Colin Finch, national president of the National Federation of Retail Newsagents (NFRN), has some surprisingly frank advice for struggling newsagents: shut your shop.
It may appear odd for a trade association which represents the interests of more than 17,000 newspaper and magazine retailers to be suggesting closure as an option, but in fact it's not quite as alarming as it sounds. "Some of our members are home news delivery experts with a proper logistics approach to delivering newspapers and magazines," he explains. "It's not about kids on bikes any more, it's adults in vans and a proper carriage charge for providing the service. It's an effective model, so I have said to members in the past, if Tesco opens on your doorstep and you can't compete, don't compete. Get the papers delivered to your garage and specialise in news delivery."
There's a harsh reality behind radical thinking like this. The NFRN has seen 400 members' stores close in each of the past five years and doesn't pretend that life for the local newsagent, along with the florist and the fishmonger, is going to get any easier. "The likelihood is that if you're running an old Coronation Street-style corner shop and you're unopposed in your area, you'll be able to eke out a living, but there won't be a blue chip pension. People don't shop like that any more," says Finch. He points out that some retailers are too caught up in their day-to-day challenges to prepare for the inevitable change.
"Some of our members have a business plan for the next five years. Some don't have one for tomorrow. The future of local newsagents lies in good service, and the glue that holds that together is home news delivery. But retailers need to understand that the days of the 30p a week delivery charge are gone. You may see yourself as a community service, but you're also running a business. There's absolutely nothing wrong with an appropriate carriage charge - people are used to paying for delivery when they purchase items over the internet, so they'll expect a delivery charge from you. Our members have rung up customers to tell them delivery will cost £3 a week and no one put the phone down on them."
The NFRN is passionate about helping its members, but sometimes that support takes the form of tough love. "We want to help them become better retailers but changing their ways can be like turning around a supertanker," says Finch. "Our £5.50 a week membership fee is a lot of money to pay for a shoulder to cry on, so we're not about tea and sympathy. We have 33 retail development managers in the UK and Ireland giving advice on ranging and merchandising news and magazines, instilling best practice and creating 'missionaries'- successful stores other retailers can learn from. There has been some resistance to what some retailers see as interference, but in general there's a strong desire to make the best use of the information available."
Finch says the hardest part of his job is having to tell old friends, news retailers he's known for years, that it's time to throw in the towel. There comes a time when pitching your life savings into the business in order to keep trading in the same way is not the answer. Finch believes his organisation can help its members adapt, but it needs their full commitment, and a supply chain that ensures they will receive the products they need. "It's important for retailers to realise that we're not just drinking in the Last Chance Saloon," he says. "It's last orders as well."
Smiths News has signed a deal to manage the news and magazines category in Martin McColl's 1,350-strong network of newsagents and c-stores.
The agreement will see the two companies devise a new range and merchandising approach, with particular focus on using regional planograms to maximise the availability of best sellers in each area.
New display equipment for the category will be rolled out to 350 Martin McColl stores during 2008, as well as new counter units featuring integrated display spaces for news.
General manager marketing Paul Taylor says: "News is a huge category for us, so it made sense to use Smiths' expertise."
Retailers have been pondering HND in the discussion forums at www.connect2u.co.uk. Here are some of their comments.
"I am seriously considering stopping delivering newspapers in favour of letting the customer come into the shop to collect, with the added benefit of more footfall and increased impulse buys. We are the only shop in a medium-sized village (the nearest other newsagent being two miles away). I would like your views, comments and experience."
"We deliver to our village and two others, and delivery charges range from £1.30 a week within walking distance to £2.10 for the furthest customers. We deliver approximately £2,000-worth a week. If we didn't deliver we would probably keep those within walking distance, but would lose the others to Tesco just over a mile away. It is a hassle, but find yourself a retired person who wants to top up their pension by helping to sort and assemble the papers."
"The bottom line is, if no one complains about your delivery charges, you're too cheap, but if only a few moan about them you're just right."
"Just ensure that the delivery charge covers all your costs and more."
"If you don't deliver I doubt very much that these customers would visit your shop every day to pick up their paper."
"I popped into my local post office with a Daily Telegraph and a Sun and asked how much it would cost to post each of them. To post The Sun second class was 60p, and first class was 70p. To post The Daily Telegraph was 83p and 98p. I hope this helps to put into context what the customer is getting from HND."
"There's no one in this area, mature or schoolchild, who wants to take on any of the rounds. Certainly not for what I can afford to pay them."
"Charging 60p for a week's deliveries, no wonder you can't find anyone to deliver your papers. My customers pay £1.50 for a week's delivery - my boys and girls earn between £16 and £25 per week Monday to Saturday."
"I find if the service is good, the charge is secondary to most customers."
"If someone lost £1.50 down the side of the sofa would they notice? I think not - £1.50 for a reliable delivery service is a bargain. Good luck, keep at it - HND can be really profitable."