Another newsagency business performance assessment

Here is another newsagency performance assessment I have recently completed. This is an interesting business facing traffic disruption in a high tourism location – challenges faced by many newsagents.

My comments are direct and to the point. My intention is not to offend but to get your better engaged with the management of your newsagency business.

Good data feeds good business decisions. I can see in your Monthly Sales Comparison Report data that you do not scan everything you sell. For example, in the three months I have data for, you sold 546 stationery items without scanning them and 4,248 newspapers without identifying the titles (by scanning them or using a hotkey). It’s important you scan everything.

Now, onto my analysis of sales by each part of the business comparing three months this year to the same period a year ago.

1. OVERALL SALES. Number of sales is down 11%. This is worse than the average I am seeing for newsagency businesses.
2. REVENUE. This is down by 15%. It is concerning that the fall here is bigger than the fall in the number of sale transactions. The best way to assess this is by looking at GST collected.
3. CARDS. Sales are down 3% off a low base. I am not too concerned here. however, I note that you;re doing only $500 a week in cards. Is this an opportunity. While I appreciate you see mainly tourist customers, could you change your card offer to better connect with tourists?
4. CIGARETTES. The decline of 18% is considerable. You’re now doing $2,200 a week in sales. You need to check your stock holding as if it is greater than $5,000 you are probably losing money. The other option is to look at your price. Are you making the highest margin you can based on your convenient location.
5. GIFTS. Sales are up by 599% off a tiny base. $75 a week in gift sales is hardly earth shattering. Based on your card sales you should be doing at least $200 a week in gifts however I suspect you could do far better than this. The gift category is important since it lifts the overall gross profit of your business.
6. INSTANT SCRATCH TICKETS. Your sales are down by 22% and this is worse than the average decline for Queensland. This needs urgent attention.
7. LOTTO SALES. Your lotto sales are up 4% and while this is good news, the increase is lower than the average I am seeing for Queensland. Yu need to do better. how are you promoting. If you are only doing what is asked of you it is not enough. Come up with your own ideas for promoting lotto products. A good campaign can draw shoppers from the street.
8. MAGAZINES. Some good news here. Unit sales declined 8% and sales declined 9% – both lower than your overall store average. That said, your weekly sales total of $1,550 is low. In fact, it could put your accounts at risk. I’d urge you to take a hard look at your magazine department: undertake a full relay, make your magazine layout compelling and enjoyable. Entice shoppers with your placement.Your data shows the convenience nature of the business with women’s weeklies accounting for 19.74% of all sales Your 3% growth here is good. Continue to focus on this category as the hero.
   – Women’s Interests magazines account for 12.96% of sales but they are down by 15% year on year. This is where a relay should help.
   – Sport magazines account for 15.85% of your magazine sales. Excellent news. However, your sales are down by 23%.
   – I am surprised at the small contribution of some categories and would encourage you to work on growing their sales: food, crosswords, motoring and computers & gaming.
9. NEWSPAPERS. The decline in unit sales of 22% must be of concern to you. That’s a decline of 535 newspapers a week. You have to be asking yourself what are you doing to replace this lost traffic? Now is the time for this question to be asked and an action plan put in place.
10. STATIONERY. Revenue is down 22% and stationery sales are down to $700 a week. I’d be looking very carefully at your range and wondering if you have the right mix for your convenience / tourism shoppers.

Your location and product sales mix makes me ask the question: Is it time for you to cease identifying as a newsagency and start trading with a different business identity more attuned to people walking past your business? Give people more reason to walk in and browse your shop than the old newsagency approach that may not be connecting with shoppers in your unique situation.

Your data shows a fundamental shift away from traditional newsagency products and if this is not responded to by the business then a predictable end for the business will be reached. This does not have to be the case. Your data also shows opportunities in terms of the types of customers and what they are buying. Use this data to kick start your business plans.

If it were up to me I’d rebrand as something fresh – after I had reconfigured the business to sell products to the unique people who walk past your shop front every day. I’d look carefully at the successful retail businesses nearby. I’d also look at how I could make shopping with me easier and more enjoyable.

I hope these comments help.

In a follow-up discussion with one of the owners of the business I’ve got an excellent answer for the department sales of stationery – cardboard and paper without barcodes.