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Social responsibility

Newsagents handing back their newspaper home delivery runs need a service contract for dealing with poor newspaper publisher service

The two main newspaper publishers in Australia, News Corp. and Nine Media (Fairfax) have a poor track record managing newspaper home delivery they take over from local newsagents, regardless of whether it is a forced takeover or a voluntary hand back.

They replace what has been for 100+ years a local personal service with corporate impersonal processes.

Whereas newspaper home delivery customers could speak to someone locally with direct knowledge of the delivery situation, in the publisher driven model customers have to navigate impersonal and broken processes that pay little regard to the local delivery situation.

I think newsagents deserve a service contract to cover the first year of post home delivery option. This contract could include the following fees payable by the publisher to the newsagent:

  • $5.00 for each email contact by a home delivery customer to the newsagent asking about home delivery such as where is my paper.
  • $5.00 for each in-store contact by a home delivery customer to the newsagent asking about home delivery.
  • $10.00 for each phone contact by a home delivery customer to the newsagent asking about home delivery.
  • $25.00 additional fee for each engagement where the customer is angry.
  • $25.00 for each call or email contact with the publisher for matters not covered by the above.
  • $25.00 for each call that has to be made or email that has to be sent to the distributor asking where the papers are for the shop.
  • $50.00 per title for each day a newspaper is not delivered to the shop by 8am (or any other time as stipulated by the newsagent based on their early morning trading). The amount could vary based on the usual number of papers sold where the penalty should be double the usual GP$ for the day.
  • $100.00 per title for each day a newspaper title is not delivered to the shop. The amount could vary based on the usual number of papers sold where the penalty should be double the usual GP$ for the day.
  • 250% GP penalty for each newspaper given to a home delivery customer who missed a paper, the publisher cannot rectify and a replacement paper is given from the shop.
  • A flat insert or giveaway fee for each time the newsagent is asked to give something away with the newspaper where the fee is at least 10% of the cover price of the accompanying newspaper and is paid weekly as an automated credit to the account.
  • A fee of $50.00 per 15 minutes for any in-store visit by a newspaper pub lister representative.

I’d make reporting simple with no opportunity for dispute by the publisher for such claim and with payment monthly by direct debit initiated by the newsagent entering contact details (date, time, customer name) into a web portal setup, maintained and paid for by the publisher.

Of course, these fees will seem over the top to most reading them. I have suggested the figures I have so they act as an incentive to newspaper publishers to do better. I reckon can predict some of the reactions people will have reading this.

No publisher will agree to this.

Newsagents have to be kidding themselves if we’d agree to this.

This list is nonsense.

Who do they think they are.

I’m just happy to have given up home delivery, I don’t want to rock the boat.

I’ve moved on.

The response by publishers will be silence. They will ignore the suggestion. They’ll read it here and mutter about it to each other, but we will hear nothing because any request like this from newsagents has been treated this way, with silence.

I started thinking about the list when I saw a query from a long-term home delivery customer to the newsagent who used to deliver their paper to a nursing home. The newspaper publisher had not actioned a change request and the customer was becoming distressed after 4 attempts at contact. They reached out to the newsagent who ultimately organised for the issue to be fixed. They did this in service of a long-standing customer and because they understand personal local service. The newspaper publisher had let the customer down because of the corporate processes put in place to manage home deliveries.

Recently, we did not get the Australian Financial Review in one of my shops that ended home delivery a couple of years back. Two phone calls produced no result. Then, a couple of hours later, the distributor called a number not on the registered contacts list to say it would not be supplied at all. The person with that number had to call the shop. Next, the shop staff had to deal with customer queries and agitation. There were several unpleasant exchanges.

All of this costs money.

The newspaper publishers control the production and distribution of their product, yet they continue to expect local small business newsagents to provide free customer service to cover for their failures.

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Newspaper distribution

Opportunity for small business retailers in the IR reforms

The IR reforms passed by federal parliament give small business owners an opportunity overlooked in much of the commentary in the media. They impose requirements on big business that take away advantages they have leveraged for years. The reduce competitive advantages of big businesses in some areas.

While we in small business, especially in retail, have had the award as our guide, plenty of big business competitors have negotiated agreements that lower their labour operating costs.

The reforms passed, as I read them, reduce the opportunity for this. Click here to see the comprehensive explanatory memorandum.

Also, since many small business retailers have fewer than 15 employees, they are not obligated under some of the changes.

Too much of the media coverage has regurgitated talking points from lobby groups, like the Australian Industry Group, Australian Retailers Association, Australian Energy Producers, Master Builders Australia, Minerals Council and some others representing big business. I don’t feel any affinity with these organisations.

If you go to the source materials on the Parliament website you can read the specifics and form your own opinion.

While there will be concern around changes relating to casuals, I think the changes are ok, fair.

COSBOA, an organisation that claims to support small business, was party to a statement Friday that included:

In addition, the changes to labour hire, also rushed through, will increase costs and complexity for business.

This will hit many small businesses and drive up prices, risk jobs and comes at a time when there are already many pressures on the economy.

I am not aware of any small business retailers who use a labour hire firm.

I can’t see anything in the changes that will drive up prices in small business retail.

I can’t see anything in the reforms that will put jobs at risk.

The changes were not rushed through. They have been on the books for months.

I get that representative organisations need to reflect the wishes of their members and be seen to be doing something. The joint statement from COSBOA and others on Friday reads to me a shouty and lacking detail, being worried for the sake of being worried.

How big businesses have used labour hire arrangements to circumvent awards is problematic I think. It has provided labour at a lower cost, disadvantaging small business competitors who did not enter into such arrangements.

Some media reports and commentators and others have complained that there was no consultation. A quick search online shows that the changes were forecast months ago. Submissions were sought and consultation opportunities were available.

From a small business perspective, if you have less than 15 employees, you’re unlikely to be impacted. If you pay according to the award, you’re unlikely to be impacted. The most contentious issue will be if a casual wants to transition to a more permanent arrangement. It you appreciate them, it’s a good think I think.

But let’s go back to the topic of labour hire arrangements by big businesses. This is about containing the cost of labour to maximise business profit. I’d rather employees have more money in their pockets than the big businesses they work for as the employees are more likely to spend their money in ways that local small business retailers benefit.

My advice to anyone who may think they have an opinion about the IR reforms, read the source material and form your own views on that rather than taking what you read from a news outlet.

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Social responsibility

Newsagents ripped-off by News Corp Taylor Swift magazine terms

Newsagents selling the Taylor magazine from News Corp from this Saturday, December 9, for $9.95 make just 10% out of which we have to cover labour, retail space, EFTPOS and theft costs.

Depending on the payment method, newsagents can lose between 1% and 6% of a purchase price in fees. At the high end it would leave 39.8 cents, 4%, from which to cover labour and theft.

Labour on circulation products sits, on average, at 12% of overall revenue and theft sits at somewhere between 3% and 5%.

The Taylor magazine will be loss making for plenty of newsagents. Thanks News Corp.

What News Corp. is doing here setting a 10% commission / gross profit percentage is disrespectful of local small business newsagents. It does not allow newsagents to even make a living wage from selling this title.

All of this from a company heavily invested in shouting (yelling) at the federal government about cost of living. Yet, here they are financially harming newsagents in terms of cost of living.

I wonder how Taylor Swift and her organisation feels about the financial arrangements imposed by News Corp on local small business newsagents and their use of her name and brand to do so.

I am confident the News Corp. has it within its business capacity to treat local small newsagents more fairly with this Taylor Swift title. For a company so opinionated about others and their masthead commitment of we’re for you, their actions speak other words: selfish, uncaring and certainly not for local small business newsagents.

Their pitch to newsagents is gushing:

Taylor Swift fever has swept the globe during her epic Eras Tour, and now it is nearly time for Australia to bask in her glittering glory.

Celebrate the iconic singer with this special 100-page souvenir edition magazine with bonus poster inside.

Ahead of her concert dates in Melbourne and Sydney in February 2024, the Taylor magazine is packed with 100 glossy pages of details about the Eras Tour, the evolution of the singer from sweet country star to global sensation and a deep dive into her music.

Also in the souvenir edition magazine Taylor:

  • Discover how big a Swiftie you are with our Taylor-made pop quiz
  • The men (ahem, Travis Kelce, Harry Styles and Joe Alwyn please step forward) who have played a starring role in her life
  • Her jaw-dropping red carpet fashion moments
  • Plus, the records she has smashed as one of the world’s top entertainers

Taylor magazine is on sale from Saturday, December 9, for $9.95 at participating newsagents, Coles and Woolworths.

I wonder what the terms are for supermarkets Coles and Woolworths. While their margin may be the same, is News Corp. paying their a ranging or stocking fee, a promotion fee or offering some break in ad rates to compensate as I doubt that these supermarket giants would sell this for 10% only without any other financial benefit for them.

Taylor Swift has a track record of doing good where she travels and performs, helping local charities. her generosity has been well documented. If only News Corp. seeking to profit from Taylor’s fame was even modestly generous to local small business newsagents when it comes to the sale of this special Taylor magazine.

News. Corp is treating newsagents as if it is the 1950s. It is disrespectful. It demonstrates a lack of care for our channel.

If News Corp did care about newsagents they would offer this product at a considerably better margin.

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Social responsibility

Scandal at Sports Illustrated magazine over AI content and fake reporters

Futurism has this most incredible story. Here’s part of it:

Sports Illustrated Published Articles by Fake, AI-Generated Writers

We asked them about it — and they deleted everything.

There was nothing in Drew Ortiz’s author biography at Sports Illustrated to suggest that he was anything other than human.

“Drew has spent much of his life outdoors, and is excited to guide you through his never-ending list of the best products to keep you from falling to the perils of nature,” it read. “Nowadays, there is rarely a weekend that goes by where Drew isn’t out camping, hiking, or just back on his parents’ farm.”

The only problem? Outside of Sports Illustrated, Drew Ortiz doesn’t seem to exist. He has no social media presence and no publishing history. And even more strangely, his profile photo on Sports Illustrated is for sale on a website that sells AI-generated headshots, where he’s described as “neutral white young-adult male with short brown hair and blue eyes.”

Ortiz isn’t the only AI-generated author published by Sports Illustrated, according to a person involved with the creation of the content who asked to be kept anonymous to protect them from professional repercussions.

Read the rest of the article if you’re interested in magazines, AI, journalism and business ethics.

This is brazen stuff being reported from making up fake AI journalists / writers, claiming they are real and then deleting them when asked and offering no comment, editorial note, or other response.

All publishers should follow this story.

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Ethics

The Optus outage and retail

The now 5-hour nationwide Optus outage is impacting many. While there is a temptation to pile-on, my advice is to keep any social media posts to the practical.

  1. If you’re trading as usual, tell people via social media.
  2. If you  don’t have EFTPOS, tell people via social media.

I’ve seen several use the outage to pitch cash. I don’t see that as helpful right now.

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Social responsibility

Your local newsagency is not a child care centre

A mum a child, around 6 or 7, entered the newsagency the other day. Mum took the kid to our toys area, said something and left. We saw mum walk towards a nearby supermarket. We told the kid to go after their mum.

Mum came back with the kid and ripped into us telling us that we should not have told their kid to follow them, that it was none of our business. The admonishment went on for a bit.

We explained that we are not a child care service and that unattended children are reported to centre security, who will attend and remove them for their safety and our safety. The mum responded with even more choice words and admonishment.

This happens every could have weeks in the newsagency in a large shopping centre. Parents seem to think it is okay to leave their young kids with us while they shop elsewhere.

Our position is no, we’re not a child care service. Any child found in the shop alone is reported to security, for their own safety.

All that would need to happen is that a kid left alone trips or otherwise injures themselves in the shop without a parent present and we would be in a legal minefield.

Or, what if someone noticed a parent leaving a kid and the kid was taken by them? What then?

Parents leaving their kids don’t seem to have thought through the consequences of something going wrong in the shop while their kid is left without supervision.

It is frustrating that we have had to say on social media that our newsagency is not a childcare centre.

There may be some reading this who think it’s okay. We all have to made decisions on matters like this in the context of our own situation. The shop I am writing abut today is in a large Melbourne suburban centre. We are near two exist. Abduction would be easy. The kid drifting off to other shops would be easy, too, as would getting lost in a crowd.

The risk for the child and for us and those who work in the shop is too great. hence our zero tolerance policy.

Back to the kid who was left, given how the mum spoke to us, we feel for how life might be at home for the kid.

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Customer Service

More challenges for vape retailers

I don’t know why any retailer sells vape products. They are a questionable product surrounded by controversy and, from a health perspective, leading to harm. I certainly have no interest in sticking vape products enemy shops.

But, since plenty of newsagents do …

A letter from the NSW Chief health Officer recently has raised alarm among vape retailers.

These statements are what really concern the retailers:

“You cannot rely on the labelling of e-cigarette products to know whether products contain nicotine.”

“It is your responsibility to ensure that any e-cigarette or e-liquid products your business sells do not contain nicotine (for example, by having them independently tested by an authorised facility)”.

Retailers and some who represent them say it is unfair that they, the retailers, have the obligation to determine if what they sell is legal. They say that governments, federal, state, should stop inadequately labelled and mislabelled products from getting into Australia.

The Australasian Convenience and Petroleum Marketers Association has written about this issue.

“Directing retailers to verify and certify the contents of products that they did not manufacture is far from reasonable and appears legally invalid. By default, it is an admission that Australian Governments are failing to properly enforcing labelling standards for vape products”, said ACAPMA CEO Mark McKenzie.

“Like their customers, retailers must be able to rely on the information provided on product labels and therefore all Australian governments have an absolute responsibility to ensure that manufacturers’ meet their legislative obligations in respect of product labelling – regardless of whether that relates to tobacco content, alcohol content, sugar content, fat content and so on”, added Mark.

While I get that product labelling is important and that retailers should be able to rely on labels. We know that right now with some vape products that is not possible. All of us in retail have an obligation to know what we are selling. If we cannot be sure, don’t sell it.

Let me finish by noting again that I have no interest in selling vape products in my newsagencies. I got out of tobacco in 1996. At that time my view was that the category had no place in a family friendly business.

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retail

If you wonder about the relevance of the newsagency channel, consider taking a stand on the Voice referendum

As the number of newsagency businesses in Australia and the foot traffic into newsagency businesses declines we have to wonder about our relevance.

There was a time when we were at the centre of each town. While some newsagencies are, and plenty are thriving, the channel, nationally, is confronting a relevance crisis.

Not that it would happen but I wonder what the impact might be if we, as a channel, took a stand on the Voice referendum and actively promoted a Yes vote.

We are uniquely positioned because many of us sell News Corp newspapers that have been actively campaigning against a Yes vote. Whether we like it or not, our shops are being used to magnify the News Corp interference in the referendum, their interference in our democracy.

What if we as a channel put up signs in our windows promoting yes, and on our social media. What if we placed a poster like this one above News Corp titles:

I get that some customers might be unhappy, but I suspect they might be among the perennially unhappy group because they read content designed to make them unhappy.

Taking a stand says something about us, what we believe, what we support, and that we are unafraid to make that statement.

If we do nothing out of fear for what customers and would-be customers might think, we commit ourselves to being ignored, we show ourselves as being irrelevant.

What our channel has is location, across the country. If we leveraged that for a national, channel wide, statement of support, we run the risk of lifting the perception of our channel out of the 1980s  and into the mindset of 2023. It’s a scary thought. One we should want, well those of us who plan to be in the channel for the long term at least. This question of the relevance of the newsagency in the mind of an everyday Aussie should matter to us.

I’d love to see consideration given to this: the associations and various other groups coming together to take a stand nationally, in our front window and next to newspapers.

We could even be the local outlet for yard signs others could collect and put up in support of a yes vote. Talk about being relevant.

I reckon plenty of folks would be happy to see us do this.

We’d run the risk of feeling better about ourselves for doing this, and how great would that be!

And to customers who disagree, I’d say: isn’t it great that we live in a country where we can disagree and still offer a g’day and a smile every morning.

The poster is one being pitched by Dr Monique Ryan to Kooyong (VIC) voters.

Across at https://www.yes23.com.au/ there are plenty of resources including art for posters and other formats. Here is one example:

There are so many resources, some many opportunities for supporting Yes. I do think that if our channel engaged as I hope we would, that we would do so in a visually unifying way as that’s part of our key need.

My personal position is that I will vote Yes. It makes sense to me. There is nothing to fear. It’s long overdue.

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Ethics

It’s not smart to pitch local with products made overseas

I was drawn to the celebrating local souvenirs stand in the WH Smith store at Adelaide airport. What a terrific pitch I thought, until I checked out some of the products.

Pitching products made overseas on this display represents a fail in my view. But, hey, maybe enough shoppers either don’t check or don’t care. It’s up to the individual as to how they read this.

For plenty of the products on this stand, the celebrating local part is the local image or Adelaide printed on a product. It’s hardly a celebration of local in may opinion.

Back in my own shops I know most people who are keen to support local want to know where products are made. Some make the point they do not want to be caught buying something made overseas and presented as local.

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Ethics

I can’t see any value in newsagents selling vape products

I am surprised that even with recently announced plans to ban recreational vaping in Australia some newsagents have reportedly been pitched to take on the category.

The legal future of recreational vaping is all but dead in Australia, thankfully. That alone should take it off the radar of any retailer. But, as can happen with things that are challenging to access, there can be value for some in carrying the product, even if it is done under the counter.

Given the new regulations outlined by the Health Minister on May 2, 2023, at the National Press Club, there is no legal place for vape products in any retail setting other than behind the prescription counters in pharmacies. That’s the clear message.

Hopefully, this government has acted early enough for Australia to not be shrouded in a vape cloud like in the UK, where on the high street even few shops is either a vape shop or a betting shop.

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Social responsibility

Beware fake $50 notes

Fake $50 notes appear to be in circulation at the moment. The first sighting this time around was in the Northern Territory. The news is a reminder to be vigilant.

The Reserve Back website has excellent details on how to spot counterfeit Australian banknotes. I urge you to print this and ensure all team members have read and understand it.

The photo is of one received at one of my shops some years ago.

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Social responsibility

Poor form by one newsagent competing with another newsagent

There is a town in Australia where one newsagent travels to the trade shows near and far, seeking out new suppliers and offers regular innovation on the shop floor. In this same town, another newsagent copies what they can, what willing suppliers let them get away with, and without the cost of travelling to trade shows.

It’s happening in more than one town though.

It sucks when you invest time and money to find new suppliers, especially suppliers who have never supplied retailers in our channel before, only to have a shop close by copy you.

It’s pathetic really, flattering to be copied, of course, but pathetic.

In my experience, these copiers don’t think they are doing anything wrong. If challenged, some have even claimed the innovation was their idea first, which, of course, it was not.

This lazy copying means the innovative newsagents work harder at their innovation, and they change their shops more frequently. This means the copiers need to pick up their pace, or give up at the thought of hard work.

Lazy retailers are ultimately found out, either by themselves when they feel exhausted at copying innovators or by suppliers who block them from copying or from local shoppers who eventually see what is happening.

If you are the retailer being copied, make a loud noise about new products, launch them so the locals know you were first, and, if you’re game, congratulate your copier on joining you in selling something you brought to town first.

If you are the copier, take a look at yourself in the mirror, know what you are doing, stop cheating.

Copying another local retailer’s innovation is like cheating on a school exam. You are the only one who loses, eventually.

…

It’s easy to get in your head about being copied. It’s disheartening to see your investment diluted by spoon copying you. It can make you angry. It can be demotivating. It happened to me. The marketplace can have a way of dealing with it though. When you see your business three of four times bigger than the business copying you, when you continue to innovate while they work in darkening shadows, your own dark thoughts can feel good.

The best advice I have, I think, is to not spend any time thinking about competitors. They are not relevant to what you do in your business. Since you have no control over them, there is no point worrying about them. You’re better off worrying about, investing in and working on that over which you do have control.

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Social responsibility

I’ll be glad to see cheques go

It’s good to hear the federal Treasurer, Jim Chalmers, say cheques will be phased out in Australia. From the Guardian:

In a speech to be delivered to the Australian Banking Association in Sydney on Wednesday, Chalmers will say there has been a 90% decline in the use of cheques over the past 10 years alone but it remains a legacy payment method, while other economies have transitioned to digital payments.

In my shops, cheques not been sent or received for many years. In my software company, we’ve not sent a cheque for many years but we have several customers who steadfastly send cheques.

Cheques take more time to process.

I’ll be glad to see them go.

And, as for the whiners out doing the media rounds today saying the move would be ageist and discriminatory I’d say go find something real to whine about.

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Social responsibility

News Corp. unhappy with the ad ban announced by the Victorian state government

The Herald Sun has a story, not behind their usual pay wall, complaining about the ad ban announced this morning by the Victorian Premier.

Concerns have been raised over an Andrews government halt on print advertising in the Herald Sun and The Age, with fears that Victorians will miss out on vital information such as campaigns to reduce the road toll, bushfire safety initiatives and public health alerts.

That opening paragraph made me laugh. I live in Victoria and doubt that many outside News Corp would have raised such concerns.

The Herald Sun is Victoria’s most influential media brand and the most-read newspaper in Australia from Monday to Saturday.

That influence was on show in the recent federal and state election results. Despite pages and pages of false and misleading stories and daily shouting at Victorians, Victorians did not listen, they were not influenced.

The Herald Sun is not important, not influential.

Technology today provides governments more timely and effective platforms through which to communicate vital information. The print newspaper medium is of rapidly diminishing value for anything, the News Corp versions of print newspapers even more so.

In my opinion, the decision makers at News Corp. have for too many years tried to interfere in our our democracy. One only has to look at their treatment of newsagents over the decades to see the extent of their selfishness.

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Newspapers

Why do newsagents have to pay for electronic invoices for magazines?

My POS software company, Tower Systems, serves 3,000+ retailers in the jeweller, bike shop, gift shop, garden centre, firearms dealer, fishing bait and tackle shop, toy shop, music shop, produce business, sewing shop and health food shop retail channels, as well as newsagents.

It is only newsagents who have to pay their supplier for electronic invoice data, which is ironic because coupled with the electronic invoice data is returns data that saves the supplier a tremendous amount of money.

It’s time that EDI was provided to newsagents at no cost whatsoever.

The current arrangement is rooted in the practices of decades ago.

I wonder if our supermarket competitors have to pay for this.

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Ethics

The Pharmacy Guild protests too much about prescription changes

It was galling to watch the president of the Pharmacy Guild weep and moan on TV last week about the planned changes to more efficient prescription access to 300 drugs on the Pharmaceutical Benefits Scheme.

The planned changes mean people accessing these medications will be able to get 60 days worth of their medicine instead of the current 30 days worth, meaning one dispensing visit for 60 days instead of two.

I get that pharmacists will lose some revenue. Those needing the medication will save time and costs involved in getting out to collect them. The government will save costs.

I think the gains for consumers and government (taxpayers) outweigh the modest cost to pharmacies.

If you believe the weepy president of the Pharmacy Guild, this move will end some local pharmacies. If that the case, the businesses must not have been strong enough to start, they must have been relying on their government protected monopoly.

In my opinion, pharmacists have been protected for too long, and at too much of a cost to Australians.

24 years ago Aussie newsagents were stripped of the monopoly they had over local newspaper and magazine distribution. This was taken from us under the guidance of the Howard Coalition (Liberal / national) Government. It was taken from us without any compensation. The cost to the value of local newsagency businesses was tens of millions of dollars in business valuation and tens of missions of dollars of revenue.

Good retailers in the newsagency channel thrived. The deregulation made them evolve from agents into retailers.

While kicking the protection crutch of protection hurt and demonstrated a lack of care for local small business retail by the Howard government plenty of us got through it. For sure, compensation would have been good. But, maybe those leading the channel at that time did not have the skillset to achieve anything for newsagents. We’ll never know. It’s 24 years in the past now.

So, back to the pharmacists, while they can moan and complain, and cry, the reality is that the current approach to dispensing prescriptions is inefficient and expensive, to the benefit off protected pharmacists. Making them more efficient and saving money have to be a benefit to the health system and to Australians more broadly.

Local retailers I have spoken with since the tears were shed on TV a few days ago offered no support for pharmacists. It seems to me like they over-egged their response to what feels like a reasonable move.

In the 23 years since deregulation, as I have often covered here, newsagents have benefited from relying less on protection and more on being entrepreneurial. Most in our channel today have stable businesses, plenty are growing, with the growth com ing from decisions we make, rather than some legacy suppliers.

Footnote: I do understand that in some settings, particularly in regional and rural Australia, and in genuine community pharmacies, the move may present some challenges. I suspect that if you look at actual financial details in those businesses you will see the impact will not match the emotional outpouring of some in the last week.

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newsagency of the future

Will some UK newsagents stop selling some newspapers because of increased cover prices and reduced margin?

There is an interesting discussion in the UK at the moment on newspaper prices and margin for local newsagents. This story from the Press Gazette sums it up.

Newsagents ‘could review selling’ some titles after price rises and margin cuts

The Federation of Independent Retailers has raised the prospect three times since December.

By Bron Maher

The Federation of Independent Retailers has again raised the prospect that its members may stop stocking some newspapers after The Guardian raised its weekday cover price to £2.80 but lowered the margin kept by newsagents.

It is the third time since December that the trade body, which represents more than 10,000 businesses including newsagents, off licences and post offices, has made the suggestion in public statements.

Newsagents receive between a sixth and a quarter of the cover price of each newspaper they sell. However, almost all national newspaper publishers have lowered these proportions over the past decade as they have simultaneously raised cover prices.

Press Gazette research in January revealed how UK national newspaper cover prices have sharply increased in the last decade as publishers have sought to counter the impact of falling advertising and increased newsprint/distribution costs.

The most recent warning from the FIR was prompted by news that Guardian News and Media plans to raise the price of the daily and weekend Guardian, as well as The Observer, by 30p per copy to £2.80 and £3.80 respectively while cutting the percentage margin for newagents to 21.5%.

The federation’s national president Jason Birks said: “Neither retailers nor their customers will take this news well.  For retailers, this could mean reviewing the profitability of selling the Guardian against other product categories and for customers, it could mean buying the paper on fewer days of the week.

“Given the low circulations of the Guardian and Observer, this is a risky strategy indeed, which is why I have written to [GNM chief financial and operating officer Keith] Underwood.”

The Guardian has responded by encouraging stockists to enrol in its “Enhanced Margin Uplift” scheme, which boosts the amount they earn when selling papers to Guardian and Observer subscribers. The company said it believes the scheme “will mean that we pay one of the highest margins in the market to retailers”.

In March, DMG Media announced that the retail margin for the Daily Mail would drop to 21.8%, prompting Birks to say he believed that “some members may consider delisting the product and, indeed, whether they continue selling newspapers because their hard work that has kept the news industry afloat for years is neither recognised nor appreciated”.

And in December the Fed criticised both DMG Media and Reach over margin drops. DMG Media decreased the retail margin for the Mail on Sunday and the Saturday edition of the Daily Mail to 20.5%, while Reach lowered the margin across its titles to “an all-time low” of 18.5%.

“Reducing margins to a measly 18.5% will simply speed up the decline of the industry, as news retailers downgrade newspaper displays in their stores and look to other categories that demand less work but where there are greater rewards,” Birks said.

In 2013 three weekday newspapers – the i, The Times and the Racing Post – offered 25% margins to newsagents. Today the highest margin offered, by the i, is 22%.

The only paper not to have lowered its retailer margin over the past decade is the Financial Times, which still offers stockists 20% of the cover price.

As newspapers’ cover prices have risen, so have the amounts of money retailers earn per paper sold. However, the decreased margins mean they earn less than they would have otherwise.

For example, the Racing Post, which nets newsagents the most pence per copy of any weekday daily newspaper, used to earn retailers 50p a copy. It now generates 88p a copy. If the newspaper had kept its 2013 margin of 25%, each copy of Racing Post sold would earn a retailer £1.13.

Some regional publishers have kept margins steady, with National World for example announcing cover price increases in December without dropping retail terms. And in August last year, the Fed praised DMG Media for (at the time) keeping its retail margins the same while increasing the Daily Mail cover price.

While I feel for UK newsagents, we are far worse off here in Australia with margins close to half what they get in the UK. Yet, most newsagents here are publicly quiet on the appalling, disrespectful and socially selfish commercial treatment of retail newsagents by newspaper publishers.

The result of declining value of newspapers to newsagents because of falling sales and falling margins is that the products are moved to less expensive space. Senior management in newspaper publishing companies are not bright enough to understand that a different approach could reduce sales decline. But, as they show us, they know best.

Their ignorant treatment of the Aussie retail newsagency channel by newspaper publishers could make an interesting business studies for universities in years to come.

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Newspapers

Is declining trust impacting newspaper sales?

While we all know that digital platforms are disrupting print newspapers, I wonder if declining trust is impacting print as well.

In the recent federal and Victorian elections we saw print newspapers that lobbied for a result failed to make an impact for their chosen candidates, demonstrating that once great mastheads that could decide an election outcome no longer have that clout.

Every piece of lobbying dressed as ‘news’ further challenges trust.

A few days ago, the Launceston Examiner newspaper was caught publishing a letter that was found to contain a made up claim on a serious matter.

Key points.

  • A letter published in a major Tasmanian newspaper claimed a man undressed in front of children in the female changerooms at Launceston aquatic centre — but the pool has denied this ever happened

  • The following day the newspaper published a clarification, saying “unfortunately we appear to have been misled”

  • The editor of the newspaper is a former adviser to former PM Malcolm Turnbull and failed Liberal candidate Katherine Deves

The letter claimed that a male entered female change rooms at a pool and started to undress, and ‘wrote’ to the newspaper over trans related concerns.

The council has quickly confirmed that the incident did not occur.

The newspaper editor claims to have spoken to the letter writer. I think she made it up, he has said.

If there is such a letter, and that is a big if, the editor has failed to appropriately check prior to publishing. This is where repetitional damage is done to the Examiner.

The Launceston Examiner is not alone. News Corp. outlets have a reputation in this area I think. And, it leads me to wonder if these games of political and public opinion interference diminish trust in the medium and whether that is a factor in declining print newspaper sales.

I mean, do people want to pay to be told what to think?

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Ethics
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