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Ethics

If only suppliers were transparent about supply chain challenges

Too many suppliers to retailers are not transparent about supply chain challenges. They seem to think that not telling you about potential delays will keep your orders active and guarantee them sales.

It is frustrating hearing that the order you placed four months ago and was due in this week will not arrive for another six weeks. Frustrating because the supplier would have known many weeks ago. Shipping to Australia does not happen overnight.

I know there is a container shortage in China and limited capacity on ships from China to Australia at the moment. If I know that, suppliers would too.

Suppliers need to be more transparent with retailers, so we can plan to ensure our shops remain full. Their websites need to be more transparent on this, so that we don’t waste time creating orders that cannot be fulfilled as and when we need them.

Every supplier that is not appropriately transparent gets a black mark against them in my book. They will have to fight harder for business in the future.

Related to this is the question of product sourcing. China continues to be problematic politically but even more so in terms of supply certainty. I am more interested in suppliers that have moved to protect their supply chain, most likely by outside of China sourcing. or course, locally made is the best solution.

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Ethics

The Australia Day Foundation in the UK ‘honours’ Rupert Murdoch with lifetime achievement honour

I would have thought the no-strings $40M gift from the federal government was honour enough. Or the $0 tax paid by News Australia Holdings racked up $16bn income but paid zero tax over six years even on the $246m they declared in taxable income. Source Michael West Media. Or the scope of interference almost daily in our democracy. No, not reward enough, not the for the Australia Day Foundation in the UK. They have bestowed a new award. And, in his acceptance video Mr Murdoch says he’s not done. Sheesh.

The Australia Day Foundation is supported by a bunch of commercial sponsors. UPDATE (27/01): And, they operate rent free out of Australian Government funded Australia House in London.

It is surprising that some companies have more capacity for donations than they have for paying tax in Australia.

Now, a couple of things:

  • I have embedded this tweet as it is the only one with the video of the speech and for no other reason.
  • Also, if you disagree with me, it’s okay. I have not written this to change your mind. I do think News Corp is a cancer in our democracy, that News Corp regularly interferes in our democracy and that News Corp is not a socially responsible entity when it comes to its tax affairs.

Daily, News Corp. tells us and governments what to do yet daily it works to limit the resources available with which to do these things.

UPDATE (27/01): It turns out the trust does have ties to the Australian government and that this ‘honour’ is irregular. This thread, including evidence, is well worth reading:

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Ethics

Tabcorp reviewing additional terminal approval process

Some retailers in line for an additional lottery terminal since mid 2020 have been wondering why they are yet to receive the much-needed additional terminal.

It turns our Tabcorp decided to review the process through which it assessed additional terminal requests. This decision to review stopped the sending of additional terminals that had already been approved.

In the meantime, there appears to be no delay to new location approvals. Hmm …

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Ethics

Excellent example of journalism worth paying for at the Washington Post

This video is a 14 minute except from a 41 minute video released to Washington Post subscribers in which they meticulously lay out what happened in the attack on the US capitol. As a WaPo subscriber, I have seen the full length video. It is chilling. It is also representative of excellent, fact-based, journalism, for which I am happy to pay.

This is the challenge for commercial news outlets, creating genuinely valuable content that people can trust.

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Ethics

A cautionary tale re online advertising

Marketing Today host Alan Hart interviews Kevin Frisch, who was recently the CMO of Wag and before that the head of performance marketing, and CRM for Uber.  In this interview they discuss a Ange of topics related to online advertising and, in particular, fraud occurring with online advertising as experienced by Uber.

It is a stunning expose of a scam that cost Uber millions. In online advertising is interesting to you, I think you will find this interview fascinating.

The discussion at around 15 minutes about how they acquire customers is fascinating as is the realisation about how much money Uber spend on pointless advertising.

Online ad platforms accessed through third parties make fraud as described easier.

In my own businesses we rarely advertise online now. We have never used third party platforms to place ads for us, thankfully.

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Ethics

Dynamic Supplies takes a stand on behalf of its customers as HP asks for access to end customer data

This email from Dynamic Supplies from earlier this week indicates that HP, a key supplier of ink and toner through them to newsagents, is seeking access to end customer data. This would concern any retailer of these products.

The letter from Dynamic is worth reading. Their approach puts the needs of their retail partners ahead of the demands of HP, which is terrific to see.

Dear Valued Dynamic Supplies Customer,

As you may be aware, HP recently introduced changes to their distribution “partners” agreements by introducing a new Global Partner program called Amplify. This new program effective 1 November 2020 immediately impacted the HP print consumables and hardware categories and as a result we advised the retraction of all HP discounts and rebate programs.

One of the conditions of the new Amplify program is the compulsory reporting to HP of extremely detailed private data including confidential customer and inventory related information. We are very concerned that HP want this information which includes your end user drop ship information including customer names and addresses and purchase data, in addition to sell through data on compatible versus HP original supplies.

I write to you today to advise that Dynamic Supplies will not comply with this data collection program and will not at any stage provide your private customer data without your express consent. It conflicts with the core values of our organisation and we believe this sets a dangerous precedent within the print distribution channel. Whilst the request for information from HP may or may not be illegal, we regard this as a highly unethical program. HP is offering significant incentives and rebates for this data and we regard this as little more than a bribe. Dynamic Supplies have opted out of this program and are referring this matter to the ACCC.

Dynamic Supplies has always operated with the best interests of our resellers at heart. We are communicating this information so that you are aware that if you purchase HP products from an authorised HP partner, those partners will be providing this data to HP as part of the Amplify program requirements.

17 years ago Dynamic Supplies fought a similar battle with HP to protect the best interests of our Reseller customers. This included the refusal to collect and supply end user data and support predatory pricing behaviours. It is familiar territory for us and we will again defend the interests of our channel.

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Ethics

Crikey: tax minimisation in the Murdoch businesses

This article by Bernard Keane at Crikey should anger any everyday taxpayer in Australia.

Tax dodging News Corp continues to rip Australia off — and is subsidised by taxpayers to do so

News Corp retains its crown as a champion tax rorter, yet again paying next to nothing in tax despite billions in revenue.

Next time you see a News Corp employee or contributor, or a News Corp editorial, opining about fiscal policy in Australia, or how tax revenue should be spent, or how the economy should be run, there’s a simple question to bear in mind.

How much tax has the foreign-owned Coalition propaganda arm paid in tax in Australia in the five years to 2018-19? During that time News Australia Holdings has earned more than $360 million in profits from nearly $13.1 billion in revenue.

The answer, of course, is zero. It hasn’t paid a single cent in tax.

It’s a different story for News Australia Investments. In 2017-18 it reported $291 million in taxable income, on which it paid … $201,000 in tax. And no, there isn’t a zero missing.

Admittedly News Pay TV Financing — the vehicle for News Corp’s takeover of Foxtel and Premier Media Group nearly a decade ago — reported a $27 million profit way back in 2015-16. It paid tax on that that year: $8.2 million.

So, including everything, in five years News Corp has paid $8.5 million in tax on more than $680 million in profits and $13 billion in revenue.

In that time the Coalition has handed $40 million to it in untied grants, swamping even the miserable $8 million. The net position is that off revenues of more than $13 billion, taxpayers have actually paid the Murdochs more than $30 million.

All this is because News Corp is one of the worst tax rorters and dodgers in the country. That’s why, in 2015, the ATO deemed it the highest tax risk in the country.

The recently released ATO corporate tax data for 2018-19 — well before the pandemic — shows that the US-owned News Corp earned $2.1 billion in revenue, down from $2.4 billion the previous year, but claims to have made no profit at all — in contrast to previous years when profits where sneaked away offshore.

The numbers illustrate the extent to which News Corp has nothing to do with Australia and Australians. It is foreign-owned, Rupert Murdoch is a foreigner, and the company pays no tax in Australia.

Of course, that doesn’t prevent the company’s outlets from lecturing real Australians who live here and pay tax here about what they should do, how they should live and vote, and what fiscal and economic policies we should follow.

Read the rest of the article online.

I get that some may say it is smart to take steps to minimise tax. News Corp. is different. It openly meddles in democracy, plays with the truth to serve its needs, tells us how to live our lives. Yet, it pays no tax. This alone should strip of what it seeks to do.

I think what News Corp. does re tax is un-Australian, wrong and purely selfish.

All companies have a social responsibility to the countries in which they operate. In my opinion, News Corp. is not demonstrating social responsibility in its tax arrangements in Australia.

Shame on all politicians who pass the rules that allow News Corp and so many other companies to pay fair tax.

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Ethics

Is Tabcorp unfair in its expansion of the retail lottery network?

Tabcorp has approved plenty of new lottery outlets recently, expanding the network of retailers selling its lottery products.

The speed of growth in outlets does not feel connected to an increase in demand for over the counter purchase of lottery tickets. It does not feel as if there is a justification for the expansion in sales. Retailers say it feels like something else is in play. Maybe it has something to do with talk of some or all of Tabcorp being up for sale. Who knows? Not me, that’s for sure.

A chunk of new outlets have been fuel and convenience focussed, often open 24 hours a day. If Tabcorp adjusting its preferred retail format focus?

If you ask Tabcorp about the new approvals, they will say they have a thoughtful process they follow in considering each new outlet application and that existing retailers can appeal and any appeal is thoroughly considered.

To that, I’d say prove it. Rarely is an appeal successful. Rarely does the company explain why it made the decision it did.

Adding an outlet in a town of 5,000 where the existing outlet is not under pressure, is gold standard and have considerably grown sales does not make sense.

Adding 2 outlets within 5 minutes of another existing gold standard outlet with an excellent track record does not make sense.

I get that Tabcorp thinks adding outlets can add to its sales. Retailers will tell you no evidence flows from the company showing this to be the case.

The big issue here is that while Tabcorp is actively expanding its retail network, while at the same time rapidly expanding its online sales, the company continues to lay heavy and expensive demands on retailers as to the premium space to be allocated in-store, the considerable capital investment in fixtures and fittings and the extraordinary demands on training.

To plenty of existing lottery retailers it feels like the same rules do not apply to some of the new outlets, such as fuel. They say it feels like the existing retailers are penalised without consideration by Tabcorp.

Given that Tabcorp wants to considerably expand its retail network: to be fair to existing retailers, the company should stop demanding premium in-store space, reduce the considerable shopfit requirements and be more flexible in overseeing the operational rules.

Talking with some lottery retailers, the moves by Tabcorp are upsetting them, distressing them. I hear in their voices the harm this is doing.

Shame on those at Tabcorp who are responsible. Shame for what feels like a lack of care for the existing retail network.

Expanding as Tabcorp is its retail lottery outlet network does not feel social responsible.

The mental health of existing lottery retailers is being impacted by the expansion. The stress some facing a new competition is considerable. It taken them closer to breaking point. Not only because of the decision but also because of the dreadful processes Tabcorp has that make the existing lottery retailer feel helpless.

This is a mental health issue Tabcorp! It demands urgent senior management attention.

Regulars will know this does not affect me personally. I’ve not had a retail lottery outlet since 2013. Newsagencies and other shops can and do thrive without lotteries.

The best move a lottery retailer can make in their business today is to do everything possible to reduce reliance in the business on lottery product traffic and revenue.

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Ethics

Ovato: taxpayer funds to cover employee entitlements?

This, from the Chairman’s address at last weeks (Nov. 26) Ovato AGM indicates that the company is restructuring in such a way that the financial responsibility to a chunk of employees who will lose employment is shifted to the Australian taxpayers.

In my opinion, it sucks. But … I don’t have the time to lobby on this. If I did, I’d say that in my opinion the trajectory of the company was set well before Covid, that those running the company should have known for years that restructuring was inevitable and that, for these reasons, the shareholders in the company should be responsible for funding employee entitlements, and, if they can’t, the whole business should collapse.

The restructure appears to be movements specifically designed to shift the liability for employee entitlements to taxpayers, and retaining, for shareholders, a smaller and, I guess, more profitable business.

But, hey, these are just my opinions. I am no expert.

I am, however, a long-suffering customer of the Ovato business, a business with inadequate infrastructure and inadequate strategic planning. It is my experience with these that feed into my wondering why Ovato is making the moves it is making and whether the reasons put forward as to justification for the restructure stand up.

Now, to be clear, I respect the folks working at Ovato. In my experience, they are professional and committee to Ovato customers. My issue is that the company does not provide them the resources they need to deliver the level of service we (customers) need.

But, more broadly on the restructure, I am curious as to the motives and long term plans of Are Media in all this.

I think it is important that employee entitlements are protected. However, I do not think companies should be able to shift things around through various structures controlled by essentially the same body for the purpose of avoiding the obligation of fully paying employee entitlements.

To me, what is happening at Ovato, the transfer of employee entitlement responsibility from the company to the taxpayer, could be considered through the lease of social responsibility. each time I see Ovato in the news, on social media and in emails touting business, there will be the reminder of how much taxpayers invested in remnants of the business so that the remaining business itself could trade.

Down here in small business land, most of us are not structured so that we can slice and dice and manoeuvre such that we keep the good bits and have others fund the funeral of the bad bits. I appreciate that sounds dramatic. Maybe I am missing someone but it is how it reads to this non accountant.

Newsagents continue to be treated poorly by Ovato., We do not have control over our level of indebtedness to the company, we carry considerable costs for wrong decisions by the company, we make bugger all margin on their products. Yet, we do it because magazines are a core category. That we do it, and they know we will, allows them to by inefficient and maybe that is a factor in getting them to the point of needing the restructure.

Who knows.

What I do know from the Chairman’s own words is that Ovato plans to restructure such that us taxpayers pay money towards the costs that will be a consequence of the restructure.

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Ethics

Tabcorp ignores retailers, encourages online purchase

At the website for TheLott, Tabcorp aggressively pitches online purchase and faintly offers help in finding a retail outlet. This screen shows their focus on online and their disregard for retail.

Add two this their relentless promotion on social media through paid advertising.

Then, there is their App promotion, encouraging people to purchase before November 24 for a gift of $5 for more spending. They say it can be used in-store, but the core focus is online spending.

I have heard from several newsagents over the weekend that they are angry by the actions fo tab copy promoting online. My, somewhat unfair, response is so? I have been saying for years online is their focus and that there is no upside for over the counter lottery product purchases.

Tabcorp has a responsibility that trumps all others and that is to its shareholders. Online serves that focus more so than in-store retail.

Years ago, before online, lotteries were rivers of gold for retailers. No more.

If you are a lottery retailer and update about their focus online, either get out of lotteries, or make your business less reliant on lottery revenue. But, for sure, stop complaining as it will achieve nothing and that Tabcorp is doing is nothing new.

That said, their behaviour toward retail compared to online is contrary to undertakings they have provided regarding promoting in-store purchase.

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Ethics

SMH: Ovato seeks ‘restructure at the taxpayer’s expense’

From Nick Bonyhady at the Sydney Morning Herald, a story about the possible multi million dollar cost to taxpayers as a result of the proposed Ovato restructure, which is backed by Mercury Capital, owners of Are Media (formerly Bauer Media).

Printing giant seeks ‘restructure at the taxpayer’s expense’
A company controlled by one of Australia’s richest families has gone to court asking for a restructure that would see the taxpayer foot the bill for millions of dollars in workers’ entitlements.

Printing giant Ovato, which rolls magazines including The Australian Women’s Weekly and TV Week off its presses, is set to get a cash injection of $40 million backed by some of its largest shareholders including the wealthy Hannan family as part of the same restructure.

Australia’s taxpayer-funded Fair Entitlements Guarantee scheme is designed as a “last resort” to cover workers’ redundancy and leave payouts when a company collapses without enough money to cover them and there is no legal barrier to Ovato using it to restructure.

Ovato argues the restructure, which involves the loss of about 300 jobs in cities including Melbourne and Sydney, is necessary to keep the broader company afloat and save many more jobs in the future as the economy continues to struggle.

A report from advisory firm McGrathNicoll commissioned by Ovato said after the restructure about 300 workers would be employed by four Ovato companies with few assets and an estimated $18.3 million owing in workers’ entitlements.

The companies “will have no ongoing business or purpose and as a result in my opinion… will be insolvent” the report reads.

In documents released to the stock exchange, Ovato notes its former employees could turn to the FEG, which has seen its cost spiral from about $60 million in 2007-8 to a predicted $1.3 billion over the next three years.

Australian Manufacturing Workers Union official Lorraine Cassin branded Ovato’s actions a “disgrace” because workers face a delay getting their entitlements through FEG during the Christmas season and had repeatedly compromised with the company to keep it running.

Read the rest of the article here.

If true, this would be appalling. I would not want taxpayer funds used to settle costs flowing from any restructure.

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Ethics

Has an appeal lodged by an existing lottery retailer to Tabcorp or Tatts before them against a new lottery outlet ever succeeded

I heard from a newsagent last week of another appeal lost, with Tabcorp approving a new outlet nearby, another of the fuel outlets that run 24/7.

The newsagent is gutted. They lodged an excellent appeal. Their case was well made and backed by evidence. Their sales numbers are excellent.

Based on my knowledge of the situation, I expect that the new outlet will drive the existing outlet to investor time to maintain (or grow) lottery sales, meaning the new outlet increases operating costs for the existing outlet.

I see no sense in this particular decision. I have no confidence whatsoever that the folks at Tabcorp actually considered the appeal from the existing retailer.

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Ethics

Why Woo Commerce (WordPress) may not be a good website platform for newsagents

The website development side of my newsagency software company has developed websites for many retail businesses. It is a tech. partner for Shopify, Magento and WooCommerce.

While each platform serves a different need, Shopify is the widest used in the small business retail space by far. Magento is good for complex requirements, but maintenance of a Memento website will require a developer. Shopify can be maintained, modified and enhanced without web developer skills.

WooCommerce will require a developer for site maintenance. It also does not have as rich a support network as Shopify.

In our experience, small business retailers can achieve better, more cost effective, commercial outcomes with a Shopify website than a WooCommerce website.

I mention this today because in my experience local web developers are more likely to recommend the WooCommerce platform. I think they do this because it is better for them commercially in that web development is often their prime source of income. A Shopify website will not drive repeat business for them from a customer whereas a WooCommerce website is more likely to.

A newsagent I spoke to recently told me they were paying $9,000 for a WooCommerce website. That same site from my company would have cost $5,000, or even $2,500 if they contracted for it as a newsXpress member because of a half price deal at the time.

My point is shop around, ask a ton of questions. Be sure to understand on-going maintenance costs. If they say you can maintain the site yourself, ask them to show you how to change the look and feel, how to add a new web page, how to change categories. Being shown how to do this will, for most newsagents show them that a WooCommerce website platform is not the right fit for them.

I don’t have a vested stake in this in that the web team in my company is skilled in Magento, Woo and Shopify as well as the even more complex and technical native web development. That team has a full room of booked business already.

There are many Shopify website developers out there you should consider before a WooCommerce developer.

A challenge in this website space is that often it is a friend, or friend of a friend, or family member involved.  They may have the best of intentions in recommending WooCommerce. For the reasons outlined already, WooCommerce is not a platform I recommend for retail newsagency website development.

Be careful. Do your research. Get all commitments in writing. If you are not sure, delay your decision.

If you have some software development skills, then Woo could be perfect for you to create your website yourself.

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Ethics

Are Media to trial magazines in Australia Post outlets

On November 2, 2020, Are Media (formerly Bauer)  commences a trial placing 10 of their top magazine titles with 28 Australia Post retail outlets. Woman’s Day, New Idea, Take 5, That’s Life, Better Homes and Gardens, Australian Women’s Weekly, Home Beautiful, AWW lifestyle title, Puzzler – Woman’s Day, Puzzler – AWW are the titles in the trial from Are Media along with a Bluey title.

The only need for this trial is to test whether Australia Post retail outlets offer a viable alternative to the newsagency channel.

Here is a short video from me this morning with some of my views on the trial.

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Ethics

News Corp. offers newsagents 37.12 cents for each copy of 40 years of State of Origin

Retail newsagent who stock the 40 years of State of Origin magazine from News Corp. will make 7.5% of the cover price for each copy sold.

Shame on News Corp. for this.

For a company that shouts daily from its print and digital platforms on many matters including telling others what to do and how to lead, here they are giving newsagents not even a living wage to support this title.

Retail newsagents will make 37.12 cents from each copy sold. For this compensation, they will have to:

  1. Unpack the title.
  2. Check supply against the invoice.
  3. Create space to display the title.
  4. Place the title in retail.
  5. Maintain space for the title for up to eight weeks.
  6. Scan each sale.
  7. Take the title off in early December.
  8. Count returns.
  9. Physically process the returns.
  10. Fund any theft of the title.

37.12 cents a copy for all of this investment by newsagents!

A few newsagents I have spoken with expect they could sell 10 or 12 copies of the magazine. For that they will receive around $4.00. They also said that handling everything necessary that is associated with the title will cost around a man-hour, maybe more.

$4.00 an hour is appalling. The current, non Covid, unemployment benefit paid by the federal government calculates out at around $4.87 an hour. With this 40 years of State of Origin magazine from News Corp., the company is paying less than the unemployment rate.

That’s how much News Corp. values small business newsagents, that’s how much the company cares for them.

On the from cover of The Courier Mail, News Corp. claims we’re for you. They are not, though, they are certainly not for newsagents and all who rely on a newsagency business for income.

So, how much should newsagents be paid to offer this title? The gross profit from the 40 years of State of Origin magazine should be at least 45%. While that would not make it profitable for newsagents, it would at least demonstrate respect for newsagents and their investment of labour and retail space in supporting the title.

The current low margin arrangement for print product continues poor and disrespectful treatment of newsagents by publishers. Newsagents putting up with this treatment allow it to continue.

Newsagents only make money from what they sell. Publishers make money in a range of ways from a print title.

Publishers will complain that they don’t make enough to give newsagents a better margin. That is not the fault of newsagents. Newsagents have fixed labour and space costs. They increase yearly. Publishers need to respect this if they want the channel to continue. They current approach to compensation is a factor in some newsagents quitting the channel.

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Ethics

WARNING: do not give out confidential information over the phone

There are several phone based scams doing impacting newsagents right now.

  1. One is from someone claiming to be from the tax office and asking for bank details, ostensibly to pay a refund to you.
  2. Another is from someone claiming to be a debt collector for the tax office and that you have to pay an amount, usually around $5,000, to avoid court action.
  3. Another is from someone asking you to vend a voucher for them as a test.

These calls are on top of phishing emails, that are seriously problematic.

Make sure your staff are trained. never provide information. Ask for a name and number to call back. They will usually hang up at this point.

In terms of emails, tell your staff to never click on a link.

Why does this matter today? because another newsagent has lost a ton of data and a chunk of money by being scammed.

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Ethics

My recommended investigative journalism outlets

Given recent comments here on Google and news, here are investigative journalism outlets in Australia that, in my opinion, lead the pack on investigative journalism in Australia.

Feel free to add your own suggestions in the comments. I don’t care if you like my list or not, it’s my list, just as your list is your list.

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Ethics

More newsagents act on newspaper content

The Kamala Harris ‘cartoon’ in The Australian a few days ago was racist and grossly offensive. On seeing it, I asked the staff at my own shops to remove it from sale. While I agree we should not act as censors, sometimes we have to take a stand. What The Australian published web too far in my view. I felt better not selling it. I don’t care what others think, this was the right decision for me.

In Scotland, The Scottish Sun has come under fire over the last 24 hours for its coverage of the train tragedy. The image is a copy of the front page from August 13, 2020.

This News International newspaper appears to approach ‘news’ in a manner similar to some papers here in Australia.

On Twitter, there are reports of newsagents not stocking the title:

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Ethics

Major landlords misbehaving with small business retailers through Covid

Here we are, four and a half months into Covid and we have major Australian landlords misbehaving in their dealings with small business retailers.

  • One national landlord has advised tenants in some locations that they will now charge additional fees if they decide to open their shops on a Sunday. This follows years of Sunday trading without a cost being applied.
  • One national landlord is yet to agree any rent relief to small business retailers in at least 2 of their centres.
  • Several national landlords have applied the maximum increase in rent even though traffic in their centres is way down due to Covid.
  • Several national landlords are continuing to bring in major discount outpost operators, which take business from permanent small business tenants, despite foot traffic =in the centres being down by more than 50%.

Years ago, shopping centre tenancies were sought-after. Today, many of those tenancies are in serious trouble because of Covid. Centre traffic is down and landlord dealings are challenging.

Australians have demonstrated a clear preference for the high street over the last four months. This makes high street retail more valuable. I think it is a reason we are seeing more high street newsagency businesses sold with shopping centre businesses less so.

Unless shopping centre landlords considerably reduce the occupancy cost and address some of their harmful practices, we will see fewer indie small business retail outlets.

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Ethics

TheLott (Tabcorp) adding former Woolworths fuel outlets

I’m told that Woolworths has sold fuel outlets and that in NSW there between 15 and 20 of these that are applying for the right to represent The Lott.

From a Tabcorp notice I have been provided, I can confirm that the company behind the multiple sites for which lottery applications have been lodged is Euro Garages, an international company with more than 5,900 outlets worldwide. This, from their website:

Founded in 2001 by the Issa family, United Kingdom based EG Group is a leading independent global “C-Store” operator serving seventeen million customers worldwide each week.

We operate approximately 5,900 sites spread across three continents, which we believe will make us the third largest independent C-Store operator in the world, the largest independent C-Store operator in Europe and the fifth largest independent C-Store operator in the United States, in each case based on numbers of sites.

Our global operations span six of the ten largest fuel markets in Europe by fuel volumes sold, namely Belgium, France, Germany, Italy, the Netherlands and the United Kingdom, all six states in Australia and thirty-one states across the United States.

We seek to deliver a modern and convenient customer retail experience by providing a “one stop” shop retail destination that offers a broad range of products and services to address evolving customer needs. For the twelve months ended June 30, 2019, we generated pro forma revenue of €22.6 billion, Pro Forma Adjusted EBITDA of €1.1 billion and Pro Forma Run-Rate Adjusted EBITDA of €1.4 billion.

I am sure the folks at Tabcorp have done their research as to the applicant.

Some of the outlets are as close a 2 minutes from an existing newsagent lottery outlet.

It shocks me that Tabcorp would consider approving a new outlet in the middle of the coronavirus pandemic.

The only party to be adversely affected by approving such new outlets would be the independent small retail businesses that already serve TheLott locally.

My view is that Tabcorp proceeding would be socially irresponsible, harmful to small business, harmful to local communities.

Unfortunately, there is little evidence that any objection process plays in favour of the incumbent local retailer.

Some the objection grounds I would focus on include:

  1. The community is already well served.
  2. Approving the application would harm my business.
  3. Approving the application would reduce the return I achieve on my already substantial investment in The Lott products.
  4. The applicant is a multi national business, not a small business, not local.
  5. The applicant would, in all likelihood be given a franchise arrangement with different terms and conditions to existing franchisees.

My suggestions are:

  1. Object to TheLott.
  2. Object to Fair Trading.
  3. Write to your state local lower house and upper house member.
  4. Write to your local councillor.
  5. Write to the ACCC as your TheLott relationship is a franchise.

The alternative is to complain to any who listen but actually do nothing and that will only make you feel worse.

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Ethics

The fatigue of the second corona wave in Victoria

The second wave of coronavirus infections in Victoria this month is a challenge for all Victorians. It is especially challenging for retailers and their team members.

Before getting into some of the challenges, my view is that masks are essential, not only in Victoria but New South Wales, too, based on the numbers. Bill Bowtell, one of the experts who guided the Australian response to HIV/AIDS, called for mask wearing early in the pandemic. he was right.

The new mask rules in Victoria have not been welcomed by everyone.

Dealing with customers who are not wearing a mask but demand to shop, yelling and even pushing, is difficult. While there is the option to call the police, the need is more immediate. I’ve told our people that if there is a risk and it is the only option, closing the shop until the situation has passed is okay. Older customers are more likely to be angry than younger in our experience, more demanding, more likely to lie about why they don’t have to wear a mask. It is disappointing to see.

The fatigue of the second wave is considerable. You can see it from shoppers, hear it in the voices of suppliers, and more. It is testing the supply chain, too, with some wholesalers closing until this wave passes.

The fatigue of retailers is readily obvious in shopping malls. From the signs on closed shops to comments from some who are open.

The biggest contributor to fatigue in my view is mixed messages. These are put about by politicians and non health expert commentators, often leveraging a News Corp platform. In Victoria, for example, the opposition decided early on to deal with corona by daily attacks on the government. Loud attacks, emotive. First it was criticism for the first lockdown. Then it was open up, open the schools, open business. Then it was shut everything down and make us safe.

All this shouty stuff from politicians and the likes to Bolt, Jones and Credlin harms people and puts them on edge and this plays out into retail as people feel empowered to be disagreeable and shouty too.

Our retail spaces, our work places, benefit from calm. In situations where achieving this is challenging it is no wonder shop retailers close for the duration.

As business owners our priority has to be for a safe workplace where our employees are not put at risk. By far is is the top priority. The fatigue of the second wave makes this challenging to achieve and maintain.

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Ethics

Why margin matters to newsagents more than ever

The thread on the Wrapaway margin cut for NSW/ACT newsagents includes a discussion on the broader issue of fair pay for service.

Our channel had its origins in Victoria in the 1800s as an agency model. I suspect that margin control had something to do with that. The agency model through last century and even into this century has been maintained for origin products like newspapers and magazines and more recent categories such as lotteries because, again, it offers the best way for suppliers to manage margin.

With many newsagents experiencing value from more commercial arrangements it is no wonder there are more fired up today when they experience disrespect from suppliers when it comes to margin.

Our businesses exist in a traditional commercial world. Our business overheads are set by commercial terms, tied often to performance of the economy outside of our small businesses.

Seeing agency suppliers push effective margin for retailers of their products in the opposite direction of economic factors intensifies the financial harm to businesses that stock them. This is an issue only with agency lines as they are the ones newsagents tend to want to keep and it is this desire that agency product suppliers leverage when they make decisions that disadvantage newsagents.

What has changed is that there are more newsagents now who care less about agency lines, there are more newsagents prepared to ditch agency lines rather than having to fight the fight to maintain a low and disrespectful margin.

Newsagents are finding their feet to make a stand on margin. As their businesses are confronted by disruption from the move online and more competitors stocking agency products, it stands to reason that they look for more equitable relationships. No longer are they prepared to let agency suppliers dictate take or leave it terms.

The Wrapaway decision to slice margin in half saw swift responses by plenty of newsagents. The company responded saying it needed two weeks to work on an alternative. Other suppliers need to take note as I suspect newsagents will react similarly, even with the small downward margin creeps driven by the newspaper publishers and the effective downward margin creep driven by magazine publishers who stifle needed cover price increases.

Experience is giving newsagents more confidence and power. It is good to see them exerting it.

10 likes
Ethics

Reuters: Rupert Murdoch’s big investment headache: Australia

This report by Byron Kaye, Rupert Murdoch’s big investment headache: Australia, which dropped at Reuters yesterday makes for a fascinating read.

SYDNEY (Reuters) – The birthplace of Rupert Murdoch’s media empire, News Corp’s (NWSA.O) Australian business, is shaping up as a trouble spot for the global firm, following a billion dollar writedown and a move to stop printing more than 100 regional newspapers.

People interested in print media in Australia should find the article interesting regardless of your views of the Murdoch controlled company. The report has been widely shared on Twitter since its release yesterday. Here are some of the tweets where a link to the article was shared:

  • News Australia dinosaur drag on whole company…Reuters.
  • analysis of why the short sellers are moving in on the Murdoch empire. #auspol
  • Newscorp the most shorted stock in Aust says Reuters. “Rupert Murdoch‘s big investment headache: Australia”
  • “I’ve had a view it’s worth nothing for a long time.” Death rattle.

Yesterday, Crikey published a report by Christopher Warren on the closure by News Corp of a printing plant in Queensland. This, too, is worth a read.

As News Corp closes down more printing presses, it threatens to lock out new players.

Australia’s press took a big step this week in its decades-long journey from venerable manufacturing process to nostalgic metaphor with the accelerated closure of those production plants where newspapers are — or were — printed.

The resulting consolidation will see News Corp making a further change, reducing the size of its metropolitan papers to the shorter size technically-known as the “bastard measure”, beginning with The Courier-Mail.

…

The Yandina press will use a single press to print the company’s remaining south-east Queensland papers — The Courier-Mail and Sunday Mail, the Gold Coast Bulletin and the Toowoomba Chronicle. It will also print local copies of The Australian, The Daily Telegraph and Nine’s The Australian Financial Review.

There’s form here that will concern independent publishers. When Horton Media, Queensland’s last independent printer, closed two years ago, some small independent papers had to shift printing to Sydney and truck their copies to the state due to local capacity constraints. Fairfax’s print plant at Ormiston (and in NSW’s Hunter), closed the same year as part of a printing and distribution agreement with News Corp.

This is all part of the disruption. newsagents, as we have seen in recent weeks, will get caught in the changes, left without papers, left dealing with angry customers. Communication from News Corp has been and continues to be appalling. It is a selfish company with a history of bullying small business newsagents. Top be fair though, plenty of newsagents have willingly made themselves available for this.

From the perspective democracy, we have to hope that there are more genuinely independent news outlets and that they have more journalists asking tough questions of politicians from all sides. The current concentration of news outlets in Australia is unhealthy for democracy. You only have to look at the biased Daily Telegraph.

4 likes
Ethics

Newsagents face a 50% cut to margin following News Corp. fee hike

Wrapaway, a niche magazine and newspaper distributor, late yesterday wrote to NSW / ACT newsagents advising them of a cut to their commission (gross profit) from 25% on their titles to 12.5%. Their letter to newsagents explains that the move has been brought about by a 500% increase in what News Corp. charges them to deliver their product.

This is another of many changes in the News Corp. that are impacting and will impact newsagents.

The challenge for impacted newsagents is when is it too much, when do you quit suppliers. While financially  such a move may make sense, when it comes to niche titles, such as foreign language titles, you may accept a reduced margin to maintain your specialist status.

The other options of course, is to increase the cover price.

If the Wrapaway letter is accurate and News Corp. has increased their charges by 500% the company needs to fully explain the basis for this increase, it needs to prove that such an increase is necessary.

12 likes
Ethics

Will Tabcorp breach retailers who do not self assess?

Tabcorp pays a business to send people to lottery outlets to check (audit) compliance with signage and other requirements.

Through Covid, Tabcorp suspended this service and instead asked (encouraged) retailers self assess. The company offered no compensation for this. Indeed, it was put as a polite request.

Retailers have told me they have been threatened with a breach by a Tabcorp representative if they do not complete the self assessment.

If true, this is the company using a heavy financial weapon against these businesses because the businesses have not done for Tabcorp, for no compensation, something that Tabcorp wants only for themselves.

This would be appalling and bullying behaviour.

Tabcorp preferences paperwork over sales, it preferences keeping small business retailers performing like circus monkeys with threats if they do not complete the circus performance routine exactly as Tabcorp demands.

You can have a small business retailer delivering net sales growth to Tabcorp and yet the company will issue bullying emails and threats of breach if the retailer does not do the act that Tabcorp demands.

Making financially harmful threats to small business owners in the middle of covid is appalling and bullying behaviour.

The harm of threats by Tabcorp against small business retailers have been considerable emotional, but the compare does not appear to care. It takes a toll at a difficult time, in the middle of Covid, with challenges in-store and in local communities, but Tabcorp and its people do not appear to care.

Tabcorp has been no help through Covid, it has offered no support. 

I get that there will be people at Tabcorp who will say he is just ranting against us as he usually does. They’d be right for there has been plenty to rant about when it comes to Tabcorp and its treatment of small business retailers. They screw up time and again, hurting businesses and those who run them. Indeed, the personal emotional cost I have seen has been considerable.

Frankly, I don’t personally care as I don’t have The Lott (Tabcorp) in my businesses and never will. I cannot and will not work with that company as their treatment of small business retailers is unprofessional, disrespectful and bullying.

10 likes
Ethics
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