For years there have been differences between how suppliers who supply newsagents and supermarkets with the same products treat these competing retail channels. While newsagents have complained, they have done nothing about it. I think we are approaching a time when we will need to act.
The challenges now are about much more than better gifts with purchase for supermarket shoppers.
The supply model used today disadvantages newsagents as it encumbers our businesses with financial,. labour and space costs that our competitors do not have. But even that is not why I say we are approaching a tipping point.
Price is the issue. More and more I am seeing different pricing in supermarkets for titles we sell in newsagencies. News Life Media and Bauer Media are the main publishers engaged in this. They must be doing it to drive traffic to supermarkets and away from newsagents for their products. Why else would they make their products so much cheaper in our competitors?
Why price Inside Out $2.00 less in Coles than the newsagency 50 metres away?
Why bundle weekly Bauer titles in supermarkets at a discount to nearby newsagents?
The only reason can be to drive supermarket sales.
Think abut the long-term implications – either newsagencies close or they reduce their reliance on magazines. What that may not hurt many of the titles sold by Bauer and News Life Media, it will hurt them and it will hurt many other publishers.
Today, the Australian newsagency channel is the largest single magazine retail channel in the country. But for how much longer? Those publishers who appear hell-bent on directing shoppers away from us need to consider the bigger picture for all publishers as well as for small business newsagents and the vital and quintessentially Australian role they play in there communities. Thankfully, not all publishers are so inclined to kill our channel.
Publishers: every action you take against us makes magazines less profitable for us and informs our own actions. Every time you facilitate supermarkets presenting your product as better value from them you harm our businesses. You’ll blame us when we are less interested in your products or quit as you have blamed us in the past, not thinking for a moment about the role you played in us deciding as we have done.
Every benefit you give supermarkets, every time you make them more appealing than newsagents is another decision against the future of the Australian newsagency channel. Shame on you as we have served you well. It is newsagents who have been key to your success and newsagents off of whom you make more money.
My mum used to say – IF THE CAP FITS, WEAR IT – when I’s complain that one of my siblings was to blame for something she told us all off for.
This is what I say to the publishers who have contacted me today to say either that they not sell into supermarkets or that their supermarket engagement is on terms identical to newsagents.
Read the post, I am clear who I consider is misbehaving in term of bad behaviour identified. The publishers contacting me should contact the misbehaving publishers. They won’t Publishers are a protective bunch.
“What to do with the magazine dept” is one of the biggest conundrums newsagents face. I know it is for me. Its very difficult to maintain the passion for magazines when 75% of the stock we receive (unsolicited) is returned unsold. At my expense. Many hours each week are spent simply dealing with this gross oversupply. So much so that sometimes we really cant be bothered putting extra effort into the department. Our time is better invested into higher profit less demanding departments.
Publishers might be thinking they can get a better deal from Supermarkets but the reality is that the better deal is to be had from sitting with newsagents and rewriting the allocation system. Publishers and agents will save millions when we agree on a new allocation system – waste will all but disappear.
History shows that when the supermarkets have the major market share they will screw over suppliers. Publishers and distributors take note, you need us at least as much as we need you. Work with us to build a strong and viable network rather than weaken your place in our outlets.
Mark, you have said “while newsagents have complained, they have done nothing about it”
Mark, what have YOU done about it?
Amanda here is some of what I have done about it:
1. Maintained the rage here at what I suspect is the most widely read forum on matters affecting Australian newsagents.
2. Had multiple discussions with the ACCC and while there has been no progress, I have kept it on their radar.
3. Had multiple meetings with Gotch and Network. The result is often one step forward and two steps back.
4. Provided newsagents with a documented roadmap by state on how they can each tack action.
5. Met with the ANF for half a day sharing the above roadmap – which they did not follow (as is their right).
6. Met with and or talked with more than fifty publishers on supply chain topics.
7. Successfully cut my own magazine exposure to 700 pockets – soon to be less.
8. Spoken with several federal politicians about the unfair supply model.
9. Written more than twenty letters in the last four years to various interested parties on the topic.
10. Helped hundreds of newsagents on better manage magazine supply in their own businesses.
11. Make countless representations on behalf of individual newsagents to magazine distributors on supply issues.
12. Provided newsagents through this place with strategic advice on a future beyond magazines.
13. Spoken at many Newsagency of the Future workshops where a considerable portion of the session is on this topic.
All this has been pro bono including many flights interstate.
Amanda, what have you done?
Good answer….lol
It seems magazine publishers and distributors have not considered the obvious.
We have seen what the supermarkets have done to our dairy farmers, meat, fruit and veg producers. Once you rely on supermarkets there is no way back. You do what they say or close the doors. In doing what they say you will erode your business to the point there is no profit left for you. You will then have a business worth nothing, cannot sell it, and close the doors anyway with nothing left. The supermarkets will not care about you!!
We have an avenue for you publishers and distributors to sell your magazines, yet you are losing floor space in newsagencies at a rate of knots.
We have owned a newsagency for 3 years and in that time have reduced our space by 50%(from 2400 pockets to 1200). To reduce pockets by this much and lose no income, this is the contempt that publishers/distributors show to newsagencies.
We are always contemplating the next bay of magazines to go, the decisions are made easier by the continued oversupply and barrage of “new” magazines(the magazines culled last year).
When we replace a bay of magazines, we gain 4 linear metres to add new product to our store, product that makes GP with minimal work.
We want to continue to sell magazines, but if the unpleasantness of magazines in our business continues to grow so will the space for other product.
Yes Amanda, what action have you taken to shore up your business ?
Or do you not see there is a huge problem looming for those with their head in the sand ?
Well said Peter. I just paid my exchangit account and after 4 years in the business I cannot see what benefit it is bringing me. An amazing situation.
Mark don’t always agree with what you write but on this occasion i DO Does Amanda not read this blog at all ???
Having read the coverage in the weekend papers about the bullying tactics the supermarkets use on their suppliers, I wonder if this is being driven from the Supermarket side not the publisher side?
Like it or not, people want to buy magazines from supermarkets, and that means that the supermarkets can put whatever pressure they like on magazine suppliers to give them the best deal for the supermarket.
People buy magazines from supermarkets for convenience, not because they like to. By the time the magazine publishers bow to the demands of the supermarkets and the newsagent chanel has been harmed beyond repair, they will finally realise that selling a few more magazines (and remember they will lose all of the specialist sales) is less profitable than dealing with newsagents even at an arguably slightly lower unit sales result.
Supermarkets surely view magazine sales as marginal – just squeezing an extra few cents from every customer that passes through the checkout.
I doubt they care about the price newsagents are charging as they don’t view you as competition – they only care about the direct impact of reducing prices on sales in their stores.
I.e. how many more people will buy Inside Out at $3 compared to the $5 it normally costs? This is extra sales to price-sensitive customers, not sales that are stolen from newsagents…although those same customers might buy from newsagents if the price was $3 there, too, of course!
If current Inside Out circulation is 46,774 (as reported on the News Corp website) and the cheaper price increases that by 20%, the supermarkets get their extra profit and the publisher gets their extra distribution (increasing the value of advertising, etc).
I suspect potential negative impact on newsagents is not even considered.
I am surprised at the number of magazine pockets some of you have pruned displays to. Mine are currently still over 1000 and I thought we were doing fairly well at sending the trash back but obviously we can do better and will be. Perhaps then I can pay their overpriced accounts on time.
600 to 700 pockets of good titles will give you a far bette return.
600 to 700 in a medium size shop?
Is this what most newsagencies have these days?
Have cut by 20% already but do need more space for Xmas.
Jenny it all depends on your sales. Your reports should indicate the point at which you could cut off pockets without hurting traffic and sales.
we are still showing good growth in our magazine category but after many heated arguments with G&G and network we top 100% of our magazines and have been for 3 years, we have told them to watch the over supply, they dont so we top every cover and we have never been refused a return.
We cut (forcibly because we were moved by centre management to a much smaller shop) our magazines from 1900 pockets to
750 pockets and after 18 months in the new store we are more profitable than we were in the old (magazines that is).
However, getting mags culled is a constant process and we do it twice a week when we get deliveries.
It is important to keep it under control otherwise we have cashflow problems.
My biggest problem now is getting enough of the saleable product and too much of the unsaleable.
Early returns is an imperative part of my week and I use the Retailer system to do
that. Actually I am embarrassed to admit
that I have only been using it for about 5 years and I have been using retailer for about 25 years so maybe I should have been doing the online training to keep up with things.
I love the early return system because it saves double handling and goes straight into the returns file so if you haven’t used it yet, try it out. It is one of the most important things in retailer IMHO.
Mark, Lance, Paul, Allan Wickham.
I read this blog regularly. Not ritually, but yes I read regularly. I often agree with Mark’s comments and his position. When I do, I make a habit of stating so, and liking the comment as i do with other contributors comments.
But I quite often have a different point of view as I do tend to have my own opinions and do not follow the herd!
Paul, if you were on the blog regularly you would probably have liked some of my previous comments. Regularly they have received more likes than any other post on that same topic. Not through popularity, but because obviously other newsagents have the same opinions or concerns.
My comments were not a personal attack, I was simply asking a question.
Mark has listed what he has done. I will list what I have done to ease Lance’s concerns:
1 – Successfully reduced magazine space allocations over a 7year period by 60%. This has been done in gradual reductions based on sales information from my POS, and forecast sales trends.
2 – I have spoken out at ACP conferences and workshops
3 – I have engaged in conversation with representatives form Network Services and Gordon and Gotch about oversupply and inadequate commission terms.
4 – Written to local member of parliament over 10 letters to three different members as they have changed so frequently in recent years.
5 – Written to individual publishers and even magazine editors
6 – Written to ACP, G&G, NDD and IPS
7 – Cancelled the agreement with IPS as a supplier
8 – Removed titles from sale whom continue to abuse the newsagency channel and see supermarket outlets as there preferred retail channel.
All this on a probono basis!
So, fella’s as you can see i have done all Mark has without the hype and glamour!
Except I have gone further in cancelling agreements with suppliers whom have inferior terms and I remove products from the shelf which insult my relationship with them as a newsagent.
I started culling magazines before Mark began blogging about it. Does this mean i can see into the future? Hell no! I just reacted to what my store and customers were telling me and what i could see with technological changes.
In all that Mark has done, and similarly what I have done….(and I am sure what hundreds or thousands of newsagents have done as neither I or Mark are Robinson Crusoe here)…The whole point of my question is.. what has been achieved?
Sounds like hype to me.
Why take titles off the shelf that favour supermarkets? Or cancel IPS? I see it as a challenge and still beat the supermarkets in my area by 10-1 with sales of every title they stock. I need IPS as it has The Saturday paper and this targets the new markets we need to have for our future.
This is no competition between you and Mark. If this blog makes other newsagents re-evaluate their product mix and start making changes to see them grow into the future then it is a victory for all. Plus I dont do anything on a probono status. i do it because I want to make more money, isnt that why you make changes to your business!
With all due respects Amanda you did not ask Mark what was achieved, you asked him what “HE” had done……
….and all I replied was “good answer”….
That’s is not true Allen
you said
Good answer….lol
Oops….my bad Bretts…..lmao
Lol – lots of love ?
I don’t know how you manage to reduce pockets. I find as fast as I cancel a title another one is sent. It like a plague! I cancelled IPS. Last month because our mags are delivered a day later than everywhere else we could not do any early returns. My bill is huge this month and I still haven’t paid it. How do we manage our cash flow? I am sick of Delayed billing that I can’t get rid off out of my shop. I am still paying off debts after the loss of trade from cyclone ITA early this year so oversupply is making me sick in the stomach.
Carol follow the advice I’ve published here on this post and elsewhere on this blog. It starts with you telling them how many magazine pockets you now have following your shop fit. Put that in writing to the managing direct – fax it and ask for confirmation of receipt.
Chris, I’m with you. Point of difference is vital. Newsagents cutting space need to so with great care. Careful what you wish for.
Thats correct Jenny….there`s always ‘lots of love’ here on the blog….pmsfl
Allan I just googled pmsfl, 3 different definitions, guessing it’s not the practical money skills for life! Who comes up with these stupid abbreviations.
We had a customer telling us recently that her aunt passed away. Her cousin had sent a text to several family members and friends and signed off lol!
More seriously I cut 36 pockets yesterday to help with Christmas space.
Filled one shopping trolley just from wedding and cooking! By the time I left we had filled 3 trolleys, totally exhausted but my magazines look great.
In the last 12 months we have decreased our pockets by about 120 (plus yesterday’s temporary ones) and I think I now try harder with less space to get a better result than before.
Jenny, now I`m ROTFPMSL…….
Good job on the magazines though.