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Newsagencies – An industry profile

The Australian newsagency industry is a unique national institution that enjoys wide community support. With over 3,000 agencies Australia wide, the industry is the largest, non- franchised, family owned small business sector in the nation.

The newsagency industry turnover is roughly $2 billion p/annum, plus over $3 billion in lotteries. Newsagents continue to diversify with over 54% reporting more than 5-10% growth in high margin Gift lines alone.

Each newsagency has a mix of core products, which include newspapers, magazines, cards, gift wrap, stationery and lottery products. These products are usually supported with a range of services including dry cleaning, transport tickets and prepaid telephony recharge & products.

Newsagents enjoy a generally consumable but not perishable product range, that creates frequent repeat trade. This is the foundation opportunity for a Newsagent to have a valuable customer relationship.

Over 62% of newsagents have owned their shops for 10 years or more, and 28% retaining ownership for 20+ years, and at least 1 we know of that has been in the same family for 100 years now. It’s a business model that has served the Australian public faithfully.

Newsagency marketing groups now account for more than 40% of all agencies, with more operators joining up to help improve their businesses.

Types of Newsagencies

Within the industry, newspapers and magazines are collectively referred to as “circulation product” and this product is supplied to newsagents under a system of publisher contracts. These contracts are:

  • A Retail Contract, for sales through a shop only,
  • A Home Delivery Contract, for the delivery of newspapers and magazines to homes and businesses within a specified area, and
  • A Distribution Contract, for the supply of newspapers and magazines to other retail outlets within a specified area.

An agency may hold one or all of these contracts. Some agencies are retail only shops and some are home delivery/distribution only businesses. It is the number and type of contracts held which determines the type of each business. In most cases the Home Delivery and Distribution contracts are linked.

Trading Terms

Publishers supply circulation product to newsagencies under a system called “sale or return”. Publishers supply agents on the basis of a “sell through” formula with agents returning for credit, unsold product at the completion of the on-sale period. This system maximizes sales whilst minimizing the risk of dead stock to the agent.

In most cases, the Sale or Return system also works for Greeting Card seasonal product, with a Sale or Exchange system available on other aspects, subject to trading terms.

Tobacco and drink products nearing expiry, can also be credited or exchanged for current product, subject to monitoring carefully, and the relationship with the particular supplier.

These trading terms maximise sales opportunity, whilst minimising risk of holding excessive stock.

Trading Hours

Following the State Government deregulation of trading hours in Queensland most newsagencies are now open 7 days a week. As an exempt business under the Act, newsagencies may, if they choose, open 24 hours 7 days a week.

Newspaper Publisher contracts require newsagents, where possible, to open for the following hours:

  • Monday to Friday: 7.00am – 6.00pm
  • Saturday: 7.00am – 12.00pm
  • Sunday: 7.00am – 11.00am

These hours are generally acceptable but may change between the various Publishers. Agents may also be bound under the terms of their shop lease to be open during “core” hours as determined by their shopping centre management. Opening hours are ultimately driven by customer demand and agencies, on average, are open 70 to 80 hours per week.

The above is just the beginning to understand what the Newsagency Industry can offer you as an owner operator. For more insight, you can Click Here for a current & experienced newsagent to get back to you.