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

The competitive neutrality inquiry into the ABC and SBS is a small business fail for the government

For years, newsagents have called for an inquiry into the competitive neutrality of the government owned Australian Post retail businesses. I wrote about it here in 2005.

One argument is that Australia Post leverages its essential service status to gain access to advantageous tenancy arrangements that are not accessible to newsagents and other small businesses that compete with them. Another argument is that Australia Post leverages its protected monopoly status in leveraging supplier deals.

Australia Post, through its corporate stores directly competes with small business newsagents.

Successive governments have demonstrated no interest into an inquiry.

Fast forward to 2018. The ABC runs a report critical of government economic policy and is hassled by News Corp and wham! we have a competitive neutrality inquiry into the ABC.

The politicians and big business put themselves ahead of the needs of small business retailers like newsagents.

The Australia Post and ABC matters are related in that they are about competitive neutrality.

I say that Australia Post does more economic damage to small business newsagents and other retailers than the ABC digital strategy does to News Corp. and other media companies.

The politicians show their hand by moving quickly on the ABC inquiry and ignoring calls on the Australia Post matter. Big business is their friend. We are not – despite the nonsense they peddle at election time.

My view is underscored by the $30 million given to Foxtel recently without any business case being made and without any requirement on transparency re its use. Oh, and the elimination of TV broadcast licences because of the cost of digital transformation for TV networks. If only we had a government that cared about small business to the same extent.

We in small business need politicians who are as focussed and energised for us and those we serve as those in Canberra who do the bidding of big business. No, actually, we need politicians who serve the whole country rather than so many we have today who serve their mates ahead of the vast majority of Australians. Shame on us, we get those we vote for.

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Competition

Tatts pitching the $12M Powerball for online purchase

This came up on my phone just now. Clicking on it takes me to an App purchase. There is no pitch about in-store.

In the App, here are three update screens, each with information of interest to retailers:

The migration of over the counter lottery purchases to mobile and online is the largest single threat to lottery shopper traffic to lottery retail businesses. Nothing can stop this migration. What retailers can do is work on attracting shoppers for other product categories, while, at the same time, pushing back on capital expenditure demanded by their lottery supplier for in-store changes of doubtful commercial value.

The migration of lottery purchases to online and mobile does not need to mean the end of a business.

In shining as  light on this I am not criticising g Tatts as this is what I waked do if I were them. It is the best move for their shareholders.

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Competition

Lotto betting closer to being banned in Australia

See this release just now from ALNA:

Lotto betting to be prohibited in Australia

Australia’s national industry body for newsagents welcomes the unanimous passing of the Interactive Gambling Amendment (Lottery Betting) Bill through the lower house, to protect consumers

FOR IMMEDIATE RELEASE

Australia, 9 May 2018: Australia’s national industry body for newsagents and lottery agents, the Australian Lottery and Newsagents Association, is pleased that parliament has unanimously supported an amendment to the Interactive Gambling Bill that will bring important new consumer protections by closing the loophole that lotto betting sites have been operating out of.

Adam Joy, CEO of the Australian Lottery and Newsagents Association said, “Today the lotto betting amendment to the Interactive Gambling Bill passed with unanimous support from the House of Representatives, and without even a division. This will protect Australia from synthetic lotteries.

“We are encouraged by the clear intent of the parliament today to rebuke online betting on lottery outcomes in Australia. This is a win for Australians and an endorsement of the Australian Parliament, and we look forward to the amendment passing in the senate in due course.

“The Federal Interactive Gambling Act already made it illegal to sell a scratchy online and play a poker machine online, and the federal government moved last year to further strengthen the act with an amendment to ban online in-play betting on sports and banning credit betting, as well as making it illegal for unlicensed operators to offer online poker. And today, we welcome the passing of an amendment that closes a further loophole in the Act by banning online betting on all lottery outcomes.

“Given the misleading and divisive campaign run to try and prevent the passing of this Bill, we would like to see this Bill sent to the Senate quickly. In the meantime, the Australian Lottery and Newsagents Association will continue to provide strong advocacy for our members, including to help newsagents receive better deals on the products that they are legally permitted to sell, making sure that they aren’t excluded from access to the digital economy, and providing support to assist them in accessing the opportunities from the Federal Budget.

“These include the instant asset tax write-off extension, an extension of unfair contract terms protections, and the new funding provided to the Australian Financial Complaints Authority to give our small business owners access to free, fast and binding dispute resolution.”

The Australian Lottery and Newsagents Association is the only national association representing newsagents and lottery agents in every state and territory of Australia, and are the only newsagents’ association with a national ACCC collective bargaining authorisation. As such, it is the only association that is negotiating nationally with Tatts for further improvements.

ALNA represents over 2,000 small businesses, many of them family-owned, who rely on the sale of official government regulated lottery products. There are over 4,000 lottery retailers in Australia.

On behalf of those businesses and their staff, the ALNA thanks the government for its efforts to bring forward this important reform to protect Australian consumers. In particular, we thank Minister Fifield for his strong leadership, and Michelle Rowland for her bi-partisan support and stakeholder engagement, and also the Minor Parties and Independents. It is evidence that Australian political representatives, no matter what party they are from, understand what is important to fight for.

This is not stopping Lottoland. Here is an ad in the SMH newsfeed just now:

Maybe now VANA and NANA will get behind a single national voice for the good of the whole channel.

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Ethics

It is time for a Royal Commission into retail shopping centre development and retail tenancies in Australia

We, Australians, small business retailers, suppliers to small business retailers, local towns, all of us need a Royal commission into retail shopping centre development in Australia and the behaviour of shopping centre landlords.

There is enough evidence to indicate that an appropriately skilled and resourced Royal Commission could uncover behaviour that is illegal and harmful to our economy and small businesses and families that rely on the small businesses.

I appreciate that the areas I think the suggested Royal Commission cover are broad and could be better served as two investigations. However, the two issues feed into each other. I think they are best considered together.

WHAT IS A SHOPPING CENTRE?

For the purposes of my proposal, I suggest that a shopping centre is a retail development with fifteen or more shops of any size.

While I am sure there is misbehaviour to consider in smaller centres, for management and focus, a threshold of fifteen tenancies, or similar, is needed. Otherwise, any Royal Commission would run too long and cost too much.

RETAIL SHOPPING CENTRE DEVELOPMENT.

This is the beginning of the issue. Whereas in the US and other countries growth in retail tenancy space is flat or declining, in Australia it continues to grow. Some say we already have far more shops that the population can support.

In regional and rural locations the challenge is that a new centre is usually located outside town and its development can gut the centre of town, diluting or killing off the heart of a small town.

In some cases, mid-size centre development tis driven by competition by the two major supermarkets and aided and abetted by several other anchor tenants and supported by Tatts keen to be in all new centres.

  1. Do we need more shopping centre space?
  2. Should there be controls on approving this?
  3. What is the economic impact of the current growth in retail space in Australia?
  4. What is the social impact of the current growth in retail space in Australia?
  5. What is the impact, specifically on small business retailers of the growth in retail space?

LANDLORD BEHAVIOUR.

Talk to any small business tenant in a shopping centre and they will have at least one landlord story that causes them stress.

There is the landlord who did a handshake deal with a party that was negotiating to buy a business. the landlord squeezed and the family business closed. The new tenant moved in without paying goodwill.

There is the landlord that took too long on centre re-develoopmnent, making decisions that saw a 50% drop in shopper traffic, and refused any compensation for retailers.

There is the landlord that permits one sore to be on a % deal where they pay 9% of turnovers in rent with a shop next door not able to have such a deal and managing and occupancy cost of 32%.

There is the landlord that strong-arms retailers verbally, never in writing, never in a way that can be used against them.

There is the landlord that takes a marketing levy every month and spends this on activities that offer no benefit whatsoever to retailers.

There are hundreds of stories.

The Royal Commission needs to listen to stories, all stories. Tenants need to be able to do this confidentially as the fear of reprisal by landlords is real.

  1. Do landlords act unlawfully?
  2. Do landlords treat retailers differently?
  3. Do landlords act in secret knowingly harming small business retailers?
  4. Do landlords abuse funds they collect from retailers for marketing?
  5. Are landlords fulfilling their obligations in terms of bringing traffic to shops in their centres?
  6. How are the various roles of employees paid in landlord businesses? What are their incentives?

There are many other questions to answer. My goal here is to kick off the discussion.

WHY?

Too many families are losing their businesses, homes and other assets. Too many small business operators are having their personal situations, including health, negatively impacted. Too many small business operators are losing their life. Yes, this issue is that serious.

Small business retailers feel helpless. They want their business. It has been their life’s work. They fear without it they will have nothing. This can see them agree to a lease that is at its very foundation doomed inappropriate for their business.

Landlords have the upper hand. They are in control. Too many people in landlord businesses are bullies and aware of how to bully without being caught.

The best way to resolve this is to shine a light. Only a Royal Commission c an have the authority and power to do this.

I get that Royal Commissions are popular right now. This suggestion, however, is important given that those most impacted are also those most vulnerable – small businesses, run by families. Were are told small business is the business backbone of our country. However, there is evidence to suggest that small business retailers are disadvantaged in terms of shopping centre development and retail teensy negotiation.

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Newsagency challenges

Learnings from Magento Imagine 2018 for small business retailers

I am grateful for the opportunity to participate in the Magento Imagine 2018 conference in Las Vegas ten days ago. Magento Commerce is the world’s leading e-commerce platform. My POS software company is a partner and has its POS software integrated with Magento.

At the conference, with several thousand other tech and retail people, there was plenty to learn, including from execs from an Aussie retail business I found myself sitting next to.

Here is a video I shot in the office last week for Tower customers. I share it here as some insights may help folks here think about their own web strategy.

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Newsagency management

VANA in conflict with ALNA as a result of commercial arrangement with MyLotto24

In a move set to further consume politicians and regulators and divide the newsagency channel, VANA, the association representing some Victorian newsagency businesses has endorsed MyLotto24, a business that invites punters to bet on the of lottery draws.

What are the directors of VANA thinking? Not thinking at all in my opinion. I get that they are excited y the percentage of commission from deposits newsagents take and the trail commission for online deposits from accounts they introduce and commission VANA will make if a commission has been negotiated. However, the future of most Aussie newsagency businesses is not agency business. The days of the agency are over.

The article published today by Fairfax raises a few concerns including this quote by Chris Samartzis, the VANA spokesperson, speaking about the ban to be considered in federal parliament:

“The unintended consequences of a blanket ban will only serve to erect a monopoly with zero competition in the market place.”

The monopoly was erected more than 100 years ago when states established their own lottery businesses.

There are other issues with the inadequately researched article by Fairfax such as the mention of 1,200 outlets but I’ll leave them for another day.

The Australian newsagency channel was healing. Actions in recent days by NANA and VANA have taken representation of newsagents back years. I question whether a unified approach is possible from this.

ALNA has run a strong national campaign on this matter and offered strong representation on other national issues, issues  beyond lotteries. It is unfortunate two small state groups try and grab attention from important issues of national importance for all newsagents.

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Ethics

WHY YOU SHOULD VET EVERYONE WHO ASKS FOR ACCESS TO YOUR BUSINESS DATA IF YOU HAVE YOUR NEWSAGENCY FOR SALE

When you list your retail business for sale, I suggest you have a clause in the agreement with the broker requiring them to get approval from you before they provide any business data to any party enquiring.

I am aware of several situations in our channel where a party has enquired and used the data obtained through the broker about the seller’s business to directly approach the landlord to seek to take over the lease.

I have been told of parties using the business data and a relationship with a landlord to facilitate them getting a business for no goodwill.  I am told of newsagents who have lost considerable sums because of this.

My advice is that you should personally approve every party you permit to have access to your business data and that you make this decision after careful through and consultation.

Yes, there are unscrupulous parties in our channel who fake interest in buying a business to provide them access to information they can leverage to their advantage and your disadvantage.

I appreciate the temptation to provide data to every party that enquires about purchasing your business because you are most likely keen to sell. Please do not let your keenness blind you from careful consideration of every decision you make through the process. You can’t take back data you have shared. It could be that you realise too late that a party on the other side is not honourable, as have others I have spoken with.

What I have written here is more relevant for shopping centre based businesses than those in high street situations as shipping centre landlords are, in my opinion, more likely to work with other parties to the detriment of an incumbent tenant. I have seen this happen too many times in our channel and in other retail channels, to the harm of the seller.

  • Be careful who you trust.
  • Vet everyone who seeks access to your data.
  • Control who has access to information about your business.
  • Make thorough notes abut every discussion.

I get that some will see my comments here as paranoid. That’s okay. All I can do is share my opinion. I could considerably focus attention by naming names. I won’t do that here because they would sue for sure. All I can sale is seller beware.

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Ethics

Beyond Lottoland for newsagents

Beyond Lottoland and the battle consuming time and money, here are some key issues I think newsagents ought focus on and need support to work through:

  1. Loss of revenue as a result of migration of over the counter purchases online.
  2. The magazine distribution model: oversupply, undersupply, supply consistency.
  3. Magazine financial model: 25% is not enough.
  4. Stationery: how to be competitive in a rapidly changing marketplace.
  5. Relevance: how to ensure this in a rapidly changing marketplace.

This last point is the most important in my view in that it encompasses relevance of the physical store, relevance online, attracting new traffic, being of service in more special interest areas and being competitive if a retail landscape that is more completive than ever before. It is a catch-all point as it also relates back to the previous four points.

The extent of structural change occurring right now will not be realised by many until it is too late. While I appreciate this sounds alarmist, I do not mean it to be. Take online, while plenty of suppliers traditional to the newsagency channel have fully embraced online through multiple routes, most newsagents are yet to determine their online strategy.

Some of the points above would benefit from national association focus while others are best handled at the marketing group level. Again, point 5 is the most important as, in reality, it is all that matters for what comes next.

I have posted this today as a reminder to all newsagents, that while Lottoland is a hot topic, which has been used to pit newsagents against each other, there are bigger challenges that go to a future beyond this lottery competitor.

Our channel has a history, as agents, of expecting others to address challenges for us. In today’s world, we bear more responsibility ourselves, and in our own commercial communities, to determine our own future.

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Newsagency management

Celebrating the royal wedding: new traffic for the newsagency

I love these two displays in two of my stores leveraging the royal wedding opportunity. They are attracting new traffic and demonstrating the relevance of each business today. They are fun too. Plus, they pitch products people will purchase on impulse.

Magazines are placed adjacent, to maximise the opportunity. The interest in the wedding is extraordinary. It appeals to royal lovers and republic supporters in different ways. This is why the range of products on offer is so diverse.

The pitches you can see reflect how we can leverage major public events to broaden the appeal of our businesses beyond what has been usual traffic for us. The more people think of us for these unique occasions the broader the appeal of our businesses.

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Management tip

Lottoland campaign against newsagents and their national association, ALNA, turns nasty

In my opinion, the campaign run by Lottoland has taken a nasty turn with this press release issued today:

LOTTOLAND AUSTRALIA CALLS ON FEDERAL GOVERNMENT TO REVIEW PROPOSED BAN IN LIGHT OF PEAK BODY REVELATIONS

May 1, 2018

The CEO of Lottoland Australia, Luke Brill, today called on the Federal Government to review its proposed legislation banning online lottery betting in light of revelations that the body supposedly representing newsagents is financially broke – and has misled the public about its membership numbers.

Mr. Brill said that the previously unpublished documents, which had been obtained from the Australian Securities and Investments Commission (ASIC), confirmed that the parent company behind the Australian Lottery and Newsagents Association (ALNA) was facing financial ruin.

“These ASIC documents raise serious questions about the financial situation at ALNA and its ability to continue to operate as a going concern, let alone to represent the interest of its members,” Mr. Brill said.

“According to ALNA’s own auditors, the organisation is in financial disarray, with the auditors telling ASIC that there is ‘significant uncertainty’ as to whether the group will continue as a going concern.”

Mr. Brill also said that ASIC records confirmed that the Federal Government had been misled into believing that ALNA represented the views of 4,000 newsagents nationally, when it fact its membership numbers are substantially lower.

“We’re shocked and disappointed to find out that a body that the Government believes has over 4,000 newsagents nationally as members has in fact only 707 paid members – about 80 per cent less than claimed,” he said.

“This raises major questions about the true intent of ALNA and whether it has misled not just the Government and others MPs, but whether it has also misled the public.”

Mr. Brill accused ALNA of acting against the interests of newsagents by advocating for laws that would hand Tatts (now Tabcorp) an unprecedented monopoly, and appealed to the Government to reconsider the proposed legislation before it was too late.

“Rather than address the shocking state of its financial affairs, ALNA has inexplicably taken part in a $5 million lobbying campaign to convince the Government to ban online lottery betting, which will leave newsagents at the mercy of a Tabcorp monopoly,” he said.

“Given these revelations, we are asking the Government to put a stop to the planned legislation and start listening to newsagents on the ground.”

ALNA has responded with this release:

Response from the Australian Lottery and Newsagents Association (ALNA) 

1 May 2018

Adding another string to their ruthless bow of propaganda and deception, Lottoland have twisted facts and figures about Australia’s national industry body for newsagents.

The Australian Newsagent’s Federation (ANF) Board of Directors who trade as The Australian Lottery and Newsagents Association (ALNA) has instructed their lawyer to investigate all legal avenues against the false allegations contained in Lottoland’s press release dated 1st of May.

Adam Joy, CEO of the Australian Lottery and Newsagents Association (ALNA) said, “The Australian Lottery and Newsagents Association is solvent and represents approximately 2,000-member small businesses. Any rumours to the contrary are unequivocally false and salacious. We have always been transparent and have nothing to hide. Our accounts are independently audited every year and are all available through ASIC, and clearly identify the solvency of our organisation.

“There has not been any misrepresentation of figures of any kind by ALNA – only by Lottoland who have been aggressively spreading defamatory rumours based on inaccurate and incomplete information.”

Lottoland has continuously worked to mislead consumers, governments and the general public, and are now seeking to maliciously defame the very same organisation they sought to conduct business with on three separate occasions.

“We find it ironic that Lottoland are attacking an honest Australian not-for-profit small business association when Lottoland’s very existence and history are based on stunts, loopholes and deception. Today’s defamatory comments further demonstrate that it is not the kind of business Australia deserves.

“From facing legal action for illegally and deliberately misusing trademarks of other businesses, being misleading regarding the winnings available, denigrating newsagents and then wanting to move their customers to Lottoland, and now making false allegations about the industry body that represents approximately 2,000 of these Australian small businesses, Lottoland continue to operate in a highly unethical manner,” explained Adam Joy, CEO of the Australian Lottery and Newsagents Association (ALNA).

Lottoland are based in the tax haven of Gibraltar, and have been granted a licence that allows them to run its Australian online business out of the Northern Territory while only taxing its gross profits earned on punting on horses, trotting and greyhound racing — three categories Lottoland doesn’t even operate in.

And they do all this while operating outside of the much tighter regulations, consumer protections, and higher taxes that official regulated lotteries adhere to.

Here are the facts:

“ALNA are the only national association representing newsagents and lottery agents in every state and territory of Australia, and are the only newsagents’ association with ACCC national collective bargaining authorisation.

“The Australian Lottery and Newsagents Association has a strong relationship with government for this very reason, and is known as a credible, effective organisation – because we are,” stated Mr Joy.

ALNA has clearly articulated to the government that we represent approximately 2,000 small businesses. ALNAs documents submitted to the government in relation to the concerning issue of lotto betting point to there being over 4,000 small businesses operating as lottery retailers whose customers have been impacted and mislead. As the only authorised national body it is not uncommon for us to refer to industry statistics.

Mr Joy explained, “ALNA only ever represents the position of its members and its board, which are newsagents and lottery agents across Australia. And in the interests of Australia’s newsagents and lottery agents, we independently and fairly advocate for them based on their feedback and requests. Our concerns regarding Lottoland have always been based on our members’ feedback, and independent of any other business.”

Auditors have determined that ALNA fairly present its affairs in all material aspects and have a clean report that is transparent and thorough and has disclosed all information required.

The last line of the extract that has been included in Lottoland’s misleading media release, states that ‘the auditors opinion has not been modified in respect of this matter’. For those who may not understand accounting terms, the Auditors are actually stating that the ANF (trading as ALNA) is solvent and is trading within the confines of the law. Any suggestion to the contrary by deliberately misrepresenting ANF financial information is unethical and defamatory. The correct information is publicly available through ASIC.

The false comments made about ALNA are in reaction to a soon-to-be-passed amendment to the Interactive Gambling Act, meaning the banning of betting on lottery outcomes. The Federal Interactive Gambling Act already makes it illegal to sell a scratchy online and play a poker machine online, and Lottoland’s business offering is another questionable model that is deemed inappropriate online. In other words, the main reason for the impending ban is consumer protection.

As Lottoland now faces the closure of the loophole that it operates in, it has pulled out stunt after stunt in desperate attempts to hoodwink the public.

Lottoland are an online wagering company and if they want to enter the lottery market, then they should consider a lottery license and completely change their product to one that is honest and operates within those much tighter regulations to offer consumer protections. Their business  is operating out of a legislative loophole and their approach is tricky and dodgy, and ultimately one that consumers should be concerned about.

The Lottoland release and the media coverage they get, especially on News Corp. platforms, speaks to the tough work faced by ALNA representing newsagents. Getting Tatts engaged and then politicians was there work of ALNA, on the back of relentless attacks on and mocking of small business newsagents by Lottoland.

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Ethics

Lotterywest pop-up trial

Lotterywest has announced a pop-up store trial:

We’re preparing for the first Lotterywest pop-up store at the Mt Hawthorn Streets and Lanes Festival on Sunday 6 May, as a trial project. This Festival is proudly supported by Lotterywest though our grants program.

We’ve partnered with local retailer Denise from The Mezz News, who will close her store and reopen 100m away as a pop-up (temporary) store at this exciting festival.

With 70,000 people expected, we’re aiming to attract new customers and educate them about our products and ways to play. Festival-goers will be able to purchase our products while seeing and experiencing firsthand our grant funding at work. It also provides a new way to showcase the retail channel and our lottery products in a way that is contemporary and where our players are.

We met with retailers in the surrounding area and they were very supportive of this initiative. We’ve also shared the details with the network through InTouch.

If this pop-up store trial is successful, we hope to offer other retailers the same opportunity at local events.

We look forward to giving you an update on the outcomes of the trial.

This trial looks to be a good idea to me, especially their engagement with a local lottery retailer. It would be good to hear what WA retailers think.

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Lotteries

How to secure the goods you sell to businesses and others on account

If you have strong accounts business in your newsagency, business where you supply goods on account to be paid at a later stage, then the Personal Properties Securities Register (PPSR) operated out of the Federal Government’s Australian Financial Security Authority could be useful.

The PPSR was established by the Gillard government in 2012.

You can register your interests through the PPSR in a way that you have almost the equivalent to a floating charge over the business you supply. This means you could retrieve your goods should the customer or the individual you supplied go broke. You could force payment to you in the event they sell the business or other circumstances arise.

Click here to check out the PPSR business guide. You will read that using the PPSR could assist in establishing business finance, if a considerable portion of revenue is to account customers.

The PPSR is a low cost way to register security without the need for lawyers or accountants to become involved. Registering will drive consistency and structure, and provides security in the event of things happening you hope will never happen.

I mention this because of a conversation I had with a retailer over the weekend who lost several thousand dollars when a small local business they supplied went broke. Only secured creditors were paid out. being registered through PPSR may have allowed them to retrieve some of what they supplied. They were locked out by the liquidator as they had no security.

If you sell on account and have substantial business in this area, research the PPSR and see if it offers security of value to you. You have nothing to lose.

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Newsagency management

Promoting Mother’s Day cards at the counter

The impulse card unit we have at th counter is working a treat selling Mother’s Day cards for us. While then unit holds three different card designs, we often only place two so that more of the design at the back can be seen. This is key to achieving full potential of the counter unit placement.

It is a thrill selling out of Mother’s Day card designs because of this tactical shop floor engagement away from the main display.

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Greeting Cards

Pitching the Pacific Magazines UK trip promotion

Here is the promotional display we have placed near magazines to pitch the Pacific Magazines prize of a trip to the UK or a diamond ring. The display is drawing shopper attention right where it needs to to generate the title purchase – which, of course, is the goal of the promotion. We are also tactically supporting the promotion at several locations in-store.

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magazines

Making the most of the royal baby opportunity

I love this counter placement by the manager of one of my stores, pitching the royal baby special issues of New Idea and Who at the counter.

Placed with other royal family related products, this pitch maximises  – the opportunity for easy impulse purchases. It also mixes product categories to demonstrate our product range diversity.

Simple timely counter displays like this work for us.

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Impulse lines

News Corp. to sell regional and local newspapers?

From Mediaweek yesterday:

News Corp in talks with potential buyers of its regional and local newspapers

News Corp has opened talks with potential buyers of its regional and local newspapers, including private equity bidders, reports The Australian’s Dana McCauley and Bridget Carter.

Sources close to the discussions cautioned that the talks were exploratory and may not lead to a sale of any titles.

They said the company was obliged to review its options after receiving interest and no decisions had been made.

News Corp has hired investment bank Citi as an adviser. Potential suitors include private equity firms Anchorage Capital and Apollo. It is unclear which titles are involved.

Staff at some newsrooms were briefed on the situation yesterday.

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Newspapers

The story of the drunk paperboy

From ITV in the UK:

A 64-year-old paperboy who deliberately set fire to his employers’ house in a bid for revenge after his benefits were cut has been jailed.

Neil Hitchin poured flaming white spirit through the letterbox of Adrian and Caroline Watts’ home next to their newsagents in Waterfoot, Lancashire, while they were sleeping.

Hitchin had been working part-time for the couple for five years delivering newspapers, but failed to declare his earnings to the Department for Work and Pensioners, Burnley Crown Court heard.

Prosecutor Richard Archer said Hitchin was caught after Mr and Mrs Watts declared their employees earnings through their accounts and his benefits were slashed.

Hitchin initially planned to ‘fire bomb’ the job centre’ but then ‘switched his attentions and focus on the newsagents itself’.

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Newspapers

Supermarkets beat newsagents on stationery placement

I have visited more than ten supermarkets in the last two weeks to see their approach to everyday stationery, following up a hunch that they are having more impact on stationery sales in newsagencies than considered.

In each case they offered an excellent range, covering everyday needs. Easily shopped. Offering brands people know. At prices that do not feel too high.

While range is important, it is the location of the stationery pitch that drives success in my view. In every case, stationery was placed to maximise passing traffic. In more than half, it was placed at the end of the pet food aisle, and most of the times, toilet paper was in the same aisle. This is what you see coming out of the aisle.

I think it is this placement that impacts stationery sales in a newsagency. People doing their weekly shop can easily satisfy their needs without having to make a separate trip to a newsagency. further, they can do it somewhere they think lower prices are a focus , thanks to advertising saying so, rather than a shop they think is expensive.

Declining stationery revenue in the newsagency channel concerns me as this product category was core, it was a traffic generator. While I do not have shopper traffic intent data, I suspect the  number of people entering a newsagency to purchase stationery is down considerably from ten, five and and even one year(s) ago.

The easy businesses to complain about for declining stationery traffic and sales are Officeworks and Staples online. While I agree, I think the focussed and tactically located stationery pitch in supermarkets is having a stronger impact on our businesses.

What can you do about this?

  1. Review your range. Ensure it is focussed, efficient and fresh.
  2. Review your price pitch. Make sure it is relevant to today.
  3. Review your placement. Make sure it is tactically placed to leverage shoppers not looking for stationery.
  4. Reach outside. Talk about stationery, specific products, on social media.

The alternatives are to complain that some other party is responsible for the decline or to sit by and do nothing. Both those responses are unproductive.

Own it. Understand it. Fix it.

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Stationery

What if you spent your energy on this instead…

Considerable time is spent by some newsagents on lotteries – fighting Tatts, fighting competitors, dealing with onerous shop-fit requirements, arguing about digital screens for which there is no commercial proof of value, competing with the growing number of outlets selling the same products, competing with online.

What if all that time, worry and money was invested in alternative products and services for the business?

If you follow the trajectory of online revenue as a percentage of all lottery revenue for Tatts at some point newsagents with Tatts will need an alternative traffic source.

Thinking about this now, thinking about how to find new traffic, can be positive for the business as you could develop a plan that is more sustainable for the business.

I know it is possible to run a business in the newsagency channel without Tatts. I have three. There are plan ty, too, running successful newsagencies with Tatts.

I sold my newsagency with Tatts over six years ago. I can’t see myself taking on one with Tatts in the future. I like the freedom, not having to submit to rules that do not benefit my business, being responsible for all foot traffic.

I get that others prefer the certain Tatts traffic. However, with that comes obligation that is often not commercially valuable.

Hence, my question / challenge:

What if all that time, worry and money was invested in alternative products and services for the business?

What if… that is all I am posing here. I am not advocating. Rather, I am posing a question, which I hope will get you thinking and rechecking with your own opinion. Regardless of where you land, it is good to check in with your opinion, to challenge yourself.

Reading here and elsewhere, the energy spent doing what Tatts wants, arguing with them and complaining about them is considerable. What could life be like if you were freed from that?

The challenge I put here is somewhat like the challenge years ago of getting out of newspaper home delivery. Early adopters saw the benefits and this put them ahead on restructuring their businesses. Those who came late to the decision did not benefit as much. I wonder is that will be the case with over the counter lottery sales.

So, all I want to achieve today is to have you ask the question of yourself, to have you imagine what the alternative would look like in your business. What you decide is 100% your decision.

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Newsagency management
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