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

Understanding ATO benchmarks is important to small business retailers

At the Vodafone COSBA National Small Business Summit in Sydney yesterday I was fortunate to talk with a representative of the ATO about their engagement with Sm all Business and, in particular, their use of benchmarks as a trigger for further investigation.

The ATO has benchmarks for various types of businesses, including newsagency businesses. The benchmarks evolve as they see businesses evolve. In our channel this is a challenge given the disparity between newsagency businesses.

Whereas for decades our businesses were, overall, similar in percentage of product categories sold and operational overhead percentages, today, the similarities are not there. Today, a single benchmark for newsagency businesses does not make sense.

Check ut the current ATO newsagency business benchmark and see for yourself.

I am grateful for the time to discuss this in detail with someone from the ATO, to point out the differences in newsagency businesses that were not there three or four years ago and to share that the differences are growing apace.

This matters since the benchmarks are a trigger within the ATO for them taking a closer look at a business, which could be an audit. Audits can be expensive so anything we can do to avoid this unnecessary cost the better.

Of course, there are reasons businesses should be audited such as situations where owners take cash out of the business, act to hide tax obligation or otherwise misbehave. In these situations or in the event of suspicion about these situations, investigation is vital not only for the ATO but for the channel.

Hopefully, the discussion I had will add a useful voice to consideration for a review of the approach to benchmarking newsagent businesses and, maybe, separating the channel out to more useful business category subsets that serve the situation of the channel today compared to a few years ago.

I see the need in the channel benchmark studies I undertake and can plot the drifting from the almost singular model to what we have today of many quite different businesses operating under a single shingle.

I am grateful that the ATO representative at least listened to the explanation of why the single benchmark approach may not be useful today.

12 likes
Newsagency management

Meet the new minister for small business

I was fortunate to be at day one of of the Vodafone COSBA National Small Business Summit in Sydney yesterday. The opening keynote speaker was Senator Michaelia Cash, the new Minister for Small Business.

While one needs to be cautious of any politician from any party, since their core focus is to the base that will elect them, I was impressed with Ms Cash’s grasp of her brief.

A headline of her appointment, of course, is that Small Business is now back in cabin et. That is good because if the minister is active in representing the department, it puts a Small Business perspective at the cabinet table.

This is good because, as we were reminded several times yesterday at the COSBOA conference, Small Business accounts for close to 50% of Australia’s GDP and we employ close to 5 million people. These are extraordinary stats.

Minister cash opened her speech with:

Thank you for being the engine room of the economy.

Thank you for providing millions of Australian jobs

Thank you for being the bedrock of the local community.

You employ 5 milliion Australians.

Small business brings innovation and culture to the community.

She went on to share her the story of her Small Business owner father and how he get her and her sister to work Sundays, when the shop was closed, to stock shelves. It was a good story to share to demonstrate empathy for many aspects of small business ownership. She talked about Small Business being a family affair, which it is.

The family is physically and emotionally invested in the business. That’s what we learnt as kids.

I heard a similarly empathetic story from John Howard when I met him years ago so, yes, I am cynical of politician stories when it comes to Small Business. However, stories of personal Small Business experience are better than  none.

Minister Cash spoke of the instant asset write off and hinted there would be another look at this, giving hope that it may be on-going and the amount could increase. Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman certainly made a point about this when  speaking on the topic later later in the day.

While the Minister for Small Business strayed into politics, much of the speech was non political and speaking to the needs of Small Business. It was encouraging. It was also encouraging that the Shadow Minister for Small Business was in the audience and was equally supportive of Small Business.

I think we in Small Business can have high hopes for what the Morrison government will achieve in this area in advance of the next federal election. Given our size in the economy and their understanding ding of our value, we ought have high expectations.

This Summit organised by COSBOA, of which ALNA is an active part, is an important event in the Small Business calendar as it brings together associations, government departments and others to discuss topics that matter to small business.

While I may write more about this another time, I’d note that one on one discussions with folks from the ATO, the office of the Fair Work Ombudsman, Google, NAB and others were most interesting. Indeed, the bank discussions were fascinating for what they did not know about our channel.

I am grateful to COSBOA for the invitation to attend.

12 likes
newsagency of the future

Renewed focus on vaping leaves retailers with unclear guidance on the product category

There has been a surge in reports about vaping, e-cigarettes, in recent months, reports critical on the impact of vaping. Here are four of the recent reports:

  1. ABC triple j.
  2. New Atlas.
  3. Business Insider.
  4. Science Daily.

Then, there is the report from Convenience and Impulse Retailing claiming a CSIRO study assists people to quit smoking. That is not the full story. Click here for the CSIRO report. As you can read, it offers six conclusions:

  1. Conclusion: the evidence available suggests that regular use of e-cigarettes is likely to have adverse health consequences. There is a lack of clarity about the magnitude of adverse health effects, and the quantity of e-cigarette use required to trigger adverse health effects.
  2. Conclusion: In many countries where appropriate evidence is available, it appears that e-cigarette use occurs with cigarette use. However the evidence is consistent in suggesting that use of e-cigarettes by non-smoking youth predicts future smoking. While many smokers and former smokers state a preference for e-cigarettes as a smoking cessation method, the effectiveness of this method compared with other smoking cessation methods is not known.
  3. Conclusion: based on the current evidence it is not possible to determine whether e-cigarettes have a positive or a negative effect on health in countries where they are permitted.
  4. Conclusion: when e-cigarettes are used by smokers instead of conventional cigarettes there is evidence for improvement in individual health. However, use of e-cigarettes may also introduce independent health risks, and ‘dual use’ (using both e-cigarettes and conventional cigarettes) is popular.
  5. Conclusion: It is a critical research question to determine the effectiveness of e-cigarettes compared to other smoking cessation methods among Australian smokers generally, and also among specific groups with a high smoking rate. The rate at which young people and adults in Australia start smoking as a result of using e-cigarettes should be assessed and monitored to fill a research gap. On present evidence, it is not possible to determine whether less restrictive access to e-cigarettes would reduce rates of smoking in Australia.
  6. Conclusion: There does not appear to be a consistent pattern of rate of e-cigarette use compared to tobacco smoking across countries. However, while tobacco smoking is a well-established practice that varies widely between countries, e-cigarette use has spread across countries in the recent past with different rate of device availability, marketing, familiarity and regulations. It is plausible that a between-country relationship for tobacco smoking and e-cigarette use could develop in the future.

The gap between the six conclusions and reports, like in Convenience and Impulse Retailing, demonstrate how vested interests are dealing with issues related to vaping.

Fairfax media reported yesterday on the source of some funding for a pro-vaping lobbying group, showing that some funding came from businesses selling vaping products.

Vaping remains controversial on a range of fronts. Retailers wondering if vaping products are a replacement for tobacco products have research to do, to guide their decision on whether to engage or not.

The differences between countries on regulation fuels confusion on vaping. Considering this, it feels like we are some distance from a resolution that can be trusted.

15 likes
Tobacco sales

Leveraging Kylie Jenner to make Vogue a sell out

While the comms about this special edition of Vogue has been poor and the shape will challenge newsagents with traditional pocket space per title, this issue will sell out. My suggestion is promote it on social media, at the counter and at the front of the store. Aim to sell out early.

Update: given what has happened, this is a stuff up by the publisher. Most newsagents I know have sold out and are fielding many calls from shoppers seeking copies. Of course, there are none left.

I’m told there is talk of a possible reprint without the gifts. I suspect this would be a mistake as people did not bu this issue for the print content.

Gifts with purchase need to support the print product, not distract from it.

8 likes
magazines

Father’s Day cards work at the newsagency counter

This placement of two Father’s Day cards at the counter has been working a treat in part because of the tactical placement, next to the EFTPOS terminal, and in part because of the stand-out cards themselves.

We have tried different cards, these two have worked the best at this retail location. The Batman card in particular is loved by shoppers. Inside, it is an homage to the original comic and TV series.

While the Father’s Day season peaks in the week before, and even then a few days before, we have had success driving impulse purchase weeks out with this counter-based tactical placement of Father’s Day cards.

We changed cards once, sometimes twice, a week, choosing cards that complimented each other, cards that spoke to our range in a way that we hoped was different to what shoppers might see elsewhere.

We have supported the counter selection with other tactical placements in store too, to provide multiple touch-points for the cards we shine a light on.

Father’s Day 2018 is going well. Of particular interest is the success we are having with gifts that are not your usual Father’s Day gifts. This has been a core focus of ours, seeking to play outside what is usual for gift shops and others in this crowded Father’s Day space.

From Ted Baker to other world-class brands along with pop-culture brands, we have played beyond what has been traditional for the channel as have plenty of other newsagents this season.

9 likes
Gifts

Is Fairfax ignoring newsagents with newspaper cover price increase?

A distribution newsagent advises the cover price for the Sydney Morning Herald (and The Age?) will not provide an increase in revenue for newsagents.

Newsagent income from newspapers used to be a percentage of newspaper cover price. When the cover price went up, so did the money made by newsagents.

The model changed with to a fee for service model from what I understand.

It will be interesting to see if newsagents take action against Fairfax in retaliation against their price move since this price change announcement is a reminder to them of what they lost.

I do wonder if supermarkets have lost in the same way.

I know of newsagents who have quit papers because of falling traffic generation and falling commercial benefit to their businesses. Makes sense.

10 likes
Ethics

Do you still do magazine putaways in your newsagency?

A couple of newsagents told me this last week that they are quitting magazine putaways out of frustration with the supply model. In one case, their frustration is to do with partworks and the inability of Gotch to supply to satisfy even only cutaway customer orders. In the other case it is to do with inconsistent supply of a couple of special interest titles and the lack of information from Gotch about this.

Told them I would put the topic up here for comment.

For what it is worth, I think the core problem here is the inadequate use of technology by Gotch. Their newsagent-facing systems are poor and always have been. A modest investment could help newsagents be the magazine experts most would like to be in their local communities.

Repeated requests and submissions to Gotch achieve nothing. Newsagents lose. Newsagency  business customers lose. Publishers lose.

11 likes
magazine distribution

Lotterywest strategic plan shared with retailers

Continuing the model of excellent transparency with their retailer network, Lotterywest yesterday shared their latest Strategic Plan, which offers valuable insights and outlines their business plan.

I encourage newsagents outside of Western Australia to read the plan as it outlines how a state owned lottery operation can work for the community and other stakeholders in the network.

4 likes
Lotteries

Pitch Better Home & Gardens with papers

I have written this here many times in the past but it is worth repeating. If you place some stock of Better Homes & Gardens next to your top selling newspaper sales will increase, you will achieve impulse purchases.

This placement costs nothing extra in terms of inventory, k time and space. It is an easy win for the business. It is good customer service.

6 likes
magazines

Newsagents in tourist areas continue to struggle to get the magazines they could sell

A newsagent contacted me recently for help getting minors magazines for their tourism destination area. Their pleas to Gotch had gone unanswered.

Similar please from me on behalf of other newsagents over man y years have elicited words but little action from Gotch. The company appears incapable of getting magazines to some places where they would certainly sell.

I hope magazine publishers who want to sell more magazines are reading this.

Here is what the latest newsagent who contacted me wrote about the issue. here is their initial contact with me:

Hi Mark,

I just wanted to comment on the magazines an area that goes through the roof for us, is impossible to get Gordon and Gotch to send more mags. Both Exmouth and myself are struggling to get them to send more like a several years ago.

People on holiday read magazines at the beach, resort or caravan park….
Its frustrating because they are not listening.

I went back to them and offered to reach ut to Gotch myself for them. Here is their response, which was forwarded to Gotch:

Hi Mark,

It would be great to have another voice that could help them change there opinion of mags in holiday destinations

The issues:-

1) It takes 2 weeks to up any magazine – eg Womens Weekly and New Idea which are a weekly magazine.
2) They have reduced my selection of mags so that the variety is not there on the shelf – when people are on holidays they will buy 2-4 magazines at one purchase
3) The grey haired nomads are here and want there “That’s Life”, “Take 5”, which constantly run out because they only send 5
4) The grey haired nomads also want knitting and arts/craft books and we no longer get the variety they want.
5) After taking over from Network Services my mags were halved and I’ve been trying ever since to replenish the new stands I purchased to hold all the mags. Its terrible to see those same shelves half empty.

I asked them to continue with the same order from Network Services and told me I needed to go onto the website and order them, which was nearly impossible because they were not coming up on the website to start with. This was so much work for me to just get a few mags back and felt it was not my responsibility because they took over the business and I don’t get paid a lot for the mags anyway.

I did consider at one point cancelling everything but I am the only person in Coral Bay that sells mags….

I’ve had a look and my downturn in revenue has dropped 50-60%

Mainly I am frustrated and have given up because I am in the busy season now with 200+ customers coming through my doors every day.

Thanks for listening if nothing else happens.

So far, no word from Gotch.

I hope magazine publishers who want to sell more magazines are reading this.

18 likes
magazine distribution

Planned leadership succession at ALNA

An announcement from ALNA this morning on smooth, structured, leadership succession:

ALNA continues to represent Australia’s news and lottery agents with new CEO

The Australian Lottery and Newsagents Association appoints Ben Kearney as its Chief Executive Offer effective October 1st, 2019

Australia, 23rd August 2018: The Australian Lottery and Newsagents Association (ALNA), Australia’s national industry body for newsagents, has announced that Ben Kearney will be promoted to the role of CEO on October 1st 2019.

Ben Kearney has held senior roles at ALNA for over 10 years, most recently as National Manager of Policy and Government Relations and prior to that General Manager of ALNA Tasmania. He was also the Executive Officer of the Lottery Agents Association of Tasmania for a number of years.

Adam Joy, CEO of the Australian Lottery and Newsagents Association, “It is with great satisfaction that I announce that Ben Kearney will be my successor as CEO of the Australian Lottery and Newsagents Association, when I leave the organisation at the end of September 2018.

“We implemented our succession plan in late June 2018 for a smooth transition to incoming CEO Ben Kearney so that members nation-wide will continue to be supported and strongly represented.

“Ben has demonstrated proven leadership in representing the issues that affect news, distribution and lottery agents, serving them well, and with a strong appreciation of the challenges that our members face on a daily basis, as well as the opportunities in front of them. He has been instrumental through his hard work and relentless dedication in delivering some of the biggest legislative changes that have been passed to help ALNAs members.

“Over the last decade, in my time as CEO and prior to that COO at ALNA, I have seen the members of ALNA prove that the industry is strong and thriving, as news, distribution and lottery agents evolve and serve the communities that they operate in. I’d like to thank my team and members across Australia for their commitment and inspiration over the last ten years.

“Along with the very dedicated team and board at ALNA, we have achieved great things to help members improve their profitability and future-proof the industry. This includes being instrumental in the banning of lotto betting in Australia, negotiating millions of dollars of cost savings for members across the country, advocating for the introduction of state and Federal Small Business Commissioners and Ombudsman, seeing in the introduction of critical Unfair Contract Terms legislation federally, and pushing other reforms to improve merchant charges and to improve fairness in competition laws.

“I know that Ben will build on these achievements and lead ALNA in enabling Australia’s largest independent retail and home delivery group to continue to grow and succeed. And as the only news, distribution and lottery agents’ association with a national ACCC collective bargaining authorisation, the organisation will benefit from his track record. We are very pleased that someone of his calibre and reputation will be taking the reins and driving the industry even further, and I’m really excited to watch the sector’s continued growth.”

Incoming ALNA CEO, Ben Kearney, said, “I am pleased to be able to serve our members as Chief Executive Officer. It is an exciting time for the industry, and I am looking forward to this new opportunity and to consulting with members on their key priorities, and accelerating the industry. Adam has provided great leadership for our industry in his time as CEO and we will build on this by continuing to be collectively invested in our success moving forward. It is crucial for increased profitability and our sustainability. I look forward to building on what ALNA has already achieved, working alongside our excellent state General Managers and staff.”

Current CEO Adam Joy will continue serving in his role and working closely with management and the board until the end of September and will be offering any requested assistance for an additional six-month transition.

6 likes
Newsagent representation

Best-practice magazine fixture

I am often asked about the best approach to displaying magazines in today’s environment. While each retailer needs to consider their own situation, for many years, my view has been that purpose built magazine fixtures are a waste of money.

For me, the best location for magazines in any store is the back wall, as a feature, with a good sign above to draw attention.

Here are three photos of one low-cost fixture. In this instance they have small single title clip in shelves. You could replace this with shelves long enough to hold six or more titles.

The photos tell the story of the simplicity of this low cost approach to full face display of magazines.

For my next wall I would do this. In my most recent wall, completed four years ago, magazines are on the back wall but using a more expensive fixture clipped into a basic frame with deep pockets to hold titles.

13 likes
magazines

If your newsagency business is drought affected

This advice released by the ATO could be useful:

We understand drought can put extra pressure on people and businesses. That’s why we’re making tax easier while times are tough.

Help and support

We can help with:

  • tailored payment plans with interest-free periods
  • more time to pay your tax
  • waiving penalties or interest you might incur during drought.

Call 1800 806 218 to discuss your situation and find out how we can help.

Receiving drought assistance payments

It is important to understand possible tax implications on payments you receive.

  • Amounts for emergency relief, such as food and personal clothing, are not classed as income and will not be taxed. Deductions can’t be claimed for the costs of buying these items.
  • Amounts to help your business are income and subject to tax. However there will usually be no tax to pay if you spend those amounts on expenses you have in relation to your business, such as purchasing feed for your livestock.

Making donations

If you plan to donate to drought relief, donations of $2.00 or more that are made through a registered charity, will be tax deductible.

Remember, registered tax and BAS agents can help you with your tax.

Find out about:

3 likes
Newsagency management

Magazine distributor Gordon and Gotch blocks small business newsagent return of AFL Team Coach product

This communication from Gotch to a newsagent yesterday demonstrates the lack of control newsagents have over magazine supply inn their businesses. This drives lack of reasonable control over labour cost, space cost, shrinkage cost and cashflow cost.

The newsagent, for reasonable commercial reasons, decided to return the title. Here is the Gotch response:

Subject: AFL Team Coach Product 7231831

We have received your request for a return on AFL Team Coach Product (either Cards or Albums or both). At this stage, your return has not been processed. As you are probably aware, Team Coach product is extremely sort after and you should be able to sell all stock received to date. On this basis we would like you to reconsider this request and hold on to the product. Also, you will not receive any further stock from us so you will only need to sell what you have received to date.

However if you still would like to return the product, please email our National Contact Centre with the following info at contactus@gordongotch.com.au. However please DO NOT send back any stock with your regular Gotch returns until we respond to your request.

1. Product type (Cards or Albums)
2. Account number
3. Qty being Returned

Regards,
Gordon and Gotch

What a poor response and a waste of time for the newsagent on tiny margin product.

There should be no approval needed. This product is sale or return. The newsagent has no control over supply. Gotch needs to be responsible.

No wonder newsagents are reducing their space commitment to circulation product.

Until newsagents are treated with fairness and respect, like business partners, magazines will continue to fade in relevance. This can be reversed. It would take publishers pressuring Gotch to fix their systems, once and for all.

16 likes
Ethics

Is cashless retail an option for newsagents?

Here is a short piece about cash retail I wrote and shared with customers of my POS software co. on yesterday.

CASHLESS RETAIL.

Over the last ten days in the US on three occasions in different shops I had to switch from a cash purchase to using a card as they did not have enough money to make change. The change needed was $27, $16 and $32 respectively. In each case they did not have enough change in their til and, hence, asked me to pay by a card.

Near our office in Melbourne, Cannings the butcher switched to cashless trading three or four years ago,

Recently, we were offered a tenancy at Malvern Central shopping centre and had decided if we went ahead with the planned gift and collectibles shop we would do so as a cashless business.

Being cashless can cut time spent banking, reduce employee theft opportunity and reduce the cost of change mistakes. While there are downsides for sure, that more and more businesses are switching indicates valuable upsides.

We mention this in our email today so it is on your mind and part of consideration for your own shop.

Going cashless needs planning from an operational perspective as well from a shopper communication perspective. While not for everyone, it is proving to be successful for plenty.

I think this is relevant to newsagents as we are as affected by retail changes as any other retailer. However, the scope and intensity of change confronting us is amplified by print media disruption, migration of lotteries online, changes in buying habits of stationery shoppers and more. While we cannot stop these changes, we can be aware and lean-in.

Going cashless is an option to contemplate for retailers without lotteries or any other agency business that doe snot involve payouts. While for sure there would be some shopper pushback, I can see plenty of upside as I note in the article above. On fraud alone there could be significant benefit. The challenge here is that the majority of newsagents do not know the cost of cash related fraud in their businesses until someone is actually caught.

I have shared this article today not to advocate but, rather, to put the topic one the table for contemplation and discussion.

10 likes
Newsagency management

Online lottery purchases for Tatts now 17.7% of revenue

In the 2015 financial year, online revenue accounted for 12.5% of Tabcorp (Tatts – The Lott) lottery revenue. In 2016 the percentage was 13.5%. In 2017 it was 14.5%.

In the financial year to June 30, 2018, according to the annual report just released by Tabcorp. This, on page 12:

Lotteries has over 2.9 million registered digital customers and digital accounted for 17.7% of all lottery sales.

That is a whopping 22% increase on the previous year. What for three years was a steady increase in the percentage of lottery revenue coming from online, the 2017/18 year saw a spike, a significant spike.

While I have no evidence, I do wonder if this is the Lottoland effect. Lottoland has spent a fortune on advertising promoting online purchase of lottery products. The bulk of that spend has been in the 2017/18 financial year. I suspect The Lott has benefited from that Lottoland advertising.

Newsagents need to factor in continues migration of over the counter lottery purchases to online. If I was a Tabcorp shareholder I would want to see this. If I was a regular lottery punter, online is what I would use as it is time efficient, accurate and easier. It fits with the migration of other in-person transactions to my phone and / or computer.

The evidence is the evidence. There is no refuting it. The challenges are: to be informed and to factor this evidence into your business planning.

For what its worth, I think the most critical point here is to be actively working on new traffic generation. This is done through offering products that will appeal outside your usual pool of customers, products people will travel to purchase, products people will purchase again and again and products that you actively and primarily promote outside your business.

Are reality is newsagents should have been working on new traffic opportunities for years as these things the time to develop and mature. There are missteps to learn from and small successes to nurture.

While I understand some will be angry at the growth on online reported for The Lott, that achieves nothing. It is a business putting its shareholders first. tats is wha you have to doo. that is why you have to be working on opportunities outside what has been usual for you – to chase a better than usual result.

11 likes
Uncategorized

Visual merchandising inspiration

I am grateful to a colleague for sharing this terrific display of toilet paper.

I love the use of a bathtub in a candy store I saw last week:

You really can use anything to display stock.

I love this fun placement out the front of a different candy store that I saw last week:

I love this placement of cards at the shop entrance, such that you can see it from out the front of the shop.

This tactical placement cold attract card shoppers who might otherwise has passed buy the shop.

6 likes
Greeting Cards

Managing feed-through card stock

I am grateful for the opportunity to film this open card storage fixture at a Walgreens in the US last week. The merchandiser was a wealth of knowledge on this and other parts of their process.

This flip open unit appears to be way more efficient than the drawers shopfitters and card companies determined Aussie newsagents needed.

9 likes
Greeting Cards

News Corp circulation results

The latest News Corp annual report provides a glimpse into the performance of its Australian Newspapers. When considering the data included and considering previous circulation data we can see declines. For example, as reported in Crikey today,  the circulation of the Herald Sun is down 8.5%.

Newsagents see the challenges of print every day in sales numbers.

Here is the part of the News Corp. Annual Report dealing with Australia in its entirety:

News Corp Australia

News Corp Australia is one of the leading news and information providers in Australia by readership, owning over 200 newspapers covering a national, regional and suburban footprint. During the year ended May 31, 2018, its daily, Sunday, weekly and bi-weekly newspapers were read by over
8.4 million Australians on average every week. In addition, its digital mastheads and other websites are among the leading digital news properties in Australia based on monthly unique audience data.

News Corp Australia’s news portfolio includes The Australian and The Weekend Australian (National), The Daily Telegraph and The Sunday Telegraph (Sydney), Herald Sun and Sunday Herald Sun (Melbourne), The Courier Mail and The Sunday Mail (Brisbane) and The Advertiser and Sunday Mail (Adelaide), as well as paid digital platforms for each. In addition, News Corp Australia owns a large number of community newspapers in all major capital cities and leading regional publications in Geelong, across the state of Queensland and in the capital cities of Hobart and Darwin.

The following table provides information regarding key properties within News Corp Australia’s portfolio:

News Corp Australia’s broad portfolio of digital properties also includes news.com.au, the leading general interest site in Australia that provides breaking news, finance, entertainment, lifestyle, technology and sports news and delivers an average monthly unique audience of approximately 9.1 million based on Nielsen monthly total audience ratings for the year ended June 30, 2018. In addition, News Corp Australia owns other premier properties such as taste.com.au, a leading food and recipe site, and kidspot.com.au, a leading parenting website, as well as various other digital media assets. As of June 30, 2018, News Corp Australia’s other assets included a 13.5% interest in HT&E Limited, which operates a portfolio of Australian radio and outdoor media assets, and a 30.2% interest in Hipages Group Pty Ltd., which operates a leading on-demand home improvement services marketplace.

Further into the report is this interesting par on ad revenue:

The Company’s print and digital advertising revenue is also affected generally by overall national and local economic and business conditions, including consumer spending, housing sales, auto sales, unemployment rates and job creation, advertisers’ budgeting and buying patterns, which tend to be cyclical, as well as federal, state and local election cycles. In addition, certain sectors of the economy account for a significant portion of the Company’s advertising revenues, including retail, technology and finance. Some of these sectors, such as retail, are more susceptible to weakness in economic conditions and have also been under pressure from increased online competition. A decline in the economic prospects of these and other advertisers or the economy in general could alter current or prospective advertisers’ spending priorities or result in consolidation or closures across various industries, which may also reduce the Company’s overall advertising revenue.

Then this on newsprint:

Newsprint Prices May Continue to Be Volatile and Difficult to Predict and Control, and any Increase in Newsprint Costs may Adversely Affect the Company’s Business, Results of Operations and Financial Condition.

Newsprint is one of the largest expenses of the Company’s newspaper publishing units. During the quarter ended June 30, 2018, the Company’s average cost per ton of newsprint was approximately 1% lower than its historical average annual cost per ton over the past five fiscal years on a constant currency basis. The price of newsprint has historically been volatile, and a number of factors may cause prices to increase, including: (1) the closure and consolidation of newsprint mills, which has reduced the number of suppliers over the years; (2) the imposition of tariffs or other restrictions on non-U.S. suppliers of paper; (3) an increase in supplier operating expenses due to rising raw material or energy costs or other factors; (4) failure to maintain the Company’s current consumption levels; and (5) the inability to maintain the Company’s existing relationships with its newsprint suppliers. Any increase in the cost of newsprint could have an adverse effect on the Company’s business, results of operations and financial condition.

And this on print media disruption:

The News and Information Services segment’s advertising volume and rates, circulation and the price of paper are the key variables whose fluctuations can have a material effect on the Company’s operating results and cash flow. The Company has to anticipate the level of advertising volume and rates, circulation and paper prices in managing its businesses to maximize operating profit during expanding and contracting economic cycles. The Company continues to be exposed to risks associated with paper used for printing. Paper is a basic commodity and its price is sensitive to the balance of supply and demand. The Company’s expenses are affected by the cyclical increases and decreases in the price of paper and other factors that may affect paper prices, including tariffs or other restrictions on non-U.S. paper suppliers. The News and Information Services segment’s products compete for readership, audience and advertising with local and national competitors and also compete with other media alternatives in their respective markets. Competition for circulation and subscriptions is based on the content of the products provided, pricing and, from time to time, various promotions. The success of these products also depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising is based upon the reach of the products, advertising rates and advertiser results. Such judgments are based on factors such as cost, availability of alternative media, distribution and quality of consumer demographics.

The Company’s traditional print business faces challenges from alternative media formats and shifting consumer preferences. The Company is also exposed to the impact of long-term structural movements in advertising spending, in particular, the move in advertising from print to digital. These alternative media formats could impact the Company’s overall performance, positively or negatively. In addition, technologies have been and will continue to be developed that allow users to block advertising on websites and mobile devices, which may impact advertising rates or revenues.

As a multi-platform news provider, the Company recognizes the importance of maximizing revenues from a variety of media formats and platforms, both in terms of paid-for content and in new advertising models, and continues to invest in its digital products. Smartphones, tablets and similar devices, their related applications, and other technologies, provide continued opportunities for the Company to make its content available to a new audience of readers, introduce new or different pricing schemes, and develop its products to continue to attract advertisers and/or affect the relationship between content providers and consumers. The Company continues to develop and implement strategies to exploit its content across a variety of media channels and platforms.

12 likes
Media disruption

Pitching Father’s Day in the newsagency

We are getting a good reaction to the different Father’s Day pitch. Here is some of the select that is attracting shoppers. We have deliberately selected items that will have appeal beyond the season and items that will attract people who might otherwise not shop a newsagency for the season.

12 likes
Gifts

Specialisation in retail can drive needed new traffic

I visited this shop, Into The Wind, recently and was impressed with the extent of their specialisation. They sell wind related products like chimes, weather vanes, flags, kites and more. Their specialisation was focussed and deep. They do it well, and this drives traffic.

More and more newsagents are doing this, chasing new traffic through deep specialisation outside what has been traditional, leaving traditional newsagency lines in the shop often but as the impulse rather than destination purchase.

Inside Into The Wind, on the Saturday I was there, the shop was visually busy and busy with shoppers. I am usually not a fan of visual business but in this case it works a treat. Here is how it looked:

There is no rulebook for this type of specialisation. In my experience, it is best found organically, in collaboration almost with local shoppers, personal interests and a knowledge of what you can do online to find shoppers beyond those who walk past the front door of the business.

I think every indie retailer needs to be aware of specialisation opportunities beyond what has been usual for their shingle – such is the state of retail today.

I am grateful for the opportunity to see plenty of specialist retail stores, some of which I share here. Some make sense for a local situation wile others have me wondering, like:

7 likes
Newsagency management
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011