In an effort to help newsagents better understand their businesses and uncover opportunities for growth, I am analysed sales data from 53 newsagencies. 25% are regional/rural and the rest city/suburban. 20% were in centres, 70% major high street locations and 10% small rural.
Sales data from January 1, 2005 through March 31, 2005 is being analysed for each newsagency.
The challenge with any analysis of data from newsagencies is lack of consistency in how technology is used to track sales and lack of consistency in managing data captured.
This post and others to follow in the series are an incomplete analysis of the data from the 53 newsagencies.
OVERALL ANALYSIS
Average items per sale
City/suburban – 1.55 Regional/rural – 1.85 Average sale value
City/suburban – $5.50 Regional/rural – $8.60 % of GP contributed by TOP 10 selling items
City/suburban – 65% Regional/rural – 46%
The big surprise is the number of sales including product from only one category – this, to me, indicates the efficiency of the business. Too many of these single item or single category sales and the cost of each sale is higher than in a situation where a customer buys from 2 or 3 categories. These are the TOP 8 categories based on unit sales. That the sold alone percentages are so high is also concerning given that none of these categories is exclusive to newsagents.
CATEGORY LEVEL ANALYSIS
Percentage of sales in each of the TOP 8 categories where products from the category were sold alone:
City/suburban
Newspapers – 66%. Magazines – 48%. Partworks – 33% Lotteries – 65%. Cigarettes – 60%. Cards – 49%. Stationery – 50%. Photocopying – 75%. Transportation – 58%. Rural/regional
Newspapers – 35%. Magazines – 34%. Partworks – 22% Lotteries – 45%. Cards – 32%. Cigarettes – 38%. Stationery – 30%. Photocopying – 60%. Transportation – 40%.
This difference between city and rural is to be expected given the nature of shopping visits in both areas and also a lower of regulation by suppliers.
Single item sales are most concerning because of the inefficiency associated with them and the measure they provide for success at up selling. While we have no data to back the claim, our feeling is that they reflect the convenience nature of newsagency shopping.
One reason for newspaper and lottery products being sold alone is the requirements by their suppliers that they are isolated from other product. In Victoria, for example, newsagents are not allowed to promote non Tattersalls product at their Tattersalls counter. These rules lead to a segmentation of newsagencies which discourages consumers from shopping the shop. Greater co-operation between suppliers of products to newsagents would allow the development of a more cohesive retail story and therefore facilitate an increase in cross category sales.
The information in this post barely scratches the surface of the results of this shopping basket analysis project. What started as a project to improve the efficiency of my own newsagency has grown into a deeper study comparing the efficiencies of 53 newsagencies.
I started this analysis of my newsagency mid 2004. The learnings from that study led (and continue to lead) to significant in store changes. The results of the changes are reflected in our latest shopping basket analysis. Sold alone percentages are down for the top 5 categories. Quite significantly in the top 3. The result is significant sales growth and that’s reflected in our bottom line.
Part works.
Newsagents take your money and by doing so, agree to provide you with part works. Common sense dictates that missing parts is as bad as encyclopedia missing parts because that is what these are – encycclopeias bought in part usually by people who are on lower income. Wealthier people just buy a large book or whatever.
Verbal contract now exists between newsagent and customers.
I am fed up with being told that Gordon and Gotch and others blackmail newsagents to take what they sell and we the end user get shafted.
Time for Consumer Affairs to have a good look at this area and make Gordon adn Gotch and newsagents live up to their obligations.
We cannot afford to 2/3rd thru series – $300 only to end up throwing away that investment becasue suppliers are slack, cncompetent, don’t give a damn etc.
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