What Happens to the Newsagent Who Does Not Decouple
If you have happened across this post out of context: I have been suggesting to newsagents for some time that they need to decouple their business from the newsagency channel given the decay of the channel and the disrespect with which it is help by news outlets and others. Staying as a newsagency its not an option in my opinion.
I have written about why to decouple and how to decouple. This post is about the path where you change nothing.
Not decoupling does not feel like a decision, and I think that is the trap. Nobody sits down and chooses decline. Every day you’;re busy doing what you know, only looking at the next step. The reorders go in and the lottery counter pays the bills. From the inside it feels like stability.
Let me show you what it actually looks like, from a real shop I reviewed recently. I will not name it.
Just under a million dollars through the till, in a wealthy village where the cafes are full every weekend. Sounds healthy. Underneath, 41 per cent of gross profit came from the lottery counter, at ten cents in the dollar. Add papers, magazines and agency lines, and more than half the shop’s profit was controlled by companies that do not know the owner’s name.
The gift department, in one of the best gifting towns in its state, sold nineteen dollars a week. Not a typo. The garden category, in a town full of acreage gardens, did twenty-seven dollars for the year. Nobody decided any of that. It happened one reorder at a time, over years, while the lottery counter quietly paid the bills.
Play it forward a few years and the exposure starts collecting. The Lottery Corporation that controls that counter told the sharemarket recently it is reviewing retailer commissions. Papers will stop at some point, and publishers will not consult you first. Australia Post reshapes its network on its own timetable. Every one of those decisions gets made in a boardroom you will never sit in, and the shop that has not decoupled absorbs each hit straight in the profit line, because nothing else in the building grew while there was time and money to grow it.
The traffic leaks away alongside the profit. The paper customer ages. The ticket buyer drifts online. The shop never built its own reasons for people to walk in, so when the inherited reasons fade, that is that.
Then comes the part I think about most: the exit. At some point every owner wants to sell. Nobody is queuing to buy a newsagency, and a shop earning most of its profit from declining agency lines is not a business a buyer can imagine owning. It is a job, attached to a lease. Many owners in this position do not sell. They close, and walk away from decades of work with a discounted value of the fixtures.
I want to be careful not to overdramatise, because the reality is quieter than that. There is no single bad year. Just a slow leak, and by the time it is obvious, the money and energy needed to transform have usually leaked out too.
The shop I described still has time. So does yours, probably. One afternoon with your sales data tells you which path you are on.