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Newsagency management

Make sure you re ready for the new award wage rates

Click here to go to the Fair Work page with up to date award wage rates for our channel.

Now is also a good time to review the Award itself, especially the Retail Employee Level classifications as these determine the rate of pay that applies to a specific role. Classifications are where plenty of retailers trip up, often down the track when there is some other dispute.

If you are not sure about any of this, The Fair Work Ombudsman can provide advice in relation to award coverage. You can ask them questions anonymously.

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Newsagency management

Visual merchandising advice for newsagents who think they know northing about visual merchandising, and for blokes who always try and get out of creating a display

Everyone can do VM!

Visual merchandising is about display products in a way that attracts people to them, top look, touch and feel. Ultimately, it is about displaying products so you sell more.

Anyone can do visual merchandising.

Here is our advice.

  1. Start with a clean space, a flat surface, in a good location.
  2. The best display looks like a pyramid.
  3. Your hero product is at the top of the pyramid.
  4. If the display is for a season or some other sign-post event, the poster should be placed with the display so shoppers can see it without having to look for it.
  5. Flowing from the hero product down to the base of the display are other products. But not so many that you can’t see what you want people to see.
  6. The display is balanced, even.
  7. A display of gifts always includes cards.
  8. If the display is promoting homewares the pyramid approach is not needed. Instead, go for something that looks more natural, like in the home.
  9. Use coloured paper to highlight certain products. But don’t go for a rainbow.
  10. From a colour perspective, a good display has no more than two core colours as the focus.
  11. A display can look untidy and that is okay in some circumstances. For example, a box of Beanie Boos exploding from a box .
  12. Mistakes are okay.
  13. Oh, and don’t treat this as an engineering challenge. Keep it simple and fun! :

Take your time, have fun.

Remember, the alternative is no display at all.

A note to others who may be around when someone is doing their first display – we all did our first display once … be gentle.

Now, here are some more notes about displays:

In my opinion, the best displays have a narrative relevant to the business, a story or purpose. This is code for saying I am not a fan of single product or single supplier displays. suppliers love these, of course, as they are a billboard for them. What suits them will likely not suit you.

A good display is a collection of items from multiple suppliers, categories and segments that make sense together, from which a shopper could choose several for a gift, or for themselves. Choosing the items for the display us you curating the display, making editorial choices to tell the story you want to sell.

Don’t leave the display up for long. My advice is one week, two at the absolute maximum. Having a length of time for which a display will be live helps you allocate appropriate time for the creation of the display. if you are not sure how long to spend on it, set yourself and hour tops. Get it done within that time.

Once you’ve done a display, if you are new to this, ask for opinions. Learn. Each display will be an improvement on the last.

Whole the opinions of others can be nice, what matters from any display is the sales it achieves for you. be sure to track this as that data will inform your next choices.

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Management tip

Inspiring retail: newsXpress Sarina, Queensland

I am grateful to Shelley and Mark Petersen for the opportunity to discuss their journey from purchasing a traditional newsagency in Sarina, 25 minutes out of Mackay in Queensland and their transformation of the business into a loved gift and homewares destination.

This discussion is a deep dive into how to approach change and thrive in a local retail business in a channel that itself is experiencing considerable change.

Neither Mark or Shelley had experience in this type of business when they bought it in 2001. Today, they are experts because of the experiences they have embraced and continue to embrace.

Their pragmatic approach to business is inspiring. Their success is well deserved. Any retailer watching the video will discover how they can evolve their business in ways Shelley and Mark have.

newsXpress Sarina is seen by plenty as a newsagency and Post Office. While it is those things, it is primarily known in Sarina as the place to shop for gifts and things that will surprise. It’s a business of which Shelley and Mark can be proud.

For context, Sarina has a population of around 6,000. I mention this as there are newsagents I have spoken with in bigger towns who think they don’t have enough population.

Any newsagent can embrace the scope of change reflected in the video. It starts with that first step. If it works, do more of it. if it does to work, take a different step.

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Newsagency management

Best practical advice on allocating space in your shop: analyse gross profit contribution by floorspace

The advice I share is something anyone can do. You don’t need a retail specialist. You don’t need advice from a supplier. You don’t have to rely on a mentor. You don’t need to use one of the overpriced business advisors governments often pitch to small business retailers.

Spend an hour on this and I am sure you will discover things you will wan t to change in your business. It’s advice I have been pitching to newsagents for 15+ years. It works.

ANALYSE GROSS PROFIT CONTRIBUTION BY FLOORSPACE ALLOCATION.

This advice outlines one of the first assessments I ask to be done when asked to review the performance of any retail business, including a retail newsagency as it provides an understanding of the return being achieved from floor space allocation.

With space usually costing between 11% and 15% of (non agency) revenue in a typical Australian newsagency, it is usually the next highest cost outside of the cost of stock itself. How you use space matters to the financial health of the business.

Spend an hour on what I suggest here and the result should be a different view of the performance of your floor space allocation. This is not advice you will get from your accountant or from reviewing your P&L or computer reports. It is designed to be practically helpful in managing your business, practically useful to those in the business.

here are the simple steps I recommend you follow:

  1. Take a blank sheet of paper, ideally A3, and roughly sketch out the layout of your shop, marking in display units, wall shelving, the counter – everywhere you have product. There is no need to be 100% accurate.
  2. The floor plan layout should also include your back room if you have stock there.
  3. Colour-shade the layout by department and major category. For example, shade all areas with magazines in yellow, all floor space for gifts in blue, stationery green but pens in a different colour etc.
  4. List the departments and categories shaded on the side of the floor plan.
  5. Calculate the percentage of total space taken by each department or category. This does not need to be accurate to two decimal places. List this next to each department you have listed.
  6. Use your computer system to report on gross profit earned by each department and category over the twelve months.
  7. Calculate the percentage of total gross profit contribution earned by each department and category and list this next to the floor space allocated to each department.
  8. Circle in green those performing the best and in red those performing the worst. A best performing department will typically be responsible for a significantly higher percentage of gross profit than percentage of space allocated whereas a worst performing department will be contributing a percentage of overall gross profit considerably lower than the percentage of floor space allocated.
  9. Right away note down action items while the data is fresh in your head.
  10. Have the shortest gap possible between writing down your action plan and taking action.

Once you have the marked-up floor plan with the space percentage and percentage of total gross profit, think about your current floor space allocation.

Are the results what you expected?

What would you change?

What do others in the business think?

The steps suggested do not take into account product size and the average gross profit percentage from each dollar of revenue for a department. For example, ink is a lower margin product than stationery, gifts are a higher margin magazines. Typically, the analysis will highlight challenges with lower margin product.

The objective of the analysis is to provide you with fresh insights you could use when considering floor space change.

You can take the analysis a step further by looking only at one department and analysing performance by all categories in that department.

For example, in one business I saw pens taking 7% of stationery space while they contributed more than 40% of gross profit earned from all stationery. This raised the question of what might happen if more space was allocated to pens?

Every business I have worded with that has done this analysis has made changes as a result. Everyone involved has discovered things they had not expected. That’s the goal, to introduce fresh insights.

My advice here is not overly sophisticated. This is deliberate, so that anyone can do it.

Our channel has many suppliers full of opinions as to what we should do in our businesses. Most of those offering the advice don’t own and run retail businesses themselves. The best advice you can rely on for your business is that which you discover for yourself from performance data for your own business. 

If you do the data analysis I have suggested here and have questions, please reach out to me. I’d be happy to look at your results and discuss these with you. You can reach me at mark@towersystems.com.au.

I’d add that the advice here works for any type of retail business, not only newsagencies.

Now for an important footnote: it’s common for local small business retailers to put off work like this. I have seen it happen many times. In some cases I think it is because they think they know best while in other cases there is a fear of what they may discover and then there are some who say they don’t have time. None of these excuses are valid in my book.

Spend an hour and either have your current floorspace allocation validated or come out with a list of changes that pursue better business results. Either is a win.

The advice I have shared here is pare of the newsXpress knowledge base of advice to while all newsXpress members have access.

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Management tip

Update on self checkout in the newsagency

Use of the self checkout POS software terminal we have setup in one of my newsagencies continues to grow. Without any encouragement shoppers are happily scanning purchases and paying.

The mix of products continues to surprise: cards, gifts and stationery with the odd magazine or newspaper. Prior to installation we expected it to be used primarily for papers and magazines. We also expected it to be for single purchase transactions. Most transactions are two items and even more. Average transaction value is $25+.

We installed the self checkout terminal as a trial for my POS software company, to play with new tech. It was not installed for a newsagency specific reason.

My interest was to see if shoppers in an independent local retail business might use self checkout. Sure, we are wired to use these types of terminals in the major supermarkets. It’s rare in independent local retail businesses. So for our trial we needed to install the tech without fanfare or encouragement, to see how shoppers behave.

The $4,400 hardware and software solution is a lower cost than what the major supermarkets install. It’s a smaller footprint too.

I know from research that shoppers are turned off by self checkout POS software that is hard to navigate. We have made sure this is simple. The in-store experience has shown this to be the case. People of all ages are engaging. There is no tech barrier like we wondered there might have been.

A factor I had not considered that much is that there are shoppers who like a more private transaction of business. Self checkout works for them.

The supermarkets have crashed through with this tech and educated people to embrace it. This certainly does make it easier for local small business retailers to embrace if it is right for their own businesses. There is less pushback than would have been the case five years ago.

Tower Systems released its self checkout solution last year. It was developed for other retailers. Now, based on the experience in my own newsagency, we will keep the terminal. It is playing a good role in the business.

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Newsagency management

SEO advice for your business website

On Tuesday I hosted a session for some Tower Systems customers on tips for improving search results for your website. This non-tech session provided practical advice anyone could follow. I am sharing it here following feedback from plenty who have watched the video of the session. If you have a business website or planning one, this free to access video might be useful:

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Newsagency management

I can’t sell gifts in my newsagency, I have a gift shop nearby, it wouldn’t be fair to them

A newsagent said this to me a couple of days ago. It’s something I heard 20 years ago, not that much today.

The gift shop near then is a small shop with a narrow focus. They carry less than .5% of all available gifts in Australia.

It’s an out of date view for a newsagent to say they can’t stock gifts because they have a gift shop nearby.

Think about your newsagency for a moment. You have competitors for every category. Your exclusivity in circulation products and lotteries was ripped from you. It’s not your job to protect another shop nearby.

Then, think about online. That gift shop nearby is being competed with by thousands of online businesses, many of which are delivering to your town.

What newsagents owe is a commitment to their business for all those supported by the business.

My advice to the newsagent is to put irrational emotion aside and explore gifts in a way that is not in direct competiton with the nearby gift shop.

  • Offer different categories. There are many categories a nearby competitor will not have covered.
  • Source from difference suppliers.
  • Display differently.
  • Differentiate as to the how: your customer service, add-on offerings.
  • Be up front with them about your plans.

A newsagency without gifts is likely a newsagency sliding toward closure. Gifts are essential. Typically, today in 2024, gift revenue can easily be 5 and more times your card revenue. It takes time and commitment, you can get there.

Use your gift engagement to differentiate your business. Leverage your current shopper profile. Indeed, your card and magazine data provide the best starting point to understand the gift opportunity in the business. That’s where I start when working with a newsagency making this move.

If you’re put off by a big business competitor in the gift space, don’t be. They do their thing, you can be different in a way that locals appreciate and give you money for.

I get that you want to get on with local shops. You can expand into areas they cover by being different. You have to put the needs of your business first. Survival of the fittest and all that!

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Newsagency management

Inspiring Christchurch gift fair

I am grateful for the opportunity to visit the Christchurch Gift Fair last weekend. It’s the smallest gift fair I have ever attended I think. Size, however, is not a measure of a good gift fair experience.

While the fair did have some of what we at gift fairs back here in Australia, there was plenty of new product to see. I have ordered from two already and excited for the opportunities those products bring.

If I had a shop in the Christchurch area, I think I would have spent at least $15,000 on products. The locally made products were particularly interesting. I liked the food and crafts as they would support the local narrative. Since my shop is not local I focussed on what I could use to reach new shoppers back home.

Since the Christchurch gift fair was small and not overloaded with visitors it was a completely different experience here in Australia. There was more time for the stands of interest and a better connection from the vendors, in part I think to them dealing with fewer people each day.

If you can get over to one of the New Zealand Gift Fairs, I think it would be well worth it.

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Newsagency management

If you are concerned about the 3.75% wage increase, what’s your view on 5% rent increase?

There are plenty of stories in the news these past few days quoting retailers and some other business owners complaining about the 3.75% increase in award wages as determined by the Fair Work Commission.

While I understand retailers with break even or loss making businesses being unhappy at a cost increase, it’s likely these same retailers have a lease for their premises that locks in an annual increase that is higher than what the Fair Work Commission has just decided.

My point here is why contract for one guaranteed annual increase and complain about another, lower and often less consistent increase?

People are often an important asset in any retail business, at least they should be. A 3.75% increase is modest in this economy, and modest for an important asset for the business.

I suspect the cost of the 3.75% will be under $100 for most retail newsagencies. Here are some ways you can cover the cost:

  • Mark-up what you sell to reflect the convenience of local shopping. Stationery, for example, should be marked-up 105% at least. The majority of newsagents mark it up 100%. Moving to 120% will not hurt sales, and you’ll make more money.
  • Pitch good margin easy to purchase impulse items at the counter. These should be items not found in convenience stores or supermarkets. Include 2 of your funniest cards – but change them every week.
  • Configure the front 3 metres of your shop with good margin winners. Have as little as possible of low margin (less than 50% GP) product here.
  • Make your front window awesome and different every week.
  • Fine a new product category you can carry, something you’d never expect to see in your shop that could attract new shoppers.
  • Lead to achieve a productivity gain from mall who work in the business, including yourself.
  • Work in your card department. Depending on your card supplier, there could be some easy wins here using your own business data to better manage your card supplier actions. I have seen newsagencies boost card revenue 20% by taking the action I suggest here.

This is not rocket science. In every retail business there are easy moves you can make to make that extra $100 or so. All it takes is a bit of time and focus.

Complaining and saying poor me is easy. I think it’s a waste of energy and not a reflection of being a good retailer.

Prices go up. It’s not a surprise. I think local small business retailers can be smarter in terms of how we engage with this.

If you’d like to discuss this or any suggestions I’ve made, you can reach me at mark@towersystems.com.au.

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Newsagency management

The challenge of employing school students part time

This email I received represents the challenges for retailers in giving work to school students:

My name is Joe, I am 14 years old, currently in my first semester of year nine at high school. I don’t have any past work experience, but I am very optimistic on getting a job with you! As I am a student, I can offer you minimal shifts unfortunately, but I can do afterschool shifts starting around 5, following bus routines, however I can be there around, 4 on Thursdays as school ends early. Wednesdays and Saturdays won’t work for me as I have already adopted the responsibility of playing netball, which, although takes up work time, has taught me how to work with people while under pressure, and I can make quick rational decisions. Please shoot me a response if you’d like to see my resume. Kind Regards, Joe

I have changed details to fully anonymise the email.

I love their confidence and clear communication. The challenge is the restrictions on hours. With the cost of training and limited hours availability, I think ‘Joe’ will struggle to find work.

There has been an uptick in school students seeking work this year in my experience. Looking back on email approached, it’s up more than 100%.

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Newsagency management

Newsagency transformation (part 3): completely change the first 3 metres

The first 3 metres of your shop from the front windows and door in represent your headline.

If you want to transform your newsagency and have people see your business as changed, change this space, dramatically, completely. Leave nothing as it was.

It’s this first 3 metres people will see and decide the type of shop you have. This is where you get to play against expectations, it is where you have to disrupt. Don’t give them what they expect.

Products, fixtures – they are all up for grabs in terms of the changes you bring.

If your counter is located in this space, it needs the same dramatic attention.

I think the best way to do this is one day when the shops is closed, take everything away from the first 3 metres, remove it so you have a blank slate. Set a rule for yourself that you cannot put back into the space anything that was there. It will be difficult. You’ll have the urge to put oe thing back into the space, then another. Resist this urge.

What you really want from the experience is for customers to tell you there are surprised to see you stock something you always have stocked but that they only notice now because of what you have done in the first 3 metres of the shop.

Here are four principles for making the first 3 metres of your shop work:

  • Declutter and Create a Visual Feast: As you place new products, keep the entrance free from clutter. Make it visually appealing. Try and not use traditional retail fixtures. Use clean lines, captivating displays, and well-maintained fixtures.

  • Sensory Experience: Consider incorporating subtle elements that engage other senses. Play upbeat music at the front of the shop – music people will know, showcase beautifully scented products, let people smell your type of business and enjoy it.

  • Storytelling Through Displays: Don’t just display products, tell a story. Create thematic displays that showcase how your products can be used or benefit the customer. Don’t have too many of an item in a display. Show less quantity but more range of products – to tell that story you want.

  • Interactive Elements: Make it easy for people to engage with what you sell, to touch and smell. Having products on display in a box of so old school. Take products out. Encourage touching and engaging.

The first 3 metres of the shop is the most valuable retail real estate in the shop if you make good use of it. Be in charge. Set the tone. Make a statement. Keep changing it. Show that yours is a transforming business.

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Newsagency management

Newsagency transformation (part 2): if your data sucks and want an easier way to start

If you know you need / want to transform your newsagency and your business data is not in good shape, there are steps you can take on the shop floor to drive change in the business.

In my experience, businesses often in this situation often have a traditional shop floor layout.

The advice I provide below is all about disrupting what you have as I have found this can help retailers see what they could see. It’s radical and rough, designed to seriously change things up in the business.

It is important to know that whatever you do is forever. Make these moves, watch, learn and adjust. Shops needs to be continuously evolving.

First: the old newspaper and magazine unit

If you have a traditional magazine fixture running down the business of the business with newspapers on the front facing shoppers and they enter the business: take all the stock off and rip it out. Don’t overthink it, rip it out.

This is prime retail space you should be using for products with 50% gross profit and more. Giving this space to products from which you make 25% GP and less is a bad business move.

Rip the whole unit out.

Now, using low cost basic everyday shelving, put your magazines on the back wall of the shop. What ever was in that spot needs to go somewhere else.

Basic strip shelving with brackets that hold the shelves will suffice.

Put your newspapers below, on a bottom flat shelf.

If you’ve ben putting out newspaper or magazine posters, stop. They do not increase sales.

Second: fill the freed up space.

Grab a couple of old tables, or some old wooden boxes. Create display places on the shop floor and on each tell a product category story. Bring products to this part of the shop that people might otherwise not have seen.

If you don’t have tables, look at a local op. shop, in your garage or somewhere like Amart. Spend as little as possible.

Resist using spinners here in this recovered space.

Choose products you are proud to offer.

Be sure to include products you are certain would not work for your customers – it’s important you do this to figure out what you don’t know about your customers.

Be prepared to change the displays within a week if they are not working for you.

Three: watch what happens.

The moves may be a bust. It’s okay if they are, make more changes and keep doing so until you see a good result.

You may see some early success. If you do, lean into that, do more.

If your business is that traditional that it has an old magazine and newspaper unit running down the middle of the shop, I suspect you will experience good news for that’s what I have seen in every business I have seen try it.

Have fun.

One newsagent I know who made these moves hosted a Saturday afternoon sausage sizzle so people would watch as they used a chain saw to exorcise the old magazine unit from the shop.

The key point of this first move is to disrupt your view of the business. Sure, the shop floor will be disrupted. You need to be disrupted more and that’s why you need to do something radical that you are likely to want to resist. The suggested changes could do more for you personally than the business itself.

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Newsagency management

Newsagency transformation (part 1): where do you start?

If you want to change your retail newsagency business, no matter whether it is a traditional newsagency or one that has already seen some transformation, it starts with being sure of where you are at, it starts with your data.

Knowing where the business is at is the foundation of steps forward. This involves looking at the business from a range of angles.

  • Up to date profit and loss statement.
  • A current debtors report and a current creditors report.
  • A list of all monies owed by the business, both formal and informal.
  • Stock listing showing total value of stock.
  • Dead stock listing showing all items for which zero sales have been recorded in six months or more – showing the total value of this stock.
  • A floor map showing gross profit percentage contribution by product department / category floorspace allocation.
  • Total rostered hours in a week, including owners regardless of whether they are paid, and a calculation on revenue per hour.
  • a revenue comparison down to the category level comparing the most recent 6 months with the same 6 months a year earlier.

It’s not enough to say you want to transform your business, you need to understand where you are at and the capacity for change. The above information will provide insights as to immediate opportunities as well as the capacity of the business to fund the cost of change. This list is the starting point of what I ask for from any business I work with on transformation.

In looking through the pool of data from this list, my recommendation is to seek our easy wins that can set up for productive focus next. For example, if there is $10,000 or more in dead stock and all of that stock has long since been paid for, quit it. The freed cash and space will give you a boost. Now, to quit the stock, place it in one location, a clearance location. It could be a table, or two or more. Put it together with the same discount for all. My suggestion is 50%.

While you are quitting dead stock, work through the rest of the data to understand the business performance as it stands today and look at the comparison report for any easy green shoot opportunities you can see allied to current business categories. This could provide you with an easy first step.

As you work through your data, make a list of ideas, action items. It could be that on that list there are some easy wins you’d not seen before or had been ignoring.

Some retailers I have spoken with over the years about business transformation or improvement have been tempted to use their accountant to guide them. I think this is a mistake unless the accountant has current hands-on retail experience in your type of shop. Others have been keen to use a business consultant. Unless they have current retail experience in your area, I’d not engage with them.

My point here is that it’s your business. You are at a point of wanting change, transformation. The next steps are up to you and best done by you so that you own the changes.

This first step starts with gathering the data, cleaning house and getting fit.

All of this work is about getting you match fit for more considerable change, that comes next.

Footnote: I’ve owned newsagencies since 1996. I’ve been a Director of newsXpress since 2005. I started Tower Systems in 1981. While I am no guru, I have had a range of experiences that have helped me see the value of changing our businesses, transforming them beyond the traditional and doing so on a minimal budget. If you are embarking on the transformation and what to talk to someone, I’m here: mark@towersystems.com.au or 0418 321 338.

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Newsagency management

The future of the Australian newsagency

The future of the Australian newsagency channel is in the hands of those who own and run the 2,800 or so retail businesses that make up the channel. The decisions they each make in each of their businesses determine the success, or otherwise, of those businesses, and of the channel.

The decisions that will matter most are those relating to the products carried in the business, the narrative of the business and how you sell.

Before I get to that, I can say the future of the Australian newsagency will not be found in newspapers, magazines, lotteries, convenience retail, tobacco, cheap gifts, cheap toys or a canyon of spinners of products with names on them. The future of the Australian newsagency will not be found in any type of business competing with discount variety.

Suppliers, too, will not play in the future of the Australian newsagency. Despite them creating our channel, print media businesses especially have no interest in our future.

We can already see from retailers, newsagents, in the space that across Australia there is value to harvest from playing in premium and unique spaces, worrying less about price point and being smart when it comes to deciding your margin. Equally, there is value in the adage find a need and fill it in evolving our local businesses.

By products, I am particularly interested in products not common to the newsagency channel. Products such as clothing, gifts at $300.00 and more in price, books but not remainder books, cookware, collectibles people will drive for. Most likely products suppliers would not have in our channel today.

Sure, everyday products such as stationery, greeting cards and other categories our channel is known for will play a role in the future. Their success will depend on how smart we are in what we carry and how we price the burden of carrying. For example, selling stationery to those who need it is easy, selling to those who love is a whole different opportunity – one that is worth more I think.

There are no borders, rules or boundaries. What you can sell is up to you and your imagination as to how it is pitch.

By narrative I mean the story of the business the why for someone considering the business. If you’re a shopkeeper, you put products on the shelves. If you are a retailer with a commitment to a narrative, customers will understand the business, love being in the business and want what you offer because the narrative will nurture trust.

You nurture your narrative through what products you carry, how you place them in store, how you pitch them on social media, on your website and how personal you yourself are in and with them.

The challenge with narrative is that it must evolve, with you, time and the community.

By how, I mean when you sell and where you sell … having an ability to sell online is the key here. If you’re not online, you will have no idea what you don’t know.

Now if this all feels a bit new age like, I don’t mean it to. Today, in May 2024, we are in the midst of a period of immersive retail, retail people feel and experience. This is where your narrative plays a difference. A writing pad in a basic newsagency is a writing pad. The same writing pad in a store with a strong narrative could sell more easily and for more.

The more your shop and your website help people to feel things, the greater the success you will have.

What I am getting at here is that the future of the Australian newsagency lies in us being smart, engaged and creative, each of us making our own shop the best it can be. It won’t look like a cohesive channel, and that does not matters. What matters is that you create a business that is mighty successful locally, and with online shoppers who find you.

To those who don’t act, who don’t embrace change, I say farewell. The days of the old school newsagency are over. Time will catch you. This will result in fewer rooftops in our channel. I’m not sure how many, but on the current trend it will be 150 – 200 in the next 12 months.

To those keen to act, there are plenty of us in the channel who will help where we can. Reach out. Together we can ensure the relevance and success of our vital local retail businesses no matter how diverse our product and service mix and no matter what we call ourselves.

Footnote: There will be some who say the shingle should change, that news is not relevant. While it’s not relevant, what you call the shop does not matter all that much. It’s kind of like a picture versus a thousand words. What a shop shows itself as being matters more than what a shop calls itself. That said, Aussie newsagencies, being quintessentially local businesses are, in my opinions best off being called a name that is locally relevant – rather than some national name that is not locally relevant.

Second footnote: Reading back what I have written I know I have not made a clear and solid prediction. That’s because I can’t. There is no channel, no way to determine what all businesses in the channel will do.

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Newsagency challenges

The history of the Australian newsagency part 3: early 2020 – 2023, the Covid years

Aussie newsagency businesses were designated essential early in the Covid pandemic lockdowns implemented in the states and territories of Australia. This meant newsagencies could open while many retailers around then had to remain closed. This reacquainted many Aussies with their local newsagency.

Plenty of newsagents leant into the lockdown opportunity, expanding what they sold beyond what until then had been traditional for newsagencies. While gifts and similar products were common among those who expanded the range of products in their newsagencies, other new categories appearing in some businesses own the channel included flowers, coffee, electrical goods, clothing and camping goods.

While retail had the physical challenges of social distancing in this time, there were also considerable supply chain challenges as well as new operational models to learn such as selling online, click and collect and making as much of the in -store experience as contactless as possible.

Plenty of suppliers who had previously not engaged with the newsagency channel as they did not consider it appropriate to them engaged during the lockdown years. The expanded the range of products forward-leaning newsagents could easily access for their businesses.

As a result of the lockdowns, newsagents and suppliers found other ways of connecting and doing business. Trade shows that had been a key part of the product sourcing cycle for newsagents proved to not be as important post-lockdown. Retailer attendance at trade shows did not bounce back to pre Covid numbers.

Another situation that emerged post-lockdown is that newsagents relied less on traditional product categories. The commercial interests of newsagents and expanded, there were more opportunities than traditional suppliers offered.

Many newsagency businesses experienced double-digit growth in calendar 2020 over 2019 and 2021 over 2020. While the growth slowed, it did continue in 2022 and into 2023. The newsagency businesses in which growth was not as strong tended to be those that did not embrace the opportunity of being designated essential during the Covid lockdowns.

The good Covid years made newsagency businesses more appealing than they had been. This resulted in more business sales post Covid lockdowns than we were seeing previously.

As 2023 developed even though Australia had fewer newsagency businesses, the businesses themselves were stronger and had better relevance. The Australian newsagency channel was refreshed, well, most of it at least.

There was a surge in newsagency business closures in late 2022 and into 2023. These businesses tended to be those that had not change, that had not embraced changed. With newspaper and magazine sales continuing to decline, foot traffic was lower, unless steps were taken with new product categories to make the business more appealing. While media outlets considered the closure of newsagency businesses newsworthy, newsagents did not as most of those remaining continued to trade well.

Covid change the local Aussie newsagency and local communities benefited.

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Newsagency management

The history of the Australian newsagency part 2: 2015 to early 2020

2015 to 2020, up to the start of the Covid pandemic, were tumultuous for Australian newsagents as suppliers newsagents had served for years in the agency side of the business looked elsewhere for revenue.

What we now know as The Lottery Corporation ramped up selling lottery products online and on mobile devices, achieving excellent growth, taking plenty of in0-store purchases from retailers who continued to invest, under duress, in shook-fit and other requirements.

Newspaper publishers withdrew from newspaper distribution arrangements with newsagents, often delivering a poor substitute and leaving customers of long standing receiving poor service, failing on their promise of a better service for their subscribers.

Newspaper publishers also reduced in real terms the margin retail newsagents make from selling newspapers. What newsagents made did not keep pace with price increases. Also in these years, plenty of local newspapers closed with local news apparently valued less by major publishers.

Plenty of magazines stumbled with Bauer Media doing a poor job running the ACP media business they had purchased in 2012 and with pacific magazines not receiving much love from its owners at Seven West.

Banks no longer valued a newsagency business as an asset against which a purchaser could borrow.

Also during this period of 2015 to early 2020 there was disruption from the migration of accessing news and other traditionally print content to online.

Newsagents themselves remained disorganised with four different associations claiming to represent them.

In the midst of the changes plenty of newsagents realised that they had to make their own success, that suppliers who had led the channel for decades had all but abandoned it.

There was no whole of channel move this way or that. Rather, some moved into book retail, others into outdoors, others into coffee with most significantly expanding their gift and homewares offering.

Initially, the evolution was through a range of everyday gift suppliers who saw the opportunities in the newsagency channel. The focus was on gifts priced at under one hundred dollars and that served the traditional seasons of Valentine’s Day, Easter, Mothers’s Day, Father’s Day and Christmas. Newsagents continued to dominate in card sales for these seasons so tapping into gift related opportunities seemed easy.

The extent and speed of change in newsagency businesses varied business to business. There were many who did not change in these years, and this was a key factor in business closures, which were tracked at around 10% of newsagency rooftops each year in this period.

These years of 2015 through to early 2020 we say the biggest move from the agency model on which the channel was built to pure retail. Success was dependent on newsagents becoming retailers.

By the time 2020 reached us, the Australian newsagency channel was a channel in name only. In reality it was just over 3,000 retail businesses all operating locally, independently, and differently – some thriving, some treading water and some slowly going under. While there were several marketing group trading banners in the marketplace, the consistency between the businesses in these groups was not evident.

If it were not for the arrival of the pandemic early in 2020, the next years for the newsagency channel would have been quite different.

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Newsagency management

The history of the Australian newsagency part 1: 1980 to 2014

 In 2014 I was asked to contribute a chapter for A Companion to the Australian Media, the first comprehensive, authoritative study of Australia’s press, broadcasting and new media sectors. Edited by Bridget Griffen-Foley, this book is loaded with terrific content on the history of the media in Australia.

My contribution was on the history of newsagents. I share it below as part 1 of what I plan to be three posts on The history of the Australian newsagency.

…

The first organised newsagency in Australia was created in the 1800s to distribute publications to the Victorian goldfields.

The delivery news agents soon found themselves delivering multiple publications along particular routes, creating the beginnings of the first newsagency businesses. Over time, delivery routes were organised, providing the newsagent covering a defined route with exclusivity by arrangement with publishers.

In the latter part of the 1800s, some newsagents opened retail shops from which to run their distribution businesses. In addition to selling newspapers and magazines, these early retail newsagency businesses also offered stationery.

A traditional newsagency business model evolved, consisting of a retail outlet, distribution of newspapers and magazines to homes and businesses in a defined territory, and the supply of newspapers and magazines on a wholesale basis to other retail outlets. This model was not national: in South Australia and to a certain extent in Western Australia, the distribution and retail businesses evolved separately, making it rare for one business to operate both a retail shop and a distribution business.

The supply of newspapers and magazines to other retailers, called sub-agents, on a wholesale basis was contentious almost from the outset. Early in the 20th century, newspaper publishers took the lead in controlling who could purchase a newsagency and where one could be opened, opening hours, service levels and even what products could be sold. The lever of control was the Newsagency Council, established in each state and made up of publisher representatives.

Central to the newsagency model was that newsagents were – and are today for some suppliers – agents. This meant that they could exert little control over key aspects of their businesses, such as products supplied, quantity of supply and selling price.

Newspaper publishers micro-managed all aspects of their products in a newsagency business, from the time by which they had to be delivered to homes to their placement in the shops. Newsagents accepted this as a cost of having a monopoly.

It was not uncommon, even as late as the 1980s and early 1990s, for publishers to restrict access to ownership of a newsagency based on race. Magazine distributors exerted similar control on the granting of a trading account.

Newsagents were selected as the preferred retail outlet for lottery products and held this position almost exclusively until the 1980s.

A typical newsagency shop for much of the 20th century would have around 30 per cent of floorspace given over to magazines, 30 per cent to greeting cards, 30 per cent to stationery and 10 per cent to newspapers.

As shopping centres evolved in Australia, more newsagents opened retail newsagency businesses inside them. In 1999, through a process overseen by the Australian Competition and Consumer Commission, newsagents lost their monopoly over the distribution of newspapers and magazines. This resulted in other businesses being able to access direct supply of newspapers and magazines. While some publishers maintained newsagents as the last-mile distributor of products, they no longer controlled the relationship. No compensation was offered or paid to newsagents for the loss of the monopoly.

While the distribution of newspapers and magazines was deregulated, pre-deregulation rules and processes have remained for newsagents in relation to the supply of magazines. This has disadvantaged newsagents. In the years since deregulation, the relationship between newsagents and magazine distributors has prevented newsagents from breaking free of the monopoly-protected business model.

Since 1999, distribution and retail newsagency businesses have evolved. The number of newsagencies with a combined retail, home delivery and sub-agent business has significantly fallen as a result. Whereas up to 1990 newsagencies carried a reasonably consistent range of products across a limited number of core categories, in the 1990s some newsagents branched into new areas.

The pace of change in the newsagency channel increased in the mid-2000s, with many newsagents either selling or giving up their newspaper home delivery and sub-agent

distribution businesses. This came about because newspaper publishers refused to allow newsagents to charge a commercial rate for distribution services. Coupled with a static cover price for newspapers, from which newsagents made a margin, this meant the majority of newspaper distribution businesses were loss-making. A limited number of newsagents purchased these businesses, combining them into bigger specialist distribution businesses by leveraging leverage critical mass to make newspaper and magazine distribution profitable.

Since 2011, the pace of change in retail newsagency businesses has increased considerably, driven by declining sales of print media products, increased retail real estate and labour costs, a higher cost of capital and a greater penetration of franchise groups providing newsagents with management and marketing advice.

By 2012, there was a growing separation between distribution newsagencies and retail newsagencies, as well as a growing gulf among retail newsagencies. This was encouraged by News Limited with a trial project called T2020, intended to force newspaper distribution consolidation among newsagents. While T2020 failed to go beyond trial, newspaper publishers continued to encourage newsagents to consolidate to drive operational efficiency.

In 2013, around 7 per cent of retail newsagencies closed, due to a lack of newspaper home delivery revenue and falling newspaper and magazine retail income. Today, while a typical high street newsagency has a floor space similar to that of 30 years ago, the average shopping centre newsagency has a more diverse product offering.

Whereas in 1999 newsagents did not sell printer cartridges, by 2014 they accounted for around 40 per cent of stationery sales. Some product categories, such as toys, have come full circle. Decades ago, newsagents used to dominate in the toys category. This faded from the 1980s; however, since 2013, newsagents have clawed back toy sales and are now a sought-after channel among toy manufacturers.

Market forces are driving newsagents to pursue greater change and develop businesses that are more competitive and with a broader appeal to shoppers. While some suppliers continue to resist this, newsagents expect to finally unshackle their businesses from pre-deregulation anti-competitive practices.

Nowhere is the change confronted by newsagents more evident than in industry representation. In 2003, close to 3,000 newsagents were members of the national Australian Newsagents’ Federation industry association or one of its affiliated state associations. By 2014, that number was estimated to be under 2000, with newsagents relying less on national representation.

REFs: Australian Newsagents’ Federation, Newsagents Year Book (2014).

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Newsagency management

Inspiring newsagency transformation: Mount Lawley News, WA

Matt bought a traditional newsagency shop in late 2021. It was his first retail business. He knew he wanted to reinvent the business, to be relevant and appealing.

In less than 3 years Matt with his family and team have transformed the business into a thriving and loved local shop in Mount Lawley 10 minutes out of Perth.

While it’s called Mount Lawley News, this shop is not a newsagency, not what you think of as a newsagency. It’s a gift shop, a fun place to shop, somewhere you’re likely to find a gift for just about any occasion.

As Matt shares in this video, he embraces the opportunities of change, and he shows that even though the shop has been transformed, he’s not done. What he has created online through the website as well as on social media is fresh, engaging, and successful.

I are grateful to Matt for the opportunity to find out more. Be sure to check out their website: http://www.oliviaandgrace.com.au.

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Newsagency management

How is the Aussie newsagency travelling in 2024: looking at retail sales January through April 2024 vs. 2023

Looking at sales in your newsagency from January through April 2024 versus 2023 is useful. Knowing your results is more important than the noise from news outlets on retail sales.

While it’s not a full-on benchmark, I’ve seen data for enough businesses to share the following as reasonable results with which to compare your business when looking at sales for the first four months of this year compared to the same period in 2023 for traditionally core categories:

  • Magazine unit sales: down 8%.
  • Newspaper unit sales: down 5%.
  • Stationery sales: up 3%.
  • Card sales: up 2%.

If your results are outside these, consider what you are doing in the business to change the situation. There could be a good reason your numbers are different. It could also be that the business is challenged in ways you can positively impact.

There are many things we can do in our businesses to drive sales growth. The key is taking action to achieve this. Success won’t seek us out, we have to seek it. Please forgive this cliche … but it is true.

Stationery is having a good moment, growing sales is easy. cards, too, respond to care and attention from you, especially if you are tactical in chasing the impulse purchase.

The big winner is gifts. What we can sell in our shops has changed so much. The price range we can offer has changed too. Gone are the days of newsagents targeting gifts that cost $25.00 or less. I love hearing from newsagents when they have sold their first $300+ item – it opens their mind to expanding their gift offer further.

I own a newsagency on Glenferrie Road Malvern, in Melbourne. For decades it was a traditional newsagency, owned and well run by one family: huge in magazine sales and strong in newspapers, cards and stationery.

Since I bought the business we have engaged in evolving the business while not anting to hard the existing core. It’s working. We are attracting new shoppers and winning new category revenue while maintaining good core sales.

Switching card companies provided a huge boost and continuous evolution of the card mix in the 2+ years. Introducing gifts is working well as is the introduction of sensory products, multi-generational plush as well as homewares.

What we stopped early on that helped too: we got rid of the drinks fridge, the ice-cream fridge, candy at the counter and 20% of the magazine space. Now, in cutting the magazine space, we did not cut any titles – we have maintained excellent magazine sales: $100,000 in January through April 2024. Special interest titles are the biggest segment, accounting for $20,000 in sales in the first four months this year.

All of this has been done on a minimal budget in a step-by-step approach, following opportunities revealed in the data.

Please take a moment and compare your January through April 2024 with 2023. See what’s working and what’s not. If you see in this things that need attention, get to it. If you are not sure what your comparison shows, feel free to reach out. I’d be happy to take a look and comment back to you on a confidential basis. I’m at mark@towersystems.com.au or 0418 321 338.

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Newsagency management

URGENT IMPORTANT NOTICE. Changes Required by Newsagents to handle the new Weekday Windfall Game

The Lott has informed Tower Systems via XchangeIT about changes slated for May 6 to accommodate the Weekday Windfall game launching on May 20.

Despite strong protests from me to senior management at The Lott, they, in their infinite wisdom (bless them), plan to reuse a product code for the new game. This  code is currently linked to a payout department.

In our opinion, this is a seriously stupid and dangerous move by The Lott. They should have used a completely new product code.

Failure to adhere to the steps outlined in our knowledge base advice will result in all sales for the new Weekday Windfall game being treated as payouts or lotto wins. This risks you disbursing funds to customers by mistake.

Act now to prevent this. Here is a link to advice for Tower newsagents: https://help.towersystems.com.au/portal/en/kb/articles/lotto-setup-new-products

Here is the response from The Lott once I had explained to them the risks involved in reusing a product code:

I appreciate that you some concern about reusing product ID 22 however due in part, to some code capacity issues, a decision was made to use this code for the upcoming Weekday Windfall. Please note, that all terminal development which includes the use of product ID 22 for Weekday Windfall has received regulatory approval and is unable to be changed.

Newsagents are at risk here.

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Newsagency management

Local retail management advice: How to partner with local community groups to win new shoppers, increase sales and support your local community

Talk about a win, win, win. This local retail business management tip helps you win new customers, your customers save money and a local community group raise funds. Engagement is measurable, so you can assess the return on your investment.

Find a locally loved and trusted community group in need of funds, a group that has a reasonable number of members who do not currently shop with you.

Offer the community group a percentage from each purchase made by members of the group and their family members.

Offer each member a discount for each purchase.

The amounts offered need to be considered in the context of your business, your margin and the value of the anticipated additional purchases.

Consider a timeframe for the offer. For example, it may be useful to trial the offer for a limited period so you can assess engagement and then adjust as appropriate. It may also be an offer only open to certain days of the week, your quietest days.

Consider the products to be included in the campaign. It may be appropriate to exclude products categories where your margin is not enough to justify inclusion.

To manage the offer, see if your Point-of-Sale software can help. I know the software from my own software company can manage this. You give each community group a member a card, which when scanned ensures they get the discounted price and the donation to the community group is tracked.

The card becomes valuable itself, something talked about, sought after.

The commercial goal of this campaign has to be net new shopper traffic for the business delivering revenue the business would otherwise not have achieved. If this is the case, a discount off the usual margin achieved is acceptable as it is effectively a cost of acquiring the additional business.

Key to the success of this campaign is the active engagement of the community group in rallying members to visit the shop, to encourage them to support you so that you support the group they love.

Make an event of handing over the donation to the community group. Get photos. Talk on social media about being grateful for the local support that has enabled you to make the donation.

Share stories on social media about the activities of the group as your support of them can encourage their support of you.

I love the campaign outlined here as it represents the circular nature of the local community: people living locally, shopping locally, enabling local shops to thrive locally and support loved local community groups.

Using POS software you can easily manage this, and adjust the offer based on the results.

…

I wrote this article for the latest issue of the Channel magazine published by ALNA.

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Newsagency management

Retail transformation: Wattle Bee Next Mount Morgan QLD

Retail transformations are challenging in an ever changing retail landscape. The challenges are compounded when you’re in a small population regional town and in a retail channel that itself is undergoing extraordinary and rapid change.

Rather than following others, Kerrilyn and Schae at newsXpress Mount Morgan evolved their newsagency into something unique, wonderful and loved. They made their business a destination and refused to be limited by assumptions about what their type of business should be.

This video shares some of their journey and reflects on a business the people of Mount Morgan love. It also plays against assumptions about the local newsagency: what it is and what it can be.

I am grateful to be a small part of this inspiring story.

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Newsagency management

Some airport shops are a rip-off, like the shop in Brisbane selling a bag of Smarties for $8.99

$8.99 for a bag of smarties that I can buy at a supermarket for $5.00 or at a discount confectionery shop for $4.00. I saw this in a shop at Brisbane domestic airport a week back. Crazy pricing.

Now, of curse, there will be factors impacting this: retail lease costs for one. The other big on being a captive market, little competition.

The prices were not turning shoppers off. Plenty of people were paying over the odds for stuff at this shop.

The experience had me thinking about the choices we make when we price items, especially readily available everyday lite=ms, like this bag of smarties. Our pricing decision tells shoppers something. It told me this shop is expensive and reminded my of why I don’t shop at airport shops.

One way to help shoppers understand your prices is to speak to factors that play into your pricing decisions. You could do this on social media or even by equipping shop staff with information.

If I sold these bagged Smarties, for example, and if my price was considerably lower than $8.99, I’d share the story from Brisbane airport on my social media to be grateful that I could sell them for less – hopefully not in a bratty way. That type of personal experience social media post can be a good way to share a pricing comparison that can reinforce your proposition.

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Newsagency management

A good read for retailers: The Effect of Least-cost Routing on Merchant Payment Costs

The Effect of Least-cost Routing on Merchant Payment Costs, an article by Boston Dobie and Benjamin Watson and published by the RBA is a valuable read for retailers interested in the cost of cashless payments.

The conclusion pitches the value of least cost routing.

This article introduces new estimates for the potential cost savings for merchants from enabling LCR. We estimate that on average LCR is associated with a nearly 20 per cent lower cost of acceptance for debit card transactions, with potential cost savings being largest for small merchants and those on plans that blend together prices for different card types. The results presented primarily capture the savings from LCR for in-person transactions using physical cards, given the limited availability of LCR for online and mobile wallet payments. As LCR becomes more readily available for these types of transactions, the potential savings should be higher given they account for a significant and growing share of debit card payments.

Plenty of newsagents had access to and benefited from least cost routing years ago. There is an even better (lower cost) option now with a cost plus model.

At the very least, newsagents should be on a least cost routing model. If you are not on that or a cost-plus model, you are likely to be paying more than you should. And, if you surcharge and think it’s not your issue, customers will notice the cost of a surcharge.

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Newsagency management
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