A blog on issues affecting Australia's newsagents, media and small business generally. More ...

How is business?

What’s your revenue per retail employee?

I have been doing some work with newsagents recently on labour cost and comparing revenue per employee to gauge the roster efficiency, or otherwise, of a newsagency.

Revenue per employee is a good metric to compare as long as you agree on some common rules.  For example, I don’t include hours or revenue for non directly retail related activity, I add up all hours worked for a year and divide by 38 to get to employee years and I include commission only on agency lines.

I have seen newsagencies with annual revenue per employee as low as $98,000 and others with annual revenue per employee as high as $304,000.  In one of my newsagencies for which I have done the calculation the figure is $246,000 per employee per year. This is a retail only newsagency with what I’d consider to be a lean roster. However, we are into growth in gross profit.

Comparing newsagencies demands that the businesses are similar and this is becoming more of a challenge as our channel evolves and diversifies. For example, a newsagency with a higher than average GP could sustain a lower per employee revenue figure. This is why annual GP per employee is probably a better measure.

I’d love newsagents to share their annual revenue per employee figures here. Just calculating it is instructive and eye-opening. Working on it by trimming the roster and or driving sales is the essential challenge.  I’d love people to share their number so we can get a feel for the range in the channel.

This is not a competition, not at all. It’s a KPI we need to each be aware of for our respective businesses and to drive – for our future. Sharing can be motivating.

Check out revenue per employee data from the US National Retail Federation from 2010.

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Hiring employees

Helping new newsagency owners

I met with a newsagent in Sydney tonight to talk about challenges faced by the business.  Answers for the key challenges are in their business data.  The biggest challenge is understanding that and then leveraging the data to guide a solution.

The newsagent is relatively new to our channel – less than a year.  They came to us with a background of success in another retail channel.  They made all the right moves including completing the required supplier specific training as well as the industry endorsed ANF training.  None of this training equipped them for the newsagency specific challenges they face.

We let new newsagents down.  Our training of new entrants is inadequate.  The business management support infrastructure outside one or two marketing groups is almost non existent.

The newsagent found me through this blog.  I have no other connection to their business.  I am glad to help where I can.  Indeed, each situation I encounter like the one I found tonight, is educational.

The key problem I saw tonight was a business making decisions on out of date data.  Their accountant provides a P&L six monthly.  The only guide as to how the business is travelling is their bank balance.

They buy stock based on what they see they need and based on what supplier reps order for them.  They process magazine returns using distributor websites.  No one is driving them to change their practices – suppliers have provided website work-arounds which bypass industry EDI standards.

We let ourselves down from the first new newsagent training session through to their early months.

An overhaul of how we bring new newsagents into our channel, how we educate them and how we support them through their early months is years overdue.  We have too many relatively new newsagents falling behind, hurting their businesses and the channel more broadly.

This is an issue crying out for national attention.

As for the newsagent I met with tonight, they will quickly address what needs to be addressed.  I am confident or a turnaround in the next three months – we are developing a plan which will improve the business and build their knowledge.  I am blogging about the meeting and the training issue at their suggestion – they feel let down by the introductory processes.

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buying a newsagency

Women’s weekly magazines do it tough in NZ

The New Zealand Herald has an interesting story today about challenges facing women’s weekly magazines.  While a good read about factors in the decline of the weekly in New Zealand, the article misses two key points – celebrities controlling more of their story thorugh their own blogs, Twitter feeds and the like and the thousands of celebrity blogs which offer magazine-like celebrity content for free.

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How is business?

Tough May sales numbers

We have experienced a tough May at Forest Hill with overall newsagency traffic down 14%.  While the landlord will not share centre figures, we expect that our traffic result is not different to other retailers.

All key departments are down except for Books up 39%, Calendars up 100% (at $300), Diaries up 122% (at $900) and Gifts up 436% (at over $2,000).  Magazines were down 10%, ink down 16% (this reflects a promotion last year which this year’s promotion did not start until May 28) and stationery down 23%.

Overall store revenue (not including lotteries) was down 6%.

While it would have been easy for me to not publish these figures, and provide fodder for some, I am committed to this blog being a place of transparency.

We have several promotions under way in the centre as well as external marketing to drive traffic.  We are also extending two departments which we feel will work well with our customers as well as planning to make some changes to the shop to allow us to evolve our magazine offer.

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How is business?

March newsagency sales numbers

How’s business?  This is a question often asked between newsagents.  I have created a new category on this blog for irregular posts I’ll make about month to date to year to date business performance.  This will hopefully open more conversations between newsagents about how they are trading.

To the close of business last night, March 15, here are our numbers for March 2009 compared to 2008:

  • Magazines. Down 13%.  Women’s weeklies down 6%.
  • Lottery products.  Down 15%.
  • Ink. Up 15%.  HP accounts for 73% of sales.
  • Newspapers.  Up 2%.
  • Stationery.  Up 32%.
  • Cards.  Line ball.  Non seasonal – up 5%.  Easter was earlier last year.
  • Stamps.  Up 91%.
  • Art.  Up 18%.
  • Copying.  Up 5%.
  • Gifts.  Up 415% – off a low base.

All percentages are based on unit sales except for stataionery, ink, gifts and lottery products.

Magazines is our biggest department by far – the financial pain of the sales fall is significant.  As regulars here will know, we promote magazines aggressively and certainly pursue a point of difference around range.

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How is business?
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