How will UK newsagents fare in the second lockdown?

UK newsagents are classed as essential in the second lockdown announced by the UK Prime Minister.

Newsagents here in Victoria (Australia) where we have just come out of a second, 100+ day, lockdown, fared well. While traditional products like newspapers, magazines and lotteries did okay, it was in the gifts, toys, homewares and personal nourishment categories where the best growth was achieved – all higher margin categories than traditional newsagency product lines.

The newsagencies that had already transitioned and relied less on traditional did the best. They met the criteria for being essential but were able to serve customers in-store and, importantly, online, maximising the profitability of this time.

The average growth I have seen in sales data to the end of lockdown is year on year growth of 20% and more. What’s interesting is that in most cases there was no noticeable increase in shopper traffic. Visit efficiency spiked.

With the second UK lockdown impacting an important time for retailers, UK newsagents that trade outside of the traditional convenience approach will, in my view, do better. The success they experience will be enhanced in they are established online.

Again, in Victoria, I have seen some newsagencies grow online revenue from a 2% contribution of total revenue to 20%. Most online sales have been of higher margin items like jigsaws, games, toys, personal nourishment and gift hampers. I am grateful that many of us were well established in these categories prior to lockdown, enabling is to serve customers who could not get to other closed shops with these items.

If I was advising UK newsagents I would be saying that Covid is the opportunity to pivot, to re-cast the focus of the business. UK high streets are full of businesses competing in the convenience space. The majors will win that battle. There are better opportunities elsewhere. Right now is the best time to consider that.