Harsh reality of retail

By Grace Jones | posted on August 1, 2019

ALBANY Chamber of Commerce and Industry CEO Benita Cattalini believes the recent buzz over shops closing on York Street could be rectified by owner-operators and leaseholders being more competitive with their products.

The subject of businesses shutting up shop on York Street has been a hot topic during the past few City of Albany council meetings.

One owner operator contesting an application for a coffee shop in May stated the approval of the shop would cause them to let go of t heir employees due to the competition, while another stated the shop would “create an unfair playing field”.

City CEO Andrew Sharpe said rates for owners on York Street were based on gross rental valuations (GRV) provided to the City by the Valuer General that were reviewed every three years and that the City was not responsible for businesses overheads.

“The last revaluation period reflected a decrease in commercial valuations of 3.62 per cent,” he said.

Ms Cattalini said the biggest issue facing retailers on York Street was the impact of online sales.

“Businesses have to make the choice to stay open,” she said.

“Most businesses on York Street can be open seven days a week.

“Albany is not a small town. Shop owners need to be extra sensitive to what customers want and need.”

The Weekender compared current commercial lease listings with the City of Bunbury to the City of Albany who had populations of 31,919 and 33,145 respectively from the Australian Bureau of Statistics (ABS) Census results from 2016.

Current listings for Albany shops on York Street would have renters pay on average $25,154.88, while Bunbury businesses on Victoria Street, the equivalent retail hub, would pay on average $30,875.

Mr Sharpe said the retail industry was experiencing hardship globally and had been impacting regional areas.

Recent statistics released by the ABS state that over the 2017-18 period, Albany experienced an overall growth of 64 new registered businesses.

According to the ABS, the wholesale trade industry had five new businesses open, retail trade had eight businesses shut, rental, hiring and real estate services had grown by 23, health care and social assistance had grown by 11, and arts and recreation had grown by 11.

Bunbury Geographe Chamber of Commerce and Industry President David Kerr said retail conditions in Bunbury were stressful for some.

“There are a lot of variables to how successful a business can operate,” he said.

“One of our issues has been the cost of rent being high.

“For quite a while property owners have been quite reticent to change their rent and support their tenants. We’ve had more owners open to negotiate now but it has been a fairly long and
challenging time.”

Ms Cattalini said Albany’s issue was that businesses were not embracing change and taking the leap to engage with their customers online or utilising their ability to operate seven days a week.

“People in general have less disposable income to spend, which is a significant issue,” she said.

“There’s an opportunity for people to make an absolute killing by staying open during an activation activity like the Christmas Pageant.

“But it’s really important for people to try it and show what they can offer.”

Ms Cattalini said times were hard for some businesses but it was not the case for every business on York Street.

“Some people are providing an excellent experience for their customers in their store and online,” she said.

“We’re offering free training for businesses to learn how to engage with their customers online and on Facebook.

“We don’t tell our members how to operate their business, we suggest that they open seven days and go online.

“Businesses can’t ring and demand we do something because their shop is closing. It’s their choice to be competitive.”

Mr Kerr said the reality of retail was that shops needed to compete with online spaces, so retailers needed to provide vibrancy for their customer’s shopping experience.

“The reality is that retail is a live game, no two days are the same,” he said.

“Opening hours are definitely part of the equation to success.

“Even if you stay closed on a Sunday, the rates and rent still tick along, but on the other hand penalty rates can make it very hard.

“People need to make a judgement call on whether to take that risk.”

Ms Cattalini said introducing deregulated trading would have winners and losers but was not something Albany would need to decide on right now.

“The bigger focus needs to be going online,” she said.