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Newsagency management

WH Smith to open 3 outlets in Melbourne

UK corporate newsagent business WH Smith is to open three retail outlets in the revamped retail offer at Southern Cross Station in Melbourne.

This move reflects further expansion by the 1,000+ store strong UK based group.  I suspect it is only a matter of time before we see their stores in Australian shopping malls.

The WH Smith model in the UK includes shopping mall and high street operations.  There is a big difference between their model and the traditional independent newsagent model in the UK.

The three new outlets in Melbourne are part of an expansion into transit locations here.

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Newsagency challenges

A Sunday marketing / management tip for newsagents

Lock your back office for a week. Don’t let anyone in or out.  Shift all the work you used to do or have done there to in the newsagency shop itself.

If you or others strong oppose the move, analyse why.  Is it because you like to hide?

In an average newsagents with non lottery or other agency revenue of under a million dollars, the business cannot afford a full time manager or back room operator.  hence the suggestion of moving back room tasks to the shop floor.

I bet if you do this, as disruptive as it may be, you will find changes you can make to your processes to reduce some of the work you do in your back room.  At the very least you will be challenged to look at your business and the back room operation in a different way.  that’s a good thing.

We need to disrupt our businesses to discover opportunities for change.

I have been in many newsagency back rooms.  Some are caves offering protection to owners and managers.  Others are warehouses full of stock which will not deliver a financial return for the business.  Others are places where occupational health and safety are challenges.  Others are places for employees to take three or four times longer to do a task than if they did it at the front counter or elsewhere others could see how hard they are working.

Lock up your back room and lock everyone out.  Look for business improvement opportunities as a result.

I’ve done this by creating a newsagency with a back room so small that it can hold one person standing up and not moving.  The business is run from the counter.

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Newsagency management

How not managing stock professionally costs newsagents money

Newsagents who do not track stock on hand with their newsagency software are more likely to experience employee theft in my experience.

The most common excuse is that newsagents don’t have the time to manage stock.  If managing stock reduced the cost of theft by, say, $10,000 a year, would you find the time.

My $10,000 figure is considerably lower than the cost of theft in an average size newsagency.  So, the benefits of managing stock properly and professional are considerable.

I can’t think of any reasonable excuse for newsagents not managing inventory using their software.  Bo not tracking stock on hand:

  1. Theft by employees is easier.
  2. Theft by customers is easier.
  3. Ordering is more time consuming.
  4. More ordering mistakes are made.
  5. Suppliers can more easily dupe you.
  6. The quality of business decisions is poorer.
  7. Your newsagency is harder to sell due to inaccurate business performance data.

So, the real question is – what is it worth to turn these situations round?  More than the cost of implementing management processes to ensure appropriate controls on inventory on hand data.

We demonstrate our professionalism as retailers in part by the way we manage business data.

Maintaining accurate business data is easy once you have established your business processes.  I’d encourage all newsagents to do this.  Your business and the channel will benefit as a result.

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Newsagency challenges

Liking the Rod Sims led ACCC

While it is early days in his tenure, I like some of the comments from new ACCC Chairman Rod Sims.

Sims’ comments last week, for example, as reported in the Australian Financial Review on Tuesday (pg. 5) about unconscionable conduct were interesting.  Sims flagged brining more action on behalf of small and medium sized businesses against big businesses which have acted, in the view of the ACCC, unconscionably.

In the newsagency channel  given the size and dominance of some of our suppliers and given some behaviour, there may be a better opportunity for ACCC engagement is the ACCC under Sims is true to his words.

The area of concern on my mind at the moment is magazine distribution.  While network Services has improved its approach and I do see light at the end of that tunnel (and, no, it does not sound like a train) Gordon and Gotch is less engaged than I can recall in 30 years in this channel.  They consistently oversupply with more than half the titles they currently supply being cash flow negative (loss making) in some newsagencies I have seen data for.  Despite claims and promises, those in control of Gordon and Gotch appear unwilling or unable to deliver an equitable (for newsagents) supply model.

So, bring it on ACCC.  Take a look at the magazine distribution model.  Check out your files as there is plenty of data already in these at the ACCC.  Resource an inquiry.  Talk to publishers of all sizes, newsagents, consumers and the distributors.  Make the interviews and discussions public so we can comment.

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Newsagency challenges

Halloween is here!

We have had an excellent run up to Halloween today, terrific sales, plenty of new customers.  All departments have benefited from the promotion.  Even though the day itself is on a Monday there appears to have been no slowdown in interest.  Indeed, sales are up more than 15% on last year.  What other department in your newsagency delivers this sort of growth?  Plus at greater than 50% margin!

I’m thrilled that halloween is a well established season, giving us something after Father’s Day and before Christmas.

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Gifts

Another newsagent walks from a shopping centre

This is becoming an almost weekly occurrence:  Another newsagent has decided to walk from their retail business in a relatively major shopping centre rather than pay a 10% increase in rent and fund the landlord required shop fit.

Some landlords are happy to accept this, and see families lose the businesses they have built up, often over many years, because there are those ready to take on a newsagency at the higher rent.  I have heard of cases where leeches are in the ears of landlord representatives long before a lease is up, as if encouraging the landlord to not offer the existing tenant a deal.

Other landlords accept a long term newsagent walking because they are ignorant of the newsagency economic model.

Newsagents in shopping centres owned by major landlords – AMP, Centro, QIC, Colonial First State, Westfield etc – need support from magazine and newspaper publishers, lottery businesses and the like to achieve more equitable rents. Otherwise we will see more shopping centres without newsagency businesses.

We need to stop families feeling so helpless that they walk away from their family business.

It takes a lot of guts to walk away from your business at the end of a lease.  This act alone speaks to the unfairness of lease terms and the competitive forces marshalled against the incumbent newsagent – sometimes including competitive forces of people closely aligned with the newsagency channel.

To read more about the cost of running a newsagency in a shopping centre, read Finding $17,500 extra gross profit this year, my blog post from August 17 about the cost of annual rent increases in shopping centres.

Newsagents facing a tough situation with their rent may have more options than they currently know.  For example, in Victoria there is the office of the Small Business Commissioner and VCAT which can be used to resolve tenancy disputes.  The Small Business Commissioner is specifically charged with helping resolve tenancy issues so that small business owners do not lose their businesses.  I have used this route with success.

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Newsagency management

South Australia to get a Small Business Commissioner

Despite opposition from the Liberal Party, South Australia is to get a Small Business Commissioner as announced last week.

This tremendous achievement is in part due to the work of some newsagents and Professor Frank Zumbo among others.

I know from the eight years of work by the Small Business Commissioner’s office in Victoria that this new body in SA will give newsagents a good forum for use in revolving disputes with suppliers and landlords.

Those who fought for a SBC is SA have done a good thing not only for all small businesses but specifically for newsagents.  Given the newsagent support and push for the SBC, the channel can be proud of the achievement in parliament.

Shame on the Liberal Party for not supporting this from the outset.  There is only so much you can oppose for the sake of opposing before voters see that you put yourselves ahead of voters.

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Newsagency management

Newsagencies cheaper than supermarkets and others for Halloween products

A week back we shifted focus of our Halloween display to face out into the shipping mall.  The display has been drawing excellent traffic.

At the newsagency yesterday a mum was dragging her kid away saying that the fork and face mask would be cheaper at the at another shop.  Well, no. I checked our prices against others in the centre and we are cheaper.

I’d go as far as saying that newsagencies are the best value shopping destinations for Halloween product.  We are promoting our price difference with some posters this week.  however, we have to do this in a way which does not breach our agreement with the landlord.

From what I can see, supermarkets are using Halloween products to claw back GP from the thousands of items they are discounting.  i.e. get them in with cheap milk and bread and charge way more than they should on Halloween product.

I’d urge shoppers who come by this post about Halloween to shop at their local newsagency for Halloween products.  You are likely to find a better range at better prices.

Newsagents with Halloween products in their newsagency and a Facebook page – promote it this week and be sure to promote that your prices are competitive.

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Gifts

Feedback from a magazine customer about their newsagency experience

Check out this feedback from a magazine lover about their encounter with an Australian newsagent earlier this week.

So disappointed with my local newsagent.  I went early to get the latest issue of [title deleted]  (I always count down the days till the release date)

.  There they were sitting on the bench of the newsagent so I was super excited and I asked the owner can I please have the new issue. (pointing in the direction)

.

The newsagent responded with “no you can’t have those I am not opening that now”.

Magazines are vitally important to our individual newsagency businesses and to our channel as a whole.  We, all of us, need to work the titles we receive, especially Australian titles.  We need to regular magazine shopper, whether weekly or monthly, to drive sales of other products we sell in our businesses.

I am confident about the accuracy of this story.

In my own newsagency businesses we resource appropriately so that we get magazine product on the shelves early, well ahead of any other retailer nearby.  We gladly open bundles if we have yet to put out a title being sought by a shopper.

While we can respond to this story with our customer complaints or complaints about magazine publishers and distributors, a better response would be to remind our team members and our colleague newsagents that we need to get magazines right every time as they are our only national point of difference right now.

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magazines

Switching card companies could hurt your newsagency

I have been talking with newsagents recently who made changes to their card supply arrangements which have resulted in them being worse off.

One newsagent switched from one the major card companies to a smaller company on the claim that sales would increase and the offer of a margin boost.  Their sales, year on year, are down 25% following the move.  The extra 5% margin they negotiated is worth nothing.  They are worse off.  It is easy for a card company to offer a bag of cash or a boost in margin.  The harder road is to help you boos sales.  However, boosting sales is better for you.

Another newsagent went from 100% with one company to 75%.  The net increase in sales year on year was 2%.  However, the sales drop for their main supplier, due to 25% less pockets, resulted in the newsagents dropping to a lower rebate grouping.  Financially, they are considerably worse off.  A lack of research leading up to making the decision has resulted in them losing money.

Some card company sales representatives are less than accurate when outlining hat a switch to their business would mean for the newsagent.

My advice to newsagents is caveat emptor, let the buyer beware.

  1. Take your time, talk to newsagents who have moved.  Ask for details of the financial impact.
  2. Get every claim and every offering writing and signed by senior management of the company with authority to sign.
  3. If you are moving because of unhappiness with your current arrangements, take time to ensure that your existing supplier is afforded every opportunity to fix any problems.
  4. Get a written guarantee on the financial benefit of the move.

The two newsagents I have worked with don’t have anything to go off and cannot therefore easily get out of their worse-off situation.

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Greeting Cards

Will newsagents ever learn about employee theft?

I have been working with another newsagent this week on an employee theft / fraud issue.  It was the lax processes around managing cash which led to the newsagent being hit for at least $50,000.  They did not worry about balancing their registers accurately each night, they also did not manage stock on hand.  These weaknesses in processes invited the thief to act… and they did.

Check of the story in the Herald Sun yesterday about employee theft.

Newsagents are their own worst enemies sometimes.  Here are some very basic rules to help newsagents avoid employee theft.

  1. Use your newsagency software properly including the full stock control facilities – they pay for themselves in no time with theft saved.
  2. Balance your registers at least daily.  If cash is out by more than $5, hunt it down.  Demand that employees are responsible.
  3. Use employee initials and codes on all sales.  Yes they can fudge this.  Just doing it is a hurdle many newsagents do not have today.
  4. Track stock on hand for tobacco products, transport tickets, phone cards with a face value, confectionery, ink cartridges, premium pens and, stationery.  Start slow and work your way up.  You will bank results from the work and eliminate the need for an annual stock take.
  5. Establish a theft policy and publish this to your employees.
  6. Change your system passwords monthly.

If the newsagent I was working with balanced their cash daily and tracked cigarette inventory they would have uncovered the problem much sooner.

Cutting the cost of employee theft in a newsagents is straightforward, all it takes is will on the part of the newsagent.

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Newsagency management

Appalling retail customer service gets talked about

A couple of friends shared with me their story of appalling customer service they recently experienced in a newsagency.

They had been in the shop for 10 minutes or so, selecting around $25 worth of stationery to purchase along with a magazine.  On their way to the sales counter, the stopped at the newspaper stand and picked up a newspaper.  They were from out of town and wanted to decide whether to purchase it.  Less than 30 seconds after picking up the newspaper they were hassled by the newsagent.  The rudeness of the approach resulted in them putting the newspaper down and purchasing only the items they had already selected.

While a newspaper purchase would not have added much to their basket, it may have got them enjoying a paper which they would buy again.

I doubt they will go back in the newsagency.  Indeed, their story of what happened is likely to encourage others to not shop in this business.

There was no need for rudeness, especially given the value of what they were purchasing.

Some people should not own a newsagency.  Customer service is just about all we have going for us. Bad word of mouth about one newsagency reflects badly on the whole channel, unfortunately.

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Customer Service

Newsagents swamped with screen advertising options

I am surprised by how many companies are offering screen based advertising solutions to newsagents.  I have looked at some and decided for the moment that this medium is not for me.

My preference is to have control and certainty over everything promoted in my newsagency.

I am also not keen on taking on an advertising platform which takes me and my team away from the core business of retail.

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Newsagency management

The challenge of higher EFTPOS fees for retailers

I am grateful to Hank Spier for chasing the following notes with me on the issue of the EFTPOS fee increase engineered y ePAL, the body controlled by the major banks plus Coles and Woolworths.

In February 2011 EPAL announced a new multilateral interchange fee regime to replace the existing bilateral arrangements. EPAL is made up of the banks and Coles and Woolworths. EPAL’s reasons for the changes is to get additional moneys for technology upgrade of the Eftpos network.

For those members of EPAL which opt into the new multilateral interchange fee model, the following fees will apply to the banks involved in an Eftpos transaction,

  • for all purchases of less than $15 (where no cash is withdrawn) there will be no interchange fee.
  • for all purchases of $15 and over, there is a fee of $0.05;
  • for each cash withdrawal (whether combined with a purchase or not) there will be a fee of $0.15.

The effect of the new regime is where there is a purchase of $15 or more, combined with a cash withdrawal there will be a fee of 10 cents.  To add to the cost impact fees of 4-5 cents rebate previously paid to the merchant’s bank has been abolished.

Normally such agreement between competitors will be subject to ACCC scrutiny but in this case the ACCC has not jurisdiction as the Reserve Bank has the regulatory role. The RBA has been generally supportive of the fee changes. The Federal Government has refused to get involved despite requests from small business.

There was much opposition to the changes from small business especially from the AHA and newsagents associations. ALDI took EPAL to the Federal Court alleging misleading conduct, namely that EPAL had been saying that it is unlikely that consumers would pay any more. The emerging facts were very different. ALDI won on 29 September. EPAL will have to place corrective advertisements in the national press. The AHA and newsagents associations assisted in the ALDI action.

The new fee regime came into effect on 1 October. It is up to individual banks what they do in relation to passing on costs to retailers. As a result of the opposition and the ALDI case two banks have backed off, the CBA has promised not to pass on the increased costs to retailers and NAB will limit the costs to be passed onto small businesses. St George has said that it will pass on increased costs.

Where banks do charge it is up to business to assess whether or not they pass on the costs to consumers, if they can.

Where the banks do pass on costs I suggest that,

  • business approach their bank to see if something can be done about the increase,
  • Trade associations look at collectively bargaining with those banks on behalf of businesses affected.

The individual fee increase involved is not high but will add up in high transaction volume businesses

While some banks have said that they will not increase fees, I don’t see this as their long term position.  They are banks after all.

I’d encourage newsagents to take Hank’s advice.

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EFTPOS fees

Keeping your landlord in the loop

If you are tenant, in a shopping centre or not, it is vital that you keep your landlord appraised on what you re doing as a retailer which adds value to their centre.

Shopping Centre landlords are especially selfish and only care about the value of their property. This is why it is essential that you share every good story you have.  Here are some suggestions for landlord communication, there are items newsagents ought to send to Centre Management:

  • Newsletters. Each time you send a newsletter to your customers, include Centre management in your mailing.
  • Advertising. Send them a clipping of all ads you do.
  • Seasonal promotions. Email them a photo of any special seasonal promotion – showing the excitement you bring to the centre.
  • Press clippings. Work at getting quoted in the local newspaper.  Copy these stories and provide them to Centre Management.
  • In-store demonstrations or events. Each time you hos an in-store event, demonstration or the like, let your landlord know as this is evidence of you adding value to the centre experience.
  • Relay and refresh. each time you relay products like magazines or refresh your offer in some way, let centre management know – they could include this in their own shopper communication.

The more you communicate with your landlord about what you are doing in your newsagency the more valuable a body of evidence they will have should they be approached by another party to open a newsagency or take over your tenancy in the centre.

Banging your own drum to your landlord is a smart and vital move for any newsagent.

Some newsagents I have discussed these and related ideas with have expressed concern that they should not have to go after their landlord in this way.  The reality is that you do, it is vital to achieving better positioning when it comes time to discuss a new lease.  A proactive retailer is more valuable to a landlord.  Some landlords will not for themselves how proactive a retailer is.

We are accountable for the perception our landlords have of us.

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Newsagency management

Is the confectionery at your counter paying its way?

With convenience stores stronger than ever – they are enjoying excellent year on year sales growth in a range of categories including magazines – and with supermarkets being shopped in a convenience way more than ever, it is to be expected that confectionery sales at newsagency counters are flat or declining.

Check your year on year counter confectionery sales.  Are they up or down?  Are they  delivering a reasonable return on the space?

In a shopping centre newsagency you would need annual confectionery sales of around $8,000 just to pay for the retail real-estate.  Add a portion of labour and other business costs and you’d need to be selling closer to $20,000 a year to be making money.

So, are you making money from confectionery?  If not, consider quitting and going for something completely different.

It may be that you stay in the confectionery space but sell more relevant and short term products.  Like the Smurf themed Kinder Surprise.  This was the most popular single product on the counter in terms of unit sales for two weeks.

I think that we have to ask these questions, to challenge ourselves.  Too many newsagents resist change and this holds their businesses back.

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confectionary

How well do you run your newsagency?

I have put together some questions newsagents could ask themselves to self-assess whether they are doing a good job running their business.  There is no judgment intended with these questions.  No, I genuinely am trying to get newsagents to look at their businesses objectively …

  1. Is your stock on hand data accurate?  If you think it is, when was it last audited?  Without accurate stock on hand data you can’t assess business performance.
  2. Do you reorder stock using your computer system or using manual processes?  Experience shows that manual ordering leads to more dead stock.
  3. Do you regularly review slow moving stock items and respond to keep stock moving?  This should be done monthly.
  4. Do you comply with supplier EDI standards?  Around 50% of newsagents do not.
  5. Do you produce (or have produced) a quarterly P&L and review this?  This is vital for quality business decisions.  I get it monthly for my stores.
  6. Do you operate to a budget?  How often to you compare business performance with the budget?  This should be done at least quarterly.
  7. Do you regularly compare your business against benchmarks: occupancy, labour to sales, overheads to sales, cards to total sales, magazines to total sales, stock turn by key departments?  This should be done monthly.
  8. Do you manage theft?  I.E. track, manage and control fraud touch points in your business.  Newsagents who do not track theft are more likely to be a victim of theft.

These are important questions we all should ask ourselves regularly.  If we are not doing these minimum things in our businesses then we cannot call ourselves professional retailers.

Too often I see newsagents demand a certain level of professional courtesy and treatment by suppliers yet refuse to manage their own businesses respectfully and professionally.

There are some high-quality, professional, newsagents out there.  There are also some who complain about suppliers yet run poor businesses.  This checklist is designed to help you see where you are and to challenge you.

We need to be accountable for our own business situation and business performance. Often, success or otherwise comes back to how we run our businesses and how much we respect business data.

I’ll gladly help any newsagent work on their business.  You can reach me at mark@towersystems.com.au.

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Newsagency challenges

Magazine relay adds 25% to magazine unit sales

While it is not yet a month old, the complete relay of magazines which I did in one of my newsagencies about which I blogged recently is driving at least 25% in overall unit sales growth.

I have double checked the numbers and allowed for sales trend in the months leading up to the relay.  There is no doubt in my mind that the relay is delivering excellent growth.

The sales of some categories are exploding as a result of the relay.  For example, some categories have achieved 200% in growth.  This is extraordinary in the climate of flat or declining magazine sales.  In Craft & Hobbies, for example, sales are up 245% off a reasonable base.  Crosswords, a category which we have consistently pushed and achieved growth from, are up 80%.

The return I am getting from less than a day’s work, including planning time, is extraordinary.

Beyond magazine sales growth, there is a knock-on effect through the store.  The relay is keeping magazine shoppers in the store longer and any retailer knows that the longer shone browses the more likely they are to shop.

It is particularly gratifying to see well-considered adjacencies deliver excellent sales growth.

The best approach to a magazine relay is to start with a blank canvass, completely empty shelves.  Place your weeklies first and grow out from there.  Create shopping zones: women, men, kids, food, garden, special interest etc.

Build the display to serve your customers.  If you are unsure in your planning, spend time watching your customers browse and shop.  Talk to them as well.  Their insights could be the key to excellent sales growth.

Approach the relay with as few barriers as possible.  I have done relays with some newsagents who have all manner of excuses on why some locations should not change.  They want sales growth but are not prepared to engage in necessary risks to chase this.

It is important to remember that changing magazine locations is easy.  If you discover that you have made a mistake, you can easily change it again.

Seven years ago the MPA (magazine Publishers Australia) published a handbook and video to guide newsagents on undertaking a magazine relay.  While that content is a bit out of date today, it would be a useful guide to newsagents unsure of where to start.

I’d urge every newsagent in Australia to undertake a magazine relay at least once a year.  Be sure to measure the results.  Let me know how you go.

PS. I used my newsagency software to look for opportunities when planning the relay.

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magazines

The Steve Jobs legacy for newsagents

While much has been written abut the sad passing of Apple co-founder Steve Jobs, for me, the message of his life for newsagents is to face challenges and innovate through them.

Steve made computers cool, music devices fashion items and the mobile hone, well, plenty more than a phone.

He turned an uncool business channel into something relevant and valuable.

For an insight into the man, watch this video of his commencement address at Stanford University in 2001.

Inspirational.

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Newsagency management

Apple releases a greeting card App

Apple this week released a greeting card App for for its devices.  Hallmark is cool with the move.  The share price for American Greetings (John sands) dropped 10%.

The Apple move will have a short term impact on greeting card sales but physical card innovation will protect and drive sales.  As people settle in with sharing emotions through a ‘card’ some are likely to consider doing the same in print … especially with marketing from card companies and retailers indicating that a card on the mantlepiece is of more value than a text message which can be deleted.

I am not surprised by the Apple move.  More will come too, not only in the card space but also more innovation challenging newspapers and magazines.  This is what we must expect in this mobile content platform world.

Our job as retailers is to run card departments which are professional, appealing and comforting.  We need to understand that buying a card is an emotional experience and connect with our shoppers appropriately.

We need to deal with card companies which evolve their products and work with us to evolve the shopper experience.

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Greeting Cards

Newsagents need to embrace multi channel marketing

Grant Harrod, CEO of Salmat, writing in the Australian Financial Review on Monday called on retailers to use multiple channels when promoting to consumers.

While much has been made of the rise of online retailing and explosion of new media, the reality is that people have diverse media habits and purchasing preference.

I agree with this and most of what Harrod has to say.

Newsagents are competing in a tough retail marketplace in tough economic conditions.  We cannot rely on what we have always done to drive traffic.  Just one or two campaigns a year are not enough.

No, we need a consistently delivered multi-channel approach if we are to have any hope of competing with the major retailers which offer what we sell.

In my own newsagencies I embrace the multifaceted newsXpress marketing: catalogues delivered to homes every six to eight weeks, commercial TV advertising, commercial print media advertising, monthly customer newsletter, a fresh flyer out the front of the businesses every month, in-store radio, a social media campaign, a local online yellow pages like campaign and a word of mouth driven campaign.

I see this mix as the bare minimum for any newsagency group.  I like the diversity as it means that the business is not relying on one activity to drive new shopper traffic.

For individual newsagents there is a challenge as the costs can be prohibitive.  That said, there are some options which could fit into a single store budget, especially in regional and rural areas.

Now more than ever we need to market our businesses and do this via more channels than we used to in the past. Changing times demand we change our approach to so much of what we do, including marketing.

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marketing

A tax break to help businesses to restructure?

The Sunday Age yesterday had a report about a report to be presented at this week’s Tax Summit calling for government assistance in the from of tax breaks for businesses facing restructure as a result of a strong dollar and or other challenges.

If there is even a hint of such support I would expect newsagents to be at the front of the line with their hand out and arguing that any such assistance should be retrospective given what the government took away in 1999 in the name of competition.

Outside of the federal government facilitated restructure of newspaper and magazine distribution in 1999, newsagents are in the middle of an even more comprehensive restructure.  In fact, it is three restructures: an overall retail restructure, the shopping centre restructure and the print media restructure.

Newsagents could use more than a tax break.  They could use help in dealing with landlords on financial and permitted use terms.  They could use help in dealing with magazine distributors on achieving equitable magazine supply terms.  They could use help in dealing with newspaper publishers on achieving fair compensation for newspaper home delivery.

I doubt that the push from Ernst and Young and others for a tax break to help businesses undergoing restructure.  But in case it does, newsagents need to be ready.

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Newsagency challenges

Q3 newsagency sales benchmark study announced

I invite newsagents to participate in my next newsagency sales benchmark study – covering the third quarter of 2011.  For ease of data analysis and consistency of reporting, participation is open to the more than 1,760 newsagents who use the Tower Systems newsagency software.  I hope to get between 100 and 130 participating again.

  1. Please run your Monthly Sales Comparison report  This is my favourite report in the software).  On the left, select July 1 2011 through September 30, 2011.  On the right select July 1 2010 through September 30, 2010.
  2. Check that the dates are right.
  3. Tick the category box.
  4. Do not tick any box about suppliers.
  5. Once the report is on the screen, save it as a PDF.
  6. Please email the report to mark@towersystems.com.au.

Thanks in advance for participating in what has become an anticipated benchmark study.  The results are useful in comparing your newsagency with others.  They also give us a health check on the channel overall.  I ensure that the dataset includes a good cross section of newsagencies.

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Newsagency benchmark

MasterCard blames retailers for fees

In a submission to the reserve bank, MasterCard says that some retailers are gouging on fees they charge shoppers for using their MasterCard.  The Australian has the story today.

While I am not concerned if the reserve Bank does introduce a cap on what we can charge for the use of a MasterCard or Visa card, it galls me that MasterCard takes a swipe at us without talking about they fees they charge retailers.

Losing margin is this tight retail marketplace is a cost any business would want to avoid.  MasterCard should look at what it charges retailers before pointing the finger at us in complaining to the Reserve Bank.  In addition to the margin cost of their fees, there is the administrative cost associated with accounting for this method of payment.

Maybe retailers could fight back with a sales counter based campaign against the MasterCard submission.

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EFTPOS fees

The newsagent position re magazines is stronger

mags-overallsmall.jpgRecent (welcome) moves by Express Publications offering greater commission for all newsagents plus other commercial moves by some publishers reflect a shift in the newsagent / magazine publisher relationship. Publishers are demonstrating that they get the importance of our channel and are prepared to negotiate terms which reflect this.

While we have a way to go to achieve what supermarkets achieve with their various methods of compensation, the recent moves show that we are in a period of change, welcome change.

The newsagents best positioned to leverage the commercial benefits which could be available to us are those who manage their magazine department professionally and with great care from the top of the business down.

While I have noted here previously the challenges for magazine sales, they remain one of the most in not the most important product category in our stores.

Newsagents who leave managing magazines to a junior or unengaged employee do so at their own peril.

I obsess about magazines because I know that a good magazine department drives traffic and sales basket efficiency.

Publishers will treat newsagents differently. Those who engage are set to make more money than those who do not.

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