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Retail apocalypse in Australia?


The retail apocalypse in the US is the closing of a large number of brick-and-mortar retail stores and shopping malls from 2010. Here are some haunting photos of abandoned shopping malls across America


The question being raised in Australia now is going to happen here too? It is difficult to say, but so far almost everyone agrees that it has not happened yet. 

I went to the Australian Bureau of Statistics and went to their page here on retail.

 Then selected chart number 8501011

Then using excel made a graph of yearly sales for every sector since 1982 to 2018.

Australian retail sales 2018

As you can see overall, it does look good. Overall retail sales and retail property overall in Australia have been healthy. Yes, there have been terrific changes in the retail landscape, for example, video rentals, books and newspaper sales are all down, but others such as food and footwear are up. This up and down by different sectors in retail has been going on since retail began.

Now some of the sectors in our marketplace look good.

ABS Pharmaceutical, cosmetic and toiletry goods retailing


However when you look at the one that seems to be now creating the most concern in our market space - newsagencies.

Newsagency and books 2018

It does not look so good, and I have been to many discussions and meeting about this sector's performance that is concerning many of its suppliers, as you can see its high water mark was about 2010. 

However, there are several points to keep in mind. The first point is that many shops move across sectors. A shop that is doing poorly in newspapers can switch to other fields e.g. I have had clients that have turned their shop into a cafe, gone into art supplies, become gift shops and toy stores. Soon it is no longer a newsagency but something else. 

The problem is that most suppliers cannot move so quickly. A newsagent once he moves partly to becoming a cafe, soon loses interest in magazines (profit margin 25%) because they have more valuable stuff to sell like cake and coffee (profit margin 55%). The magazine company soon gets very upset.

The other issue here is that just because a sector does poorly does not mean that an individual shop in that sector does poorly. I have a client that is bookshop nearby a large bookshop closed down, and their sales went up dramatically as many of the customers of the large bookshop came to them.  

Which is moving to an interesting point that often what we see in a sector as the sector drops the players inside that sector do better! 

For example in 2013/4 according to IBIS, 2500 newsagencies did about $1.9 billion in turnover about $760,000 each, in 2017/8 1960 newsagencies did about $2 billion in turnover about $1,020,408 each in turnover. Probably what happened is as the newsagencies consolidated, they kept enough of the clients, so individually they gained and then sold these customers other products to them.


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With the recent announcement by Coles and Woolies that they are phasing out plastic bags, many of my clients could see this as an ideal time to access what they are going to do about their packaging too.

On one hand, by having bags it certainly encourages people to buy more, many people appreciate these bags. The other problem is that if they bring in their own bags, they are limited to how big their bags are. So I have had clients after getting rid of bags brought them back in the shop.

On the other hand, many in the public do not like it and in places like Canberra, they have already implemented bans, plus it costs. An article on the ABC that estimated the cost savings to Australian supermarkets of plastic bags was $171 million a year?

Here is an idea you may want to chew on, free bags if the customer purchases over a certain amount. It may encourage them to buy more. Easy to implement such a change in our point of sale system.

Anyway now is a good time for many of you to make a decision.

Security basics: Is your point-of-sale being used as a seedbox?


As from today, several well known pirate sites - The Pirate Bay, Torrentz, TorrentHound, IsoHunt and SolarMovies are being blocked in Australia.



Currently it is laughably easy to bypass these blocks as the ISPs are only doing the minimum but its early days.

What I have noticed is that these blocks, do not seem to be enforced on many business accounts. Which means that many people have discovered that using their business Internet, they have a free seedbox. All they need is a smartphone which most people have, the WIFI codes that most employees are given and a free torrent app.

This causes, however, several problems for the business.

1) Much of the bandwidth of their Internet is being used by these programs, and their Internet runs slow.

2) Then their plan limits are exceeded so they get extra charges or get put on slow.

3) And the big one, is they could get involved in a major legal problem.

The quickest way to see if your pos system is being used as a seedbox, which should catch most of them is to go to this site here.

If you come up, then I suggest you investigate. About 4% of my clients are finding something.

I find it very good, using it we caught an accountant who was doing a job here on behalf of one of our clients, downloading torrents from her laptop while she was working here.



Biggest pet shop in the world


While in Germany, one place I had to go to was the pet shop in Duisburg called Zoo Zajac as it is according to Guinness World Records, the biggest pet shop in the world to get ideas for our software. So we drove five hours to get there, which is not unusual as many people go that far just to buy something there. Once I saw it, I could see. Why. I just went "Oh My God." The warehouse alone is bigger than the MCG. They call it a zoo, as it has more animals then most zoos. It has just about everything for animals, including animals like crickets, meerkats, dogs, cats and monkeys. It has something like 500,000 different types of fishes. It has 170 staff.

Just to walk around is a big job. This is not much of a problem to the owner Norbert as he drives around on a bike all day. I found talking to him; I had an unexpected problem as he only speaks German but fortunately my wife is a polyglot and speaks six languages one of which is German. So she translated for me.


I also meet his brother who was very friendly and fortunately speaks English, and we talked while he and my daughter fed the animals.

Overall pet shops have not done well in Germany in the past few years; they used to have 3,500 but now only about 2,000 exist. Although you would not see any economic trouble in this store, as it was full. It started 40 years ago as a very small shop. The whole philosophy now of the shop is to make it a destination store, as although they are big in Internet sales, they prefer direct sales partly as they get paid immediately as opposing to waiting two to three weeks to getting paid. for example when they feed the animals they make it a public demonstation as here.



I took a lot of notes, pictures and got quite a few ideas for our software.

Here are some pictures, and I hope you enjoy them.



A quick business guide to Facebook


I strongly believe that every serious business and organisation today needs a web presence. The web has become the major means of communication between business and their clients.

One place you have to be in is Facebook as every day, 10 million Australians are active on Facebook. Many spend almost two hours a day on it.

And it is free.

If you are not there, I recommend you go to Facebook, see what a few similar businesses to yours are doing on Facebook now. Check the ones you like and take a few notes about what your business needs. Note the words you need to say.

Then take a good camera, someone associated with your shop must have such a camera or failing that use a top smartphone. Now give the shop a clean, tell everyone to get nicely dressed tomorrow and take heaps of digital photos of shop, you in the shop, the staff, the shop, the products and services. You will not be sorry if you take too many, only if you do not have enough. Now go through them and select the ten best.

Now find the pages of your suppliers, similar businesses, your own and some other pages that would interest your clients, check out what they do, the details required and note these down. Change it to what you need for your business.

With so many Australians already on Facebook, the odds are that someone associated with your business knows how to set up a Facebook page.

If you are stuck and are a client of ours, we offer a free service to help you.

Now go to Facebook and set up a page. In my experience, it takes people about an hour to set up. If you do not know what you are doing it’s a pretty full-on hour. If you make a big blunder, do not be worried as you can correct later.

Once this is done now push your page on your clients. Ask them to like your page. Put a sign up the front of the shop, “Like us on Facebook." Put a similar message on all your receipts and statements. Push the page to all your VIP members, your staff, etc.

Now every few days check out the pages you noted above. Share or cut and paste an interesting comment from one of these. Please if you do a cut and paste make sure you change it so it becomes an original piece. Furthermore, add every now and then something interesting from your store, for example, a new service you are offering, an award you won, a new stand, new items, etc. Doing this will probably take you about half an hour a week and while you are doing that you will, in addition, keep you abreast of current affairs in your marketplace.

As an added bonus, our clients can integrate this Facebook page in our point-of-sale system.

Now if you want something more like an integrated website available through our point-of-sale system, stay tuned as I will discuss how you can do this in my next article.


Woolworths makes a new reward program


Many of our readers will be struck about how similar the new Woolworths reward program is to our standard loyalty program. It's no accident, what happened was just before we designed the program, We went to a conference which largely dealt with loyalty programs. As we listened to what these experts from some of the largest convenience stores in Europe and Australia such as 7-11, Telstra and Optus said we took notes and later used their ideas to make our adaption. Presumably Woolworths listened to the same experts.

You can see how it works here, and as you can see it's exactly the same as ours.

You must have a card and to get it you must supply Woolworths with your personal details. This is because the value of the customer monitoring, email addresses and information is considered to be worth 1% and Woolworths are not giving that 1% up.

Then when you purchase selected products, in their case the items marked with an orange ticket, your account collects Woolworth's dollar (points) on your card.

When your account reaches in Woolworth dollar (points) $10, you get $10 off your NEXT eligible purchase. There is no part payment accepted like some rewards programs have.

If you do the figures, it works out to for every $800 of purchases, their customer will get back about $10, or 1.25% assuming they do redeem it. In practice, many do not redeem it so reducing the cost somewhat.

The payout figure itself is not surprising as 1% cost as I stated is about what most loyalty programs work on. Note the Woolworth rewards program is not going; I am sure to cost Woolworths 1% as I can guess who will be forced to pay for it!

Here are some links with more information.

The system itself is a tested and proven system and is available to all our clients in our software.


Read the latest ABC circulation report


Looking at the latest report, digital has at the moment almost overtaken print. In some newspapers like the Sydney Morning Herald, it already has we are at 50/50 now. Compared to the same period last year, digital is approximately 10% up and print is 10% down. they are about equal. If this trend continues, how long do printed newspapers last?

You can see the numbers and discussion here.

Overall magazines are down about 6% which is better than expected.

Most of it in the weekly magazines where the fall is on the majors about 8%. You can find a discussion here.

The non-weeklies are all down with massive variations in circulations. You can see the figures in the ABC circulation report; I quoted earlier, and a discussion is available here.





Clearly exciting news from Hubbed



30% of Hubbed has just been sold to Singapore Post for $4.3 million dollars.

Singapore Post is one of the largest in world and is well placed in Australia to expand. Among other things in Australia, it owns Courier Please, which is Australia’s leading metropolitan express parcel delivery service with nationwide operations in Brisbane, Gold Coast, Toowoomba, Sydney, Canberra, Central Coast/Newcastle, Melbourne, Bendigo, Ballarat, Geelong. Carrum Downs, and Adelaide.

This I am sure will mean quite a lot to the 680 newsagents who by way of Hubbed provides a parcel delivery service in every major city across Australia. Included in this announcement is an expansion in Hubbed e-commerce delivery service to Australian customers using Singapore Post plus a new product for parcel drop-offs and sale of delivery products. It will also mean an expansion of Hubbed's customer base as Singapore Post huge customer base will be entering the Hubbed network.

The ANF submission on plain packaging of tobacco


The ANF here made a submission on the consultation on Post Implementation Review (PIR) Tobacco Plain Packaging.

Their main claims are that it has had very little significant public health benefits, that the economic impact on its member has been substantial, and that it is unfair that SMB should not have to carry most of the cost of this legislation. Although I am not going to comment on the last point, I do feel that the first two points are correct.

I data mined tobacco sales from 2006 to 2014 and can find no evidence that plain packaging had any effect. It's a total blank. I agree with the ANF too that the reduction in sales in mainly due to the higher unit costs of tobacco, although I would add that the drop magazine sales is also having a major effect on tobacco sales with their members.

I do not think this was a well-thought-out campaign by the government at all.

Here are some interesting links if you wish to check this out further:








Tonnex folds


In an industry rocked recently by one very expensive court case Nextra Australia Pty Limited v Mark Timothy Fletcher here we now have another one. The ink wholesaler Tonnex has gone into liquidation following an unsuccessful court battle against Dynamic Supplies. After losing the appeal, the liquidator stated that the directors decided that they could not cover the cost order and damages against them, so they went into voluntary liquidation.

What is amazing is that they did go to court as they were offered an opportunity to avoid it.

Are these expensive court cases worth it?

I spoke to the liquidator today, thinking that someone had brought it but was told that the assets were sold, so it is gone. I was stunned as they were a long-term major supplier that we had dealt with for years with offices in many states.
If you need to discuss alternate ink suppliers, please call.


Neil Chandler
Ph: +61 3 9879 4319
Fax: +61 3 870 3552
Mob: 0417340817
If you wish to read about the case here are the links.