I have completed the analysis for the latest newsagency sakes benchmark study. While the results are not unexpected, they present challenges which newsagents need to sep up to.
As I note in the full newsagency sales benchmark, I am concerned about the widening gap between newsagency businesses in this country. You can’t excuse the gap as being the difference between city and country or between shopping mall and high street. No, the gap I am concerned about is the gap between professional retailer and those who don’t care about their business as much as they should.
Now let’s look at the results by key departments. Note that for some departments I use unit sales and others I use dollar revenue:
Magazines. 18% of newsagents in the study reported unit sales growth with an average growth of 3%.
Of the more than 80% of newsagents reporting a decline in magazine sales, the average decline was 7%.
Looking just at women’s weeklies, the decline is not as great with the average just below 5%. That said, the difference between businesses is more considerable here. More 25% of newsagencies are reporting growth of weeklies of, on average, 4%. Another 25% and reporting a decline, on average, of 11%. This is what I meant before about the difference between newsagencies at either end of the scale.
Elsewhere in the magazine department, craft & hobbies is a stand out, often delivering close to 10% year on year growth. I bet many newsagents don’t realize this, that they have such a traffic generating success story on their hands which they could use to support other parts of the business.
Food & wine had a challenging quarter with the average decline across the board at 7% in unit sales. There must be some titles in trouble in this category.
The category with the worst sales results is children’s with an average of 13%.
NOTE: I have no doubt that newsagents can do better. The start is a full magazine relay. I have the data to prove the value of a few hours shop-floor work. This is vital as magazine range is the only channel-wide point of difference we have.
Greeting cards. 68% of newsagents reported an average of 5% revenue growth. Of those reporting decline, the average decline was 3%. This is an excellent result for cards, a department on which newsagents spend too little time.
Stationery. 63% of newsagents reported an average decline of 4% in stationery revenue. This is not good for the channel. At the other end of the scale, 20% of newsagents reported average growth of 13%. This is further evidence of the problem for the channel. This requires leadership to address. NOTE: I took a moment to look at stationery in some more detail. Pens and paper remain at the core. They usually account for close to 50% of sales. The sales losses are at the fringes, where stock turns are lower. There are some fundamental challenges for newsagents when it comes to stationery. The data shows that we are all over the place – some have a great story while others do not. This confuses shoppers and ensures they cannot have a consistent stationery experience in a newsagency.
Ink. 48% of stores participating in the study separate ink sales data allowing further analysis. 59% of stores reported ink revenue growth with 6% the average increase. Of those reporting decline, the average decline was 3%. Ink continues to be an important product category given the habit nature of the product. Win an ink customer on price and or service and you have them for life.
Gifts. 53% of the stores in this study have a gift department and reported on this separately. 70% of these reported an average sales increase of 8% in gift revenue. Of those reporting a decline the average was a concerning 12%.Gifts are a challenge in that they require considerable attention. We have to create an offer that respects the core nature of our business. If we go too far then we risk magazine, newspaper, stationery and lottery business.
Newspapers. 51% of newsagents reported a decline in newspaper sales. The average decline was 1%. The average increase was 2%.
In the last study it was capital country newsagencies which were most challenged. In this study the differences based on geography are not as strong. That said, there is no doubt that shopping centre newsagencies remain vulnerable. This speaks to the fickle nature of shopping centre traffic performance. While am no economist it could be that they are the first to experience trends.
You can download the full newsagency sales benchmark here.