News retailing may be a challenge, but there's good reason for optimism in the year ahead
On the face of it, 2007 wasn't a great year for newspaper and magazine retailers. Beset by falling sales of top titles, increasingly burdensome promotions, inserts and giveaways, and soul-destroying supply problems, newsagents around the country could be forgiven for quietly asking themselves; why do we bother?
Ever happy to help, Convenience Store asked a similar question of a panel of representatives from across the supply chain: a publisher, distributor, trade association, retailer news group and a successful independent newsagent. How important is the convenience channel to newspaper and magazine publishers?
Retailer Peter Wagg, who runs seven busy news outlets in and around Canary Wharf in London, sees plenty of promise in the year ahead. "Publishers are increasingly recognising the importance of convenience stores, especially independents, to the future of both newspapers and magazines," he says. "I believe 2008 will herald a sea change in publisher attitudes towards neighbourhood retailers, c-stores and newsagents."
Adrian Calver, news category manager at Spar UK, elaborates: "Any progressive brand owner who does not recognise the increasing importance of the convenience channel does so at their own peril. Publishers need to quickly realise that there is life outside the main supermarket-styled retail outlets."
Independent retailers believe that while reliance on the multiples might be the easy option for publishers, it's not a good long-term strategy. "Publishers are not always the quickest to pick up on trends in shopping behaviour as they tend not to engage with the main retail market research companies," says National Federation of Retail Newsagents (NFRN) head of news and magazines Stefan Wojciechowski. "If they take note of trends over the past 18 months, and surveys by HIM, more and more UK consumers are shopping in c-stores and less through supermarkets. They really must review their strategies and budgeting accordingly."
And that, according to Rob Everett, channel manager at distributor Comag, is exactly what they are doing. "Publishers are realising that many opportunities for sales growth, title awareness and brand advertising exist in the convenience channel and are re-aligning their budgets and plans to reflect that," he says. Unfortunately for the independents, however, he cites the recent growth of formats including Tesco Express and Sainsbury's Local, and the major store refits for the Co-op group and One Stop due this year, as the reasons why the channel will continue to see footfall rise, and so attract the attention of publishers.
Channel manager for convenience at Mail Newspapers, Mike Page, is also reassuringly positive about the sector. "With the convenience market set to grow past £30bn in 2008, it remains a key area of growth for us and vital to the success of our titles, and we will continue to work with both independent and multiple retailers to increase our market share," he says. The group's focus for the year will be on display, availability and a commitment to home news delivery, which Page describes as "crucial and the life-blood
of many businesses".
Countering the suggestion that publishers don't track shopping habits, Page points out how Mail Newspapers uses basket analysis to identify sales opportunities. He reveals how a new approach will be extended to convenience in 2008. "We will work collaboratively with key brands to offer added value to the consumer - for example, we have recently joined forces with Hovis to deliver a month-long activity that benefits everyone and brings together the consumers of two high-footfall driving products."
After the group's success with CD and DVD add-ons in 2007, retailers should expect more of the same. "Mail Newspapers have a proven track record in TV-advertised DVD/series activity that will drive footfall to stores at weekends when the cover price and retail sales volume is higher," says Page, "so retailers should ensure that ample display is given to promoting via additional facings and, where possible, counter display."
Comag's Everett suggests that a closer relationship between publishers and retailers is the key to success. "Retailers can improve the category's performance by working with publishers on trading plans," he points out. "Key issues, periods and promotions should be agreed and communicated to stores with the same efficiency and urgency as other categories."
NFRN's Wojciechowski agrees that planning should be the newsagent's watchword. "Independents need to improve the business plans they have for the category," he warns. "They need to better understand their immediate competitors and their consumers and ensure that not only the backbone of bestsellers are available, but that they more effectively exploit their local niche and specialist newspaper & magazine demands.
"All this needs to be delivered by matching range to space deployed so that improved displays ensue and greater in-store theatre can be attempted."
Calver neatly sums up Spar's aim for the year: "A quality news and magazine offer is built on the platform of the right ranged choice and quality promotional activities supported with excellent availability."
And finally, from Peter Wagg, some advice for fellow retailers. "Epos-driven sales-based replenishment (SBR) is already well established with the grocery multiples and the massive benefits are now becoming available to smaller retailers. Those retailers who have epos should discuss SBR with their wholesalers - if you haven't invested in epos, consider its financial benefits seriously."
Restitution deal fails to impress
The news trade supply chain complaints procedure has been extended to allow retailers to claim for financial losses resulting from late delivery of newspapers and magazines that are caused by the publisher.
It is the first time that claims for restitution, which could previously be made only on delays caused by the wholesaler, have applied to publishers.
The National Federation of Retail Newsagents (NFRN), which has campaigned for the extension, explains that restitution "will be payable by publishers for proven losses arising out of lateness of supply to wholesalers, subject to an agreed definition of persistent lateness". In the case of magazines, this is defined as three late arrivals in six issues, and for daily newspapers, three occurrences in a two-week period. The maximum restitution for a single claim is limited to £30.
Retailers with experience of the current restitution system were unimpressed with the move. "It's just window dressing," says Subhash Varambhia of Snutch Newsagents in Leicester. "The definitions are unreasonable, and I'd like to see anyone prove severe and persistent lateness. I'd have to check back through records for six months to see if a magazine had been delivered late three times, and then the publisher would have to admit they were at fault."
East Anglian newsagent Brian Webb adds: "This business of three times late before compensation is rubbish. Asking for three attempts, and the NFRN agreeing to it, makes a mockery of any relationship within the trade."
Information about best practice, guidelines and standards for the news industry supply chain can be found at the Association of Newspaper and Magazine Wholesalers (ANMW)'s relaunched website, www.anmw.co.uk
On the face of it, 2007 wasn't a great year for newspaper and magazine retailers. Beset by falling sales of top titles, increasingly burdensome promotions, inserts and giveaways, and soul-destroying supply problems, newsagents around the country could be forgiven for quietly asking themselves; why do we bother?
Ever happy to help, Convenience Store asked a similar question of a panel of representatives from across the supply chain: a publisher, distributor, trade association, retailer news group and a successful independent newsagent. How important is the convenience channel to newspaper and magazine publishers?
Retailer Peter Wagg, who runs seven busy news outlets in and around Canary Wharf in London, sees plenty of promise in the year ahead. "Publishers are increasingly recognising the importance of convenience stores, especially independents, to the future of both newspapers and magazines," he says. "I believe 2008 will herald a sea change in publisher attitudes towards neighbourhood retailers, c-stores and newsagents."
Adrian Calver, news category manager at Spar UK, elaborates: "Any progressive brand owner who does not recognise the increasing importance of the convenience channel does so at their own peril. Publishers need to quickly realise that there is life outside the main supermarket-styled retail outlets."
Independent retailers believe that while reliance on the multiples might be the easy option for publishers, it's not a good long-term strategy. "Publishers are not always the quickest to pick up on trends in shopping behaviour as they tend not to engage with the main retail market research companies," says National Federation of Retail Newsagents (NFRN) head of news and magazines Stefan Wojciechowski. "If they take note of trends over the past 18 months, and surveys by HIM, more and more UK consumers are shopping in c-stores and less through supermarkets. They really must review their strategies and budgeting accordingly."
And that, according to Rob Everett, channel manager at distributor Comag, is exactly what they are doing. "Publishers are realising that many opportunities for sales growth, title awareness and brand advertising exist in the convenience channel and are re-aligning their budgets and plans to reflect that," he says. Unfortunately for the independents, however, he cites the recent growth of formats including Tesco Express and Sainsbury's Local, and the major store refits for the Co-op group and One Stop due this year, as the reasons why the channel will continue to see footfall rise, and so attract the attention of publishers.
Channel manager for convenience at Mail Newspapers, Mike Page, is also reassuringly positive about the sector. "With the convenience market set to grow past £30bn in 2008, it remains a key area of growth for us and vital to the success of our titles, and we will continue to work with both independent and multiple retailers to increase our market share," he says. The group's focus for the year will be on display, availability and a commitment to home news delivery, which Page describes as "crucial and the life-blood
of many businesses".
Countering the suggestion that publishers don't track shopping habits, Page points out how Mail Newspapers uses basket analysis to identify sales opportunities. He reveals how a new approach will be extended to convenience in 2008. "We will work collaboratively with key brands to offer added value to the consumer - for example, we have recently joined forces with Hovis to deliver a month-long activity that benefits everyone and brings together the consumers of two high-footfall driving products."
After the group's success with CD and DVD add-ons in 2007, retailers should expect more of the same. "Mail Newspapers have a proven track record in TV-advertised DVD/series activity that will drive footfall to stores at weekends when the cover price and retail sales volume is higher," says Page, "so retailers should ensure that ample display is given to promoting via additional facings and, where possible, counter display."
Comag's Everett suggests that a closer relationship between publishers and retailers is the key to success. "Retailers can improve the category's performance by working with publishers on trading plans," he points out. "Key issues, periods and promotions should be agreed and communicated to stores with the same efficiency and urgency as other categories."
NFRN's Wojciechowski agrees that planning should be the newsagent's watchword. "Independents need to improve the business plans they have for the category," he warns. "They need to better understand their immediate competitors and their consumers and ensure that not only the backbone of bestsellers are available, but that they more effectively exploit their local niche and specialist newspaper & magazine demands.
"All this needs to be delivered by matching range to space deployed so that improved displays ensue and greater in-store theatre can be attempted."
Calver neatly sums up Spar's aim for the year: "A quality news and magazine offer is built on the platform of the right ranged choice and quality promotional activities supported with excellent availability."
And finally, from Peter Wagg, some advice for fellow retailers. "Epos-driven sales-based replenishment (SBR) is already well established with the grocery multiples and the massive benefits are now becoming available to smaller retailers. Those retailers who have epos should discuss SBR with their wholesalers - if you haven't invested in epos, consider its financial benefits seriously."
late call
Restitution deal fails to impress
The news trade supply chain complaints procedure has been extended to allow retailers to claim for financial losses resulting from late delivery of newspapers and magazines that are caused by the publisher.
It is the first time that claims for restitution, which could previously be made only on delays caused by the wholesaler, have applied to publishers.
The National Federation of Retail Newsagents (NFRN), which has campaigned for the extension, explains that restitution "will be payable by publishers for proven losses arising out of lateness of supply to wholesalers, subject to an agreed definition of persistent lateness". In the case of magazines, this is defined as three late arrivals in six issues, and for daily newspapers, three occurrences in a two-week period. The maximum restitution for a single claim is limited to £30.
Retailers with experience of the current restitution system were unimpressed with the move. "It's just window dressing," says Subhash Varambhia of Snutch Newsagents in Leicester. "The definitions are unreasonable, and I'd like to see anyone prove severe and persistent lateness. I'd have to check back through records for six months to see if a magazine had been delivered late three times, and then the publisher would have to admit they were at fault."
East Anglian newsagent Brian Webb adds: "This business of three times late before compensation is rubbish. Asking for three attempts, and the NFRN agreeing to it, makes a mockery of any relationship within the trade."
Online info
Information about best practice, guidelines and standards for the news industry supply chain can be found at the Association of Newspaper and Magazine Wholesalers (ANMW)'s relaunched website, www.anmw.co.uk
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