Regulation hinders retail – CCI

Key arguments used by independent retailers during a fiery deregulation debate several years ago have been challenged this week by the Chamber of Commerce and Industry of Western Australia.

The CCI claims deregulating trading hours would likely lead to lower prices, create higher levels of retail investment and increase employment opportunities.

The 75-page report, ‘Retail Trading Hours in Western Australia: A Case for Reform’, aims to debunk arguments used by independent retailing lobby groups, which waged a successful campaign against the deregulation of trading hours ahead of the 2005 referendum on whether to introduce weeknight and Sunday trading.

When the government first mooted changes in 2003, the WA Independent Grocers Association led with a campaign titled ‘More Hours Means Less Shops’.

WAIGA, and later a new lobby group that employed Brian Burke, the WA Retail and Small Business Association, claimed deregulated shopping hours would lead to increasing domination of the retail pie by Australia’s supermarket giants – Woolworths and Coles.

However, the CCI report shows that between 1998 and 2006 (when the major states deregulated) the number of small retail businesses in NSW increased by 4,900, in Victoria by 6,400, and in Queensland by 4,500 but by just 200 in WA. There were 100 fewer small businesses in South Australia during the same period.

The CCI said the statistics suggest restricted trading hours may have limited small business growth in WA and SA.

The report also cites an unnamed retailer that wants to expand its three-shop business but is unable to under WA’s current laws, which prohibit seven-day trading if an owner has more than three shops.

It’s even something that John Cummings, the head of lobby group WA Independent Grocers Association, has come up against.

Mr Cummings, who has been fighting the battle against deregulating shopping hours for about a decade, owns IGA Supermarkets in Leederville, Duncraig and Glengarry.

However, he is linked to a fourth supermarket in North Beach, which is owned by his wife, son, and daughter-in-law.

Mr Cummings said the current legislation did not restrict small business growth and business owners needed to assess their options when looking to expand.

“Trading hours can not be the reason, it has not stopped Harvey Norman opening up,” Mr Cummings said.

He said there was no evidence to prove there were economic benefits created from introducing deregulated trading hours and that the CCI was simply acting on behalf of Coles and Woolworths.

Mr Cummings said retail sales had increased in WA more than in any other state in recent years, and that big name retailers such as Harvey Norman and David Jones were achieving strong growth out of the WA market.

The CCI report also highlights underperformance in retail development in WA compared with development in other deregulated trading states, and suggests deregulating trading hours would likely stimulate investment in the sector.

Using figures from Access Economics, CCI says the value of retail work in WA, estimated to be about $373 million, represents just 5.9 per cent of retail output.

In New South Wales there was $2.3 billion of worth of retail work underway representing 13.9 per cent of 2005-06 retail output. Victoria’s retail development of about $1 billion represented 8.4 per cent of total retail output.