Are newsagents and post offices a dying trade?

skysky69

The village post office where I work is currently on the market and I was just wondering what people's thoughts are on its viability as a business. Asking price is 37.5k but there is only a 2 year lease left. Rent is 6.6k. PO wage is about 14k and turnover at the moment is about 160k. The village is relatively small with approx 1000 residents and a couple of smaller surrounding villages that don't have a shop. Although 1.5 miles away is a Co-op in the village next door. Current hours are 6am - 5pm.

Is it a dying trade and is there any money to be made as a subpostmaster? Opinions grateful!

paulwf

My main concern would be the hours you end up working; potentially 5am to 6pm in the shop and then until 8pm a couple of nights a week going to cash n carry. That is 7 days a week and every day of the year except Christmas Day. If you are ill you still have to work. This is how my parents ran a newsagents, they didn't have a life. So even if it is profitable you would want a serious salary to justify 90 hours a week 52 weeks a year.

Newspaper sales have been in decline for decades and things like iPads are only going to hasten their demise. Check out your local Bookers wholesaler and you'll get a real eye opener on profit margins for food, you'll be buying at a price roughly the same or more than the rrp in supermarkets so your profit margin in some cases is less than 20% (cans and crisps do a better though).

BTW village sub post offices are a magnet for armed robbery. Some have closed because of this.

It wouldn't be my first choice for a business

lincroft1710

A newsagent/sub PO in a tertiary shopping area in my town, which had been as such for probably 50 years+ closed about two years ago and remains empty. Although not so common now, village sub POs were often targets for ram raiders. Armed raids on village sub POs around here seem to have been carried out by gang(s) who would hit several over a period of a few weeks.

Is there an established newspaper round, as that's another thing you've got to worry about

vivatifosi

I'd want to find out more about the government's plans to turn Post Offices into mini-banks for all. It could be a good move to rejuvinate Post Offices. However I'm also mindful of the county (Essex?) where the County Council had to buy many small post offices to stop them from closing which indicates for sure that many are very marginal businesses.

lincroft1710

Also if you did decide to go with this idea, the first thing I'd do is enquire about possibility and cost of extending the lease.

C_Mababejive

I think you could up the income by diversifying into niche areas for the locals.

Pennywise

You need to see the last 3 years accounts to see what profit the whole business is making, including the PO salary. Unless it's making at least £25k per year after all costs, it's not worth your while as you could earn that by having a couple of jobs without the stress and risk.

It's not true to say that newsagents/post offices are a dying breed. Some are dire and havn't a future, others are still profitable.

A lot depends on the locality. Is your village a "magnet" for the local area, i.e. with maybe a pub or two, a fish & chip shop, doctors surgery, or other shops - if so, there's more chance of it remaining relatively vibrant. If it's the only shop and there's nothing else, people will be more likely to go to other villages/towns. Some people think that being the only shop in a village is a good thing - in fact, it's the opposite, you need other "attractions" to get people to come to your village.

Can it diversify? I.e. can it get a lottery terminal, can it become an off-licence, can it get a cash machine, etc., etc. You can't stand still with a small shop - you need to be constantly reviewing your shop, keeping up with modern trends, etc.

jexygirl

Hi ya,
I would ask what the net profit is, not what the turnover is, and also how its run, what can you change/improve. I bought this place knowing it lost 120k the previous year, but it was badly run, our first year we broke even. It isnt about turnover, its about profit. I have no idea about that specific trade, but prior to "recession" my trade, a lease was generally worth around twice its adjusted net profit as a guidleline. We paid the lease, despite the loss, because there are other factors such as location, quality of F&F, the way its currently run compared to how it would be run.
You would need to study the figures. An example for us, was that the manager in place, had gone to 35 ml measures from 25 ml and not increased the price of the drink.
Look at current suppliers and options available.
I would not be happy paying the 37k with only 2 years of a lease. That works out at alot of money per year just in lease, without rent.

As for the trade itself, my OH's family buisness was a newsagents and had been in the family for 60 years, started by his grandmother. My Fil worked 14 hour days 7 days a week
His father took one weeks holiday a year, and that was only in the latter years, and forced!


They sold it, and within 6 months of selling it, it was back on the market, not because it wasnt financially viable, simply because it is hard work and long hours, and it was a big family that bought it, but still it was too much.

I would also look at where you are. When I was in Norfolk, postoffices / local shops, were closing hand over fist, simply because local people were selling up, and being in picturesque locations, meant people purchased the property as a holiday home, not a permanent one, therefore reducing the amount of people regularly using the shops / post office as part of everyday life, as holiday homes, people dont need that facility. Whats happening in your area?

Jex

COOLTRIKERCHICK

I would def find out about extenting the lease before going any further, plus find out what type of rent increase there might be..

Is the post office on a prime holiday route? if so could you cash in on this some how.

My hubby opened his shop 7 days a week, it not only is it hard work, it also saps the life out of you, seriously...if you are going to go for this venture, make sure you have trust worthy staff who can run the shop while you have time out during the week/weekend

not only would 7 days a week drain you, it will also cloud your judgement... and you will not be able to forcus on potential financial changes in the business

Owain_Moneysaver

If you are thinking of diversifying, remember the Post Office have some restrictions on what can be sold. You'd also need to check whether the current PO setup complies with all their requirements, you don't want to find out the week you move in that the PO want you to install new CCTV and a computers system at your expense as a condition of the franchise.

Savvy_Sue

Owain_Moneysaver wrote: »

If you are thinking of diversifying, remember the Post Office have some restrictions on what can be sold. You'd also need to check whether the current PO setup complies with all their requirements, you don't want to find out the week you move in that the PO want you to install new CCTV and a computers system at your expense as a condition of the franchise.

Or that they want you to improve access for the disabled / install an induction loop etc