The CEO of the Australian Retailers Association, Paul Zahra, today welcomed the Australian Competition and Consumer Commission’s decision to grant interim authorisation for retailers to bargain collectively on rents with shopping centre landlords, saying it has “levelled the playing field” for retailers struggling with costs during the current Coronavirus episode.
Speaking after the decision – which allows current and future members of the ARA to share details such as rising vacancies within centres, falling customer counts and deteriorating trading conditions due to Coronavirus control measures – was announced, Mr Zahra said it cleared the way for retailers to bargain with individual landlords from a position of strength.
“Rent, along with wages, is one of the biggest outgoings for retailers; while JobKeeper has given welcome relief on the wages front, this decision will assist our members to strike collective arrangements with their landlords,” Mr Zahra said.
Mr Zahra said while the ACCC ruling protected retailers against breaches of competition law, and allowed sharing some types of information, this did not extend to disclosing actual rents payable by individual businesses or colluding on rent.
“A practical example is a group of retailers – large and small – negotiating a collective percentage reduction in rent, but those retailers would not be able to quantify to each other the specific impact on their businesses in dollar terms,” he said.
“Retailers will also be able to discuss the position landlords have taken around interpreting and applying the mandatory Code of Conduct for retail leasing announced recently by the Prime Minister, which the states are legislating,” he added.
Mr Zahra said the ACCC’s decision meant all ARA members – including those from chains with collective turnover above the $50 million threshold to which the Code applies – would also be able to participate in group discussions with landlords.
“The ARA has many members above the $50 million turnover threshold that are also facing existential challenges as a result of near-total collapse in their trade; the Code does stipulate the principles it contains should apply to all retail leasing negotiations – not just for small businesses – and this ruling will assist them to take advantage of that,” Mr Zahra said.
Mr Zahra noted the decision applied to all groups of retailers sharing a common landlord, and was not restricted to businesses located in major shopping centres.
“We thank the ACCC for its decision, which enables retailers – if they belong to the ARA – to bargain on rents with landlords from a stronger position in a uniquely challenging time for the retail sector, and for Australia generally,” Mr Zahra concluded.
The ACCC’s interim decision, if confirmed, will apply for a period of twelve months.
