ACCC allows retailers to collectively bargain for rent relief

By Dean Blake | 23 Apr 2020 View comments

Following on from granting landlords the power to discuss rent relief measures, the Australian Competition and Consumer Commission has given interim authorisation to retailers to bargain for rent relief collectively.

The temporary measure is being granted to current and future members of the Australian Retailers Association, and will allow retailers to share information pertaining to negotiations in order to ensure any support is spread across the industry.

“We see a clear public benefit in allowing retailers to work together in these negotiations with landlords as it will help those tenants who are experiencing financial hardship during this pandemic to reach a fair outcome,” ACCC chair Rob Sims said.

“We need to maintain strong competition in the retail sector and supporting these businesses will help with economic recovery once the pandemic subsides.”

The ACCC expects the proposed co-operation will follow the proposed mandatory Code of Conduct, which sets out good faith leasing principles.

Executive director of Stenton Retail Property Services Robert Hartman ultimately believes this will have a positive impact on the industry, though is still expecting to see a spate of voluntary administrations down the line.

“What’s happened in general is that individual retailers are still having individual discussions, and while there’s the Code of Conduct most businesses need more [support]. They need to pay no rent,” Hartman told Inside Retail.

“The Code of Conduct looked pretty good – it’s a reasonable concept – but if you’re doing no turnover you can’t afford to pay anything.”

According to Hartman, several individual retailers are pushing to pay a percentage of turnover as rent when they do eventually reopen – something he said landlords aren’t on board with as it could mean fluctuating payments at a time when retail is already facing uncertainty.

“[COVID-19] is going to change the whole face of retail. It’s going to change everything.”

The ARA has been contacted for comment.

This article first appeared on Inside Retail, a sibling website to Inside Franchise Business Executive.