The retail newsagency, stationery and bookseller sector is undergoing a tough transition as sales were reduced by 0.7% over the past five years, while newspaper and magazine circulations continue to decline.
According to the IBIS World Industry Report, industry sales are expected to contract by 2% in Australia to $7.8 billion over 2011-2012. However there will be a transition period over the next five years, with a modest increase of 1.4% per annum as the sector evolves, due to realisations that online sales will take a bigger share of the market.
According to the Australian Newsagency Federation head of communications
Carolyn Doherty, declines in magazine and newspaper circulations are
affecting newsagency sales: “In 2011, declines in magazine sales in some
outlets ranged from 2-10%.
“Consumers generally reigned in
spending and fewer people buy the newspaper every day and many read it
online. This affects sales and traffic flow in newsagencies.
IBIS World industry analyst Paul Lyons believes there is going to be an inevitable decline in newsagency sales: “What IBISWorld has seen over the last few years is that people are increasingly turning to the internet to get their news and reading material. Circulations of newspapers are down and magazine publishers have also seen declines in recent years due to weak retail sales.
“This will ultimately see a decline in newsagency sales. Anecdotal evidence would suggest that the majority of newsagency revenue would be generated from the sales of newspapers and magazines, with the small amounts of revenue being generated from other products they sell, such as stationery or confectionery.”
But newsagencies are reacting to these tough times realising the need for innovation. Doherty believes newsagents have diversified businesses by adding telco products, gift lines, books, Western Union and convenience items.
Doherty said: “Newsagents are playing to their strength – that is the community. In most towns, the newsagency is central to the community and newsagents are adapting to provide many of the products and services that have been lost to the community when specialist shops close.”
ANF CEO Alf Maccioni said in the ANF report N-View 2012: “The massive changes brought about by the digital world have spooked newsagents and their suppliers alike, but ‘bricks and mortar’ retailing will remain for as long as people want to touch and feel products, interact with real people and be part of a sociable shopping experience.”
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