Newsagency performance assessment – for a newsagency in transition

Here is another newsagency business performance assessment I have completed. This regional high-street business (population 3,200) is in the middle of significant owner driven change, building a higher average GP and basked size.  Here’s what I sent the owners…

I have reviewed your business sales and other data for the year to June 30, 2013 and compared it with data for the year prior. I have selected the year on year comparison, as opposed to my usual three month comparison, as it provides a better analysis of the changes you have made to the business.

In your business data I can see that you don’t scan all stationery items with 4,405 items being sold using department keys in one six month period. While this could be cardboard or loose paper, it’s important you check. In my own newsagencies we do not use department keys at all and the result is more useful business data.

Your newsagency is what I’d call traditional in product mix. yes, You are introducing some new products – but you need to do more to keep ahead of the waves of change hitting your business and all newsagencies. Bring on change through your actions and not as a reaction to what is hitting you.

1. OVERALL SALES. Total sales fell by 5% in 2012/13 compared to 2011/12. That’s on average 163 sales each week. This decline requires a response from you as business owners – what are you doing inside and outside the business to bring in new traffic?
2. OVERALL REVENUE. This is down 3% year on year, meaning you are earning more from each transaction than in a year earlier.
3. AVERAGE ITEMS PER SALE. You have 1.734 items per sale. This is a good number, nicely above average for a newsagency in Australia.
4. AVERAGE SALE VALUE. Your average sale value of $9.49 is terrific – up 7% on a year earlier. This is what is softening the impact of a small decline in sale transactions.
5. CALENDARS. I can see this is your first year with a separate calendar department. $1,362 in sales at 60% gross profit is a good starting point. Your magazine data could guide you in calendar purchasing. I have found magazine sales data to be the best guide in this area.
6. CARDS. Your sales are up 4% year on year. The data shows the shift from one card company to another and in this a shift in price point focus. While the 4% increase is good, I’d stay on top of the card relationship by requesting a review to tweak what you have … chasing more growth this year. Your card data can better inform your gift, toy and plush buying. for example, I think you could increase plush sales by 500% on the basis of your card sales.
7. GIFTS. While you had gifts the year earlier, your sales result in 2011/12 of $1,312.61 is nothing compared to $15,402.26 this year. As well as increasing revenue from gifts by 537% you have increases your average GP. Based on your card sales I am certain you could grow gifts further this year. I suggest you target $25,000 as your sales target for gifts this year. I am certain you can achieve this. I’d suggest you move toys to their own department for more accurate reporting. Looking at Toys I can see this accounted for most of your 2011/12 gift revenue – making the result in 2012/13 even more stunning. Well done.
8. INSTANT SCRATCH TICKETS. With ticket sales down 6% and revenue down 10% you have to look at how you promote these. Are you and your team engaged? Are tickets being offered across the counter? The data indicates the decline is in the lower denomination tickets.
9. MAGAZINES. Unit sales down 5% and revenue down 7%. These figures are not bad compared to the newsagency channel average. Whatever you are doing – keep doing it but do more to ensure that you keep the decline in check.
   – Women’s Weeklies are only down 3% – an excellent result considering what I see elsewhere. Since they account for 26.72% of your sales the good performance is important to you.
   – Your commitment to special interest titles sees them accounting for 12.39% of your magazine sales at around $500 a week. This is important since special interest titles are usually only sold in newsagencies.
   – Well done on the 13% year on year growth in teen magazines and 15% in buying and selling.
   – I can see from your magazine data that your shoppers are more likely to be women: craft 7.55%, Home & Lifestyle 8.19%, women’s Interests 4.89%, Women’s Weeklies 26.72%, Food 2.59% and Crosswords 4.34%. Are all your women-focused titles in the one area? Is this easily shopped? Could you improve their shopping experience?
10. NEWSPAPERS. Unit sales are down 7% just below the newsagency channel average. The concern is that this reflects a decline in traffic, a decline you need to replace. The other question re the 37,919 newspaper sales in the year is – what’s next to your top selling newspapers? You ought to have products you want purchased on impulse next to them. For example: better Homes & Gardens Thursday through Sunday, Women’s Weekly the first few days it comes out etc.
11. STATIONERY. You dropped $14,500.85 in revenue over they year, a decline of 7%. This is higher than the channel average. What’s interesting in your data is the growth for account books – 25% year on year, Binders – 15%, crepe paper – 25%, Notebooks – 21%. A deeper analysis is challenged because you’re slack in managing your data – you have $11,509 in sales sitting in unknown category. This can be easily fixed to give you accurate data. In terms of stationery overall, connect with your GNS rep and ask for an assessment based on their top selling stationery items in the area. It could be that you have some opportunities here.
12. LOTTO SALES. Well done on the 12% increase in sales, this is better than average. What are you doing to encourage and guide your lotto customers into purchasing other items? You had 38,172 transactions in 2012/13 – plenty of opportunity for promoting other parts of your business.

As I noted above, what you have is a reasonably traditional newsagency but I can see transition underway in some areas. I think you need to pick up the pace on this transition, chasing new traffic by expanding your product offering.