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Research leads regulation call

DESOLATE local shopping centres, sluggish employment growth, and greater dominance of major supermarket chains are the truths of a deregulated retail trading environment according to a leading retail industry researcher.

Robert Baker is a senior lecturer in geography and planning for the New South Wales-based University of New England and has been studying the economic and social effects of retail trading hour deregulation for more than 10 years.

Dr Baker has most recently been seconded by the NSW Government to help formulate a policy to solve the demise of retail trading in areas outside metropolitan centres and has provided reports to both the Queensland and South Australian Governments about the likely impact of deregulation.

His findings rule out any benefits of extending trading hours and suggests that opening up trading times closes community-based shopping centres and gives market dominance to Woolworths and Coles Myer.

Both the Queensland and South Australian Governments have decided deregulation is the way forward and to the detriment to each State, according to Dr Baker.

In his 2002 retail trading hours assessment report provided to the South Australian Government Dr Baker says that added household mobility, the rising incidence of planned shopping centres and deregulation of trading hours has crippled community shopping centres.

“By extending shopping hours significantly, there is going to be a substantial drop in the propensity for consumers to shop at their nearest centre,” the report states.

“The result is the proliferation of vacant shops in traditional shopping precincts. Rapid structural change has hit small business on many fronts in both metropolitan and regional Australia.

“The decline in passing trade in traditional town centres can be directly attributed to the shift in multi-purpose supermarket-based shopping towards planned shopping centres. The results have been long-term retail vacancies of more than 10 per cent and often more than 20 per cent.

“In Bankstown Sydney the vacancy rate in the traditional CBD precinct has improved from 15 per cent in 1996 to 10 per cent in 1998, but rental values have been stagnant since 1993 when there was a 14 per cent decline from 1991.

“Small business is essential to the vitality and viability of traditional shopping centres. Main streets will become less attractive to tourists if small business closures produce vacant shops, thereby reducing the attractiveness to tourist-orientated retailers.

“Online shopping offers the potential to solve the problem of catering for ‘time-poor’ households, without using trading hour deregulation.

“The problem with shopping hour liberalisation is that the cost of providing this convenience is spread over all consumers, even when they are not using the extended hours to undertake shopping.”

Dr Baker said he believed that South Australian food retailers would be hit significantly by the introduction of late night trading.

“Extending closing time to 9pm will cost small food retailers $128.4 million,” he said.

Dr Baker does not agree that deregulating retail trading hours improves retail employment growth. In his South Australian submission he states: “Aggregate extended hours in NSW is estimated to have seen a structural change in employment of 26,372 loss of full-time jobs (including owner-operators) and a gain in 2,467 part-time positions in the major supermarkets.

“These losses in NSW come out in ABS employment comparisons from 1995 to 2000. NSW had only 11.6 per cent growth in employment over the period but if these 26,372 jobs are added to the statistics, the figure would have been 21.9 per cent.”

ABS figures obtained by WA Business News show WA’s retail employment growth from 1995 to 2002 was 51.7 per cent compared to 36.7 per cent in NSW. The national average was 45.7 per cent.

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