Small business newsagents call for fairness from Lotterywest and WA Premier

I have spoken with several newsagents who were at the ALNA organised meeting between Western Australian newsagents, the WA Premier and Lotterywest. The common feedback has been gratefulness to ALNA for organising the meeting, disappointment that the Premier is unable to provide practical help and frustration that Lotterywest remains unwilling to engage in meaningful dialogue with newsagents.

The meeting was well attended and provided a place for newsagents to express frustration with Lotterywest over their retail revamp and recent commercial decisions that have harmed newsagents.

Here is a press release from ALNA on the meeting:

FOR IMMEDIATE RELEASE

2 February 2017

Retailers praise Premier but confidence lost in Lotterywest

Hundreds of lottery retailers met with Premier Colin Barnett and Lotterywest chief executive, Paul Andrew, yesterday afternoon, to discuss their concerns over prohibitive costs required for lottery shop fits.

The mandatory installations are required as part of government-owned Lotterywest’s franchise agreement. In some cases, quotes for the shop fits have blown out to over $100,000 – or up to four times what retailers believed would be the case – without a guaranteed return on investment. Lotterywest also have investigations underway to potentially open more than 100 additional outlets across the state.

Lottery retailers, travelled from as far away as Esperance and Coral Bay, to attend the Australian Lottery and Newsagents Association’s (ALNA) forum held at Crown Perth, Burswood.

ALNA chief executive, Adam Joy, welcomed the proactive steps taken by Premier Barnett of agreeing to listen to the concerns of lottery retailers.

“Retailers praised the Premier for listening to and recognising their issues,” said Joy. “They also appreciated that he shared his concerns at the meeting about the current relationship between lottery retailers and Lotterywest, as well as committing to discuss with Lotterywest’s board the issues raised in the forum.

ALNA, on behalf of lottery retailers, have held discussions with Lotterywest for over 18 months raising the issue of costs for the mandatory shop fits. Retailers have also raised concerns about the commercial viability of this investment, especially when the gross margin for lottery product sales is only 8 per cent before costs.

“Our retailers have been frustrated that these concerns have not been adequately listened to by Lotterywest. These are the small business people of Western Australia who feel their voice isn’t being heard,” said Joy. “Especially at a time when the Western Australian economy is struggling and other Government owned bodies like TAB provide detailed return on investment analysis to their outlets.

“Retailers at the meeting were disappointed in Paul Andrew’s outright refusal to suspend and review the model that is creating such angst. Even after such a significant portion of all Western Australian lottery retailers were in attendance to seek a solution.

“These are mum and dad family owned small businesses that are the backbone of the Western Australian economy. They are throughout regional areas and are the lifeblood of the community. Their viability is important to these communities and the local people they employ.

“Our members want to find solutions with Lotterywest for their businesses. They want assurances they are being heard and that Lotterywest will work with them and review the model. We hope constructive discussions will still occur.”

Australian Lottery and Newsagents Association is the peak body representing lottery agents, and retail and distribution newsagents.

The CEO of Lotterywest on Thursday wrote to WA Lotterywest outlets about the meeting and related media coverage:

ALNA meeting – The West Australian article

You may be aware of an article titled Lotto revamp angers sellers which was published in today’s edition of The West Australian which you can view here.

The article outlines a meeting that the Premier, our Board Chair Heather Zampatti and I attended yesterday which was hosted by the Australian Lottery and Newsagents Association (ALNA) about our Retail Transformation Program (RTP).

I want to clarify content covered in the article and reinforce the reasons behind RTP and our support to the retail network.

We are committed to running a successful lottery to maximise funds returned to the WA community – something we’ve been responsible for since we were established over 80 years ago.

Our retail network is an important and valuable part of Lotterywest. Your stores remain our main distribution channel.

The way our customers engage with lotteries is changing as technology and retail evolves. To ensure your stores remain relevant and contemporary in an increasingly highly competitive market, Lotterywest has invested $30 million in RTP.

We have engaged regularly with retailers since 2013 and your feedback has been an important part of RTP.  This has included approximately 50 formal engagement and consultation sessions with retailers, retailer reference groups, staff, players, shopping centres, landlords and leasing agents, in addition to various informal one-on-one meetings. We will continue to do so.

As a result of your feedback we are developing additional signage to optimise external visibility and brand presence at retail stores. This may include new signage items or additional digital screens installed.

We are also looking at ways to keep you more informed and up-to-date on RTP. While we currently use InTouch and direct email, we are developing new ways to make information more easily accessible in a central location. We’ll continue to keep you updated on these improvements.

I also want to address feedback on our Retail Distribution Strategy. As you know we commenced a program for network expansion following third party geodemographic research. This strategy is to complement our traditional retail channel and optimise sales.

Your feedback is valuable to us so please feel free to contact our Customer Services team. You can also review some background on RTP below.

Thank you for your continued support and hard work.

Regards

Paul Andrew
Chief Executive Officer
Lotterywest

Background

• RTP is dedicated to modernising the Lotterywest network’s retail presence and providing contemporary ways to play lottery games through the best available lottery technology.
• RTP is delivered through three main stages of signage, shopfit and technology.

Signage:

• New signage will be installed by the end of March 2017.
• We’ve allocated $2.9 million to supply and install Lotterywest signage – the majority of costs are covered by us.

Shopfit:

• We’ll contribute $2.2 million to existing retailers who install the new shopfit by the end of September 2019. This represents about 30% of the estimated costs for the manufacture of the Lotterywest shopfit component.
• Other support we offer includes a dedicated shopfit team to support the process.
• We’ve also negotiated and secured bulk purchasing and supply of materials required for your shopfit.

Technology:

• New technology is scheduled for installation later in 2017.

• We’ll cover all costs associated with new technology and have allocated $16.5 million.

Lotterywest does not have the support of its retail network that it once had. From what I can see, new leadership at the organisation has burnt what was a strong base of goodwill with retailers, resulting in a relationship of mistrust and frustration.

Decisions by Lotterywest in some areas have reduced the goodwill value of small family businesses. The organisation appears unwilling to respond to this, leaving families at risk. This is not a good look for a government organisation.