It was disappointing to see Today Tonight on the 7 TV network last night rip into newsagents among others on retail markups. This story on their website says:
Newspapers are marked up 25 per cent, stationary up to 100 per cent, cigarettes up 25 per cent and confectionary as much as 50 per cent.
Newspapers are marked up 33% by the publishers. Our on sale price is dictated by our suppliers. Every retailer charges this cover price. In fact, most of what newsagents sell is at prices set or recommended by suppliers. Stationery is the biggest category where we set our own markup. Here the range is from 5% through to 120% with the industry average 60%.
There is no shame in markups. Shame on Today Tonight for inferring there ought to be. The markup (gross profit) pays rent (around 12% of retail), wages (around 10% of retail), theft (around 3% of retail) and overheads (around 6% of retail).
A journalist doing their job would have reported that many items sold in newsagencies are done so with prices set by suppliers and that in many cases prices have not changed in years.
I sell the Herald Sun newspaper today for $1.00. I sold it 5 years ago for $1.00. In the 5 years my rent has increased 4% each year – I am paying $1,000 a week more rent now than 5 years ago – wages have increased by 35%, insurance by 30% and so on. A good journalist would have investigated the situation and not just accepted what the Australian Consumers Association fed them.
Newsagents do not have any form of government protection like chemists. We do not have a monopoly. Indeed the last six years have seen our core products of newspapers and magazines pushed to all manner of outlets with the result of less traffic in our shops. Such is the impact of competition.
Our 4,600 independently owned small businesses provide worthwhile local business employment for many, we’re a beacon in the local community, assisting in many ways.
This Today Tonight story is really part of the push by Woolworths to get pharmacies in their supermarkets.