Not only is Australia Post achieving its own form of privatisation by stealth (as discussed previously), this government owned business has been busy branding all manner of products so that it can, in my view, ensure it’s piece of retail action in the franchised stores as well as LPOs.

Here’s a list of the items Australia Post branded in the latest stationery catalogue: copy paper; wireless mouse; wrist rest; CD wallet; optical mouse; Internet keyboard; DVD-R; diskettes. Visit any PostShop and you’ll see plenty more.

Why does not government continue to own a retail business so focused on grabbing stationery sales from small businesses like newsagencies? Every move Australia Post makes to increase its retail sales extends its mockery of the Government’s small business policy.

Newsagents don’t have an Australia Post postal service brand to leverage off in branding their own product. We don’t have access ot postage product for fair margin. We don’t benefit from essential services considerations such as store location, rent and operational benefits. We don’t have the guaranteed traffic of customers accessing the Australia Post exclusive services.

The damage being done to the small business sector by Australia Post is such that an inquiry is required to determine the impact. Given the Government’s conflict of interest, the inquiry ought to be stridently independent.

AAP reports:

Carsales.com.au Ltd have approved plans to combine the business with PBL’s online classified business.

News Ltd has extended its offer for realestate.com.au since its stake has passed 50%.

These news items when considered in the context of flat or falling sales for classified focused over the counter product (Trading Post; SMH, The Age) underscore the need for retailers and in particular newsagents to bring on stream new traffic generators to replace newspaper sales traffic.

News Corp ought to reconsider its decision to refuse small business newsagents’ request for fuel price relief. Talking to some colleagues over the weekend it is clear that the fuel price hike is hurting to the extent that some may shut their distribution businesses down. The denial by News of newsagents being able to pass on the high cost is proving to be the last straw.

In an email bulletin to newsagents (28/10), the Australian Newsagents’ Federation indirectly and subtly invites newsagents to consider boycotting IPG, distributor of a range of titles to newsagents. They have done this as a result of IPG entering into a newspaper supply arrangement with News Ltd for supply of newspapers to major city hotels. Here is the text of the bulletin:

My concern is the double standards demonstrated here. Newsagents recently had the commission they earn on Vodafone recharge transactions cut by 37.5% and the ANF berated newsagents rather than suggest any action; newsagents have just had their application for fuel price relief rejected and the ANF has remained silent of any possible action; newsagents have lost the Apple iTunes recharge opportunity to Coles and the ANF has published excuses rather than suggested action.

As an industry association the ANF is clearly having difficulty representing newsagents on issues to do with some suppliers compared to others. Like any industry association, the ANF needs to be consistent. They will achieve greater respect from newsagents if they achieve this.

On IPG the ANF would better serve newsagents by developing a tactical response. Indeed, given that this is a situation the ANF has had knowledge of for more than a year, one cold reasonably expect that this was done last year. The ANF should: inform newsagents of the facts (without emotion); build business plan assistance for the newsagents affected; write to the customers contracting with IPG (informing them that they are putting Australian jobs at risk); create a public relations campaign (small business being done over by big business; buying Australian versus buying through a UK company; keeping jobs local); make representations to News Ltd (with these being put on the public record); seeking out other opportunities for the affected newsagents; providing standard form contracts to enable newsagents to lock in current arrangements.

Newsagents have received advice that their application for a fuel levy has been rejected by News Corp’s Australian subsidiaries in Queensland, Victoria and South Australia. Small business newsagents had sought relief from high fuel prices compared to the delivery fees which have not had a fuel adjustment for (I estimate) more than 10 years.

Newsagents do not control the delivery fee they are allowed to charge nor the cover price for the product they deliver. So any operational cost increase hits hard. With wages continuing to rise and fuel at an all time high they were hopeful that News Corp. would see its way clear to allowing them to recover some of the higher cost just as News Corp. itself does through its advertising pricing policy.

The rejection of the fuel levy application has hit newsagents hard and some are considering handing their delivery runs back because of the high price and the lack of business control they have over the operation.

Suppliers and others involved with Australian newsagents are calling for greater compliance in terms of shop presentation, services, operational standards etc. They see the lack of compliance as a key problem for the channel and talk as if fixing this will deliver a bright future for Australia’s 4,600 newsagents.

I am not sure if I agree with this. First up newsagents need to want to be compliant. This will only happen if they see a benefit. This will only happen if they (all) are businesslike in running their business. Also, newsagents need to have something to be compliant about.

From a supplier perspective compliance is more about carrying a certain range and displaying their product in a consistent way. Shackling all newsagents in this way will hold some back. It does not make sense, for example, for newsagents to spend $4,000 on a newspaper display stand for one part of their shop when their current (non compliant) retail strategy is delivering double digit growth.

Before we consider compliance I think our efforts would be better spent on understanding what consumers think about newsagencies today and researching what products we will have to offer in our stores in five and ten years time.

Right now our core traffic generator products in order of traffic volume are newspapers, lotteries, magazines, greeting cards and stationery. (For some cigarettes will be in there too.) What changes will occur with newspapers, lotteries and magazines in the next five and ten years which we need to consider in developing our retail story from today on? This is the question we should be drawing attention to.

Creating a model newsagency now, while interesting, will only be of value if it reflects current consumer research and considered predictions about what our retail network needs to look like in five and ten years. And then such a model newsagency needs to be underscored by a supply paradigm and operational model which is economically sustainable and which is attractive to newsagents.

Our businesses are shackled with too many pre deregulation rules and it is only once these are released that more newsagents will become businesslike.

Bill Express, a major trading partner of newsagents, has announced to the ASX today that they are providing electronic vouchers that can be used on the internet to acquire and download products from Apple’s iTunes Music Store.

While it is likely that Bill Express were brought to the table by Coles Myer after they did their deal with Apple, it is appalling that newsagents have been cut out of business which should be ours. We have the technology network and we have the connect with the iTunes demographic. What 15 year old wants to go to a supermarket to get an online voucher. They’d be happier in a newsagency where they can get music magazines and other products.

I hope that Bill Express robustly represented newsagents as a better recharge outlet than supermarkets.

Rather than just blog about the franchising of the Australia Post PostShop network and how the government owned business is taking sales from independent small businesses like mine I have written to Helen Coonan, Minister for Communication, Fran Bailey, Minister for Small Business, Phil Barresi, MHR for Deakin and the Chairman of Australia Post. I will be interested to read their responses.

Why is the government demanding that Telstra compete in an open marketplace while it protects the best stores in the Australia Post retail network from open competition?

Why has the government allowed Australia Post to aggressively pursue product lines sold by small business newsagents?

Why has the government demanded that newsagents deregulate (in 1999) yet refused to open the sale of postage stamps to the same retail competition?

Is the government prepared to compete with all small business sectors or will it restrict its enterprises to competing with newsagents?

How does the government feel when its employees visit small business newsagencies, note retail prices for items and return to their PostShop and adjust sales prices?

Does the government have a small business policy which is pro small business?

Why will the government not set a policy of selling off the PostShop retail businesses to local small business people?

Roger Corbett of Woolworths has been gracing TVs again reminding us that the Woolworths Big W network sells for less. I price checked ten stationery items yesterday and found that we beat their price on nine of the items. Based on this small sample I’d say that they don’t sell for less, certainly not on all lines as their advertising implies.

It is disappointing that Apple has chosen to partner with the giant Coles Myer retail chain for the sale of prepaid cards for its iTunes store than partner with small business newsagents. Apple has shunned a wonderful opportunity to demonstrate its support for independently owned small business stores but has instead decided to support Australia’s largest retailer.