Here is a photo from an On The Run store in the Adelaide CBD from last Friday night. Within walking distance of this store is a newsagency with a different looking counter, more space allocated and tougher rules for what can be displayed with or near Tatts products.
Having seen both shops first-hand Friday, it appears greater flexibility is given to the On The Run operator in terms of the use of space and even the total space allocated.
While I am no lawyer, I do wonder if this apparent double standard is something that newsagents could challenge. While the Tatts defence could include a claim that On The Run sells a limited range of products, that could be countered with an analysis of sales data to see the percentage of tickets purchased that fall within the range of what can be purchased at an On The Run.
The folks running the One The Run group are smart, they have built an excellent business in South Australia. Their stores are impressive. I expect they have Tatts in their business because it is successful and not because of a limited range of products. They have it because the product mix works for them.
Making money in retail comes down to the numbers: return on floor space allocated, return on labour and basket efficiency (what else you sell with an item). The Tatts model in On The Run focuses on all three.
My concern here is not that On The Run has Tatts. No, my concern is that On The Run appears to have it on terms considerably more favourable than any small business newsagent nearby. It appears as if On The Run has been given a competitive advantage, leaving newsagents with an operating cost that disadvantages them, that makes them less competitive.
Thinking about the two very different space allocations, shoplift requirements, product adjacencies and operational trading rules I am left wondering why Tatts is allowing this. I am also wondering whether those representing newsagents in this area have taken any action to test the difference in rules, to test the difference in competitive situations.
There is an old Mobil site run by On The Run where I am located. It is about to be redeveloped into the usual OTR format. I do not know if it will have SA Lotteries, my RTM cannot tell me. I am expecting it will.
I will watch very closely the requirements they must meet and will emulate anything I see them do that succeeds.
After a recent breach notice from Tatts for a floor stand in “their space” I asked their GM in SA why the double standards compared to OTR. Still waiting on a reply.
I am obliged to give them 9 metres of clear space on the lease line in a Westfield. Given my second terminal is used less than 50% of the time I am rethinking my position moving forward when I see these double standards.
I also received “demerit points” on their last quarterly survey for refusing to visually clutter my terminals with their up-selling prompter strips.