newscorp, rupert murdochWhile hacking may have put Rupert Murdoch into an unpleasant spotlight last month, the analysis of the direction of his business empire offers some uncomfortable truths for independent retailers who sell newspapers – which is most local shop owners in the grocery market.

Mr Murdoch has been very successful and retailers need to acknowledge that over the past 40 years he has made them a lot of money, particularly in the UK, through his investment in and vision for national newspapers. A chart in the FT provided an interesting commentary on the development of Mr Murdoch’s company. In 1980, newspapers and magazines accounted for 90 per cent of his revenues. In 1990, they accounted for 71 per cent. In 2000, they accounted for 45 per cent. In 2010, 11 per cent.

In part, the decline is explained by the expansion of his companies into broadcast TV, cable networks and films. In 1990 they were worth 1 per cent, 0 per cent and 8 per cent of his business respectively. By 2010 they were worth 5 per cent, 48 per cent and 29 per cent.

Print is the bedrock upon which the business was developed but the skills he learned in publishing newspapers were applied to audience development on TV and movie screens around the world. The newspapers funded the growth of the business and are still contributing to the group, even if the outlook is less rosy.

The news-based local shop has been the most successful across the same period of time. In the 1980s, just selling newspapers and magazines was the bedrock of a successful retail operation. In the 1990s, snacks and soft drinks and alcohol needed to be added. By the 2000s, if was full scale convenience.

Unlike News Corporation, most local shops are not scalable businesses. However, collectively independent retailers have had to change their mix to attract the audience of local shoppers. But this does not mean that you need to throw away the business model you started with.

I visited one shop in the Midlands recently and observed the fantastic fruit and vegetable display at the back. This looks fantastic, I said. Yes, said the owner, it is where my dad started out and he loves making it look good. It still contributes to the bottom line too!

It is easy to get carried away with fashion statements. Sometimes you need to ditch yesterday’s lines. Sometimes you need to retain them – as long as there is sufficient shopper demand. To use the language of the City, newspapers are still a hold.