It’s good seeing a major city newspaper with a front page of news and not political lobbying, biased takes and Harvey Norman ads. The NZ Herald is what newspapers, particularly in Melbourne and Sydney, used to be like.
I am here today for the Gift Fair which, while small, was well worth visiting.
It’s been terrific to see WH Smith actively support Sydney World Pride 2023.
I am grateful to have been able to visit Toy Fair in Melbourne yesterday. There was plenty to see, plenty of new products, plenty of show specials.
It runs through to March 8. If you have time and can make it, it’s well worth it as it shows a broad set of shopper reach opportunities beyond what has been traditio9nal for the newsagency channel.
The specials on good turning lines provide extra margin opportunities to make the time commitment, and travel, worthwhile. There are also plenty of opportunities to schedule deliveries through the rest of the year.
All in all, an excellent trade show.
Twice yesterday I experienced a surcharge being added to a purchase, in different retail businesses. In each case, the amount of the surcharge was not revealed until after I had presented the card and in each case the receipt I asked for did not include the surcharge.
Both businesses were selling items over which they had price control, good margin items.
Ian the first purchase I didn’t;lt notice the amount on the credit card terminals, and the staff member could not tell me the amount of the surcharge, only that there was one.
In the second situation, I saw that the surcharge was 8 cents as it showed on the screen, but it was not on the receipt from their POS software.
Applying a surcharge where the items have good margin and where the business can set prices does not make sense to me. It turns me off these businesses.
A bigger problem thous is the poor service of not adequately disclosing the amount of the surcharge and not documenting it on the copy of the receive they provide when requested.
If I was competing with these businesses their current approach to surcharges exposes a weakness that I’d, for sure, exploit.
I get that retailers don’t like credit card fees. At less than 1% of purchase value, they are a low cost compared to other business costs. For example, I suspect the 1% cost is considerably lower than the cost of theft in the business.
To me, a credit card surcharge applies a cost to a business service that actually has time saving and other benefits for the business.
So, yeah, I don’t like it, and I especially don’t like that it’s more often used in independent local retail than our big business competitors. The last thing we need is giving shoppers a reason to preference big retailers over our local indie retail businesses.
Too often, local indie retailers are grouped together on things like this, and that worries me – that enough local indie retailers apply a surcharge for card use to have some shoppers think we all do it.
I get that some want a way to recover the cost of card use.
My point is, applying a surcharge is easy and, I am sorry to say, lazy. There are other moves a retailer can make to claw that cost back.
🚨Out now! New edition of Northern Life! 🚨
Available to buy online now, and copies are winging their way to newsagents today.
You can get your digital copy here:https://t.co/VigV1uFYiA
Here is a sneak preview of what’s inside… pic.twitter.com/J5gJJj1fVo
— Northern Life (@NorthernLifeMag) February 28, 2023
Two stories over recent days reinforce the extent of change in retail and remind all of us in local indie retail to consider change as well.
As I have written here previously, trading outside what has been traditional for your retail business is key to attracting new shoppers, to opening the appeal of your business beyond what has been usual for you.
Yesterday, Bunnings announced the addition of 1,000 pet related lines.
Bunnings gears up to be dog’s best friend with expanded pet range
Emma KoehnHardware giant Bunnings is hoping shoppers will add dog food and toys to their shopping lists when heading in store as the retailer launches a significant expansion of its pet merchandise business.
Bunnings will throw down a competitive challenge to specialty pet retailers, which have boomed since the COVID era, when it expands its range from a couple of hundred items to close to 1000 products from late March.
This is a smart move because the majority of pet related purchases are habit based and habit based shoppers are tremendously valuable. Their regular shop is valuable in the context of what else a business operates.
It’s kind of I told you so but around 5 or 6 years ago I suggested the pet category to newsagents.
The other move in by Chemist Warehouse, into optical.
Chemist Warehouse and Peter Larsen join forces to ‘disrupt’ optometry industry
MYLES HUME
February 15, 2023, 3:18 pm 847The first store in Melbourne is the start of a mass rollout to take place in the coming years.
Australian pharmacy retailer Chemist Warehouse has entered the optometry market, opening its first store in the Melbourne suburb of Malvern and appointing prominent industry figure Mr Peter Larsen as its managing director.On 15 February, Optometrist Warehouse announced it had opened its first location at 120 Glenferrie Road, with plans to “disrupt the industry” in the coming years.
“Initial expansion plans include the opening of a handful of stores in 2023, followed by a mass network rollout which will see Optometrist Warehouse become a household name and the go-to optometry service provider within the Australian market,” a press release stated.
I noticed the Chemist Warehouse move as one of their first locations is two doors from one of my shops.
These are thought out moves, designed to reach new shoppers, to strengthen existing, well-established, businesses. In each case they target product / service categories served by vertical businesses, specialty businesses focussed only on these niches. It’s those narrow-focussed businesses that are at risk.
This is why I think it is vital that any local indie retail business draws shoppers for many different reasons, and not just the usual 3 or for product or service categories that we see are typical in a newsagency business.
So, my question today is what moves are you making to attract new shoppers? You have to have made or be making moves because you need new shoppers, especially new shoppers who would not usually shop your shop.
Across at my newsXpress business we have been focussed on this for years – the need to attract new shoppers, especially the need to attract and serve habit based shoppers.
It’s not too late. There are plenty of opportunities. The moves by Bunnings and Chemist Warehouse should wake some local retailers up, and help them see the opportunities out there.
Retail is changing in 2023 at a faster pace than in recent years. We need to change.
I am writing today as a supplier to newsagents and other retailers. My newsagency software company, Tower Systems, supplies software to more newsagents than all other newsagency software companies combined.
The price of the newsagency software is the same for everyone, $185.00 a month (including GST) rented with no lock in period. You can have as many terminals as you want. Included in the Xero link, Shopify link, Tyro link, Smart Pay link, and plenty more.
A newsagent recently enquired about switching software. After the demonstration, they asked for a better price. Following some discussion it turned out that price mattered much more than what the software did, more than value and benefits they could leverage for their P&L through the software.
They came back a couple of times on price. In the meantime, another company they were talking with dropped their price twice.
We urged them to go elsewhere, and to not ask us again for a better price. Their obsession was wasting our time.
The relationship between supplier and retailer, whether it is for products or services, needs to be considered long-term and in the context of mutual business value more so than what it might cost today.
While there are suppliers desperate to cut prices to win business at any cost, they are unlikely to be the suppliers delivering the best value for their clients. They are unlikely to be the suppliers evolving in ways that benefit their clients.
There is no connection whatsoever between cheapest and best. Anyone chasing cheapest deserve what they get.
You only have to look at the value of a cheap generic tool that you buy from some big hardware business compared to the value of the more expensive brand name tool on the shelf next to it. In my experience, the more expensive brand name tool delivers more value.
While I understand why some suppliers give in to price pressure and discount, and discount some more, that action does not give them capacity to invest in a valuable relationship that better benefits their client and their own business.
This is true with product suppliers, and services suppliers.
While, for sure, you want to make sure that any price you pay is fair, pressuring for a discount just because you want to pay less without even understanding the value of a product or service does not make sense to me.
Our channel does not benefit from people chasing cheap. We are better off leaving that to the $2 shops, the discount variety businesses and other similarly awful cheap shops as the only thing they can compete on is price, and competing on price is a mugs game.
After note: this post is not the business one supplier thinks it is about. In typical fashion, they jumped at a shadow and landed in a puddle.
Several newsagents have contacted me over the last couple of weeks concerned about rent increases, which have ranged from 5% to 15%.
While no one wants a rent increase, every lease I have seen documents the basis for any increase.
A couple of the situations outlined to me recently are outside what the lease allows, but the retailer needs to be prepared to take action to defend their rights, which they appear unwilling to do – they wanted someone else to do that for them.
The bigger challenge right now relates to market reviews. In plenty of locations, the market has moved from when current leases were negotiated, giving the landlord an opportunity, that plenty appear to be embracing.
The rights of a retail tenant vary state by state. It’s not difficult to determine what your rights are and the avenues for appeal and resolution.
My advice to newsagents and other retailers is to make yourself aware of your rights in your state or territory so that you can act on them, rather than relying on someone else to do it for you, maybe at a cost, or maybe with an interest other than your own. Sure, you can talk to your association, or hire a negotiator. I still think the tenant is in the best position to achieve something closer to what they want.
The best position to be in when rent is being negotiated is to be the tenant the landlord likes, trusts and wants. If you are not that, finding someone else may be more appealing to them. So, if you like your tenancy situation, pay on time, keep conflict to a minimum and help the landlord feel proud of their investment.
Through 2023 and 2024 I think we will see continued upward pressure on occupancy costs. In our day to day business decisions we need to mitigate against the impact of higher costs, so we have a buffer of protection.
In the half year results released by The Lottery Corporation released yesterday there are some data pints that may interest newsagents.
The retail channel delivered continued turnover growth (up 3.5% on the pcp). Digital turnover continued to grow strongly (up 10.6% on the pcp) and accounted for 38.4% of all turnover in the half.
The TLC announcement attributes growth to jackpots, in particular, Powerball.
The note about EBITDA is interesting:
The EBITDA/Revenue margin improved from 18.8% to 19.7%, primarily due to the lift in digital share of turnover, a further step up in fees from the Jumbo reseller agreement and interest income on Set For Life deposits.
With the key being: primarily due to the lift in digital share of turnover.
Online is strong and growing, but the trajectory of growth appears to have slowed. This graph from Taylor Collison plotting TLC (and formerly Tabcorp) data shows:
I think a key reason for the small decline in percentage of revenue through the digital channel is the Powerball jackpots and that the infrequent shopper is more likely to purchase in-store than online.
For lottery retailers, jackpots are key to the return they achieve from offering lottery products since very busy lottery days offer an efficiency form which they can benefit.
Overall, the results for The Lottery Corporation are good for their shareholders.
I am sure that lottery retailers will appreciate the changes to remuneration that come into effect mid May 2023:
The Sydney gift fair this past weekend and into this week has ranged from awesome to dreadful depending on the person sharing their opinion.
That it is three different shows over two separated locations is a key frustration, with no obvious reason for a supplier being at Homebush versus the city.
For those with limited time, getting to the three events is challenging.
The geographic split diminishes the value of the show I think.
The other issue for me, from a supplier perspective, is a bigger geographic split. I’d prefer to see gift fairs concentrated to one city, and held twice a year, like in most other countries.
Gift fairs in Melbourne and Sydney add unnecessary cost to suppliers, meaning retailer buy prices are not as low as they might otherwise be.
So, for me, I’d like 2 fairs a year in one city, Melbourne or Sydney. I don’t care which. And, in whichever city, the fair to be in one location, not many kms apart.
Suppliers need a more efficient route to selling to retailers. The current approach benefits the trade show companies and their suppliers of furniture, shell schemes, lighting etc, costing the suppliers, and, ultimately, retailers too much.
The meson gift fairs in Australia really does ultimately hurt local retailers. Talk to suppliers in New Zealand, The United States and the United Kingdom. They all love 2 shows a year in fixed locations.
Click here to see this ad:
Retail Manager: Hawthorn, Victoria.
We are looking for an experienced retail manager, keen to manage their own small business retail shop. Someone with good current Aussie retail skills, ideally in innovative small business.
Yes, we are a POS software company. We also own some retail shops and are keen to find a leader to manage a shop, make it the best it can be and better inform us of local small business retail needs.
Product categories of interest are gifts, homewares, greeting cards and pop culture. We are keen to expand our reach.
We provide considerable freedom, which is backed with encouragement and support from our head office team.
The use of current POS software is key to success as are the growing online sales fulfilled through this business. Experience with Shopify would be a help.
The role includes, buying, hiring and training staff, rosters, shop floor displays, and days to day customer service. This is a lean business where the manager is a key day to day retail associate too.
This role reports direct to our head office retail businesses manager. There are opportunities in the future outside the shop, too.
This is a full time role.
Want to know more, please email mark@towersystems.com.au.
https://www.linkedin.com/in/mark-fletcher-tower/
https://www.youtube.com/@TowerSystemsPOS/videos
No agents.
Permanent residents or Aussie citizens only.
I am glad for the opportunity to visit Liberty again:
People will travel for specialty magazines, as we can see in the US where the range of magazines I found in this Barnes & Noble is common in that group.
I have been thinking about this for a while and wondering what it would look like in Australia with a few newsagencies with a bigger range. And, by a few, I mean maybe only 2 or 3 in a capital city.
I don’t care so much about the weeklies or high volume monthlies – the supermarkets cover them. I am thinking about the titles outside of, say, the top 50 sellers, as outside of that there are many hundreds of titles people wold travel for. I see this today in the newsagency I have that offers the range. It does much better than the shops with a couple of hundred titles.
Anyway, here’s what I saw at Barnes & Noble, front of store, in the front window, attracting plenty of late night shoppers.
And, for those tempted to comment about margin and control: yes, we deserve much more than 25%, and we should have complete control over what we carry. In many situations, this second point wold increase sales.
I’m looking forward to offering these fun and innovative cards. On show this weekend at Reed in Sydney (stand M53).
Special magazine retailers, those with 800+ different magazine titles on their shelves, thrive on diversity in titles as it is this that brings in folks interested in the special interest titles as well as lovers of the magazine form.
The Australian Campdrafting Magazine is a good example of specialty. I get that it’s very niche, and not for most newsagents. I think it’s a good magazine to promote outside the store, as ist speaks to diversity in range and, I think is enough to attract people looking for unique magazines.
So that’s what we did in one of my shops. we used this magazine for an out of store promotion to pitch diversity in range. We try and do this type of promotion weekly on social media, and we put a small amount on the table to support the promotion.
Stationery retail has changed, especially for want versus need purchases. I loved visiting Present & Correct recently.
It is terrific that Lotterywest approached its existing existing retail partners to apply for additional locations:
Interested in another Lotterywest outlet location?
The next round of new Lotterywest locations will be available on our website and open for Expressions of Interest from tomorrow.The Expression of Interest process sources new Lotterywest outlets and business owners, giving retailers the best opportunity to operate a successful lottery business in prime locations for player access.
These locations have been approved after thorough analysis that indicates unmet player demand, minimal impact to existing retailers and a benefit to the community.
How to apply?
You will be able to apply for these new locations via the Lotterywest website and on Retail Link.
Anyone interested in opening a new outlet for any of these locations must complete and submit an online application by 5pm, Wednesday 29 March 2023.
We are also holding an online information session on Tuesday 28 February at 5.30pm. Please email retail.enquiries@lotterywest.wa.gov.au to register your attendance.
If you would like to receive an email notification in future, on the day that new locations are advertised, you can subscribe via the link located on the Lotterywest website.
If you have any questions, please contact Customer Services on 133 777 and ask to be put in contact with Retail Support or your RRO.
Thank you to the 119 newsagents trading under a variety of shingles and in a variety of settings (rural, regional and suburban high street) who provided sales data for this benchmark study. The only connection is that they use newsagency software from my POS software company. Their transparency will help many in our channel.
Many newsagents had an excellent 2022 compared to 2019, the majority who participated in this benchmark study in fact.
Common among those who did well is active engagement in non newsagency traditional product lines, active promotion of the business outside the business, and focussing on three key metrics: basket value, margin and the cost base of the business.
Common among the businesses that did not report as good results is their focus on traditional newsagency operation: lotteries, papers and magazines more so than other product categories.
What is particularly interesting is the results for businesses that transitioned from traditional in 2019 to innovate in 2022. In those cases, the results are extraordinary. In one million dollar business the revenue was almost the same but business GP% moves from 29% to 34%, which is an extra $50,000 in gross profit. In another business they added $120,000 to their $590,000 revenue with the added revenue for items achieving more than 50% GP.
This is the story that stands out when comparing 2022 to 2019, transition. Transition from relying on agency revenue, from relying on commission, to relying of good margin from sought-after products through which the business can attract new shoppers, non newsagency traditional shoppers. A highlight of the transition as evidenced in the dataset is that size and location do not matter. Okay, location in terms of shopping centre matters as it’s not proving to be a winner for our channel, but outside of shopping centres – city or country, large or small – success is equally attainable.
After comparing data from the businesses in the benchmark dataset here are the averages for business performance measurement points and categories, comparing 2022 with 2019:
Since the above results are averages, there are some considerably below and some considerably above.
There is also interesting data within departments, like stationery and magazines:
I have a note about traditional categories: lotteries, papers and magazines. They are important, but they should no longer define your business. Make what you can from them, support them well, but do 9other things to attract new shoppers who will purchase better margin products from you. And on magazines, if you focus on special interest titles and promote them outside your shop, you could do very well.
Common feedback I get from these benchmark studies is can I see the report for the best shop so I can learn. I can’t do that. But I can share snippets. Here are some category specific snippets from different businesses. The results speak for themselves.
If you want better results it is up to you to act.
There is no one size fits all solution, anyone who says there is is wrong.
The first step is to understand where you are at, from the data evidence in your business. next, you need a plan. Then, you execute with clarity and commitment, and draw on the support of others who have done this.
I own newsXpress, a marketing group supporting newsagents. newsXpress helps with this. If it interests you, please email help@newsxpress.com.au or call Michael Elvey on 0400 331 055 – he’s not a sales person, he’s part of the team encouraging success.
Mark Fletcher
M | 0418 321 338
https://www.linkedin.com/in/mark-fletcher-tower/
News Corp emailed newsagents yesterday about cover price increases.
Dear Newsagent/Distributor,
Effective Monday 27 February 2023, the Monday to Friday cover price of the following publications will increase by 30 cents to $2.80.
- Herald Sun
- The Daily Telegraph
- The Courier-Mail
- The Advertiser
- The Mercury
- NT News
- Geelong Advertiser
- Gold Coast Bulletin
- Townsville Bulletin
- Cairns Post
- The Chronicle
- Sunshine Coast Daily
- Mackay Daily Mercury
An updated list of all relevant News Corp Australia publication cover prices, retail commissions, prices to retailers, distribution fees (where relevant) and prices to account is provided below.
We ask that you notify customers of the price change and ensure your systems are updated on the effective dates to reflect these changes.
As retail commission increases, so too will your total home delivery remuneration. We will provide the full detail of this change in a separate letter.
We thank you for your continued support and look forward to continuing to partner with you in driving new sales opportunities.
Should you wish to discuss this with us, please feel free to contact our News Retail Support Team.
It amazes me that, especially in Melbourne and Sydney given the products in those cities, people willingly pay to be told what to think.
Mediaweek has reported on the latest News Corp results. Here’s part that relevant to what we sell:
News Media
Revenues in the quarter decreased $59 million, or 9%, as compared to the prior year, driven by a $65 million, or 10%, negative impact from foreign currency fluctuations and lower advertising revenues in constant currency, partially offset by higher circulation and subscription revenues in constant currency.
Within the segment, revenues at News Corp Australia and News UK decreased 13% and 10%, respectively, as both were impacted by negative foreign currency fluctuations. On a constant currency basis, revenues at News Corp Australia and News UK decreased 3% and increased 3%, respectively. Adjusted Revenues for the segment increased 1% compared to the prior year.
Circulation and subscription revenues decreased $20 million, or 7%, compared to the prior year, primarily due to a $31 million, or 11%, negative impact from foreign currency fluctuations and lower print volume. The decline was partially offset by cover price increases and digital subscriber growth.
…
Digital revenues represented 37% of News Media segment revenues in the quarter, compared to 34% in the prior year, and represented 35% of the combined revenues of the newspaper mastheads. Digital subscribers and users across key properties within the News Media segment are summarized below:
• Closing digital subscribers at News Corp Australia as of December 31, 2022 were 1,011,000 (924,000 for news mastheads), compared to 909,000 (861,000 for news mastheads) in the prior year (Source: Internal data).
Click here to access the company release.
Knowing for certain the performance of inventory in your business will support better decision making. Too many decisions in local indie retail, however, are not made based on evidence.
The very simple approach I outline in this post could be done by anyone, and it could lead to profitable changes in your business.
With retail space usually costing between 11% and 15% of (non agency) revenue, it is usually the next highest cost outside of the cost of stock itself.
Retailers often argue that rent should be lower. It could be that a different view of shop floor performance helps you achieve a better return.
The goal is to show you the performance by space, so you can work out if you should give more space to a category or less. Many shops don’t make changes to their shop floor by moving categories or increasing or decreasing space allocation. The evidence revealed by this quick GP analysis could lead to valuable changes.
Typically, a business owner doing this for the first time will have an ah ha moment, seeing something they had not realised.
I have seen business owners make changes including to floor layout, quitting suppliers and increasing stock weight for some departments.
You can take the analysis a step further by looking only at one department and analysing performance by category, using the method outlined above.
What I have outlined here is very basic, easy to do. It’s not something you need an accountant to advise you on. There is no downside is spending the new minutes it takes to do. So, do it!
I don’t think it will sell that well, people don’t like him.
And with that, the group of four retailers moved on from this stand offering coronation memorabilia at the Spring Fair in Birmingham yesterday.
There were several stands with products. The displays did not appear to attract people from what I could see as I walked past.
In the group of four I overheard there were 2 girls and 2 guys. The age range of this group I eavesdropped on was from 20s to 60s. They all agreed as to popularity, or not as it was in this case.
I’m aware of a couple of Australian importers pitching coronation memorabilia. It will be fascinating to see the interest in Australia.
I think there is a big difference between the pitch cushions, mugs and similar and commemorative mint coin sets. I suspect 2023 will offer us some good opportunities with the latter.
I didn’t come to Spring Fair to look for or consider coronation related products. On first glance I was surprised to see them, but it makes sense here in the UK.
Spielwarenmesse, the international toy fair in Nuremberg/Germany, the world’s biggest toy fair was wonderful this year. I am grateful to have been able to be there, to see this 2023 event first-hand.
I met with plenty of Aussie suppliers who were there as well as some people from businesses not currently in Australia. Some were visiting while others were in the stands of their suppliers.
The sheer size of this event is extraordinary – way bigger than any trade show in Australia. Think the big Melbourne gift fair and multiply that by 10 or more. Yes, it is that big.
But size is not everything. It’s the innovation on show that I loved.
It is interesting seeing toy retailers from the US who I met at the New York toy fair now making the trip to Nuremburg. It makes sense as it is the first big toy show of the 2023 year.
Product launches in Nuremburg will not hit Australia in many cases until late in 2023. having an advance insight into this is wonderful, useful. Early insights into the trends toy designers and makers see as important help too.
A couple of the trend highlights that interested me were the integration of tech, AI specifically as well as mobility products.
Getting around the event was extraordinary. In a day, 25,000 steps is nothing at this event. But in some halls, there were displays of delight and nostalgia. As is always the case at this trade show, the model train displays are a hit.
I appreciate not everyone can get to trade shows like Spielwarenmesse. I am here for newsXpress of course, to meet suppliers to the group, find new suppliers and to collect and share insights with group members. The trip has commercial value.
Thanks to better flight prices between Australia and Europe compared to flying two the US, it is economically valuable to be here, especially since in a week it can be a two trade show trip. But more on that another time.
That so many Australian suppliers are here speaks to the importance of this show in Nuremburg to their business back home in Australia.