(last updated July 2019)
What has been happening in the newsagency sector
Traditional newsagents have had to face intense competition in recent years because supermarkets - including smaller High Street store formats like Tesco Express and Sainsbury's Local - and many other outlets have diversified and now sell the newsagent's core products. Many independently owned shops have closed down and survivors have had to diversify into other product ranges and make sure they offer a first class service to their customers.
In recent years there has been:
- strong competition from supermarkets, convenience stores and petrol filling station forecourts
- an overall decline in cigarette smoking as a result of smoking bans, health warnings and other measures like plain packaging
- an increase in smuggled tobacco products, reducing demand for newsagents. High duty increases appear to be increasing the demand for smuggled products as smokers look for cheaper tobacco products
- an increase in counterfeit tobacco products in the UK. It has been acknowledged by HMRC that the introduction of plain packaging will increase the likelihood that retailers will unknowingly sell counterfeit tobacco products
- long-running newspaper price wars coupled with falling newspaper circulations
- the growth in popularity of online newspapers and news websites as younger audiences abandon print
- the growing number of free newspapers, particularly in larger cities - although several free newspapers closed in 2015 due to sliding circulation and advertising sales
- a fall in sales of consumer magazines since the late 2000s
- an increase in demand for snacks, impulse and take-away food items - but bear in mind that the trend towards healthy eating in the mid 2010s has meant that sweets and crisps are not such popular snacks as previously
- a trend towards longer opening hours
- pressure on prices as a result of competition, from supermarkets in particular
- increased costs as a result of new employment legislation
- an increase in newspaper carriage charges, affecting profitability
- an annual increase in the level of shoplifting, with some police forces not pursuing cases where the value taken is less than £200 and others telling shopkeepers to ring the parents, not them
- an increase in the number of shopkeepers facing violence and abuse when challenging shoplifters, refusing to sell age-restricted items or refusing to serve people who are drunk
Although there is still demand for well-run newsagents, they face keen competition and many independents have had little choice but to introduce new products and services - such as a lottery terminal, utility bill payment point, groceries and so on - to improve their chances of survival.
You will have to decide whether:
- demand will be high enough in your area to support your proposed business. If you plan to locate in a rural area, there simply may not be enough customers
- your local economy is healthy - if your area has been unlucky enough to suffer from many business failures and factory closures recently, it is unlikely that local people will shop anywhere other than the cheapest supermarket
- you will be able to compete against other newsagents, c-stores, supermarkets and petrol filling stations, all of whom are looking to sell into the same market
- your takings will be high enough to be able to employ staff, otherwise you will be working very long hours, seven days a week - many newsagents work 70 hours a week and take no holiday at all
Keeping up to date with the newsagency sector
Joining a trade association is an excellent way of staying up to date with developments in your industry.
The National Federation of Retail Newsagents (NFRN) represents the newsagent sector and produces a great deal of material of interest to all those operating in this market. Visit the NFRN website for more details.
Retail Newsagent journal, published by Newtrade, carries latest news and features of interest to the sector. The Retail Newsagent website includes further details of the journal's content and tells you how to subscribe.
The Professional Publishers Association (PPA) produces facts and figures relating to trends in magazine launches and circulations. These are available on the PPA website.
Trade shows
You will be able to obtain a lot of useful information if you go to a trade show or exhibition for the newsagency or convenience store sectors. The Exhibitions UK website contains details of trade shows that may be of interest to you.