Author: Mark Fletcher

Further to my earlier post here about Australia Post…

Foot traffic is crucial to every retail business. It’s a numbers game. The more people walking through your front doors the more likelihood that someone will find something they like and make a purchase. For many years Australia Post retail outlets existed to provide a retail face to postage products. In the 1980s they started to offer non postage product and this trend picked up apace in the 1990s to the situation we see today where, on average, more than 50% of a government owned Australia Post retail outlet is given over to non postage product of greeting cards, stationery, telephone hardware and in person bill payment services.

That Australia Post has exclusive representation of the retail of postage product through its outlets provides it with an unfair competitive advantage over the retail outlets selling the other products and services which Australia Post carries. Australia Post competitors do not have an equivalent government protected product offering to guarantee equivalent customer traffic.

The Western Union money transfer service offering is a good example of Australia Post benefiting from its government ownership. Newsagents introduced Western Union in 2000 and by January of 2004 year had achieved 800 independent small business owned outlets. During 2003 year Australia Post introduced Western Union.

Solely because of its foot traffic, Australia Post has been able to snare a majority portion of the Western Union business. Australia Post outlets do not provide signage or significant promotional displays whereas newsagents invest significantly in signage, literature and advertising.

A study of the Western Union example will prove the considerable commercial value of the Australia Post foot traffic and show the advantage Australia Post gains from having access to the exclusive foot traffic.

What is happening with Australia is privatisation by stealth. Our own government is beefing up the Australia Post retail network to the detriment of small businesses like newsagencies. What for? Dividende? A sell off?

Newsagents should revolt and demand an enquiry!

Welcome to blufftontoday.com. You are witnessing the launch of a new kind of newspaper.

And which those words the world was introduced Sunday night to a new newspaper model – an online newspaper with a free daily give away for the citizens of Bluffton South Carolina.

Blufftontoday is part online newspaper, part citizen journalism. There are professionally written pieces and blog entries. Professional photos and submitted photos. But all wrapped with an air of professionalism whcih makes it interesting.

We have to find a way for traditional news and information retailers (like newsagencies in Australia) to be part of the new media. Maybe reading stations in our shops? Maybe a promotion point for the such new local ventures. We must respond in some way otherwise our relvance will be challenged.

Newspaper sales are falling. Or that’s what we’re told. In our newsagency we are experiencing double digit growth thanks to relentless hard work by our front line team.

Having said that, we are watching with interest the move toward citizen journalism. Today I stumbled across this report, published April 3, from the Carnegie Corporation in New York.

Here’s the riveting opening paragraph:

There’s a dramatic revolution taking place in the news business today and it isn’t about TV anchor changes, scandals at storied newspapers or embedded reporters. The future course of the news, including the basic assumptions about how we consume news and information and make decisions in a democratic society are being altered by technology-savvy young people no longer wedded to traditional news outlets or even accessing news in traditional ways.

I’m interested in the report since it goes to the heart of products which are critical to the future of by retail business and 4,600 like mine in Australia. 50% of our traffic is generated by newspaper product sales.

The world is changing around us at a rapid pace and we need to not only embrace change but create a model which will serve us and our employees for the future.

We will not allow this business to become a white elephant.

We accept that News Corporation and other newspaper publishers and mainstream media generally need to put the needs of their shareholders ahead of businesses in their current supply chain. However, we’d like to be part of the conversation about the future.

No government has a right to own and operate a retail channel which competes with independently owned small retailers. Especially when the government owned retail channel, in this case Australia Post, has a monopoly on the retail of postal products and have leveraged that monopoly driven traffic by moving into other products areas.

For more than 100 years stationery was dominated by newsagents (4,600 independently owned retail stores unique to Australia) and other retailers as was the greeting cards category. About 15 years ago Australia Post entered these marketplaces and have turned their government owned retail post offices into businesses which look, for the most part, like newsagencies.

This is the Government of Australia demonstrating their care for independently owned small retailers. It is obnoxious, offensive and killing small businesses. And the government does not care. They will say they do but lay out the facts and you will see they do not. They are happy for Australia Post to spread its competitive tentacles even further into space ably served by independent retailers.

Newsagents don’t have the luxury of monopoly traffic. They do not enjoy that protection bestowed by the Government on Australia Post. Australia Post claims 1.1 million daily visitors to its 4,477 stores. Newsagents, while having good foot traffic, cannot match the Post because we do not have the products which only they allow themselves to carry. Newsagents cannot claim to be an essential service and therefore get preferential rental agreements with landlords. We do not have the postal service logistics operation of backload stationery and other products around our network for a fraction of the commercial fees we pay.

The Government supports the continuation of the Australia Post monopoly because, as the sole shareholder, they are the beneficiary of the arrangement. They are conflicted in any decision they make about any small business channel competing with Australia Post. I appreciate it’s an emotive and simplistic view. However, walk in my shoes and then tell me I am wrong.

This same government facilitated the deregulation of newsagencies in Australia in 1999 and created a situation which today sees thousands more businesses selling newspapers and magazines (core products for newsagents) than in 1999.

My software company bought a retail business 9 years ago so that we could walk in the footsteps of our customers. We still own the business today. Right across from our shop is a Post Office – government owned. We do a promotion on printer ink cartridges. Australia Post does one. We fine tune our prices. They fine tune their prices.

This is our government competing with my tiny shop.

What right to they have in using their might to compete with my business?

We sought approval for a sign on the wall outside our shop the same size as that for Australia Post. Centre management refused.

If all they sold was postal products then I’d be happier. If they provided me with postal related products for reasonable margin so I could compete with their core products then I’d be happier.

The current situation stinks and politicians on both sides seem to lack any care. Australia Post is untouchable.

I’ll have more to say on this in future posts.

This is the first entry in a what we hope will be a warts and all blog about life in a busy Australian Newsagency.

We’ve owned Forest Hill Newsagency since February 1996. It’s a very busy retail shop plus there is a home delivery round, loarge magazine distribution round and sub agents to manage.

We bought the business to gain first hand experience in running a newsagency – the software we write is for newsagencies.

Anyway, 9 years on and we’re still here and still learning.

You can see photos of our shop here.