Two more newsagents have contacted me yesterday to advise that they are handing their runs back to the publishers, each saying they can no longer afford to run the home delivery side of their business. Each cited the drop in delivery fees and little change to cover price in ten years as the cause. One has exceptional data to backup his claim, showing that the home delivery side of his business is 23% worse off today than it was ten years ago and that it is losing more than $300 a week.
It would be appropriate for representatives of all parties who care about the newspaper home delivery system – newsagents, industry associations, delivery contractors, publishers and home delivery customers – to resolve the issue of falling net return before more newsagents decide it is no longer a viable business.
To balance this report, I’d note that in some states groups of newsagents are getting together and evolving a new model buying up territories. These are the businesses to watch – smart operators better managing costs and leveraging economies of scale from a more modern home delivery model.
We are a rural newsagency in NSW and our newspaper delivery business is losing money mainly due to late supply from some publishers. Our local newspaper is not delivered to our shop until around 3am during the week however on saturdays this blows out to 5:30 or 6am and the last few weeks it has been 7am. The rest of the papers arrive at between 2 and 3am which leaves me to pay employees for 2 to 3 hours while they are left standing around OR having to pay for the run to be done twice.This is not the employees fault as they are there every day at 3am ready to go. The problem as I see it is that publishers do not make the majority of profits from the sale of newspapers, it is made from advertising, so there is a greater need to wait for advertising to be inserted instead of delivery. On saturdays we are still delivering newspapers at 9am which means I am paying 6 hours worth of wages instead of 2&1/2. The cost are crippling and causes the entire week to run at a loss. Customers complain and because the newsagent is easiest to get hold of our staff members are being abused. It makes you wonder is it worth it however as in most rural areas we cannot sell our run because no one wants it we will have to simply give it up and lose all our hard earned goodwill.
Luke,
You detail the problem which many rural newsagents face. Delivery times can be a problem (less where we are compared to yourself) and the non-existant prospect of selling a run are problems that seem to be growing, or at least gaining more attention.
The publishers may have some problems if rural newsagents begin to simply give up their runs. I highly doubt it would be cost effective, or practicle, to have their own people doing the runs that newsagents have given up.