My latest Newsagency Sales Benchmark Study, comparing January through March 2011 with the same period in 2010, has revealed a concerning decline in greeting card sales, an average decline of 8% in unit sales. It also reports a continuation of the decline in magazine sales with an average decline of 7%.
While newsagents can’t control magazine supply, we can control card supply. Card companies tend to supply based on sell in. Newsagents should be armed with their own sales data when agreeing to supply by card companies.
On magazines, that overall magazine supplies to newsagencies have not declined in line with sales is appalling. This is something which needs urgent attention. We have less control than our magazine competitors yet we sell more than they do. Gotch and Network could well be killing off the channel by supplying as they do.
There is good news in the sales benchmark study. Ink and gift sales are up 10% and more for newsagents with solid offers in these categories. Some newsagents are reporting extraordinary growth in art related sales but this is due to a particular range (I might have more to say on that soon). I also have data for some stores reporting double digit growth in magazines … as a result of extraordinary campaigns competing with other newsagencies and nearby supermarkets.
Here is more detailed information from the latest Sales Benchmark Study:
- Magazines. Magazine sales fell, on average, 7% (in unit sales) in the January through March 2011 quarter over the same period last year. 78% of newsagents reported a decline in magazine sales. Computer, Music, Teenager and Motoring and led the decline with most delivering a double digit decline in sales. Women’s Weeklies declined but not as much as the others.
Greeting cards. Greeting card sales fell, on average, 8% (unit sales) in the quarter. 84% of newsagents reported a decline. While category level data is not available for more than half participating newsagencies, what data I have suggests that the declines are outside everyday cards. - Stationery. 73% of newsagents reported a decline in stationery revenue (not including ink) with the average decline 5%.
- Ink. 40% of stores participating in the study have a separate ink department. 90% of these stores reported growth in ink revenue of 10%.
- Gifts. 65% of the stores in this study have a gift department. 80% of these reported an average sales increase of 9% in gift revenue.
- Newspapers. 80% of participants report an average newspaper sales decline of 2%.
- Basket size. 57% of newsagents reported an average 6% decline in basket size.
- Traffic. 69% of newsagents served fewer customers than in the 2010 period.
Yes, these are tough times. Rather than complaining about it, we need to work on our businesses, reconfiguring them for a brighter future. Creating the businesses we want rather than the businesses we are told to have.
Now, more than ever before, newsagents need to assert control. Suppliers who resist us acting as business people in control of our own businesses need to be ignored.
we are in recession. imagine if china in trouble, we will be worst than GFC
A very quick analysis of supply from Network in the first quarter of 2011 reveals that in the face of gradually declining sales, supply seems to be increasing, and signifcantly as well. In March we returned 63% of all stock received from Network – up from 54% in Jan and 58% in Feb. As well, more titles seem to be becoming full returns and more and more bagged titles are coming in (ex NDD titles) which we had previously worked hard to get rid of. This means that our returns costs are increasing also – now well above 2% of total magazine sales. Where is it going to end? Something has to give, but what?
Does the late Easter this year affect your numbers? I cannot remember if Easter was in March last year or not.
Easter was in the first week of April last year. It would have a small impact but not much given that it is a three month period.
There may be some distortion in some of those numbers too due to issues such as the floods up here in Queensland couldn’t there Mark ?
Having said that though we seemed to have bucked most of those down trends and while not directly affected by the flood are in a group of suburbs that were heavily impacted. Mags for us were up on last year for Jan & Feb but faded last month and seems on par this month. Everything else seems to be up, even if just marginally (+2% newspaper unit sales) and cigarette sales which climbed at the time of the floods have stayed high +9 % unit sales so far this month and double digit last month.
One thing it does make clear to me is that I definately need to look at Ink (We currently don’t carry any).
The mag issue is certainly the big one though. I’m early returning several thousand dollars of mags that are oversupplied (I don’t know whether to laugh or cry when you see the invoice with “expected sales 3”, yet receive 8 of a title) each month and never even see the shelves. The lost time and cost that could be better put into growing other areas of the business rather than keeping an eye on mag supplies really peeves me.
Thanks again for taking the time to provide these valuable overviews Mark !
Good point Paul. I should have noted that I pulled back on QLD and country Victoria newsagents to balance for this. So, I’d say the results are not flood affected.
Times are hard at the moment and as Wayne Swan stated today if not for the mining sector masking a lot of the doom we would be deep in a official recession, we find that people are spending less on the non essential things in our area and unfortunately for us this means mags and cards are not high on the needs list. But all we can do is make sure when people are ready to start spending again we are still here with the right mix of stock to capture their interest.
We moved our shop to the other end of the shopping center 12 month ago and doubled its size. Results: large drop in news paper sales due to moving away from the bus and train terminals. Huge increase in magazine sales due to extended range and aggressive use of the magazine club card, growth in stationary due to relay of stock and attention to customers, large growth in gifts due to larger range in new shop, decline in book sales due to customers buying cheaper books (item sales seem the same), and worryingly a small drop in card sales which has always been our best department by far.
Being retail only and a subagent for papers and ACP, paper sales do not bother me so much. The profits are better made in other areas sucjh as stationery, cards and gifts. These are along with magazines are our core business and with the exception of magazines we have full control over these departments. I firmly believe that if we put our effots, time and money into these better margined areas and raelize that mags and papers are really only of great benefit in generating traffic, we can improve profits. Our store has lost sales numbers by the same amount that newspaper sales have slipped BUT our basket size is larger, our basket value is larger and our profit on that basket is larger. This is what we need to concentrae on and when the economy improves we should have more sales as well. If we prepare for this there is godd growth and profitability on the other side of this downturn and don’t think that only newsagents are suffering, a lot of people I know in different industries are finding it very tough at present which indicates to me that thing can and will improve for those who put the work in now.
We had a drop in card sales just after christmas. I decided to kick out one supplier (there were other reasons besides the drop in sales) and it has worked like magic. With a fresh range, sales are up and customers are happy.