The ARA response to the VIC Business Relief Package and recommended retail roadmap

The Australian Retailers Association (ARA) has welcomed the Victorian Government’s

expanded financial support package for Small to Medium Size Businesses (SMBs) but

cautioned it won’t be sufficient to prevent an avalanche of permanent retail closures due to

protracted lockdown restrictions.


ARA CEO Paul Zahra said the immediate grants and tax relief would offer important survival

funding for small retailers, but won’t address the fallout of jobs and store closures for medium or

larger size retailers which employ the majority of Victorian retail staff.


“We are pleased that smaller retailers with payroll of less than ten million dollars can access

cash grants and deferred payroll tax. The CBD focus announced today is also critically

important, with those retailers more affected than most due to the collapse of all forms of viable

visitor numbers since early this year.


“However, grants of $10,000 to $20,000 only represent a tiny percentage of the losses retailers

are now carrying. Whilst the increased threshold for retailers with larger payrolls is valuable, this

remains a very low bar for retail and means there is no support for many of the retailers that

represent the household names Victorians know and love. Many of these retailers are unable to

access JobKeeper and have no support to offset their considerable losses.


“We are also concerned that deferred payroll tax creates yet more mounting debt for retailers

already carrying significant deferred leasing costs,” he said.


Mr Zahra said retailers are committed to the safety of Victorians, but the sector remains

extremely concerned about the catastrophic impact of the proposed approach to retail

reopening contained in the Roadmap.


“In its current form, we predict the Roadmap measures will mean the permanent loss of up to 50

per cent of Victorian small retail operations that might otherwise survive, leaving many

thousands of people unemployed. Some areas of retail, such as CBD retail, will take up to a

decade to recover.


“The Roadmap means retailers will have been in lockdown for or many months ongoing, in

addition to the previous round of lockdowns. And some have been in continuous lockdown since

March, which is globally unprecedented and untenable on many levels.


Alternate Covid-safe measures


Mr Zahra said Covid-19 transmissions within retail remain extremely low, with an ARA members

survey last week indicating that 93.4 percent of retailers have had no cases of Covid-19

transmissions in their stores or distribution centres.


“We would like to see a much earlier reopening and believe an approach to reopening which is

better aligned with successfully working examples, such as NSW, is reasonable to consider,” he

said.


Mr Zahra said in addition to the existing Covid-safe measures, retailers would support broader

measures, such as:

  • The restriction of people movement to one person per household in the same way we have for essential services and supermarkets in recent weeks.

  • Mandatory mask wearing by both customers and staff to help protect and mitigate any risk of transmission.

  • The introduction of Covid marshalls, consistent with the South Australian approach, would be another area our larger retailers would support.

  • Other Covid-safe measures identified by the Victorian Government which avoid strict lockdowns.

Retailers are also actively undertaking the Government subsidised (accredited) infection control

training, which the ARA provides, in the lead up to re-opening.


“Retailers will be relying on Christmas earnings to help offset their significant 2020 financial

losses. With this financial outcome now also in jeopardy, many retailers will be considering

permanent store closures.


"Accruing leasing deferrals payments will push more businesses to bankruptcy. Whilst we

applaud the extension of the national leasing code protections, the legislation requires 50 per

cent of rent to be deferred and repaid later, in a protracted lockdown environment this is now a

burden that may bankrupt many small businesses in Victoria and weigh heavily on their mental

health,"he said.


Mr Zahra said the ARA is pleased to see the easing of lockdown timings for beauty businesses,

with those businesses now able to open a month earlier on 26 October, in line with hairdressers.

This is a point ARA and our sister organisation Health and Beauty Industry Association (HBIA)

have advocated for and also provides an important win for a sector which employs and services

thousands of women.


ARA Recommended Retail Roadmap


Mr Zahra said key recommendations provided to the Victorian Premier last week include the

following measures:


1. Immediate increase in warehouse and distribution centre staffing.


A further six weeks of lockdown ahead for most retailers will place an untenable strain on supply

chains not only in Victoria, but around the country. Distribution centres can not only provide an

online offset against physical closures, but they take some of the strain off physical stores

particularly as we get closer to the Christmas period. The flow on effect of this constraint is that

it will mean unsafe levels of pent-up demand are in place by the time retail does reopen.


The ARA requests that warehouse teams, including those in retail distribution centres, and ‘dark

stores’ are allowed to increase their staff numbers to full capacity. This can be achieved in two

shifts to allow a safe workforce bubble to be maintained.


These centres have been safely operating at a two thirds arrangement during the recent

lockdowns to support online retailing. ‘Dark stores’ are important to include in this provision, as

many retailers do not operate warehouse locations and they also help spread the distribution

load safely allowing better distancing and workforce bubbles.


2. Reassessment of case loads


The ARA is concerned that the target case-loads of less than five daily cases is unrealistic and

inconsistent with the approach of other jurisdictions. New South Wales has been operating at

case-loads in the double digits (generally between 8 - 18) for much of August and remained

open successfully and without significant infection spikes.

We believe that when Victoria reaches NSW levels of containment, retailers should be able to

safely open. The ARA supports a nationally consistent approach in line with the nationally

agreed trigger for hotspots of a rolling three-day average of ten locally acquired cases per day –

30 over three consecutive days, in line with medical advice.


3. Bring retail reopening dates forward for low-risk retailers


In light of all of the above considerations, we propose a progressive reopening, bringing the

retail reopening dates forward by a number of weeks to allow a more even spread of retail

activity prior to Christmas.


4. A gradual extension of trading hours


To help reduce the intensity of peak shopping, which will be based on pent up demand and the

delayed start to Christmas shopping, we propose relaxed retail trading hours to allow for

improved social distancing.

Retail is a broad church - from hairdressers to hardware, fashion to food. A one-size-fits-all

model does not appropriately reflect the true safety considerations across the sector. We

support prioritisation of opening for: the full staffing of distribution centres (as noted

above), regional locations, large retail stores, stand alone and high street locations, and

shopping centres, using a hot-spot approach.


“The retail industry is keen to work with the Victorian Government to support a safe and sensible

retail reopening plan. We are asking the Victorian Government to consider a holistic view of

health and safety considerations,"said Mr Zahra.


“The stress created by lockdowns and complete financial collapse of the majority of small and

medium retailers will have a health flow-on effect that is not currently being addressed or

measured.


“Many retailers may not only lose their life’s work, but face a legacy of permanent

unemployment including many young people and women, with retail as a largely female

workforce,” said Mr Zahra.


Mr Zahra said with Victoria as Australia’s capital of freight and distribution, the lockdowns have

also financially impacted retail operations around the country.


ENDS…for more details: Tim Janczuk (m) 0431 045 373 (e) media@retail.org.au


About us: founded in 1903, the Australian Retailers Association is Australia’s largest retail association, representing a $325bn sector employing more than 1.3m people. As Australia’s premier retail body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members. To learn more, visit www.retail.org.au or call 1300 368 041.

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