January numbers for my newsagency show revenue up 19% year on year. There has also been a significant increase in gross profit percentage. The small team at the newsagency has worked hard to make this happen.
Here are key measurements for the business:
- Traffic – up 2%
- Average sale value – up 17%
- Average items per sale – up 2%
- Cards – up 28%. (24% of total sales)
- Everyday counter cards (birth to death) – up 26%.
- Diaries – up 24%. (5% of sales)
- Gifts – up 135%. (8% of sales)
- Magazines – up 5%. (21% of sales)
- Women’s weeklies magazines – up 9%.
- Newspapers – no change. (6% of sales)
- Plush – up 5% (10.39% of sales)
- Stationery – up 14%. (5% of sales)
- Toys – up 210%. (4% of sales)
Two thirds of what we sell has a gross profit of 55% or more. Toys for example is at more than 60% as is plush and most gifts. Magazines remain an important part of the business for revenue and for what we achieve with the traffic.
I appreciate these numbers may seem unreal to some. Like all the data I publish here, I will provide an opportunity to see the reports for themselves, to be certain that the numbers are true.
What we are doing in this business is living by the principles I have been writing about here for years – living by the principle that every day is our pay day.
The key factors to the growth are our whole of business discount voucher program, acting as retailers and not agents, chasing change in what we sell and how it is presented, using data to understand our customers and making the shop a destination for non-traditional products.
The discount vouchers continue to deliver the best result I have seen from a loyalty program. I launched the channel’s first loyalty program more than ten years ago and have used a clip card approach as well as a comprehensive points based approach. Discount vouchers are different again and customers love them.
Newsagents can grow their businesses by standing for something and relentlessly pursuing this point of difference.
Keys to success are multiple traffic generators for the business, above average margin, leveraging existing traffic as much as possible and being ruthless when things don’t work.
This 135 sq m shop is in a Westfield centre with another newsagency, two Coles supermarkets, Target, K-Mart, Australia Post and plenty go gift shops selling cards and gifts. It’s a highly competitive situation. We do not have lottery products or tobacco products as traffic drivers.
Mark,i would like to visit your shops in march after newsxpress conference.
Mark, I congratulate you on the continued growth that you report, I have no doubt that the figures that you quote are correct.
It would be helpful to know shop history, for example if the shop is new, young or old. For example if it is only 2-3 yrs old it would be expected to have growth. If it is 10 years old with growth like that you should be running the country.
Peter we’re into year five for this business. There was a newsagency here for years prior. But a gap of a year between them and us. The business today is different today to five years ago. This is assisted by the flexible fixtures we started with which I wrote about here at the time.
Great set of numbers Mark. It would be great to see the rest of the channel pumping these.
While I find sale figures are a good indicator I personally would rather use gross income for each category to gauge the growth of my business. Here are my gross income numbers for each department.
Cards 8.8% of gross income up 6.8 yoy
Lotto 34.6% of gross income up 9.6 yoy
Scratchies 8.2% of gross income up 9.6 yoy
Magazines 7.5% of gross income down 3.7% yoy
Papers 2.8% of gross income up 18.7%
Stationery 17.3% of gross income up 15.5%
Gifts 16% of gross income up37.7%
Others 4.6% of gross income.
As you can see my newsagency is heavily weighted to lotto products. I know this is not ideal but its a growing part of my business. Try as I might Tatts keep on coming up with new product and price rises keeping at this level.
The other strange one is papers. The recent price rises has given this a boost, but still not relevant in the scheme of things.
My business is probably the other end of the scale to your newsagency as we specialise in gifts and are heavily into back to school. Most other newsagencies would fall somewhere in between.
Would like to hear from other newsagencies with their figures.
Slightly off topic, but I wanted to share!
It was lovely to receive an email yesterday from newsagent Howard in Torquay Vic asking whether he could obtain copies of two earlier issues for one of his customers.
Howard – and all newsagents – certainly can get them and we offer two methods:
* Newsagents or their customers can buy online with free postage (see Back Issues on our website)
* we can supply Newsagents ex GST with commission and free postage, and provide a Tax Invoice
Howard mentioned that he had asked our distributor IPS who of course cannot supply back issues because we only supply our current issue each month for distribution.
We love providing our customers with great service and it’s a privilege to be able to help newsagents do the same.
Howard’s email arrived close to 5pm yesterday and gave our office a buzz. A nice end to the working week.
We are in a Westfield centre that has thrown some challenges at us in the last year. A rebellion against boom gates has seen the centre decline, and the addition of Target and Riot art and craft has affected toys and stationery sales.
traffic down 6%
average sale value unchanged
cards unchanged(20% of sales)
diaries up 8%(6%of sales)
gifts up 42%(5% of sales)
magazines down15%(27% of sales)
newspapers up 1%(7% of sales)
plush down 13%(5% of sales)
stationery down 21%(16% of sales)
toys down 4%(7% of sales)
Stationery has been in freefall and do not see any way to address it except to cut space and go further into gifts. Back to school was terrible due to the added competition(Target & Riot)
Toys down due to added competition(Target)
Mags down due to weeklies mainly which seems to be consistent with the magazine circulation figures.
This next year will be interesting, will have a few decisions to make sooner than later.
Peter B, we went on line this year with back to school. Also promoted heavily that we were the back to school specialists. If you do it well the mums will talk about on facebook. Best goodwill you can get. It paid big dividends for us.
Can’t comment on the other departments. Gifts have turned my business around so I can recommend that path.
Hope you decide wisely. I am sure you will.
Our results this year compared to last so far
Newspapers up 5%
Magazines Level
Stationery up 2.7%
Cards up 4.8%
Gifts up 15.2%
Drinks up 14.6%
Confectionery down 11%
Cigs down 4.5%
Epay (except Opal) down 12%
All Gambling down 10%
It has been positive to see that the areas that I have spent the most time (higher commission areas) has paid off. Confectionery is my next area to minimise. So much premium space is spent on a dying sector, this will change in 2015. This is also the case for Cigs, will still sell them as we sell between $3-3500 a week but space allocation will be cut by 25-50% pending logistics.
Keep working on your business and please do not rely on the attitude that you a re newsagent and people always go into newsagencies. This attitude has long gone and you need to make yourself attractive to visit. Presentation, Customer Service, Community Interaction and Product Range are my selling points.
I hope 2015 is a year of fresh ideas and I look forward to growing into new markets and changing the perception of my store in the local area.
Wow, we’re a varied lot but some categories tell a tale of where we are all going.
Cards down 7% (17.43% of sales)
Diaries down 20% (4.85% sold most before Xmas)
Calendars down 28% (4.07% but up far the season)
Gifts up 33% (7%)
Ink up 21% (4.67%)
Mags down 11% (24.4%)
papers up $ 9% (8.69%)
Plush up 342% (2.45%)
Stationery down 8% (19.11%)
Toys up 470% (2.86%)
over all $ down 1% Sales down 3% but we are more profitable due to the mix of sales.