This week we have covered the evidence that the newsagency channel is closing and the agency income that is being pulled away. Today, the tempting wrong answers, because two of them look sensible right up until you study them.
The first wrong answer is convenience.
More drinks, more snacks, more quick groceries. The UK ran that exact experiment fifteen years ahead of us, and we can see how it ends. British national newspaper sales have fallen by about three quarters since 2010, and as the papers went, so did the standalone newsagent. The survivors did not survive as newsagents. They became convenience stores under symbol groups while Tesco Express and Sainsbury’s Local moved onto their corners and undercut them on the very drinks and snacks they were pinning their hopes on. WHSmith, the oldest newsagent name in Britain, sold and walked away from every one of its high street shops last year. The country that invented the modern newsagent has effectively retired it.
The second wrong answer is cheap.
Officeworks is a $3.5 billion specialist that matches any school list price and beats it. And the discount end is about to get far stronger: Dollarama bought The Reject Shop, plans to convert every store by 2027, and has said plainly it will lower prices, improve the shops and roughly double the store count over the next decade. The low price end of everything newsagents dabble in, wrap, party, basic gifts, seasonal, confectionery, cheap stationery, is about to be run far better than we run it, at a scale we cannot touch. Cheap is not a strategy. It is a trap.
Even the good advice needs honesty. Diversifying into cards and gifts is half right, and cards remain the strongest asset in the shop. Australians buy half a billion dollars of greeting cards a year and newsagents still sell more than a third of them, at the best margin per square metre in the building. But cards bought by destination shoppers dry up when the foot traffic dries up. Cards cannot save the old shop on their own. They can anchor a new one.
We will never win on price. We can win on everything price is not: curation, service, the local, the personal.
Tomorrow: the proposal we put to the conference, and why the sign over your door is now working against you.
Website: www.newsxpress.com.au | Find out more: help@newsxpress.com.au | CEO: Mark Fletcher: 0418 321 338