Victoria: newsagencies remain open
Click here for the detail list of restrictions. Here is the first part of the announcement:
Father’s Day selling earlier this year
Last week, we saw good Father’s Day card and gift sales. The season has started already this year, way ahead of what is usual for Father’s Day.
It is common that around 75% of Father’s Day card purchases are in the last 4 days of the season. based on sales already, I think we are likely to see sales over a longer period as well as an overall boost in sales.
If you have Father’s Day cards and gifts and are yet to put these out, my suggestion is you put them out now and start pitching them on social media. Placement in-store should be front of store or the window if you have a window.
On social media, I think it is useful to pitch to unique captions.
Due to corona, people are unsure as to how and when they might shop. Plenty are buying now for later because of these uncertainties.
Also, with most supermarkets yet to put the season up, you can benefit from a first mover advantage.
In my own shops we have gone out early with Father’s Day cards and gifts front of store as well as online. We have been particularly surprised, and pleased, with the early Father’s Day card sales.
On social media we have engaged with a series of pitches, including this announcement video that the season has arrived in-store.
Celebrating the Tokyo 2020 Olympics
It is certainly odd selling products that celebrate the Tokyo 2020 Olympics that should be being held right now but are not on and may possibly not be held at all based on the latest analysis. However, that is exactly what we are doing with this and other mint coins from the commemorative 2020 Tokyo Olympics mint coin set sourced from the Royal Australian Mint.
Collectors are collecting even though the 2020 Olympics are yet to be held. Some think this anomaly makes the coins more interesting and, for some, more valuable.
In-store, the collection is an interesting talking point and another marker of an odd 2020.
I had thought that the Mint might recall the product and start again but once I realised the cost of that and the interest in the coins regardless of the event itself not happening I understood why the products are out there, and selling.
This is another unique experience of 2020 from which we are learning … and I like that.
Victorian retailers experiencing the importance of online
The on-going challenge of COVID-19 infection in Victoria is hitting even high street retailers with shopper traffic down for this segment of retail that had been resilient over recent months.
This past week has seen a measurable downturn in traffic.
Retailers with an online presence have seen an increase through that channel. One high street retailer in Victoria retailer I spoke with yesterday, not a newsagent, said that over the counter was down 30% while online was up 200% with the business overall trading at close to the same revenue level.
In my own situation, online is helping with sales fulfilled through the post as well as sales fulfilled through click and collect. indeed, click and collect has become quickly understood and appreciated by shoppers, especially older shoppers.
These days, being flexible with how and when we transact business is important. Online is no longer niche or a game, it is a core need in business … challenging for plenty but core.
Ovato publicly announces no physical magazine returns for strongnewsagents
Ovato hit Twitter yesterday with an announcement re no physical returns. This is great news as there is no better incentive to reduce waste in magazine printing than eliminating physical returns.
OVATO RETAIL DISTRIBUTION – NO PHYSICAL RETURNS PROGRAM: IMPORTANT UPDATE – https://t.co/pfyCNa4qp7
— Ovato Retail Distribution Aus (@Gordongotch_au) July 30, 2020
UPDATE @ 10:00am: I have been contacted by Ovato,. Apparently the Tweet announcement was inaccurate. Here is what I received:
I have been alerted that our marketing team has posted on twitter that we have stopped all physical returns. You have picked up on this on your blog today.
This was actually the EDM Mailchimp notification sent out to newsagents on our NPR (No Physical Returns) program that has been running for over 3 years that was linked to twitter in error. We do a quarterly review of all EDI sales data from XchangeIT and then confirm to agents who are on if they continue to pass the criteria and confirm to agents who have just passed they are now on the program. From the latest review with now have 1,129 newsagents on the NPR program with 25 joining from August. We know this is an extremely beneficial program to newsagents saving time and real cost and is a key focus for XchangeIT and ourselves to work with agents to improve their data and get more newsagents on the program.
In regards to continuing to simplying the magazine category for returns to save time and money we confirmed in June to all newsagents not on the NPR program that we had permanently stopped full copy returns except for partworks and selective trading cards from July. We confirmed this after doing a 3 month trial from the start of COVID in April which we received very positive feedback. The newsagents on this program still have to send back tops so we can perform audits.
I would be grateful if you could update your blog post on this do avoid and further confusion and we will send an update and apologise on twitter to clarify the mistake.
Okay, so returns of unsold magazines is still a thing, which is disappointing since newsagents can’t control wheat they get yet they have to spend money returning what does not sell.
Here is a new tweet from this morning:
Our post yesterday on No Physical Returns was supposed to be sent only to agents who supply us with daily sales data that pass the criteria, but in error was also sent on our twitter feed. We apologise for this mistake.
— Ovato Retail Distribution Aus (@Gordongotch_au) July 31, 2020
Here is the original detail Ovato shared on Twitter:
To ensure continuation of this process, the following terms and conditions apply:
You will:
- Continue to send regular Sales Inventory Data (SL2 files)
- Submit returns files via XchangeIT not via web and Ovato Connect
- Maintain minimum Gold Status through XchangeIT
- Pass Ovato Retail Distribution’s data review process where variances in your EDI scan data and returns claims are evaluated across the entire Ovato Retail portfolio.
- Continue to return full copies of Partworks and some trading cards as these are excluded from the program. We will communicate to you in advance of recall which trading cards need to be returned. All returns boxes containing Partworks and trading cards must have the fluro “Partwork” label supplied by Ovato next week in a prominent position.
- Hold physical returns for 2 business days commencing the day after submitting your returns through XchangeIT; this includes supplementary returns
- Remove all returns claimed from sale and destroy all unsold product to ensure it is unsaleable
Ovato Retail Distribution will:
- Generate random audit requests whereby you will be required to submit physical proof of claims. These audits will be advised through XchangeIT or ORD and compliance is compulsory. This is a key requirement of the program. If you are unable to provide proof of claims to support your returns submission, we may consider your returns submission void and reverse the claims raised.
- To meet the requirements of the audit, physical returns must be held as specified above.
- Continue to review the performance of newsagents across all measures to ensure full compliance.
- Require resumption of our normal physical return policy if at any time you do not meet the above criteria.
- Provide you with “Partwork” fluro stickers to be placed prominently on all return boxes for partworks/nominated trading cards. To order additional stickers contact us on 1300 650 666 or via email contactus.retaildistribution@ovato.com.au
We hope these revised trading conditions deliver efficiencies related to the management of the magazine category in your business.
The NLNA sales pitch is a joke
I was cold-called by an NLNA sales person late yesterday, Sam.
Sam had the pitch down claiming that NLNA helps its customers, yes, that is the term he used, to make more money in their businesses and cut their costs.
I questioned him about the details and he mentioned other business names, partners apparently, but no details as to the how.
He was on a mission for me to sign up. That appeared to be his only goal.
I am guessing that Sam is one of the NLNA sales people they hired a few weeks ago, pitching $2,000 a week income commission only.
While Sam has a job to do, a quota to make, if he wants to achieve any income, association representation comes from the hard slog of representation. There is only one national association representing newsagents and that is ALNA, as recognised already by suppliers and myriad government bodies.
What a joke.
Major landlords misbehaving with small business retailers through Covid
Here we are, four and a half months into Covid and we have major Australian landlords misbehaving in their dealings with small business retailers.
- One national landlord has advised tenants in some locations that they will now charge additional fees if they decide to open their shops on a Sunday. This follows years of Sunday trading without a cost being applied.
- One national landlord is yet to agree any rent relief to small business retailers in at least 2 of their centres.
- Several national landlords have applied the maximum increase in rent even though traffic in their centres is way down due to Covid.
- Several national landlords are continuing to bring in major discount outpost operators, which take business from permanent small business tenants, despite foot traffic =in the centres being down by more than 50%.
Years ago, shopping centre tenancies were sought-after. Today, many of those tenancies are in serious trouble because of Covid. Centre traffic is down and landlord dealings are challenging.
Australians have demonstrated a clear preference for the high street over the last four months. This makes high street retail more valuable. I think it is a reason we are seeing more high street newsagency businesses sold with shopping centre businesses less so.
Unless shopping centre landlords considerably reduce the occupancy cost and address some of their harmful practices, we will see fewer indie small business retail outlets.
Be careful sourcing face masks
Not all face masks are the same. Be sure to do your research before deciding what face masks you will stock.
Given the use of face marks, the last thing you want is to discover that you sold something not fit for purpose, not safe.
I know of one business that recently purchased KN95 masks where the straps that held them in place were 2cm shorter than usual, making them unsafe for adults to wear.
I know of another business that bought surgical masks that were imported and found to be missing a protective layer.
Beware that there are some pitching face masks, taking money up front, and not delivering. This product niche is ripe for scammers.
This is a whole new product for retailers. if you do decide to play in this space, research is key.
Newsagency retail sales revenue benchmark results: April – June 2020 vs. 2019.
The positive and negative impacts of COVID-19 on newsagency retail sales revenue across Australia.
The results of the June 2020 quarter newsagency retail sales benchmark show the extent to which COVID-19 is impacting businesses.
There are winners and losers.
- The winners are regional and high street retailers.
- The losers are shipping centre based retailers.
Looking at comprehensive retail sales data from 137 newsagencies for April – June 2020 compared to April – June 2019, the results underscore the value of the retail newsagency channel to local communities. This is a same-store comparison, making the results meaningful. FYI, I removed stores that were closed for any time in the reporting periods.
Data include a mix of rooftops from several brands. The benchmark includes data from businesses using the Tower newsagency software and several who are not.
Given the extraordinary gap in performance, I share the results separately, because reporting them as one dataset does not make sense.
Shopping centre based retail newsagencies.
- Transaction count change: down 42%.
- Revenue change: down 36%.
- Basket size change: up 11%.
- Newspaper unit sales: down 15%.
- Magazine unit sales: down 21%.
- Cards revenue: down 27%.
- Stationery revenue: down 11%.
- Gift revenue: down 45%.
- Toy revenue: down 42%.
- Puzzle revenue: up 5%. A quarter of reporting businesses sell puzzles.
- Instant lottery revenue: up 9%. Half reporting businesses have lotteries.
- Lottery revenue: down 5%.
A note about shopping centre data. The dataset in small, just under 10% of respondents. However, the gap between respondents is small.
High street newsagencies.
- Transaction count change: down 5%.
- Revenue change: up 27%.
- Basket size change: up 20%.
- Newspaper unit sales: down 5%. early din, there was a jump, which has disappeared.
- Magazine unit sales: up 5%.
- Cards revenue: up 7%. There are pockets of success – female birthday and thank you cards, in particular.
- Stationery revenue: up 13%. Homeschooling and home office, of course.
- Gift revenue: up 25%. Some categories are down while others, like nesting products, are in triple-digit growth.
- Toy revenue: up 13%.
- Puzzle revenue: up 150%. Less than half reporting businesses sell puzzles.
- Instant lottery revenue: up 16%. Just over half reporting businesses have lotteries.
- Lottery revenue: up 4%.
A note about this high street data: it includes regional and rural as well as suburban high street. The performance of regional and rural is considerably better than suburban high street for the most part. How much, you ask? Around 33% better is my response.
Embarrassed.
Plenty of regional and high street newsagents are embarrassed to be reporting such good numbers. Their growth while other businesses nearby are struggling makes them not want to be too open about their success. Even within the newsagency channel there are those in growth who do not want to talk about it with newsagents who are way down.
A moving feast.
Looking at early July data, I’d note that it would be wrong to lock the April – June results into a view for the long term. We are certainly in a period of significant change. The next quarter results could be different again.
What have we learned from the last 3 and 6 months?
- Shopping local has been embraced.
- The high street feels safer than a shopping mall.
- Newsagencies are trusted and appreciated businesses.
- Our channel is essential.
- A newsagency is a good business to own overall.
While we have learned more, this list is my key points.
Finally, I am grateful to all newsagents who shared their data for inclusion in this study.
Mark Fletcher.
Email: mark@towersystems.com.au Website: www.towersystems.com.au Blog: www.newsagencyblog.com.au
M | 0418 321 338
Suggestions from a non-economist for creating jobs in Australia, for Australians
I failed high school and dropped out of university, twice. I’m not an economist and have no accounting training. My only experience is the software company I started and still run and my retail related businesses. I’ve experienced wins and losses, confronting adversity and getting out the other side.
That disclaimer noted, below are my suggestions for boosting the Australian economy and, through that, creating Australian jobs. However, before I get to that, in an overall sense, my suggestions represent a pivot in government support. I think the time is right for such a pivot, to lean into the opportunities presented by corona. Here you go:
- Maintain job keeper for net new roles created in Australian owned businesses. Do this for a year, maybe longer. It would bring forward decisions by employers about roles they might create. I’d pay it in arrears ti mitigate against businesses hiring if they cannot afford it. However, if this idea was implemented, it would need to be managed with minimal paperwork.
- Permanently increase unemployment benefits, the age pension, carer’s allowance and more. Giving people with little money more money will see that money spent more so and faster than giving people with plenty of money more money.
- Support regional communities. Corona has shown that living regionally has considerable benefits. These are expected to linger long after corona. Invest now to support people in making that move. Consider more useful financial incentives for people and businesses to relocate to the regions. While I get the usual focus on tourism, I think more everyday businesses locating to a region could bring economic balance to that region.
- Promote buy Australian by Australians. All governments should fund a national, clever and engaging ad campaign to promote buy Australian so that Australians understand what this means, what it can achieve for the economy and for people individually. This campaign needs to be so strong that an Amazon box, or similar, is a bad look.
- Incentivise buy Australian. Consider a reward for buy Australian. Make it more beneficial to Australians to make this choice in situations where there is a choice to be made.
- Buy Australian at government level. It is frustrating to see governments spend money with overseas companies where there are Australian businesses that can supply. Governments spend too much money with overseas businesses across plenty of business sectors.
- Review government support that ships offshore. Let’s look at programs like franking credits and situations where money is paid to people living outside Australia and tax breaks given to offshore businesses and individuals. Any government assistance or payments could be of greater use if retained in Australia.
- Introduce a multi-faceted investment allowance program. To get businesses spacing in areas they have not spent in the past.
- For Australian businesses to advertise to Australians.
- For Australian businesses to pivot and shift from overseas manufacture to local.
- Rank Australian. Create an indicator to allow quick and easy understanding that a business is Australian. Something better than the current logos. This could allow for Australian ownership, percentage of Australian materials and labour – so that consumers can make informed decisions.
- Eliminate payroll tax. This tax is a disincentive to employment.
- Increase the tax take part 1. No, don’t increase tax rates. Rather, take forceful action against the big businesses that structure their arrangements to minimise tax by offshoring revenue. Independent journalist Michael West writes about this and runs a list of corporate tax dodgers – I urge people to read it.
- Increase the tax take part 2. Introduce a fractional transaction tax, capturing all money movements and thereby getting for the government revenue before it is manipulated to be tax free.
- Review employee import programs. My understanding is that we usually have hundreds of thousands of people from overseas working in Australia. The programs that allow this should be reviewed with rules tightened. I’ve heard of situations that sound sketchy.
This list is incomplete, of course. It’s unstructured and basic. And, yes, I get that it parochial. Corona is driving the need for us to be parochial. I think that is what is needed to create jobs.
In business I have often found the simplest approach to a challenge is the best.
TheLott (Tabcorp) adding former Woolworths fuel outlets
I’m told that Woolworths has sold fuel outlets and that in NSW there between 15 and 20 of these that are applying for the right to represent The Lott.
From a Tabcorp notice I have been provided, I can confirm that the company behind the multiple sites for which lottery applications have been lodged is Euro Garages, an international company with more than 5,900 outlets worldwide. This, from their website:
Founded in 2001 by the Issa family, United Kingdom based EG Group is a leading independent global “C-Store” operator serving seventeen million customers worldwide each week.
We operate approximately 5,900 sites spread across three continents, which we believe will make us the third largest independent C-Store operator in the world, the largest independent C-Store operator in Europe and the fifth largest independent C-Store operator in the United States, in each case based on numbers of sites.
Our global operations span six of the ten largest fuel markets in Europe by fuel volumes sold, namely Belgium, France, Germany, Italy, the Netherlands and the United Kingdom, all six states in Australia and thirty-one states across the United States.
We seek to deliver a modern and convenient customer retail experience by providing a “one stop” shop retail destination that offers a broad range of products and services to address evolving customer needs. For the twelve months ended June 30, 2019, we generated pro forma revenue of €22.6 billion, Pro Forma Adjusted EBITDA of €1.1 billion and Pro Forma Run-Rate Adjusted EBITDA of €1.4 billion.
I am sure the folks at Tabcorp have done their research as to the applicant.
Some of the outlets are as close a 2 minutes from an existing newsagent lottery outlet.
It shocks me that Tabcorp would consider approving a new outlet in the middle of the coronavirus pandemic.
The only party to be adversely affected by approving such new outlets would be the independent small retail businesses that already serve TheLott locally.
My view is that Tabcorp proceeding would be socially irresponsible, harmful to small business, harmful to local communities.
Unfortunately, there is little evidence that any objection process plays in favour of the incumbent local retailer.
Some the objection grounds I would focus on include:
- The community is already well served.
- Approving the application would harm my business.
- Approving the application would reduce the return I achieve on my already substantial investment in The Lott products.
- The applicant is a multi national business, not a small business, not local.
- The applicant would, in all likelihood be given a franchise arrangement with different terms and conditions to existing franchisees.
My suggestions are:
- Object to TheLott.
- Object to Fair Trading.
- Write to your state local lower house and upper house member.
- Write to your local councillor.
- Write to the ACCC as your TheLott relationship is a franchise.
The alternative is to complain to any who listen but actually do nothing and that will only make you feel worse.
Having a website will be as common as having a photocopier or a fax machine
Having a website for a retail business is part of the new normal of 2020 and beyond. It is the common tech tool as the fax machine was for a while and as the phone was, and still is for many.
While corona has demonstrated the value of having a website, the reality is the need has been there for years and early adopters have been benefiting for years.
Here are several reasons for a website for any retail business. More than one reason may apply, it all depends on your circumstances:
- Pitching your knowledge. A website is a terrific way to show off what you know, to pitch your specialist status. It reinforces credibility.
- Price comparison. Whether you like it or not, it is common. If you are not online you are not even part of the consideration.
- Stock availability. Some shoppers prefer to find out is something is available through online searches rather than in-store shopping or calling. If you are not online you are not even part of the consideration.
- Selling 24/7. Some businesses do more online selling when their shop if closed than when it is open.
- Expanding your shopper reach. A website can have no borders, introducing you to shoppers you will never see in-store.
- Pivoting. A website can leverage your infrastructure and allow you to experience with products and or services that have no connection with your current shop.
The most common learning for retailers who go online is the discovery of what they didn’t know.
The challenge newsagents present most often when considering a website is what do I sell online. This is a decision only you can make.
My advice is start somewhere, anywhere, knowing that you will end up somewhere else, and, at some point, change again. yes, a website is a journey, a sort of never ending journey.
For ease, start with what you know, what you sell today. Alternatively, start with a single product or category.
Worry less about the usual – what others are selling or charging and how they pitch themselves. Work out ways for your pitch to be different. One way to do this is to have a personality through which to sell what you sell. This can feel like hard work but once you get into your groove you can see the website differently.
The key is start, start now. Online is big and growing.
The fatigue of the second corona wave in Victoria
The second wave of coronavirus infections in Victoria this month is a challenge for all Victorians. It is especially challenging for retailers and their team members.
Before getting into some of the challenges, my view is that masks are essential, not only in Victoria but New South Wales, too, based on the numbers. Bill Bowtell, one of the experts who guided the Australian response to HIV/AIDS, called for mask wearing early in the pandemic. he was right.
The new mask rules in Victoria have not been welcomed by everyone.
Dealing with customers who are not wearing a mask but demand to shop, yelling and even pushing, is difficult. While there is the option to call the police, the need is more immediate. I’ve told our people that if there is a risk and it is the only option, closing the shop until the situation has passed is okay. Older customers are more likely to be angry than younger in our experience, more demanding, more likely to lie about why they don’t have to wear a mask. It is disappointing to see.
The fatigue of the second wave is considerable. You can see it from shoppers, hear it in the voices of suppliers, and more. It is testing the supply chain, too, with some wholesalers closing until this wave passes.
The fatigue of retailers is readily obvious in shopping malls. From the signs on closed shops to comments from some who are open.
The biggest contributor to fatigue in my view is mixed messages. These are put about by politicians and non health expert commentators, often leveraging a News Corp platform. In Victoria, for example, the opposition decided early on to deal with corona by daily attacks on the government. Loud attacks, emotive. First it was criticism for the first lockdown. Then it was open up, open the schools, open business. Then it was shut everything down and make us safe.
All this shouty stuff from politicians and the likes to Bolt, Jones and Credlin harms people and puts them on edge and this plays out into retail as people feel empowered to be disagreeable and shouty too.
Our retail spaces, our work places, benefit from calm. In situations where achieving this is challenging it is no wonder shop retailers close for the duration.
As business owners our priority has to be for a safe workplace where our employees are not put at risk. By far is is the top priority. The fatigue of the second wave makes this challenging to achieve and maintain.
See how News Corp. managed delivery of magazines is playing out for one ACT newsagent
This is how the magazines looked at one ACT newsagency this morning.
New Ovato shareholder
Sporran Lean Pty Ltd notified the ASX they have become a substantial shareholder on Ovato, buying 5.7% of the company for just over $430,000.
The registered address is that of Nazaaray Estate, a winery in Flinders, Victoria.
There is no apparent synergy between the winery business and that of Ovato.
When TheLott (Tabcorp) changes their freight company
The Friday order used to be delivered Tuesday. Now, thanks to TheLott changes, it comes 2 days later. While the company ia quick to breach a retailer for the slightest infraction, it has no mechanism for a breach back on itself.
Newsagents wonder about the XchangeIT / The Lott project
XchangeIT sent out an announcement yesterday that looked like it was from the clip art days of the early 1990s, about a new project they are pushing for with The Lott. With the ink barely dry on basic specs, they are promoting something that is not yet available. Based on the 50+ newsagents I heard from yesterday about it, something newsagents don’t want.
As is usually there case with these supplier related initiatives, the owners of the software companies doing the work are expected to be the major investors in these projects dreamed up by others.
Why is this XchangeIT / The Lott project a thing? I suspect it has more to do with XchangeIT trying to ensure relevance than anything else. Knowing a bit about what is actually planned, I am doubtful sufficient numbers of newsagents will use it if delivered as currently specced. However, the engagement will be up to newsagents to determine.
Unclear Tabcorp communication confuses retailers
Several retailers sent me this comms from Tabcorp’s TheLott, saying that it is unclear and unhelpful.
Bauer ceases titles paused due to covid
This announcement just in from Bauer Media:
BAUER AUSTRALIA CEASES PAUSED TITLES DUE TO COVID-19
Sydney, 21 July, 2020: Bauer Media Australia has today announced the closure of eight of its brands due to the ongoing impact of COVID-19. Affected titles include Harper’s BAZAAR, ELLE, InStyle, Men’s Health, Women’s Health, Good Health, NW and OK!.
Bauer temporarily paused these publications in May due to the significant impact of travel restrictions on transit-reliant titles such as NW and OK!, and declining advertising revenue to support Harper’s BAZAAR, ELLE, and InStyle, as well as Men’s and Women’s Health and Good Health. Consequently, a number of staff across these titles were stood down due to a stoppage of work.
Brendon Hill, Bauer Media ANZ CEO, says: “It has been a challenging time for Bauer and our team with exciting highs and devastating lows in recent months. We were delighted to acquire Pacific Magazines in May and were thrilled to recently announce a new future under Mercury Capital. However, these positive changes have taken place amidst an unexpected, uncertain and unrelenting economic downturn. No one could have anticipated the swift, widespread and ongoing impact of the pandemic on our business and industry.”
Recent Nielsen AdQuest (AQX) data revealed the economic impact of a full month of COVID-19 lockdowns with a 38.8% MOM drop in media advertising expenditure in April equating to a $303m decrease in spend. June recorded a 32.7% drop when comparing the same month in 2019*.
“We, like many other media companies, have deeply felt the impact of COVID-19. The reinstatement of these titles and teams was always dependent on the advertising market bouncing back and the return of domestic and international travel. Despite promising signs from advertisers in recent weeks, this has not outweighed the medium-term outlook for these titles.
“Additionally, with a second lockdown in Victoria and minimal travel, it is not feasible to sufficiently distribute NW and OK! without transit channels. The financial impact of these factors and the ongoing economic uncertainty makes the return and sustainability of these titles no longer viable. We have been forced to reset and future-proof the business like all of the media industry has.”
As part of the closures, Bauer will lose valued editorial, sales and production staff. Some of the staff affected by the paused titles were offered temporary work during the period, and Bauer will hold further conversations with the affected teams with the aim to find alternative employment across the business.
“The real and significant loss is that of our exceptionally talented and loyal colleagues as part of these closures. We have been optimistic about bringing our team back, however, the market has only seen further decline since stand-downs were implemented in May. We wanted to give direction and clarity to our staff as early as possible, rather than create further uncertainty with irregular publishing schedules. This is a devastating blow to those who are directly affected, the entire Bauer team and the industry as a whole. I would like to acknowledge and thank the hard-working staff across these titles for their commitment and significant contribution to these brands.”
Bauer will work through the appropriate consultation process with impacted staff.
On Friday Hill announced the return of a Bauer operation in New Zealand after COVID-related restrictions have eased. Government-led distribution restrictions meant that Bauer New Zealand was not able to operate during the lockdown period with the office ceasing in April.
“The return of a New Zealand operation is a green shoot for our staff, brands and readers. The New Zealand market is very different to Australia at this point in time with people back in the office, a more promising advertising market and many Kiwis enjoying domestic travel. The easing of restrictions has meant we have been able to bring back around 40 editorial and advertising staff and much-loved titles such as Woman’s Day, New Zealand Women’s Weekly, The Australian Women’s Weekly, Kia Ora, Your Home & Garden and The Listener which is fantastic. As conditions improve, we hope to continue to expand operations there.”
The recent sale of Bauer Media Australia to Mercury Capital received regulatory approvals and was completed on Wednesday 15 July. Mercury will work closely with the Bauer executive team to form a new strategy for the business and identify key areas for investment and growth. Bauer Media Australia will launch its new brand and strategy in the coming months.
Corona stimulus package proposal: targeting local small retail businesses and their communities
A while back I pitched this package of stimulus ideas to federal politicians and here with little interest. I pitch a modified version today as what I’d like to see
Covid stimulus package for local small business retailers and the communities in which they serve.
Small business retailers are nimble and able to lift local economies faster than big businesses and certainly better than online businesses.
Here are six tips for politicians on steps they can take, decisions they can make to help lift retail, especially small business retail, as well as those local businesses with which small business retailers can quickly connect.
- Local shops refresh grant. Give every local retail business a grant of at least $25,000 with the stipulation that it is spent locally (at least within the state or territory) on capital works for the shop, to improve the shop. It could be for painting, carpentry, electrical, new aircon, new carpeting, staff training or similar. Proof of local spending in the form of an invoice from a local tradesperson or small business company with and ABN and more than a year of trading as recognised by the ATO – to avoid fraud. The management of this should be online with quick approval and payment. Note: the $25,000 is suggested to provide sufficient local economic stimulus.
- Local visual merchandising support. Keeping in-store displays can be a challenge for small business retailers. Fund a network of merchandisers to make a 2 hour call weekly on qualified independent small retail businesses, sub $1M retail product turnover (i.e. not including agency), ABN registered, trading for six months or more. With each visit to be about visual refresh of the shop. Cap the campaign at six months and then assess the economic value. Only local merchandisers to be used – i.e. not an overseas agency who hires local contractors.
- Local artists grants. Offer cash grants to fund buskers for local high streets, to make shopping locally more entertaining. Make the application easy. Focus on local artists entertaining in their local community. This serves the dual purpose of injecting cash locally as well as fostering the local arts. The application process should be online, approval fast and payment immediate.
- Direct all politician electorate spending to be with local small businesses. For printing, subscriptions, gifts, parties, cards, everything for a year purchased through a politician’s electorate to be through a a business in their electorate. Have the results assessed independently. Ensure that spending is fair, too, to benefit a variety of local businesses, and not dolled out as political favours. Shop local, shop small.
- Run a national shop small shop local ad campaign. Make it educational, smart, encouraging … guiding Aussies on the value to them from shopping local, shopping small. Help to understand the true value of shopping local, shopping small compared to the alternatives. The ad campaign should run regionally across multiple media platforms, giving preference to locally owned platforms with a track record for not managing their business to minimise tax. Yes, Amex does this. We need a campaign that is not credit card supported.
- Establish local currency systems. These work overseas on regional towns where local currency has more value than the national currency. It supports shopping local through a smart value structure. the government role could be on the tech back end to manage the currency – taking away capital cost from local councils. To find out more ab9out this, read up on the Bristol Pound.
This list could be much longer. It is offered here as a start, to get people thinking of practical ways to support shopping small, shopping local.
Corona is challenging the economy. While I am no economist, I suspect that giving money to people likely to spend it quickly and spend it locally would be good for the economy and at a pace that is helpful to overall economic performance.
This is all about boosting local.
Why margin matters to newsagents more than ever
The thread on the Wrapaway margin cut for NSW/ACT newsagents includes a discussion on the broader issue of fair pay for service.
Our channel had its origins in Victoria in the 1800s as an agency model. I suspect that margin control had something to do with that. The agency model through last century and even into this century has been maintained for origin products like newspapers and magazines and more recent categories such as lotteries because, again, it offers the best way for suppliers to manage margin.
With many newsagents experiencing value from more commercial arrangements it is no wonder there are more fired up today when they experience disrespect from suppliers when it comes to margin.
Our businesses exist in a traditional commercial world. Our business overheads are set by commercial terms, tied often to performance of the economy outside of our small businesses.
Seeing agency suppliers push effective margin for retailers of their products in the opposite direction of economic factors intensifies the financial harm to businesses that stock them. This is an issue only with agency lines as they are the ones newsagents tend to want to keep and it is this desire that agency product suppliers leverage when they make decisions that disadvantage newsagents.
What has changed is that there are more newsagents now who care less about agency lines, there are more newsagents prepared to ditch agency lines rather than having to fight the fight to maintain a low and disrespectful margin.
Newsagents are finding their feet to make a stand on margin. As their businesses are confronted by disruption from the move online and more competitors stocking agency products, it stands to reason that they look for more equitable relationships. No longer are they prepared to let agency suppliers dictate take or leave it terms.
The Wrapaway decision to slice margin in half saw swift responses by plenty of newsagents. The company responded saying it needed two weeks to work on an alternative. Other suppliers need to take note as I suspect newsagents will react similarly, even with the small downward margin creeps driven by the newspaper publishers and the effective downward margin creep driven by magazine publishers who stifle needed cover price increases.
Experience is giving newsagents more confidence and power. It is good to see them exerting it.
Australian made sells
This Proudly Australian Made shelf-talker, in the card department, attracts shoppers, it starts conversations and brings appreciated comments of kudos at the counter. The artwork is smart and noticeable.
This Australian made pitch works in other parts of the business too, which feeds into social media messaging. It is topical.
How is the News Corp. managed delivery of Ovato product going for you?
Here is information from one newsagent about their experiences with News Corp. delivery of magazines for Ovato:
- Thursday, July 2: We arrived at work 1 hour before we open as we do every magazine day to enable us to process the magazines and have them on the shelves before the customers arrive. No magazines. We eventually tracked them down to the News Limited depot, from where we picked them up ourselves.
- Monday, July 6: No magazines when we arrived at work. We eventually located them, they were on the supermarket run and thus did not get them until 2pm. Yes, 2pm.
- Thursday, July 9: The same as Monday we thought they had sorted the issue but not so.
- Monday, July 13: We received our key parcels – they were on the newsagency run but our bulks New Idea, Woman’s Day and TV week were on the supermarket run.
- Thursday, July 16 (mid morning): Have been informed they are again all on the supermarket run.
I have had several newsagents call upset at the situation, upset at the anger from customers, upset at now being able to run they business they want to run, upset at the lack of communication from News Corp and set at the disinterest from Ovato.
This is a mess made by Ovato and News Corp. They are killing interest in magazines through this change and no one seems to care.
If they have the excuse of teething problems, I would reject that. They had time to get this right.
If they have the excuse of others are not affected, I would reject that as it would be a stupid excuse.
If they have the excuse of we are sorting it out, I would reject that because this should never have happened.
The poor management of the change by Ovato and News Corp. is costing newsagents time and money, it is impacting their mental health. yet, neither Ovato nor News Corp. is offering any support or assistance to the newsagents affected.
The other question is where are the magazine publishers in this? It is their product that is not reaching newsagents on time. Maybe they don’t care as long as supermarkets get their stock on time.
This is an own goal by all involved. Newsagents and their customers are the victims.
Reuters: Rupert Murdoch’s big investment headache: Australia
This report by Byron Kaye, Rupert Murdoch’s big investment headache: Australia, which dropped at Reuters yesterday makes for a fascinating read.
SYDNEY (Reuters) – The birthplace of Rupert Murdoch’s media empire, News Corp’s (NWSA.O) Australian business, is shaping up as a trouble spot for the global firm, following a billion dollar writedown and a move to stop printing more than 100 regional newspapers.
People interested in print media in Australia should find the article interesting regardless of your views of the Murdoch controlled company. The report has been widely shared on Twitter since its release yesterday. Here are some of the tweets where a link to the article was shared:
- News Australia dinosaur drag on whole company…Reuters.
- analysis of why the short sellers are moving in on the Murdoch empire. #auspol
- Newscorp the most shorted stock in Aust says Reuters. “Rupert Murdoch‘s big investment headache: Australia”
- “I’ve had a view it’s worth nothing for a long time.” Death rattle.
Yesterday, Crikey published a report by Christopher Warren on the closure by News Corp of a printing plant in Queensland. This, too, is worth a read.
As News Corp closes down more printing presses, it threatens to lock out new players.
Australia’s press took a big step this week in its decades-long journey from venerable manufacturing process to nostalgic metaphor with the accelerated closure of those production plants where newspapers are — or were — printed.
The resulting consolidation will see News Corp making a further change, reducing the size of its metropolitan papers to the shorter size technically-known as the “bastard measure”, beginning with The Courier-Mail.
…
The Yandina press will use a single press to print the company’s remaining south-east Queensland papers — The Courier-Mail and Sunday Mail, the Gold Coast Bulletin and the Toowoomba Chronicle. It will also print local copies of The Australian, The Daily Telegraph and Nine’s The Australian Financial Review.
There’s form here that will concern independent publishers. When Horton Media, Queensland’s last independent printer, closed two years ago, some small independent papers had to shift printing to Sydney and truck their copies to the state due to local capacity constraints. Fairfax’s print plant at Ormiston (and in NSW’s Hunter), closed the same year as part of a printing and distribution agreement with News Corp.
This is all part of the disruption. newsagents, as we have seen in recent weeks, will get caught in the changes, left without papers, left dealing with angry customers. Communication from News Corp has been and continues to be appalling. It is a selfish company with a history of bullying small business newsagents. Top be fair though, plenty of newsagents have willingly made themselves available for this.
From the perspective democracy, we have to hope that there are more genuinely independent news outlets and that they have more journalists asking tough questions of politicians from all sides. The current concentration of news outlets in Australia is unhealthy for democracy. You only have to look at the biased Daily Telegraph.
Opportunities for newsagents in the cancellation of gift fairs
With the Reed gift fairs cancelled, more suppliers are keen to connect with new retailers in different ways. They are also keen to connect with retailers outside of their usual retailer channels.
Those with stock certainty in the back half of this year that they need to clear are especially keen.
I am seeing suppliers who would not usually connect with our channel, even with highly evolved gift and homewares retailers in our channel, pitch to newsagents individually and through some of the groups.
This is a good trend to see as it will further break down the borders between channels. Newsagents will, overall benefit from this while some could lose business as traditional Newsagency suppliers also trade more outside they channel as they, too, seek growth.
In a related topic, it is terrific seeing more suppliers engaging with Zoom and other platforms for virtual showroom tours and mini supplier / retailer conferences.
How we do business has changed for the long term and through this those doing well and those leveraging new platforms and skills for safely transacting business.