September quarter results reveal a mixed bag of results for newsagents. The gap in results between businesses is wider than ever and the performance of print media products more concerning than ever.
While some newsagents are generating ne traffic from new products to the traditional newsagency, not enough are doing this.
Change is essential. Too many newsagents and traditional newsagency suppliers are operating business as usual model. This is driving the downward trend I see at the core of the benchmark results for many newsagencies. The only way to arrest this is to drive change – in supplier relationships and in newsagencies.
Here are the headline numbers for the benchmark study:
- Customer traffic. 81% of newsagents report average decline of 4.3%.
- Overall sales. 73% reported an average revenue decline of 3.4%.
- Basket depth. 66% report a 1.8% decrease in basket size.
- Basket dollar value. 21% report an increase in basket value of 3.9%.
- 36% of respondents using a structured loyalty offer.
Benchmark results by key departments:
- Magazines. 94.1% of newsagents report an average decline in unit sales of 7.3%. The average decline in weeklies was 8.9%.
- Newspapers. 81.3% report average decline in over the counter unit sales of 7.8% . Capital and regional city dailies lead the decline.
- Greeting cards. 54.2% of report average revenue growth of 3.1%.
- Lotteries. 58% of those with lotteries report an average decline of 2.7% in unit sales.
- Stationery. 62.8% of newsagents reported a decline, with an average of 5.4%.
- Ink. 27% of stores report ink separately. Of these, 55% reported decline of 2%.
- Gifts. Of the 63% in the offering gifts, 58% reported growth with an average of 6.2%.
- Tobacco. Of the 48% with tobacco, 75% reported an average decline of 14%.
- Confectionery. 52% of stores reported an average decline of 3.7%.
- Toys. Of the 27% with toys, 63% reported growth of 4.2%.
Product mix shift. The shift in product mix continues. For example, the gift and related maximum single item price point I have seen this quarter is $1,000.
Traffic shift. Whereas the newsagency channel was built in print media products, they are less likely to be the destination purchase than today. I suspect this is a consequence of deregulation, of publishers facilitating access in supermarkets, c-stores and other locations.
In my own newsagency: My key category numbers off a good base, are: Books: up 1,000+% due to adult colouring. Diaries: up 196%. Cards up 25% with Everyday Counter up 38%. Cards account for 23.78% of sales; Gifts up 35% and account for 11% of sales; Magazines up 5% and weeklies down 5%; Stationery down 8%, Plush up 28% and accounting for 8.24% of sales. Traffic: no change; Average Sale Value: up 8%; Average Item Value: up 11%.
Here is data from another newsagency embracing growth strategies: Books: up 1,000+% due to adult colouring. Diaries: up 187%. Cards up 29% with Everyday Counter up 22%; Gifts up 47% and account for 13% of sales; Magazines up 7% and weeklies up 5%; Stationery up 7%, Plush up 24% and accounting for 8.6% of sales. Traffic: down 3%; Average Sale Value: up 9%; Average Item Value: up 11%.
CONTEXT
In the benchmark pool for this quarter, there are newsagencies with gift revenue of more than $50,000 and others with gift revenue under $500.00. To look at this in another way, there are newsagencies with gift revenue equal to or greater than card revenue and others with gift revenue equal to 5% or less than card revenue. I could share similar ratio analysis for plush, toys and selected other high margin categories.
NEWSAGENTS, IT IS YOUR FUTURE TO OWN
I urge newsagents to focus on traffic in gifts, plush, toys, homewares, fashion, ink and office furniture opportunities. You have to buy well and promote even better. More often than not your suppliers will not be traditional newsagency suppliers.
We have more control over our businesses than ever before. What we do with this is up to us. The trends affecting us are obvious. Our future is ours to own.
Please take this benchmark report as a call to action.
Why such a huge jump in diaries ?
Broader range and out of store marketing.
re magazine sale decline, the rubbish that is supposed be stories in New Idea & Woman’s Day today perfectly highlights why the weekly mags are declining so quickly. Again nonsense stories on Bec & Leighton Hewitt,pregnant again in one, breaking up in the other. The continued gossip on them, Nicole Kidman, Princess Mary usually one magazine totally contradicting the other has dumbed down both magazines to a very sad level. Both publishes should hang their heads in shame.
Adrian , ah that was pretty funny just had a look at the front covers , that is really bad for front page stories and I would say sales will suffer if a customer sees that
the probelms with weekly mags are customers told me they won’t beleive what those gossips anymore.
Weekly titles like NI or WD should be not be in your premium magazine area anymore. These are decliners and that space should be allocated to growth titles or growth products. I did this and it did not affect my sales of these titles but did increase other title sales as they get more exposure.