When I visited WHSmith at Bristol airport I noticed that the i was not available on their newspaper display. With the margin on i being just 5p, I understand why it was not available, but it does raise questions about the challenge the title presents to all newspaper retailers.
Every product that you stock should add to the profitability of your business and i delivers on average six customers to a newspaper retailer. I am fairly certain that a 30p gross profit per day is not enough to pay for a full facing display.
The main benefit of stocking newspapers is the increase in daily footfall, but not all titles offer the same value. When I looked at what else customers purchasing the Daily Mail and Sun had in their basket, I discovered that the Sun purchasers were the most valuable, with an average spend of over £5.
The pricing and profit issues surrounding i does raise questions about all slower selling, lower reward products. Do they pay for their space? Do they add to your bottom line? Could the space be used for a product that will be more profitable?
You can calculate your cost per metre of shelving by adding up the cost of running your store from your annual accounts, and dividing this by the total length of shelving in your store.
Knowing the gross profit you make from each product and understanding how powerful a basket-driver an item is when coupled with the cost of space w0ill allow you to challenge the effectiveness of your range. As Better Retailing retailer Shahid Razzaq reports, identifying the poor performing areas of your business will allow you to gain valuable space – at no extra cost!