible

In our magazine relay completes ten days ago I created more space and a better position for English magazines.  I can already see a list in sales.  Sales were growing anyway – now sales are growing faster.  This placement change is also helping sales of titles near to the English magazines.  Newsagents can increase magazine sales by relaying magazines based on careful analysis of sales and consideration of the range of titles carried in the shop. I appreciate that I have already said this recently.  I want the message to get through and newsagents to embrace the opportunity of annual magazine relays with regular (at least monthly) tweaks.

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magazines

Officeworks does not have the lowest prices every day

You’ve heard the Officeworks ads, they run on high rotation on TV, they are in the newspapers regularly, then there are the flyers in the letterbox and, of course, billboards.  The all proclaim that Officeworks offers LOWEST PRICES EVERYDAY.

Officeworks does not have the lowest prices every day.  Not the way I see it at least.  They get away with this claim by publishing a price guarantee, that they will better the price of any item by 5%.  Their website says that their price checkers guarantee that they bring you the lowest prices possible every day.  Hmmm, their price checkers cannot be all that good.  The Officeworks price for a pack of four check tickets is $4.53.  These checkers employed by Officeworks would know that the vast majority of newsagents easily beat this price by 47%.  Check the responses from newsagents on what they charge for check tickets when I asked the question this past weekend.

Newsagents don’t just beat the Officeworks price on check tickets, we beat them on a range of items every day.  It is us who should be proclaiming the lowest prices every day.  Instead, we would rather complain about Officeworks and them get away with it.  Instead of complaining maybe we should fight.

It’s a bit like the carbon tax debate or the poker machine pre-commitment changes.  If you make enough noise with your spin, regardless of how distant from the facts it is, you soon get it into people’s heads that what you are saying is accurate, regardless of whether it is accurate.  Spin wins.

Officeworks does not offer the lowest prices every day.  What they do offer is to beat any price by 5%.  The shopper has to find the better price and provide it to Officeworks.  Officeworks does not pursue delivering the lowest price as a matter of course.

I clicked on the social responsibility link on the Officeworks website as I figured it would have something to say about their commitment.  It didn’t offer much of substance.  Sure it was nice words, but nothing relevant to what I would call social responsibility  Then clicked on the ethics link – expecting that would speak to their commitment to honesty and integrity.  It, too, lacked substance in my view.  The stand out paragraph on the ethics page for me is:

Maintaining a culture of integrity ensures that our team members always act in the best interest of our business and our shareholders.

There it is.  Shareholders come first.  As a public company this is as it must be.

I suspect that Officeworks knows that it does not offer the lowest prices every day.  If they don’t, they should know this.  I suspect that Officeworks does not regularly price check against outlets like newsagencies.  If they do they need to lift their game.

The out for them on Check Ticket prices is that we do not offer a four pack.  I’d reject that saying that we would sell four packs for, usually, $2.40.  Even though they are sold individually, it is reasonable to compare the price of four individual packs with a single four pack and they have it displayed.

I’d like to see the Consumer’s Association or some other body challenge the Officeworks LOWEST PRICES EVERYDAY claim.  They spend a ton of money on the claim so they ought to be prepared to be investigated to ensure that it is accurate wherever and whenever it is made.

In asking the price of check tickets I intended to write a blog post about the need for newsagents to proclaim that they have the LOWEST PRICES EVERYDAY. Based on prices I checked of everyday stationery lines, such a claim would be accurate.  I wanted to write that we should be proud of our price position and that as an entire channel we should make noise about this to combat what I consider to be misleading advertising by Officeworks.

But my attention was diverted by what I found at the Officeworks website and the realisation that truth does not matter for it is perception which sways shoppers. Officeworks has the money, marketing and advertising experts necessary to drive perception.

Australian newsagencies are not as expensive as shoppers think.  We need to find ways to push back on that perception.

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Ethics

Connecting with the AFL tribes

Newsagents in Victoria are making the most of this AFL week opportunity, especially given that we have two Victorian teams in the AFL Grand Final this Saturday.

At one of my newsagencies the team is using streamers on the display to connect with team colours in their promotion of the AFL Football Record.  This display is on a column facing out into the mall … it’s been working a treat, luring shoppers into the business.

What with the Grand Final days away, the Royal Melbourne Show on and school holidays under way, it’s like a carnival in some newsagencies here in Victoria this week.

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magazines

Terrific Time magazine cover

I love the cover of the latest issue of Time magazine.  It captures the challenges of the debt crisis which is challenging Germany, gripping Europe and, indeed, all financial markets globally.  It’s the kind of cover which needs to be seen in its entirety to be picked up by shoppers.  This is what we have done with our placement in our magazine display units.

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magazines

May be some disruption to blog posts

We have upgrading the technology which underpins this blog and this may disrupt posts and the look and feel of the blog over the next few days.  The software upgrade will provide enhanced blogging facilities which will make finding posts through Google and the like easier.  Thanks for your patience if things go awry for a day or two.

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