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Ethics

Pet Circle targets local petfood shop with Google ad campaign

The big Pet Circle business has been targeting local small business The Petfood Warehouse with ads that specifically name The Petfood Warehouse.

Google permits this, a business naming a competitor in an ad. This is what one of the Pet Circle ads targeting The Petfood Warehouse looks like:

 The headline of one Pet Circle ad says: The Petfood Warehouse – Fast Delivery + Free Shipping.

 The headline of another Pet Circle ad says: Petfood Warehouse | Low-Priced Pet Food Online

If you click on either ad it takes you to the Pet Circle website.

I can understand how a shopper may think they are shopping at The Petfood Warehouse when they click on the link. The headline suggests that it is an ad for The Petfood Warehouse and the ad presents when you do a Google search for The Petfood Warehouse. But this is an ad for Pet Circle.

Why does this matter, why am I writing about it at the Newsagency Blog? fair question. The Petfood Warehouse is a customer of the POS software company I own, Tower Systems. I feel for their situation as I went through the same thing last year. The Google keyword Tower Systems was targeted by a company that used it in their ad heading promoting POS software. No, it was not a newsagency software company. People searching for us were presented their ad with our name in the ad headline text – which is exactly what has been happening with The Petfood Warehouse.

This all matters here because it can happen to you. Beware. keep your eyes open. I know of one business it happened to and their online sales dropped from 25 a day to 5 a day when this happened.

Pet Circle is not the local small business serving the Illawarra like The Petfood Warehouse.

I’m not saying Pet Circle is a bad business. But, I am raising a concern that they are paying to use the name of a competitor of theirs in a apparent move to see people looking for that business to shop at Pet Circle.

In my opinion, it sucks that Google permits this type of advertising, where a competitor uses the name of another business in a headline for an add to effectively pass the ad off as being for the other business.

I am all for competition, fair competition. Local small businesses do not have the marketing budget for expensive Google campaigns. I think any Google ad that uses the name of a competitor to divert eyeballs and clicks is unfair, inappropriate.

Maybe the best way to deal with businesses that squat on a competitor’s business name like this is to click on their ads. A higher ad spend for no revenue will soon get the attention of those in control of their ad budget.

Being a local small business is challenging, in the physical world as well as online, as this issue shows.

Hopefully, the folks at Pet Circle will change their approach. I have lobbied them to do this, in support of the family that owns The Petfood Warehouse.

Footnote: LegalVision makes some interesting comments about this type of advertising.

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Ethics

The turmoil of newspaper delivery for a regional newsagent under new News Corp arrangements in Victoria

Victoria is in the middle of considerable changes to newspaper distribution let by decisions of  News Corp.. While change can be challenging, as we have seen in Queensland and New South Wales, the newspaper distribution experts at News Corp. are certainly expert at the botch up. Newsagents are suffering, enduring higher costs and upset that they are letting their long-term customers down.

Here is the experience of one regional newsagent in Victoria in dealing with the Herald and Weekly Times:

The Herald and Weekly Times replaced the reliable transport company they had used for decades to deliver papers to us and many newsagents in regional Victoria. Under the new transport company arrangement, it has been a nightmare.

Previously, papers for home delivery were delivered between 2:30am-3:30am, giving us time to unload, wrap and deliver by 6:30am. This meant deliveries were done when there was less traffic on the road. Delivery people are working longer hours and are delivering to homes in a less safe situation given more traffic on the road later in the morning.

Newspaper home delivery drivers are angry and threatening to leave. Customers are disadvantaged with later papers, often coming after they have left for work.

Circulation people at the Herald and Weekly Times have been disinterested. They tell newsagents to be patient and that what newsagents are experience are teething issues. For the first couple of weeks this could be the excuse, but months in, it is no excuse at all. To be fair to them, maybe they are saying all they can given the company’s decisions.

The Herald and Weekly Times people set the OH&S standards that newsagents are consistently unable to meet now because of their failure to deliver newspapers on time. The consistent failure puts delivery drivers and the public at risk.

The failures of this change in newspaper delivery transport arrangements is impacting the mental health of some in our channel. Yet, management at the Herald and Weekly Times, and their masters at News Corp. headquarters in Sydney appear disinterested. It feels like the News Corp. financial situation is all that matters.

I get that News Corp. wants to cut costs. But to do so in a way that even more burdens are shouldered by local small business retailers reflects a lack of ethics, it represents poor social responsibility.

I tell newsagents who tell me about the challenges relating to getting newspapers on time for home delivery to quit newspaper home delivery. There is no upside. What you make today in real terms from newspaper home delivery is less than a couple of years ago. Few newsagents genuinely profit from it. It is a distraction to other parts of the business that should be experiencing double-digit growth, and which make you happier.

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Ethics

More calls to boycott the Herald Sun

Allied to the protests in Melbourne this past week has been an increase in calls for people to boycott the Herald Sun, with some referencing similar calls in the UK re The Sun.

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Ethics

Another day of political lobbying by the Herald Sun

Rather than report news, like the coming out of lockdown roadmap released by the State Government yesterday, on the front page, the Herald Sun today runs another front page splash designed to anger Victorians. This looks like interference by a foreign company to me. This lockdown is a result of failures in NSW, a state with a government supported by News Corp and festered by people not following lockdown rules, something I could argue egged-on by News Corp.

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Ethics

Did Herald Sun ‘reporting’ play a role in the Richmond protests yesterday?

I live in Richmond Victoria, a street from where some of the violent protests occurred yesterday, once street away from some disturbing footage you can see in this video:

We have media outlets in this city that have, in my opinion, played a role in encouraging unrest that has played a role ‘encouraging’ the protests.

The Herald Sun has run story after story about the lockdowns, personalising attacks agains the premier. They preference appears to be for opinion, to encourage a set of views, more so than reporting. You only have to see today’s front page to see that in action.

This front page story, Dan’s slow road, is not journalism. The so-called slow road is the road agreed by national cabinet – but there’s no reference to that on the front page.

I am angry at the personal risk I and my neighbours faced yesterday. While the major confrontations were one street away, there were protestors on my street, as well as police. There were also helicopters directly overhead. It was a tense few hours.

The coffee shop I go to had hundreds of protestors outside, closing with police. I can only imaging how they felt.

The actions of the protestors effectively caused us to be barricaded in for the day given how the local streets were barricaded.

I am tired of selling this nonsense published baby News Corp., tired that their newspapers are no longer newspapers, that they are political lobbying pamphlets.

I support free speech. But to dress this up as front page news is ridiculous. News Corp. should focus on news on the front page and restrict opinion peddling to their opinion pages – and they should label them as such.

Do I think the Herald Sun played a role in what we saw yesterday in Victoria? It is hard to say, specifically. I do think the Herald Sun has played a role in encouraging unrest and disrespect.

Footnote: the protest was in Richmond because the police decided to stop the trains at my local station. This decision caused the city planned protest to relocate to my suburb. I would like to understand why the police thought shifting a protest from an empty CBD to populated suburban streets was a good idea.

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Ethics

Should retailers take a stand on vaxxed or unvaxxed in their shop?

There was noise on social media this week when some retailers said they would welcome anyone to their business, vaxxed or unvaxxed.

Vaccination is a vexed (sorry) issue. You’re damned if you speak up and damned if you do not.

I can understand retailers say they welcome anyone as it presents as inclusive. I can also understand retailers saying they prefer shoppers to be vaccinated, especially if they have family and loved-ones who for some reason cannot currently be vaccinated.

While I am not a fan of fence-sitting, I think with this issue we are better off saying nothing because saying something will attract fringe-dwellers and these folks can be demanding, nasty and distracting. I know a retailer who said anyone is welcome and then found tribes of fringe dwellers on their social media doorstep.

By all means have a view for yourself and those who work in the business as it is your workplace and you have obligations. However, I don’t see how that can extend to customers when the government itself does not have a view.

For sure I want everyone who can to be vaccinated, and urgently. If I was in government with the authority, I’d try and find a way to force that, for the health and safety of the community. I’d tie it to some funding or benefit, as happens already in child care. But, I am not in government and owning a shop does not give me the right to dictate what my customers believe, no matter how much I see my shop as my little kingdom.

So, for me, I’ll have my wish and hope that everyone who can gets vaccinated while, at the same time, serving anyone who comes into the shop. And, while doing this, the shop will remain clean, happy and as Covid safe as possible with masks, hand sanitiser, free face masks and the other steps in place that have kept us safe and trading so far.

Covid has a long long way to go I think. This vaxxed and unvaxxed can shop here pitch is another pot-hole on the road that, when we look back on it, will be a small distraction.

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Ethics

Deleting your business data prior to selling your retail may not be a wise move

A former newsagent got into some legal hot water about the performance of the business as represented through the sales process.

It was when the purchaser discovered historic business data had been deleted that they became suspicious. That kicked off a legal process that was expensive for both sides and resulted in a financial payout to the purchaser.

When you sell a business you sell it with a set of assets necessary to the running of the business. Data are such assets, especially data relating to sales performance. How can someone buying your business expect to achieve results close to yours if they do not have the historic data to guide decisions?

I mention this today as my newsagency software company has a process around any request from a customer for help with deleting data. We ask for the request to be in writing, signed by the owner. We do this based on legal advice. We do not want is to be drawn into a legal battle between vendor and purchaser. We have been in the past, several times, when vendors found business performance that did not match representations made in the sales process.

In the legal fights I have seen at close range (as an expert witness)  it has been expensive for the business purchaser as well as the vendor. If data is deleted, the vendor can’t prove their position and this tends to not play well for them. I’ve reluctantly become involved as an expert witness relating to the management of the data.

My advice to anyone selling their business is don’t delete recent (within the last 7 years) historic business data on which you would, in the usual course of business, expect to rely for decision making.

If any asks me I say don’t delete business data. It is what it is. There is nothing to fear from the truth.

Now, on the matter of data. It is a core business asset, genuinely valuable. Collect it, cultivate it, treat it with care, analyse it. The most successful retail businesses I see do this. A retail business of any size can do it, and expect valuable results from it.

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buying a newsagency

A start-up local community newspaper closed when a big competitor offers free ads

Mackay Local News launched in February this year following the sudden closure of the Daily Mercury by News Corp.

Established by local business people, the Mackay Local News quickly filled a gap, an interest in genuinely local news.

A few days ago, the folks behind the Mackay Local News decided to close. I’ll let them explain, in their own words:

Mackay Local News newspaper ceases publication

The directors and shareholders of Mackay Local News Pty Ltd announced to staff on Thursday September 2 that the paper would cease publication immediately.

 

The directors and shareholders of Mackay Local News Pty Ltd announced to staff on Thursday September 2 that the paper would cease publication immediately.

Despite being recognised as the best quality newspaper based in Mackay, with the highest content of local community news, views and sport, and with the largest staff of any local publication, the directors believed the market was entering a destructive ‘media bloodbath’.

Advertisers had been approached by competitors with offers of ‘free ads’.

Rather than reduce quality or participate in a destructive media war, the directors believed this to be the fairest outcome for all involved.

The directors would like to thank the thousands of locals who regularly bought, read and responded to the paper, and the tens of thousands who visited the FREE mackaylocalnews.com.au website, as well as the local businesses who showed real dollar support by advertising their wares and services at a fair and reasonable price.

Mackay Local News was first published in February 2021, in response to vocal local concerns about the sudden closure of the Daily Mercury by foreign controlled News Corporation in June 2020, and protests about their paywalled website.

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Ethics

News Corp rejects outback Queensland and offers of help from newsagents

The ABC has this story:

News Corp confirms newspaper distribution will cease to much of outback Queensland

For some regional Queenslanders heading to buy a News Corp Australia paper from their local newsagent this weekend, the purchase will be one of their last.

News Corp has confirmed it will stop delivering its titles to certain parts of regional Queensland after September 26 and following more than three months of lobbying from concerned newsagents.

News Corp wrote to select newsagents in March informing them it planned to cease physically distributing eight mastheads including The Courier-Mail, The Australian, and The Daily Telegraph, due to the “very high cost” of distribution.

Longreach newsagent Rob Luck said he offered a range of solutions to the media company to try to reverse the decision.

However, on Thursday afternoon he received an email from News Corp confirming it would go ahead with its plan of ceasing distribution after September 26.

Towns further west than Charters Towers in the north, Emerald in central Queensland, and in some parts of the state’s south-west will be affected.

Distribution will cease in the regional centres of Longreach and Mount Isa.

Charleville in the state’s south-west will remain unaffected, after News Corp organised a cheaper, alternative freight arrangement.

Residents in impacted towns will no longer have access to a physical daily newspaper covering state, national, and international affairs.

Consultation just for show, says newsagent

In June, News Corp’s managing director for Queensland and News Regional Media, Jason Scott, visited Longreach to meet with concerned newsagents.

Mr Luck, who has owned one of Longreach’s two newsagencies for 26 years, said he was told “the door is ajar” but was sceptical there was any intent to reverse the decision.

“It took from March to mid-June for someone to come and I will, in inverted commas, use the word ‘consult’ with us,” Mr Luck said.

Read the whole story published by the ABC  as it provides details of offers of help from newsagents.

News Corp’s decision is all about money, as its shareholders would want.

Why politicians pander to News Corp. is beyond me. In my opinion, the company is a bully, using its media pulpit to tell us what to think and our state and federal governments what to do. I’d go further and say that some days in their papers it reads to me like political interference. Thankfully I don’t watch the trash on Sky News.

Here News Corp. is just after receiving additional government funding, turning their back on outback Australians.

Given the continued slide in over the counter sales and the decline in real terms of margin, maybe it is time to stop stocking News Corp titles. I am sure Harvey Norman would put the catalogues in their locations.

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Ethics

Newsagents: beware claims of fast profits and stellar growth

There must be something in the water, something bringing out people with loud claims of fast profits, amazing results for newsagents, the best offer ever put to newsagents, a revolution for newsagents.

These are some of the claims being pitched to newsagents in recent times.

Not one pitch I have seen recently provides evidence. Sure, there are newsagents talking them up, but, again, no evidence, no facts that can be verified.

We all want success, right?! Any pitch that feels believable, that offers success that feels attainable, can be successful for the party making the pitch.

History has shown that get rich quick schemes are not likely to succeed, that fast profits are not easy, or fast, that revolutions tend not to be.

If you’ve received a pitch that interests from you, be inquisitive. Ask tough questions. Seek evidence, get it in writing, making it clear that you want it in writing should things not go as promised.

Asking for evidence in writing will have some back off. They’ll probably say that you are not a good fit for them our that your question demonstrates lack of trust or that they don’t have time to answer you because they are too busy with people who want to proceed.

Slick sales people leverage the fear of missing out to get people to sign up quickly, before they have done any due diligence.

I have researched a couple of recent claims that have been put to newsagents and can’t find any evidence to support the claims of success.

In one case a claim about margin failed because the sales price needed for items was found to not work in shops. The real margin at which point the products did sell was half what was claimed.

In another case, online sales claims feel inflated in that the website is getting around 50 visitors a month and is ranked at the bottom of page 2 on Google.

My point is, buyer beware, do your research. It may turn out the pitch is right for you, that it delivers what you hope for, which would be terrific. It is better you make the decision with the facts and not the hype, because anyone can hype.

And, yes, I have made claims myself here at this blog. Most recently about card sales growth of 50% and more. These claims from me are based on evidence in the data. Greeting cards continue to be the best margin and easily grown products in a newsagency today.

Absolutely chase growth and success for your newsagency. But … do so based on evidence.

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Ethics

News Corp continues to interfere

From the Herald Sun and the Daily Telegraph, two different narratives. It’s pathetic, but on brand for News.

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Ethics

If you’re finding it tough in your small business …

Take a moment to read about the 25-year old protection offered rich big businesses. This explanation published by respected journalist Michael West given you a hint into what should be considered a scandal:

It’s quite the cosy little arrangement that some of Australia’s “old money” billionaires enjoy, courtesy of the federal government. It’s a cosy arrangement afforded to no other Australians, and a number of the country’s wealthiest individuals have fought tooth and nail to protect their privilege despite repeated attempts by parliament, the corporate regulator and Treasury to end it.

Billionaires such as Gina Rinehart, Anthony Pratt, Harry Triguboff, Frank Lowy, Kerry Stokes and dozens of other “old wealth” Australian families are exempted from having to produce audited financial accounts to the Australian Securities and Investments Commission (ASIC).

A total of 1,119 large proprietary companies are on this secret rich list; a result of “grandfathering” provisions of the corporations laws that were introduced by the government of Paul Keating 25 years ago.

…

The grandfathering exemption was put in place to give these wealthy proprietary companies time to adapt to a new financial reporting law introduced in 1995.

Introduced as a temporary plan by the Keating government, the list of exempt companies was to be reviewed after a few years but the Howard government stopped that move. The Rudd-Gillard government passed laws to limit the exemption, but the Coalition overturned them.

This an appalling situation, providing cover of darkness for thee businesses, while the rest of us here in the trenches are subject to tough regulation and oversight.

Rex Patrick is fighting to resolve this:

This is a story that should anger Avery small business owner as it’s us who are carrying the cost of measures like this one, which appears to protect big businesses.

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Ethics

Under-award cash payment of employees without a payslip is illegal

I received a call Friday from someone saying they are working at a newsagency and being paid cash in hand, without a payslip and at a rate that is 25% lower than the award.

They were asking for help. I gave them the phone contact details for Fair Work and urged them to make immediate contact. I also gave them the link for an anonymous report.

There is no excuse for systematic, deliberate, underpayment of employees nor for payment by cash without a payslip.

As we have seen in the conveyance, fuel and hospitality spaces, the actions of a few can tarnish perceptions of a channel.

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Ethics

Were newsagents obligated to sell the Herald Sun yesterday at $2.00?

There Herald Sun newspaper had the wrong price on the cover, as I noted here yesterday.

Reps from the publisher advised newsagents to keep track of sales at $2.00 and that they would credit the newsagents.

Please be aware the incorrect cover price of $2 was printed on the Herald Sun today, Wednesday 30th June 2021.

The correct cover price is $2.20, and this is what should scan when using the barcode.

If customers insist on paying the printed cover price today of $2 it should be honoured.

To avoid being out of pocket, please advise us via email to newsagents@news.com.au the route number and number of customers that paid the reduced price for the Herald Sun and we will apply a credit to your account.

Please call us on 1800 639 700 if you have any other queries.

I have three comments about this:

  • Poor communication channels meant that plenty of retail only newsagents did not get that ‘memo’.
  • Some distribution newsagents made up their own rules when advising retail newsagents.
  • The publisher advice is not supported by consumer law. Nor is it supported by the voluntary Code of Practice for Computerised Checkout Systems in Supermarkets.

This supermarket code sets out procedures employees in a store must follow in the event of incorrectly priced items. In one example, if an item scans at a higher price than the price listed on the shelf, the customer is entitled to receive the item free (assuming the look-up number is correct). I wonder if this happened.

What the newspaper publisher could / should have said is follow your in-store policy as it is this policy that should lay out how you handle an incorrectly priced item.

In my stores, the price of any item that arrives in store with the price permanently printed or marked on it is the price. That is is the price we sell the item for. So, in our situation, all Herald Suns sold yesterday were sold at $2.00.

Consumer law is governed by the Australian Consumer Law (ACL).  This requires prices to be clear and correct, so that they do not mislead consumers. Pricing must not leave consumers with a false impression as regards pricing.

It was wrong of the publisher to expect retail newsagents to deal with their publishing mistake. I think a smarter move would have been to be very public about the mistake and promote it as a deal for the day. I suspect there would have been a sales jump as a result, and considerably less stress for newsagents. yesterday was a missed opportunity.

This may seem like a small issue. All it would take is for one customer to make it big. They could make it even bigger by comparing how a newsagent would handle this versus a supermarket.

To me, the issue reflects out of date practices in our channel, practices that root us in how things were done too many years ago. We need to grow up.

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Ethics

Tabcorp decides against an increase remuneration for small business lottery retailers

In a blow for small retail businesses confronting annual increases in rent of at least 5%, in wages of 3% or more and in other operating costs of between 5% and 10%, Tabcorp has decided to not increase the commission paid to its lottery retailers. Here is a letter sent to retailers. Happy end of financial year folks.

While they thank parties for their submissions, the letter shows that it was all wasted effort by all who made submissions, just as it is for most who object to new outlets being approved near them. Tabcorp is great at telling retailers who much they care and great and doing very little to put the words into action in my opinion.

Tabcorp shareholders have every reason to be happy. Small business retailers will keep working, for less in real terms, because some do not see an alternative and because some see the commission as icing on the cake for whet else they dip in their business.

The lowest paid is the lottery food chain are locked in to be paid less in retail terms.

What frustrates me is that this giant of a company punitively controls so much of what the agent retail businesses can achieve – in such a way as to hinder good and fair retail management.

28 June 2021

Dear Retailer

Subject: Commission Review Determination

As a proud operator of lotteries across Australia, Tabcorp recognises and appreciates the critical role retailers have played and will continue to play in the future, in the success of the Tabcorp Lotteries business.

As you are aware, in Victoria, Tatts is required to formally review the commission for retailers no less than three times during the period of the Victorian Public Lottery Licence. Although this is not a requirement across all jurisdictions, Golden Casket has elected to extend this review to include all of the jurisdictions in which we operate. After an extensive consultation process, we have now concluded this review.

As part of the current commission review and consultation process Golden Casket has:

  • considered all of the factors listed in our letter to retailers in November 2020;
  • actively engaged with Industry Associations that hold a current collective bargaining authorisation under section 88 (1A) and (1) of the Competition and Consumer Act 2010 in accordance with 3.3 of Schedule 4; and
  • invited retailers not associated with the Industry Associations to make individual submissions.We would like to thank ALNA and NLNA for their detailed submissions and subsequent engagement, as well as thank those retailers that are not members of ALNA or NLNA, for taking the time to provide us with their submissions.Following our extensive review and consultation process, Golden Casket advises that no changes are proposed for the maximum commission rates and the current commission rates will be retained.

1. Rational for retention of current commission rates

As you are aware, the current commission rates were adjusted on 19 August 2019 as part of the Omni- Channel Remuneration Program. Golden Caskets analysis demonstrates that these commission rates reasonably reward retailers for their role as a stakeholder in the conduct of Public Lotteries in Queensland.

Total commissions paid to Golden Casket retailers collectively have increased and are projected to continue growing. Through the successful management of the lotteries portfolio, coupled with the implementation of the Omni-Channel Remuneration Program, Golden Casket has delivered to retailers a steady increase in commissions, above the CPI during the term of the Current Licence, noting fluctuations related to jackpot activity.

2. Benefits delivered to retailers as a result of the commission review

Although Golden Casket does not support an increase in commission rates at this time, we will continue to regularly evaluate and seek to improve the net remuneration paid to retailers via competitive rate and fee structures. We will also continue our investment in product and marketing initiatives that drive growth and sales for retailers.

The Omni-Channel Remuneration Program which commenced on 19 August 2019 with enhanced remuneration arrangements for retailers, has delivered over $21M in FY20 in additional income to retailers, with a further $8.9M invested by Tabcorp in the DigiPOS buyback program.

Outside of the formal review process established by the government, Golden Casket regularly reviews methods to help reduce the costs for retailers and will continue to do so. We consider that this dynamic regular review process, which considers relevant and current factors, delivers better outcomes than simply operating a system with prescribed fixed / regular commission adjustments.

Golden Casket also has a strong pipeline of planned initiatives which are focussed on delivering ongoing benefits to retailers and building a stronger retail network. Such initiatives include:

  • exploring ways to drive new foot traffic for lotteries retailers;
  • training programs for our retailers;
  • the provision of retailer syndicates via The Lott Website and app;
  • terminal enhancements to bring the retail and digital experiences closer together; and
  • The Lott rebranding program that will see a single master channel Omni-Channel brand across boththe digital and retail networks.

3. Golden Casket future approach to remuneration of retailers

Given the maximum commission rates were increased in 2019 as part of the Omni-Channel Program launch, Golden Casket advises that the maximum commission rates will remain at the current levels.

Golden Casket will continue to regularly monitor the performance of its retailers including the level of commission paid to retailers and consider whether the commission reasonably rewards retailers for their role in the conduct of Public Lotteries. The implementation of the Omni-Channel Remuneration Program outside of the Schedule 4 requirements demonstrates Golden Caskets absolute commitment to this approach.

Conclusion

Golden Casket is committed to working in partnership with lotteries retailers, industry associations and the government on other programs that can assist retailers in maintaining relevance of their businesses into the future.

Thanks again for your participation and engagement with the Commission Review process and for your ongoing support. Should you have any further queries, please do not hesitate to contact your Business Development Manager.

Yours sincerely,

Antony

Antony Moore
General Manager Lotteries Retail

This letter reflects the challenges of being an agent, of relying on the entity in control to care for you beyond lip-service.

I suspect Fair Work would have decided differently if they were involved and looked at lottery agents as employees.

UPDATE (10:49am): Here’s part of ALNA’s response emailed just now:

What is ALNA’s position on the determination outcome?
Overall, ALNA is very disappointed with the outcomes for our retailers from the CRM process that were communicated today, we hoped and believed Tabcorp would be able to positively respond to our recommendations and deliver a range of improved solutions for retailers. Given the current circumstances, we feel it misses an important opportunity to address key issues and to deliver timely and meaningful solutions for the challenges facing retailers right now, and the broader Tabcorp business, that we had highlighted in our submission, with solution focused recommendations to this CRM process.

By not providing a baseline increase in commissions to retailers in this second review in the CRM which is affordable and already offset by ticket price increases, we believe Tabcorp will not meet its Lottery Licence and CRM obligations to retailers, as it has now been nearly 10 years since the retailer’s baseline commission safety net was increased. As a result, ALNA will be raising our concerns over the outcomes and recommendations from this review with the Victorian Minister for Consumer Affairs, Gaming and Liquor Regulation, as we did previously after Tabcorp’s response to the 2018 Commission Review Mechanism process.

While we acknowledge that since the last CRM, and our subsequent representations to Government, which ultimately resulted in the new Remuneration Program being launched, the majority of retailers have earned additional commissions and these have been very beneficial, they are not guaranteed like a baseline increase is and so they do not provide the safety net that retailers desperately need and that we have justifiably raised in this CRM process. They are ‘at risk’ commissions offset by a rise in fees and ticket prices and conditional on performance measures to discount these.

Our requests in the latter part of these negotiations were calibrated, to be reasonable, measured and affordable for Tabcorp in the economic circumstances, asking that they pass through a portion of the ‘at risk’ component of commissions in the remuneration program and asking that they reconsider their approach to available Omni-channel digital commissions and to improve these.

Furthermore, the opportunity this CRM review provided to adopt recommendations aimed at shifting retailers’ perception of the remuneration program from somewhat punitive and migratory to win-win rewarding and incentivising, should not have been overlooked. We believe this is critical for franchisees ongoing success with their franchisor.

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Ethics

Card company pressures newsagent to change to them … the result is a drop in sales for the newsagent

A representative of card company, and through them the card company itself, pressured a new owner of a newsagency into switching to their products from a successful incumbent a while ago. A year on, the move was shown to be a failure.

Card sales declined significantly.

Proving it was not a business problem, the rest of the business performed well.

The change pitch was you’ll do better. It’s been put to me that the pitch was pressured. If true, this being applied to someone new to our channel and new to cards, there is an ethical question for those involved.

For what it’s worth, I suggest retailers get every supplier claim / promise in writing from them or at least diarised by the retailer – with a date and time.

In the case of the newsagent above, evidence could be presented in an appropriate forum for a compensation claim that could amount to thousands of dollars of lost gross profit.

Now, some notes about this. The new owner did not know the incumbent company at the time was successful because they did not look at the data. Nor did the representatives of the card company agitating to win the business. from what I understand, their approach was high pressure and heavy with claims of greater success.

Now that the newsagent is no longer new and have learned the value of business data, they understand the cost of their decision. It’s not a good situation for them. It could have been avoided had the representative agitating them to change been ethical.

Of course I am not sharing anything whatsoever that enables identification of the newsagents, the card company or their representative. but, as happens with our channel, I am sure the story will make its way around. I am not the only person with knowledge off what happened here.

Here are my tips relating to what this story is about:

  • Get every claim by a prospective supplier in writing.
  • Ask for evidence supporting any claim they make.
  • Keep notes.
  • Hold them to account for their claims.
  • Free stock is no benefit unless it sells easily.
  • Anyone giving you cash or something else that could consider is valuable will be repaid by you in some way.
  • Read every contract carefully.

The costs to the business I have written about are real and someone, or some people, working in our channel know what their pressure led to for the owner. Shame on them.

11 likes
Ethics

In attacking Samantha Maiden, The Australian Financial Review plays politics, not news, again

The hatchet job by Aaron Patrick on Samantha Maiden published in The Australian Financial Review today is yet another example of Nine Media outlets ditching news for political engagement / interference, and another reminder that paying to access biased trash is a waste of money. In this week of the Nine hack, surely they had better priorities.

That the Patrick ‘story’ got through the editorial process and published speaks to how weak Nine Media has become. That the story remains publicly available, and not behind their paywall, speaks to the objective of the piece.

In my opinion, this ‘story’ by Patrick is another shitty interfering and biased article in a shitty publication that cares little for evidence based reporting.

It’s an embarrassment to have The Australian Financial Review on the shelf – because of the lobbying in which it engages daily and it’s tiny size for such a high price. I guess the only redeeming feature is that it’s not a News Corp. title.

11 likes
Ethics

A warning to newsagents considering deleting business data prior to settlement when selling the business

It concerns me when I hear of a newsagent wanting to delete data from their computer system prior to settlement, prior to a new owner taking over the business.

In one instance recently, everything was deleted except for bare bones stock information. All sales history, supplier details and more was obliterated, everything a new owner would need to make good business decisions.

It’s a key point I make to prospective new owners. I suggest they have it written into the purchase contract that business data is not to be deleted without their written permission, and that as part of due diligence, yes that is a thing in buying any business, they scrutinise the data available and ensure it is what they expect and need.

I can’t think of any reason to delete data from the POS software prior to the sale of a business. I appreciate that for some in our channel this is not a popular view. However, I am looking it in terms of the future and not in terms of protecting a newsagent who is selling.

Imagine taking over a business on an agreed set of performance numbers, being in there a few months and needing to compare how you are going and realising that the data you need for the comparison has been deleted. If this happened to me I’d wonder why, I’d wonder what the deletion of data was hiding. This is why I recommend that requirements as to data are covered in any purchase agreement.

6 likes
Ethics

US landlords claiming online sales as in-store revenue for rent calculation

The Wall Street Journal is reporting that some US landlords are demanding retailers report online sales as part of store revenue.

Retailers and Landlords Clash Over What Counts as a Sale
Rents based on percentage of sales leave room for interpretation as line between online and store sales blurs

Stores are reopening and customers are streaming back in, which means retailers that withheld rent during Covid-19 shutdowns are now able to pay. But first they have to agree with their landlords on how to define a sale.

Landlords are increasingly offering deals in which retailers pay a percentage of their monthly sales in rent, rather than a fixed amount. Percentage-rent leases give retailers breathing room when sales decline and allow landlords to reap the upside when sales recover.

But there is a sticking point. With e-commerce soaring, some landlords want to include a portion of online sales in the new leases, arguing that physical stores play an important role in many of these transactions. Retailers are pushing back, according to landlords, real-estate brokers and retail executives.

If this does happen it will only lead to more retailers exit9ing shopping malls. Malls are struggling as it is to attract retailers because shoppers are remaining sticky with high street retail they engaged with during lockdowns.

But, hey, we know what major shopping centre landlords are like. Yeah … awful. Look at Westfield, long into a lease they decide to charge a fee to access the post box located in a non public area of the centre that you have had free access to for years. And they wonder why retailers are exiting.

4 likes
Ethics

Is Tabcorp ignoring objections from lottery retailers on new outlets?

I have heard from several newsagents over the last few days about situations where they say Tabcorp has ignored their objections to new outlets following my post recently about this topic.

One retailer told me that despite a comprehensive submission heavy with data, there was no inquiry from or discussion with Tabcorp about this, no interest in the detail.

Another newsagent told me they had been told by a Tabcorp representative that they would be contacted for discussion prior to a decision being made. This did not happen.

Another newsagent told me they objected immediately they were advised by Tabcorp only to see signage up for the new outlet, which had apparently not been approved, a week later.

Another newsagent told me they had arranged for mediation regarding their objection to a new outlet only to be advised that the new outlet had opened a day or so prior to the agreed formal mediation date.

There are plenty of other stories like this, demonstrating Tabcorp itself mocking its processes, delivering no transparency and disprtespective existing lottery retailers.

No wonder lottery retailers are stressed.

2 likes
Ethics
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