Newsagency business performance analysis: tourist area

Here’s a newsagency business performance analysis I recently completed for a business in a tourist location:

Your business is in a unique situation being located on a major tourist area. Your situation demands you carry a broader range of products that the traditional newsagency with some of these products being very seasonal in nature.

Looking at your data it makes me wonder if you stock some products to sell out within the season, so you are not burdened with those highly seasonal products until the next season. This is certainly the approach I would take – even quitting at cost or below anything I;d have to put in storage until the next season. Otherwise you’re bound to find yourself holding stock for months on end.

Stock not on the shop floor has a high cost to the business.

In comparing sales July 1 through September 30 2013 with the same period in 2012 what stands out the most is what I cannot see. You are not managing your data well. Too much product is sold without a category. take Arts & Crafts. Your sales are $5,713 in the 2013 quarter but 99.76% of this is in unknown category. This poor data management hides a management opportunity for you.

Tracking inventory at the category level takes a bit of work to setup but once done you are better served. The quality of your business decisions, your buying especially, will improve considerably and this will help you make more money.

I’m not going to comment on all departments. Rather, I have notes about what really stands out.

1. Coke. our sales are down 34% year on year. needs work since Coke is a beacon brand.
2. Fax & Copy. You’re clearly offering a valuable service. Revenue is up 191%. Well done. Chase more growth. Promote this well and at every opportunity. Also look at your prices. Do they reflect the convenience of the service you offer?
3. Gifts. Almost no sales. Based on your card sales you ought to have been able to do more than $4,000 in gift sales in this quarter. Get on it.
4. Lottery. Up 8%. Well done. Whatever you are doing, keep it up. Also look at up-sell opportunities. What do people see as they approach and leave the lottery counter? What else is offered at the lottery counter? It looks like the majority of lottery customers make their purchase and then leave. Consider offering a coupon for a purchase that day only. Date the coupon. Make the offer compelling. make your good lottery traffic count for more!
5. Magazines. I can see from the categories of titles you sell that yours is a genuinely mixed business in terms of gender and age. I trust your magazine department is zoned guys and girls and that your relay is fresh – a magazine relay takes between four and six hours to do. Your overall magazine sales are down 26%. This is dreadful compared to the channel average – indicating you need to put some serious work into your offer. If I were you this is where I would start in re-energising your business. Create a fresh look for magazines, chase more sales. What you are doing right now is failing.
6. Stationery. This is up 7% and that’s god.Because of poor data management I can’t see where the growth is coming from. Whatever has changed between this year and last – do more of it.

Here are my top three things you need to do immediately and once they are done we can work on next steps:

1. Do a magazine relay.
2. Fix your data – assign categories to everything you sell. This is pretty straightforward to do.
3. Leverage your lottery traffic with an offer.

Oh, and look at how you handle seasonal product.make sure you don’t hang on to anything.

I hope this helps. You should aspire to act on the three items above in the next two weeks.