In our work analysing retail newsagent performance we are getting closer to a efficiency rating benchmark for shopping centre, high street, regional and rural newsagencies. The efficiency rating is, in our view, based on the efficiency of the shop. The more items in the basket the greater the efficiency. The more items sold along, the lower the efficiency.
We’ve looked at close to 100 newsagencies now and a key challenge is the diversity of data management disciplines. In some cases discipline is non existent whereas in others everything is measured. In some cases employees are lazy as to even the department a sale is recorded to whereas in others if it doesn’t scan it doesn’t sell.
Another challenge is the view to take of the data given that the dataset is three dimensional. We can view from the perspective of suppliers, products (and/or categories) and time.
For starters we’ve stepped back and are just looking at basket penetration. This measures the percentage of baskets leaving a store carry items from each of the product categories carried in the store. Even at this base level of analysis we are seeing considerable differences between newsagencies and are facing challenges with data management. It’s this area of lack of discipline which is a huge challenge for newsagents moving forward.
So, what is a good level of penetration? Given that a newsagency is about newspapers and magazines first, what is reasonable penetration. I have seen newspaper basket penetration as low as 8% and as high as 55% based on January/March 2005 data. St each of the extremes there are explanations. However, in a business management sense it’s not good business. This analysis is about balance in the retail business.
More soon.