Ovato Retail Distribution COVID-19 update #4

Here’s the latest report from Tony Edward, GM of Ovato Retail - 25 March 2020

Based on the information we currently have; these channels will be closed during the COVID-19 shutdown:

• Whitcoulls
• Paper Plus Group (including Take Note)
• Relay and Airport Stores
• Independent Bookstores
• The Warehouse Ltd

There are also a number of dairies that have chosen to close during this time, and we are still trying to identify these.

These closed retailers account for around 24 per cent of our total unit sales across the total retail magazine category. This does however vary by publisher.

I will update you if there are any significant changes to the retail footprint due to further closures or changes in government restrictions.

Impact on overall sales

I have had many requests asking me if I know what the impact on sales will be. The simple answer is no.

What I can tell you is that the bookstores have had a huge spike in overall sales and Supermarkets continue to over-trade. Exact impact on magazines are still to be determined. I hope to provide you some actual sales data next week.

I have spoken with a major distributor in the UK and their feedback was there has been a major shift in buying patterns – including a spike in sales in convenience stores.

What if my sales are mainly from Bookstores?

There are some publishers that the Bookstores channel account for most of their distribution/sales. Where practical we will allocate some copies to other retail channels, but this will be very limited. Please work with your account manager to reduce your print runs accordingly. And for those magazines already printed (or en route) we will have to increase overs held. In some cases, we may not be able to place copies at all.

Countdown and Foodstuffs

Both major Supermarket groups have requested that we do not change any prices or barcodes for the foreseeable future. They have also instructed us that they will not be carrying out any range reviews or accepting new titles.

Are those retailers that are staying open trading differently?

The Oil retailers have informed us that they won’t be allowing customers into their stores. Instead customers can request products from the store via the ‘night pay window’.

Dairies will be operating on a one-in one-out basis for customers.

How secure is your delivery network?

We use Post Transport for all our linehaul and Courier Post for store deliveries. These businesses are part of NZ Post and they are recognised as an essential service. They have a safe and secure national network. I have also told NZ Post that our delivery deadlines (times set out in the Service Level Agreement) aren’t critical, so any essential products should get priority. NZ Post doesn’t anticipate any issues.

We have also reached out to Countdown and Foodstuffs to offer the use of our warehouse and distribution network to their suppliers to help reduce the pressure on their distribution centres. We deliver direct-to-store (twice a week) which means some of their smaller suppliers can use us rather than pushing their product through the already busy Foodstuffs or Countdown DCs.

How are things at Ovato?

Ovato NZ has taken the position, that under Government guidelines, we are an entity that provides essential services and as such will continue to operate in a targeted approach. This means Ovata (NZ) Retail Distribution will continue to distribute magazines to those essential retailers.

Our office staff will be working from home with a couple of exceptions for operational purposes (on some days).  The warehouse team will continue to operate out of our national warehouse under strict health and hygiene rules to eliminate close contact with others.