COULD the humble suburban newsagency be the next victim of the supermarket giants’ “scorched earth” business model?
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You bet.
News Woolworths has been approached by Tatts to sell lottery tickets in supermarkets has sent shockwaves through the local newsagent fraternity.
And for good reason.
The prohibitive market power of Coles and Woolies has touched almost every corner of our small business community.
Corner shops, hardware stores, independent liquor outlets, pharmacies, butchers and many more have suffered from incursions by supermarkets.
Already, big supermarkets are selling what were once the exclusive domain of newsagencies – papers, magazines, cards and stationery.
But the golden goose has always been lotto.
While it only turns a small profit for newsagencies, it has given them a critical point of difference and helped drive customer traffic.
Industry heads are rightly fearful if the battle for lotto is lost, the battle to stay in business for many newsagents would go the same way.
The wretched former state Labor government, desperate for funds to prop up its ailing budget, could be the architects of the newsagent’s demise.
In 2010, the NSW government flogged off the publicly-owned and highly-profitable NSW Lotteries in its clamour for cash.
As always with governments, short-term gain trumped long-term pain.
Written into the deal was a five-year moratorium stopping Tatts from selling lotto outside of newsagencies.
But when that deal lapses in April, it will be open season.
The episode should act as a cautionary tale about the dangers of governments selling off public assets.
It should also remind us that local small business is the bedrock of our economy.
Ultimately, the consumer decides where they shop and unless they shop with a conscience, small business viability will continue to be slowly eroded.
And the newsagent, such an important part of our history and daily lives, will become yesterday’s news.