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Retailers offer Govt savings of $15.2 million on wasted spend

Peak retail industry body the Australian Retailers Association (ARA) said the Government's announcement of $2.2 million to establish a unit pricing code for retail supermarkets was wasted expenditure that could be better spent on establishing a code of conduct to help retailers operating in a tenancy crisis.

ARA Executive Director Richard Evans said the $2.2 million provided to the ACCC over the next two years would be wasted on the heavy-handed implementation of a code to regulate unit pricing initiatives that many retailers are already voluntarily introducing.

"This is a clear focus on funding initiatives with no consumer benefit just like the $13 million allocated to the GroceryChoice website which the ARA called to be scrapped prior to the Budget. Initiatives like these will only result in the burden of compliance costs for retailers to avoid costly sanctions. Meanwhile, one of the biggest issues retailers are facing during the GFC - tenancy - is being ignored," Evans said.

"Retailers are very savvy with their spending and they could easily save the Government $15.2 million by scrapping the ineffective GroceryChoice and unit pricing code initiatives.

"If the Rudd Government is serious about reducing cost burdens for small business they should be focused on measures to address the retail tenancy crisis and implementing recommendations from the Productivity Commission's Market for Retail Tenancy Leases final report (August 2008), including a code of conduct to help curb robust behaviour from landlords.

"In the past six months, over 31 percent of retailers suffered rent increases greater than 10 percent when they renewed their leases. Some of these retailers have reported annual rent increases of up to 25 percent at a time when many of them are struggling with 12 months of reduced demand.

"Retailers operate within tight margins and they watch every dollar they spend. Retail budgeting 101 states that if recurrent revenues decline then recurrent spending should also be reduced.  We see little evidence of this in the Federal Budget with the Government's wasted funding on initiatives that will only burden retailers with compliance costs and sanctions - including the funding for the unit pricing code.

"The Government has a real opportunity to introduce a code of conduct to major shopping centre landlords regulated by the ACCC and take steps towards alleviating spiralling retail occupancy costs, but there has been little action to do so.

"Instead, the Federal Budget wastes $2.2 million dollars on a unit pricing code resulting in retail compliance costs, including training staff to deal with customer confusion, that will be passed onto to working families at the check-out," Evans said.

For over 105 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia's $292 billion retail sector which employs over 1.5 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia.

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