Two newsagents have advised their colleagues in a public forum in the past week that they are shutting up shop. Increased rents and operating expenses in a business with fixed prices and margins are among the reasons cited. While diversification can help address these challenges, for many newsagents it is not an option in their location.
I’d like to see newsagent suppliers, industry associations and others invest serious effort into this challenge of newsagents closing their doors and exiting the channel.
The shrinking of the newsagency channel was a predicted outcome of the decision by the Federal Government in 1999 to deregulate the distribution of newspapers and magazines. The government reduced the viability of newsagencies with their decision yet did not offer any financial support for families – to allow them to exit with dignity.
The Federal Government put around $65,000 on the table for each pharmacy which closed as a result of their competition based decisions in the 1990s. Nothing for newsagents. They stump up cash for auto workers, farmers and others when circumstances make life tough. Nothing for newsagents.
There are newsagent families doing it tough because of the circumstances created and permitted by the government in 1999. While they deregulated the newsagent side of the channel, they did not address the supplier side. Newsagents continue to be treated as if in a regulated environment. The compliance costs are high with no genuine reward for above and beyond effort. In other competitive markets there is reward for effort, not here. This is one example of how deregulation has not served newsagents fairly. There are plenty of others.
I am not against deregulation. I accept that it was necessary. However, I would like to see it implemented fairly. I would like to see newsagents be given greater competitive opportunities. I’d like to see them permitted to use their collective assets to cut operating costs as their suppliers have done.
Newsagencies face rental increases of 5% a year, labour increases of around the same. Unless we can negotiate terms which provide business like flexibility and have mechanisms through which we can cut costs from the supply chain of core products like magazines and newspapers, more will reduce their commitment or exit altogether.
Suppliers ought to take notice of the stories of those exiting the channel. There are lessons to learn, for the future. An open debate about these issues is essential to our collective viability.
I can’t see a great future for us.
We are situated next door to a supermarket who sell : papers, magazines, stationery, cards, drinks, cigarettes. Everything we sell except lotto!
This makes it so hard to compete.
We need something else to sell/provide to earn more.
Any ideas?
Michael,
What you have and the others don’t have is your personal service levels. Make these better than the supermarket and back them with a genuine loyalty offer. This is a starting point. Then, look at other categories – gifts, ink, art etc. Newsagents are making a go of it. It’s hard work and can be successful.
Mark
While I agree with your issues of compensation on deregulation etc, I would like to add that one of the newsagents I know that is shutting shop is in a main street with 4 other newsagents. The one a block away is a huge one with lots of stationery and work clothing as well as a big range of traditional lines expected at a newsagency. Whether they are struggling also I can’t say, but you can’t sit in a small shop and be stagnant. I wish we all could, but when there are 5 newsagents in a main street, it is very hard. There are also plenty of other newsagencies around. So how did they become this thick on the ground? Maybe before deregulation there was enough for all, but with wages and rents I totally agree, it is a tough game if you are in a small shop.
The way you are treated in regard to delivery just sounds criminal also. What is the use if you are fighting one by one. I thought that was what you joined an association for, but it appears that there is no headway being gained buy anyone except to hand in the runs and be pleased to be out of the early morning grind for little reward.
Clem, There are too many newsagencies just as there were too many chemists. My proposal is downsizing with dignity. Mark
does anyone have any ideas for loyalty programs?
i have the same thing woolies next door , woolies servo across the road it sure makes things tuff