GNS November 2012 Newsletter

The Official Newsletter of Group Newsagency Supplies

GroupNews

November Issue 2012 Inside this Issue: Chief Executive Officer...................... 2-4 Christmas Display Competition............. 4 NSW News..............................................5 2012 Sydney Market Fair........................5 2013 - A Profitable New Year................6 Back to School Benefits...........................6 VIC & TAS News.....................................7 2012 Melbourne Market Fair.................7 Christmas Catalogue Promotion...........8 QLD News................................................9 2012 Brisbane Market Fair .....................9 NEW Australia Day Stock.....................10 WA News...............................................11 2012 Perth Market Fair..........................11 Newspower............................................ 12 Officesmart............................................ 13

Welcome to the November Issue of

Group News

Chief Executive Officer Alex Stewart

When I joined GNS in December 2011 to replace Ted Rogan as Chief Executive Officer, I discovered a business with a rich history dating back several decades, and therefore a solid foundation upon which to move forward. GNS had been a significant supplier to the Newsagents’ channel for many years yet seemingly the relevance of GNS to its traditional markets has changed and in many aspects, GNS has not fully evolved to meet these market changes. This has resulted in declining revenues in a market that is faced with many and varied external pressures that challenges the ongoing viability of its very existence.

The statement “GNS is owned by Newsagents, for Newsagents” whilst accurate is no longer as relevant as it has been in the past. GNS is owned by our Newsagent customers, however I strongly feel that in many ways, we have forgotten some of the fundamentals of customer service and as a result, our customers have moved away from GNS both commercially and in their own perceptions of not only who we are, but more importantly who we are to their businesses.

In order to arrest the commercial decline of revenues as well as our own internal cultural challenges, change is not only inevitable, but necessary.

Principal Activities GNS are wholesalers of Office Products/Stationery, Giftware, Confectionary, Canteen Supplies, IT Consumables, Newsagent business supplies and associated products, to the Newsagents and Commercial Office Products Reseller Channels.

GNS also provide marketing support for its customers by way of promotional campaigns delivered via print, online, television and radio mediums, both directly and via Industry Associations and Industry Marketing Groups.

GNS also develop, source and range Private Label products in the product categories we operate both for GNS Private Labels as well as our customers own brands.

Financial Performance Notwithstanding a decline in revenue for the Financial Year ending 30th June 2012, our performance in these general market conditions was better than most. Overall our revenues declined 3.9% over the previous year and our Net Profit before tax declined by 19.4%. Our Operating Expenses have increased over the previous year by 1.5%.

Establishing Reality In order to arrest the commercial decline as well as our own internal cultural challenges, we have identified four key business objectives from which all of our core focus will be based around. These are: 1.

Increase Revenues 2.

Reduce Operating Expenses 3.

Liberate Cash 4.

Vision for a National Business Every named and planned project or action in the business will be attached to one or more of these objectives. Every employee has been briefed on these objectives and their own performance will be based in and around outcomes relating to these objectives.

Increase Revenues As it suggests, this objective seeks to undertake actions to increase revenues through the existing GNS customer bases by actively identifying lost sales through share of customer and/or share of wallet spend, and systematically address the underlying issues that have caused this decline.

It also seeks to address new product category opportunities with existing customers as well as to target new customer opportunities in other vertical market segments.

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Chief Executive Officer Alex Stewart Reduce Operating Expenses This objective is a key driver to profit as every effort made to reduce our operating expenses returns a better result to our net profit, regardless of revenue performance. It should be conducted with determined urgency to ensure we can deliver to this target. We have identified key drivers of this metric within the business and actively seek ways to improve these results.

Where and when we have optimised our expenses as a percentage to revenue, it will then fall back to Objective 1 “Increase Revenue” whilst holding where possible Operating Expenses that will improve this result.

It is however holding us back from progressing on many key projects but also greatly affects customers with National presence that require multiple state or nationally consistent outcomes.

By moving towards a National entity, we can leverage ‘best practice’ for our business as some states are managing operational processes differently to other states and therefore will impact on our other key metrics as well as overall customer service levels.

Similarly we have traditionally managed our internal accounting system on a decentralised state based model, which does not provide for a National position in an easy to define format.

We have recently moved all of our accounting systems to one server in NSW, however still maintaining disparate systems. Ultimately we will maintain national data from one source which will allow consistencies across all aspects of business operations as well as better visibility to information.

Liberate Cash This objective is to primarily free up working capital from respective resources in order to re-invest in other projects within the business that will underpin other objectives. This will incorporate further and structured management of inventory on hand, purchasing and replenishment practices, supplier management, pricing structures, customer levy program, current asset management and key marketing activities.

Key Staff and Management Changes In March 2012, Ross Ollerenshaw who headed up the GNS Procurement Division, retired from his position and this role is now managed by Daniel Landers who has held various positions during his 16 year history with the company.

The ability to generate working capital is essential to re-invest in some of our key projects such as our E-Commerce platforms, Product Category development, Warehouse Management Systems and Sales Automation programs.

Vision for a National Business GNS has operations in NSW, Victoria, Queensland and Western Australia. Despite sharing the same trading name, the business has operated in many ways as standalone operations for many years, as they have had to evolve to meet local market conditions but also as a result of disparate and decentralised systems and processes.

This has not presented any major challenges to the business due to the traditional nature of our customer base, made up from individual businesses that, other than Newsagent Marketing group requirements, have not had a reliance on national consistencies in our structure.

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Ted Rogan, Chairman and Managing Director, retired from his role as Managing Director in March 2012 and in July 2012 resigned his position as Chairman. Allan Wilbers, Deputy Chairman has assumed the role of interim Chairman until we appoint a replacement in this capacity.

Both Ted and Ross were key drivers of the business for many years and the board, management and staff thanks and acknowledges Ted and Ross for their significant contributions to the business over this time. Ted was also recognised with an award presented at the ANF/QNF conference in July 2012 for his service to the industry.

Chief Executive Officer Alex Stewart Question everything that we do Like most mature organisations the phrase “This is how we have always done it” is well used and a common excuse for resistance to change. I have challenged every employee at GNS to question this statement in everything that we do and challenge the process or action they are taking.

In many ways GNS must change its culture, attitudes, legacy systems, marketing activities, processes and most importantly customer service models in order to meet our objectives. It is a challenging process but essential for GNS to become more relevant to our customers.

Opportunities We have identified and developed several key initiatives that we will be introducing over the coming months that will positively contribute to our business, as well as our customers’ businesses.

These initiatives include product category range extensions, distribution of promotional marketing campaigns directly to the end user on behalf of our customers, a completely new concept for sourcing printing consumables specifically in the ink cartridge category and additional range extensions to newly introduced lines such as canteen and facilities products and office furniture lines.

I do believe that our business is changing for the better – both within our own internal culture and processes, but more importantly what and how we position ourselves to our customers. The business has a great foundation that we can build from and opportunities are out there – despite the many and real challenges that face our industry now and in the future. We look forward to demonstrating our capabilities through innovative solutions and following through on our commitments.

Alex Stewart CEO

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New South Wales News What a busy couple of months, the signs are that things are picking up at last which is good for all of us, whatever the reason we have seen an increased level of activity since July.

Market Fair had been and gone and we are into the larger promotional orders such as Christmas and Back to School. Thanks to all those who took the time to answer the questionnaire, the more feedback we get the better the next Market Fair will be, also you may receive a follow up call in regards to your response.

We are currently shipping the completed Christmas orders out as per the required delivery date, and many of the customers who picked the first date have actually received and sold their stocks and are placing more top up orders.

If you wish to get your order delivered early then please call the Customer Service room on (02)8708 3444 to arrange to have this done.

Also, if your order is for pickup, please ensure once you are advised it is ready you make prompt arrangements for the pickup.

Please also note that the terms for the Back To School progress payment have changed to 70% (inclusive of GST) to be paid by COB Friday 25th January for the first delivery dates, with the remaining 30% due by COB Friday 22nd February.

Due to the costs of retrieving money last year the penalty has been raised to 15%.

Here’s looking forwards to a busy, and prosperous Christmas period.

Michael Howes State Manager

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Victoria & Tasmania News All Christmas pre orders have been picked and shipped ready for your busy retail period. We are seeing Christmas retail displays already in market preparing the consumer come November and December, so we aimed to have majority of stock to you in October so you can commence your in-store marketing.

For the first time GNS has introduced direct distribution of retail brochures to your customers on your behalf.

Our goal was to save you time and money managing this process, whilst ensuring your promotional campaign achieves better reach to new customers for you.

We did receive mixed feedback regarding GNS offering this service, however a good majority were pleased with GNS taking this next step in assisting.

The concerns raised were more in the context of loss of margin, as brochures in market means retail pricing had to be honoured. Our concern is that we are in a market where the consumer is very aware of price and has multiple mediums to determine where to buy. The average consumer is happy to buy local if the price is competitive and the product is of relevant quality to price.

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Brochures in letter boxes is still one of the most effective ways to reach the consumer, it enables your offer to be compared to your competition. My hope is that GNS continues to build on this additional service to take away your costs and give you more time to focus on your customers.

An important aspect with the Christmas promotion is to create an in-store and online (yourlocalnewsagent. com.au) display of the promotion which ties the consumer to your marketing. The consumer needs to associate your store to the brochures almost without thinking & this process needs to essentially start now.

Creating these triggers in the mind of the consumer is what your opposition does every day, so why not beat them at their own game. Over the next few weeks you will see receive email templates and e-marketing type adds to use through your yourlocalnewsagent.com.au websites. If we can help you further please do not hesitate in asking.

Good luck and happy selling.

Jason McLeod State Manager

webconnect.groupnews.com.au Some Stocks of some lines have already sold out after super high demand, & limited seasonal lines for top up wont last

It’s nearly Christmas time again. Time to check your list twice This year we have an exciting fresh approach to the 2012 Christmas Promotion, with new strategies to help participants succeed in their market. This will assist more stores than ever to re‐engage more stores than ever to re engage with the consumers & help bring more with the consumers & help bring more consumers back in to buy with new lines & beefed up marketing campaigns.

CLOSE TO ONE MILLION EXTRA HOMES THIS CHRISTMAS WILL SEE A NEWSAGENTS’ CHRISTMAS CATALOGUE IN THEIR LETTERBOX……………….MANY FOR THE FIRST TIME!!

We know that most stores have endured a tough period over the last few years and many of you have jumped at the opportunity to have your overprinted brochures distributed this year. This is a first for GNS and is very necessary to assist newsagents build a stronger perception in consumer’s minds as a destination to buy from this Xmas. The excitement this has generated is fantastic!

Brochure quantities ordered have been the most we have ever seen and has given many owners a renewed confidence coming up to the busiest 6 week retail period on the calendar after an interest rate cut.

This year, the catalogue has also seen many new inclusions with gifts being added for the first time, along with strong household brands such as Crayola with super priced licensed products. Some stocks have had to be re‐ordered again & again to cope with such strong demand and as such, some toy lines are now sold out. We strongly reccomed you hold enough of your toy lines for the start of the promo in late November/start of December . This will be to coincide with the brochure drops as stocks are limited and more lines will sell out quickly. It is also the perfect opportunity to add extra value to the promotion with any other limited and more lines will sell out quickly. It is also the perfect opportunity to add extra value to the promotion with any other related products you might have in stock to sell in store at the same time, so set up eye catching displays and reap the rewards.

MERRY CHRISTMAS & MAY YOUR CASH REGISTER JINGLE ALL THE WAY

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Queensland News The expected result for you will be more customers through your door, buying your products…you WIN!

It is amazing how quickly the year is going!

Here at the warehouse we have finished picking all the Christmas promotion orders and have started on BTS orders.

If you want any Diaries or Christmas product please just order with your normal stock orders.

As you would no doubt be aware by now, GNS have taken the positive step of directly delivering Christmas and Back To School promotional brochures to households in the area of participating Newsagents. The dual purpose being to: (1) Advise potential consumers of the product offering available at their local Newsagent.

(2) Highlight the value proposition that by shopping at your local Newsagent, you’re not paying extra for the convenience of doing so.

Sandy McCullum (Previously in Special Orders and Purchasing) who has been with us for 14 years has decided that a trip round Australia is her next venture. We wish Sandy all the best for the future.

Steve Livingstone (Area Manager Rockhampton – Bundaberg) has decided that the quiet life is in order and will be retiring later this year. We wish Steve all the best.

Geoff Sugden State Manager

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When it comes to winning business Officesmart Agents have the program to offer the customer the total package.

The customer’s needs of today have changed but with the Officesmart philosophy, you only need to tinker from time to time to offer Officesmart as a complete package.

FULL LINE CATALOGUE Photographs, descriptions, pack sizes and codes for over 8000 product lines, all major suppliers are represented.

A great reference for your customers.

QUARTERLY BROCHURE Featuring top selling products that are in demand by the customer, all products are priced and the pricing is held firm for a full 3-month period – what a selling feature. Prices are benchmarked against the leading opposition so that you are competitive in the market place.

MONTHLY FLYERS/EMAIL Designed to keep your name in front of your customer promoting your Officesmart business normally highlighting a category or a range of products.

Use as a flyer or use the images in an email to keep your name in front of your customer.

WEBSITE FOR EASE OF ORDERING Unquestionably the most important selling tool to win over today’s customer. The ease and convenience of being able to shop online at whatever time of the day, FRIENDLY BACK UP SERVICE The last piece of the puzzle you and your team the people that drive the business ensuring customer satisfaction and the needs are met in a professional manner.

New South Wales: Queensland: Victoria:

Officesmart State Coordinators Officesmart Coordinator kgraham@groupnews.com.au Kim McCloy kmccloy@groupnews.com.au Frank Misurelli fmisurelli@groupnews.com.au - 10 -

Western Australia News Market Fair What a great Market Fair this year!! It was fantastic to see so many customers attend once again. Thank you to everyone.

Your support of the event is always appreciated.

Once again the WA Sales team put in a fantastic effort in pulling the day together and a huge thank you goes to them.

Thanks also goes to the Exhibitors who every fair dedicate themselves to creating appealing stands and worthwhile offers.

We once again had a record number of exhibitors on display representing a good cross section of the industry and each and every year we encourage more of our Industry partners to be part of this important event.

This year we asked all of our customers to complete a survey on the Fair. Thank you to those who took the time to respond.

We’ve received some valuable feedback which will be considered for next years event.

Diaries We still have a large range of 2013 Diaries available in the warehouse. Some lines are starting to sell out so you are urged to place your top up orders now to avoid missing out.

Christmas Christmas is fast approaching and we are rapidly picking all your Christmas orders. Toy lines once again have been a huge success.

This years inclusion of more gift lines has proven popular with many lines needing to be reordered to meet your demand. Each year we encourage you to order enough to avoid disappointment. This year is no exception with some lines already proving very popular. I can’t stress enough how important it is that you order adequate quantities of stock early.

Space is at a premium in the WA warehouse at this time of year so we ask for your assistance in adhering to the pick up dates for your Promotion orders. Getting your stock up early in store will also assist in maximizing retail sales.

Back to School I am hearing many reports that Newsagents this year have secured School Booklist business due to the demise of the major educational supplier in WA, Wooldridges. It is great to see that the hard work and dedication put in by stores over the past few weeks has paid off. I know many of you have been tendering for this business for many years unsuccessfully so it is gratifying to see your persistence has rewarded you. The GNS WA team is able to assist you with sourcing any non warehouse ranged lines on the booklist, including Textbooks.

Please ensure you give us ample notice to order these lines in for you.

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Sue Conyard State Manager

“Newspower’s mission is to provide marketing support and buying opportunities for you so that you can sell more products and services, more often to more customers”

Buying Opportunities

Newspower’s rapidly growing Preferred Partner Program delivers substantial discounts, deals and offers to you, covering categories such as Technology, Giftware, Novelty, Beverage, Confectionary, Stationery and Greeting Cards.

Brochure Distribution into Letter Boxes Professional brochure distribution with area maps created for you. Your store name printed on the brochure puts you in customer’s letter boxes, driving them into your store. Newspower delivers over 5 million brochures into letterboxes every year!

18 promotional events every year A complete marketing calendar with promotions every month across every category in your store supported by professionally designed and produced visual merchandising kits to help your promotion be the best and most successful it can be.

Brand Support Store Signage‐ external and internal signage solutions for you.

A uniform range for all shapes and sizes.

Communication – keeping you informed Member Website, eNews, Newspower Today Newsletter, Faxing and Mail Outs

Member Benefits Meetings Regular Member meetings with Partners, great offers and brilliant opportunities.

And time to share information and ideas with other Members.

Largest Marketing Group A strong Newspower strengthens your Industry.

NEWSPOWER AUSTRALIA National Office National

Helen Dowling 0438 648 444

Queensland

Evan Jamieson 0434 417 701 SA/NT

Vic/Tas Peter Oredsson 0438 804 602

NSW/ACT WA - 12 -

02 8708 3455

John McGarry 0488 120 497 David Thompson 0418 856 139 Sarah Garvey 0400 654 362

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