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newsagency of the future

Venues announced for Newsagency of the Future workshops

newsagency-future.jpgVenue details have now been announced for most of the free Newsagency of the Future workshops which commence next Tuesday in Melbourne.    The details for next week are: Melbourne – 15th June 2010 @ 11:00am, The Brighton Savoy, 150 The Esplanade, BRIGHTON VIC 3186. Adelaide – 16th June 2010 @ 2:00pm, Grand Chifley Adelaide, 208 South Terrace, ADELAIDE SA 5000. Perth – 17th June 2010 @ 11:00am, Metro Hotel Perth, 61 Canning Highway, SOUTH PERTH WA 6151.

At this stage we have over 300 newsagents participating in what I hope will be a good conversation about the future of the channel.

For the latest flyer and booking form listing venues please click here .  You can also book online and update your Outlook calendar at the same time.  You will see that I have added a Geelong session on July 6 at 11am.

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newsagency of the future

More capacity added to Newsagency of the Future workshop

The Newsagency of the Future workshop I am speaking at later this month is proving to be popular among newsagents.  We have added more capacity to the Melbourne, Sydney, Brisbane and Adelaide venues.  We have also added a date for the Gold Coast in response to requests – Thursday July 8 at 10am.

While I don’t promise to have all of the answers, I do promise an honest appraisal of the short to medium term future of the newsagency channel based on current data and assessment of trends which are set to impact, positively and negatively.  I also promise a lively discussion – there are things we need to talk about to help us navigate to our own future.

Click here to book online.  Venues will be announced for all locations next week.

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newsagency of the future

Why would you buy a newsagency today?

I am often asked by people looking at buying a newsagency why they should given the issues and challenges discussed here and elsewhere.

In my view, a newsagency represents a good investment and offers good opportunities, plenty of upside – despite some challenges presented by out of date practices.  The value in theupside is why I have expanded my own involvement.

There is plenty about a newsagency business you can control.

There are excellent new traffic opportunities: ink, books, gifts, services and some other new products areas I am not prepared to name here just yet.  These are brining new customers in.

There are excellent sales efficiency opportunities – selling more to existing customers. This is achieved by cleverly leveraging high traffic products such as newspapers, lotteries and major magazine titles to drive impulse purchases.

There are good margin opportunities. For example, ditching magazine company calendars in favour of dealing with calendar specialists – newsagents more than double their margin.

Proactive newsagents can transform the business. This is where the biggest opportunity lies. By respecting existing key traffic generators and evolving the business offer in other categories, smart retailers can significantly increase sales and profit. Yes the traditional newsagency is old and tired. The new newsagency is vibrant and profitable.

Change. Yes technologies like the iPad will impact our businesses. This will be more in a good way than a bad way. Entrepreneurial newsagents are seizing the opportunity of change and using this to motivate internal change.  There are newsagents making good money from cafe services, online businesses and expanded distribution businesses.

So, why would I buy a newsagency today? The opportunity!

The only caveat I would apply is that you need to buy at the right price.

I will be covering the themes in this blog post in detail at the Newsagency of the Future workshop next month.

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buying a newsagency

Newsagency of the Future workshop – Cairns date added

I have scheduled a Newsagency of the Future workshop for Cairns on July 1, 2010 @ 10am following contact from Cairns area newsagents.  Bookings can be made here.

At all of these sessions we will discuss how new technology like the iPad will impact on newsagencies, how newsagents are reinventing their businesses and attracting new traffic and driving better margin.  There are some exciting stories to share.

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How to create your Newsagency of the Future

future-newsagency.jpgI am speaking at a series of workshops next month on How to create your Newsagency of the Future.  After months of planning I am pleased to be finally able to announce the details of this important workshop series for newsagents.

The announcement is timely with the launch of the Apple iPad tomorrow since part of the workshop content will look at the likely impact of the iPad and similar technologies on the newsagency channel.

It is time for newsagents to look more carefully at the implications significant changes to the distribution channel which will affect newspapers and magazines.

The time is also right to discuss online strategies and how these may work for newsagents.  Some newsagents are having tremendous success while others are wondering why they bothered.

I will share details from the latest newsagent benchmark study which tests the health of the newsagency channel as we currently know it.

I will also share case studies of newsagents who are transforming their businesses, attracting new traffic and selling better margin product.  This will include sharing some secrets on how to get good knowledge on good margin product trends.

I promise a practical business-building session which will leave participants with change opportunities which can be implemented in almost any situation and with a better understanding of what the future may hold.

Access to the workshop is FREE and open to all newsagents.  To book, please book online here or download the booking form here and fax this to the number noted.

While the workshop is funded by my software company, Tower Systems, it is NOT a sales pitch. I’m not out to sell you anything. What I want is a healthier and stronger newsagency channel, a channel with a bright future for newsagents, their employees, their suppliers and all of the families which rely on the newsagency channel for income.

I am happy to consider dates beyond those listed.  Make contact with me direct if you and a group of newsagent colleagues would like a workshop hosted closer to your location.

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Zinio launches iPhone app

Digital-magazine publisher Zinio released an app for the iPhone and iPod Touch this week, meaning you can now read electronic editions of magazines on the go.

Zinio includes embedded videos in some magazine titles, links, article sharing, and other electronic facilities that print can’t match. Through Zinio, consumers can purchase individual issues and longer term subscriptions – from within the app.

The timing is interesting on the back of the wave of e-reader announcements last week and the much-hyped iSlate(?) from Apple set to launch later this month. Check out their launch video:

Zinio is a well established company which I have written about here before. They bring magazines to devices, eliminating the print channel.

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New concept ‘newsagency’ in Victoria

nx_knox2.JPGLast Thursday, newsXpress opened a new concept corporate store at Knox City Shopping Centre in Melbourne.  While not yet fully stocked and with some adjustments to be made, the first four days of trade have been most encouraging. Click here to see a video walk-through of the store.

This store is different to the traditional newsagency because of the floor space, product mix, flexible layout and the strong corporate image.   This is a 130 sq m store, small for a shopping centre newsagency.  The layout is designed to drive a greater per square metre return and customer contact efficiency than you would achieve with a traditional newsagency layout.

But there is more to this store that you’ll see from walking through.  There are back end processes and in-store strategy which drive margin.

Is this the newsagency of the future?  I doubt it because there is no end point to retail innovation.  That said, this store reflects a considerable advancement on traditional newsagency layout, range and floor space efficiency.

Thanks to the design and build work by Interfit and their flexible and efficient space management system, we have a store which is completely flexible and which redefines a ‘newsagency’.

Disclosure: I am a 50% shareholder in this new concept store.

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Selling The Lakes District Calendar

lake_district_calendar.JPGI experienced a another reminder of the value of constantly moving stock yesterday.  We have more calendars than facings in our display.  This means we need to rotate titles so they all get browser time.  Ten minutes after I moved The Lakes District calendars to the front of their pocket we sold one.

While some calendar shoppers will flip through the range looking for titles which interest them, others will purchase on impulse when they see a title which interests them or someone for whom they need a gift.  Constantly moving titles drives excellent impulse sales.

Our calendar sales were up 23% in November compared to November 2008.  This is based on unit sales.  The excellent results are off a high base from last year.  We are not discounting. This means a margin of 65% for most titles.

I put our success with calendars down to exceptional in-store management. Time is spent every day working the calendar display, keeping it tidy, moving titles where there are two or more in a pocket, monitoring stock – ordering more as necessary.

Our point of difference with calendars is range.  The success of this is dependent on time investment.  As the sales results show, it is paying off.

Newsagents have an opportunity to own the calendar space.  For many this can be a department generating $10,000+ a year in sales from impulse and new traffic sales.  Calendars are an excellent small step in building a more profitable newsagency of the future.

The customer who bought The Lakes District calendar yesterday did not visit our shop looking for this calendar.  Every day we see impulse purchases of calendars like this.

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Rupert Murdoch’s speech to the US FTC provides guidance to Australian newsagents

Rupert Murdoch, CEO of News Corporation, appeared before the US Federal Trade Commission’s Workshop: From Town Crier to Bloggers: How Will Journalism Survive the Internet Age? on Tuesday.  His speech contains information which could be of interest to newsagents facing a decision as to whether to accept the new News Limited contracts.

Here is some of what Rupert Murdoch had to say to the FTC:

First up, on the trust between consumer and a newspaper:

From the beginning, newspapers have prospered for one reason: the trust that comes from representing their readers’ interests and giving them the news that’s important to them. That means covering the communities where they live … exposing government or business corruption … and standing up to the rich and powerful.

And on the future of newspapers:

The same is true with newspapers. More and more, our readers are using different technologies to access our papers during different parts of the day. For example, they might read some of their Wall Street Journal on their blackberries while commuting into the office … read it on the computer when they arrive … and read it on a larger and clearer e-reader wherever they may be.

Later, he adds:

I have often made the point about newspapers this way: by reminding people that we are in the news business, not the dead tree business. In other words, what makes a newspaper is its content and brand – not necessarily the form in which it is delivered.

He outlines the principles for the new world:

  • Let news organizations innovate to give their customers the news they want, when they want it, and how they want it.
  • Ask consumers to pay for the products they consume. Let aggregators desist – and start employing their own journalists.
  • And ask the government to use its powers to ensure the most innovative companies are free to reach new customers instead of looking for ways to prop up failures or intervene in a constitutionally sensitive business sector.

I’d make several observations on this.  Newsagents are distressed at the challenge of their individual small businesses negotiating with a global corporation on a contract which many see as the reason for their existence.  News Limited has denied newsagents the opportunity to charge consumers fairly for the services they provide.  Successive Governments in Australia have ignored calls by newsagents to give them genuine freedom in structuring their businesses around newspaper distribution in ways which are appropriate to their communities.

Looking at Rupert Murdoch’s speech more broadly, News Corp. is rightly positioning itself for the next generation channel.  This will not be print, certainly not to the extent that it has been in the past.  It is therefore, in my view, open to newsagents to decide the timing of their move out of newspaper print distribution .  The contract on offer today is two years (one year in South Australia) for a reason.  Newsagents need to understand that and not expect anything beyond this period.

Australian Newsagents ought to study this and other speeches by Rupert Murdoch and add them into the mix when considering what to do about the contracts.

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Newsagency challenges

November newsagency sales

We achieved good sales in November with sales up in key traffic departments as well as in key good margin departments.  The numbers are even better when you consider that some departments had a high base – calendars, diaries, cards and ink.  Here is a summary of performance* across my own newsagencies:

  • Books.  Up 11%.
  • Calendars.  Up 23%.
  • Cards. Flat.
  • Diaries. Up 20%.
  • Gifts. Up 84%.
  • Magazines. Down .7%.
  • Women’s Weeklies magazines. Up 7%.
  • Newspapers. Down 3%
  • Ink & Toner. Up 8%.
  • Stationery. Up 1%.
  • Prepaid Visa. Up 650%.
  • Lottery sales.  Up 11%.
  • Instant lottery tickets.  Up 6%.

Overall traffic is up 2%.

What is particularly appealing to me in the numbers is the adjustment to our mix.  We continue to build a more efficient business by balancing low margin high traffic products with high margin lower traffic products.  This is an on-going mission, one with which every newsagent ought to engage.

The growth is due to a combination of constant change in-store, a good retail experience, good external marketing and a strong commitment to a brand / price strategy.  We are known in several key departments for these points of difference.

People who ponder the future of the channel need to look at their numbers.  Every month we have an opportunity to gauge our progresson this long term mission.

* I have used revenue as the measure for all departments except for magazines and newspapers where I use unit sales as the measure.

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Newsagency management

More newsagents selling home delivery runs

I am hearing of more newsagents selling their home delivery runs to concentrate on retail.

My own experience is that the separation of two different and competing businesses is good for both.  They have different labour and capital demands and separation allows for more appropriate allocation.  Retail has less regulation whereas home delivery is highly regulated.  Retail can pull revenue from a broad range of categories whereas home delivery is challenged in this area.

The separation of home delivery from retail continuesd to be the most significant structural change in our channel.  It is great that newsagents are achieving this for themselves.

Retaining customer traffic in retail after selling the run is easy with good PayPoint technology which lets the retailer act as if they are the distribution newsagent when it comes to payments, stops and starts.

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Junk shop newsagencies

The gap between newsagencies is wider than I have ever seen it.

At the top end, our channel has professional looking newsagencies making a clear newsagency pitch around core lines and offering brand name products in a retail environment which competes with any major retailer.

At the bottom end our channel has what can be best described as junk shops, newsagencies dominated by cheap China product in dump bins and on tables spread across the front of the shop to the detriment of core newsagency lines.

Both types of businesses call themselves newsagencies, unfortunately.

The junk shop newsagency is more of an endangered species given the number of other junk shops out in the marketplace. It seems that shopping malls and high streets are cluttered with shops pushing cheap China product.

There are fewer newsagencies focusing on the core and offering strong, logical, shoots off each side of the core. Yet many of these newsagencies are flourishing. It surprises me that more to not take what is clearly a successful path.

While newsagents can run their businesses how they choose, those in the junk shop space, where more than half the floor space is taken up with cheap China product, ought to find a new name so as not to confuse shoppers looking for a newsagency.

The alternative is that the proactive newsagents shift focus away from the newsagency shingle.

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Newsagency challenges

Mapping the future of newspapers debate

The Independent has published an interactive map which is reflective of the debate around the future of newspapers.  By interacting with the map you are able to navigate the diverse views and through this develop a better understanding of the challenges faced by today’s newspapers.

This excellent map is a fascinating tool, especially for people still working through their position on the future of newspapers.

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275 US magazines closed already in 2009

Folio reports that 275 US and Canadian magazines have closed so far this year.  In the same period, 187 new magazines have launched.  525 US and Canadian magazines closed in all of 2008.

if you are planning a shop fit, do not include purpose built magazine fixtures.  Go, instead, for flexible fixtures which can be easily reconfigured by any staff member.

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The case for Australian newspapers

John Hartigan, chairman and chief executive of News Limited, yesterday spoke at the National Press Club.  Click here for an extract from his speech as published by The Australian this morning. Hartigan’s case, in my reading, is more about the future of publishers and journalists they employ than the print newspaper medium:

Instead of throwing a paper over your fence we will offer you a much more sophisticated package of print and electronic content, incentives for loyalty and tools that allow you to conduct transactions with our advertisers.

We will make our content suitable for the next generation of smart phones: devices that are still in their infancy with potential to deliver news, information, entertainment and shopping in high definition with full interactivity.

I agree with most of what Hartigan said in the speech.  Publishers do need to evolve their model for new distribution channels.There is a bright future for quality journalism.  Consumers will pay for this.

Newsagents ought to read the extract in The Australian as it reinforces my view that our shops need to be flexible and our businesses need to be structured to not rely on newspapers for traffic as we have done for decades.

The speech also reinforces my view that newsagents do not need contracts with newspaper publishers in this period of transition.

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UK newsagents doing it tough

The Norwich Evening News ran a story yesterday about the challenges facing UK newsagents.  The story reports that they are closing at the rate of one a day in the face of tough competition from national retailers.

While I understand the pitch of use us or lose us, consumers will shop in newsagencies only if they see them as relevant.   This is our challenge here and in the UK – to be relevant in today’s marketplace.

We are challenged by history, supplier relationships, rules and a cost basis which is not as flexible as could be useful to changes to our model.

The newsagency of the future will not be a newsagency.

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Digital Britain, the new distribution channel

Newsagents will be interested to read Digital Britain, a 245 page report from the UK Department for Business Innovation & Skills which lays out plans for Britain to take a leadership position as a digital knowledge economy. At the heart of the plan is a distribution channel which imagines less paper based communication.

This report is further evidence of why we, at the end of the paper based media distribution channel, need flexible shopfits, flexible leases and flexible business plans which permit us to evolve our newsagencies.

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Media disruption

The smaller format newsagency

I noticed reports that JB Hi Fi announced that it will open around 50 smaller format stores.  This is an interesting move.

Newsagents face a challenge around size, especially in shopping centres where landlords tend to want us to take 250 square metres and more.  If we take that size of space we need a broad offering attracting considerable traffic. With little of what we sell (today) unique to us, 250 square metres of retail space is a lot for a small business to maintain at the edge of competitiveness.

My view is that we are better off with smaller format newsagencies in shopping centres, between 100 and 150 square metres, and more narrow and specialised in focus.

A smaller format newsagency is more likely to have a genuinely unique selling proposition – with less space to manage, the challenge to harness this is easier.  Also, with less space from which to achieve a return, newsagents are likely work this more efficiently than in a larger format store.

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Rupert Murdoch on the digital future

Fox Business has published another video interview with Rupert Murdoch in which he talks about, among other things, newspapers.  He makes interesting comments about migration online.  Check it out:

Reuters has several quotes from Rupert Murdoch including this about newspapers:

“Communications are changing totally and we’re moving into the digital age and it’s going to change newspapers. But if you’ve got a newspaper with a great name and a great reputation and you trust it, the people in that community are going to need access to your source of news. What we call newspapers today, I call ‘news organizations,’ journalistic enterprises, if you will. They’re the source of news. And people will reach it if it’s done well, whether they do it on a Blackberry or Kindle or a PC.”

“I can see the day maybe 20 years away where you don’t actually have paper and ink and printing presses. I think it will take a long time and I think it’s a generational thing that is happening. But there’s no doubt that younger people are not picking up the traditional newspapers.”

Some in News Limited here in Australia could learn from Murdoch’s direct answers on newspapers.

Newsagents need to watch this interview, and the previous one, and take on board the comments in the context of shopfits and newsagency business planning.  The fundamentals of our businesses are changing.  We need to embrace this change as the opportunity it is.

This means flexible shop fits, new traffic-generating product categories and embracing entrepreneurial spirit.

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Media disruption

Major changes for newspaper home delivery accounts in South Australia

Advertiser Newspapers announced to South Australian newsagents Monday their plan to take over managing home delivery accounts for Advertiser products. They will gradually assume control for starting new home delivery accounts, collecting payment, managing stops and starts, handling holiday redirections and handling queries.

This significant and unexpected move by the publisher has been pitched to newsagents by them as a positive move with significant benefits. The key reason for the change appears to be improved subscriber retention.

The implications for South Australian newsagents, should the planned changes proceed, could be considerable. Indeed, the implications for newsagents across Australia could be considerable. This is why the proposed changes need to be discussed and debated nationally. If they are as valuable and equitable to all stakeholders as the letter from Advertiser Newspapers says then I’d expect them to proceed. If they are not then I’d expect the proposal to not proceed.

My concerns are:

  • Transition challenges. The transition will require newsagents to hand over partial account details where they deliver and bill non-Advertiser products. Given the nature of home delivery accounts, balances handed over and or retained will be wrong.   This will make for a frustrating time for newsagents and customers. Newsagents will end up giving away credits to satisfy customers.
  • No benefit for newsagents. Many newsagents will need to maintain accounts for customers – for Fairfax product, magazines and other non Advertiser product delivered. Indeed, with the accounts being smaller one could argue that, based on experience, these accounts will be harder to collect. Indeed, from a data management perspective
  • Reduced revenue. Today, newsagents are able to sell home delivery to a customer at full price. Under the planned arrangement, the publisher controls all pricing. This denies the newsagent the opportunity of selling at a better margin.
  • Retail traffic. While many suburban distribution newsagencies are distribution only, across the state many newsagents have retail businesses which rely on account payment traffic to drive retail sales. Customers receiving only Advertiser product will not need to visit to pay the bill and will therefore have greater opportunity to purchase traditional newsagency lines from other retailers.
  • Processing delays. The current system allows customers to contact newsagents until late in the day before new run lists are printed or data transferred to electronic run devices. Centralising this in Adelaide will require an earlier cut off so that newsagents can have the data in enough time to get their local processes taken care of.
  • Relevance. The move by Advertiser Newspapers goes to the relevance of the newsagency. Newsagents provide a one stop shop for home delivery customers. Slicing that relationship up by publisher will confuse customers and demonstrate that one supplier sees newsagents being less relevant. This may, in turn, impact back on the publisher down the track.
  • Ripple effect. Newsagencies, retail and distribution, are finely balanced – take one slim plank away and there is a ripple effect. We saw this in 2004 with the ACP move to supply 800 or so petrol and convenience outlets directly. Reducing contact between home delivery customer and the newsagent, retail and or distribution, will lead to a loss of revenue in another part of the newsagency and this weakens the channel.

Some will disagree with my concerns. Others will want to add their own. Regardless of your position, please join the conversation here.

What is important is that newsagents, publishers, customers and other stakeholders engage in open discussion about this change. We owe it to each other to test the proposal and be prepared for what comes out the other side.

How the newsagents discuss and debate this plan will demonstrate our resolve in relation to the future of the newsagency channel as there will be more challenges like those outlines here.

UPDATE: I originally posted this at around 6:15am today.  I have updated the time stamp because newsagents new to reading the blog are having trouble finding this post.  I’ll leave it in this top place overnight.

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Newsagency challenges

The impact of the Internet on US newspapers

At the ABC’s 7.30 Report website is an excellent extended interview with former journalist and Crime novelist Laura Lippman about the demise of newspapers in the US. The interview provides an excellent back story to the impact the Internet and corporate takeovers on newspapers. I especially found Lippman’s comments about newspaper publisher interest in pursuing ‘young poeple’ interesting.

Publishers here will tell us that Lippman speaks from a US perspective and they will be right.  The changes she discusses are happening here – our model is such that it will take some time for the changes to be noticied.

Newsagents and those claiming to represent newsagents need to watch this interview as it provides a perspective of opportunities (or challenges depending on your perspective of change) which remain undiscussed in newsagent circles. We need to create our own leadership through these opportunities.

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Media disruption

Magazine readers aging

The median age of magazine readers in the US has risen greater than the population accoring to research just published in the US.

Since 2001, 64 out of 90 leading consumer magazines have seen the median age of their readers increase faster than the population at large, according to a MediaPost analysis of the latest figures from Mediamark Research and Intelligence. The analysis, based on MRI’s spring 2009 measurements, confirms the continuation of a long-term trend previously observed in 2006-2008.

This generational shift is seen in our newsagencies every day.  It is why some newsagents are experimenting reconfiguring their businesses to appeal to a younger demographic.

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Newsagency: jack of all trades, master of none

In reviewing online content as part of research on the newsagency of the future, I discovered an excellent review of a WH Smith store by Steve Haywood.

I used to love going to WH Smiths as a child – I lived in a small town that wasn’t big enough to have a Smiths, so it was always a real treat. I could browse through the magazines look at all the books, see exciting new board games and much more. Now though, I realise that although it sells many things, with the exception of magazines you can find somewhere better with bigger stock selling those products elsewhere on the high street.

The Lancaster store is no exception. The front third of the ground floor is dedicted to magazines and newspapers, and there’s no better range in Lancaster. The middle third sells stationary and cards – the cards are often good quality and there is an adequate range of stationary. The last third of the shop sells music, dvd and games but the choice is very poor particularly for games. Most things are a lot cheaper elsewhere too, unless you find a cheap box set, which they often have offers on.

Upstairs they sell books and a small selection of board games. I rarely go up there these days as there is much bigger choice of books and Waterstones, which is just behind WH Smiths. I’m a board game fan and am always disappointed with the games they have on sale. Bigger stores have a slightly better selection, but Lancaster is too small to sell much other than the usual monopoly, trivial pursuit, scrabble etc.

So overall good for magazines and newspapers, but not a lot else. Oh and the Lancaster store (crazily for a newsagent) is closed on Sundays, except occasionally in the run upto Christmas.

This review is a reminded that as retailers we must stand for something for if we don’t we are not memorable and not talked about in positive terms.

We need to take control of our newsagencies and turn them into memorable retail businesses which are unique and profitable.  Some newsagents play in this space today.  Many do not.  It is hard work.  The reward is a future.

WH Smith released their latest results yesterday.   Magazines down 8%.

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