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Testing time looms on retail hours

PREMIER Geoff Gallop calls it being held to ransom; the National Competition Council calls it fair play. No matter which catchcry you believe one thing is for certain, the level of debate about Western Australia’s retail trading hours has intensified and is expected to gain momentum until June this year, when the NCC expects an answer to its ‘please explain’ from the State Government.

The NCC is currently unhappy with WA’s current retail trading legislation and, if the State is to maintain its $72 million a year in competition funding, it will need to deregulate retail trading hours or provide a strong public interest argument as a reason not to.

The NCC has long held the view that governments must assess community needs rather than the needs of individual sectors when reviewing trading hours.

“The key question for all governments when reviewing shop trading hours is whether the benefits of removing restrictions on trading hours are greater than the associated costs, for the community as a whole,” according to a three-year-old NCC report.

High level Council insiders who spoke to WA Business News say the NCC is still singing from that same song sheet.

But WA independent retailers claim the social costs are huge.

WA Independent Grocers Association president John Cummings said deregulation would cause the loss of a number of small business operators, place jobs in jeopardy, and would severely affect the family lives of small business operators and the communities they support.

“In the lead up to the last State election the Australian Labor Party stated that it would retain the current retail trading hours system until 2005,” Mr Cummings said.

“Now it appears prepared to turn its back on not just wholly owned supermarkets, grocery stores and their employees, but also thousands of farmers, growers and small businesses who supply them.

“Extended trading hours is an opportunity for major supermarkets to increase market share as they have done in the other states.”

He said increasing market share to major players would ultimately lead to less choice for consumers and higher prices.

“Moves by our State Government to provide these corporate, east coast-based retailers with longer trading hours in WA will give them still more market power and make them less accountable to consumers in terms of prices, customer service, and convenience,” Mr Cummings said.

Community organisations and sporting groups also would suffer, he said, because of increased pressure on small business owners to work on Sundays.

The National Association of Retail Grocers of Australia (NAGRA) believes WA has a retail model that stimulates competition and serves as a shining example of how the retail sector should function.

NAGRA national spokesman Alan McKenzie was in Perth last week to help launch the ‘More Hours Less Shops’ campaign with the WAIGA.

“Western Australia alone enjoys the benefits of a balanced grocery industry where independent retailers hold a larger share of the market than either Coles or Woolworths,” he said.

“If shop trading hours are deregulated, however, we will see in this State the same patterns that are now established in other places; the transfer of market share to the big supermarket chains, lack of diversity and a smaller small business sector, less able to keep the big boys honest.”

A senior source at the NCC said the arguments made by small business operators were self-defeating and that States that had adopted change had experienced significant growth.

“If they provide the choice, the convenience and the quality the consumer requires, then they have nothing to fear from competition. It must be because they are protected and the consumer is paying for that lack of choice and lack of convenience” the source said.

Victoria – the pin-up market of many advocates of deregulation – is put forward as an example of how cutting restrictions on trading hours succeeded. Australian Bureau of Statistics data shows Victoria’s retail employment growth was 51 per cent from February 1995 to November 2002.

Taken in isolation these figures appear to be a convincing argument.

However, retail employment growth was 18.5 per cent between February and November 1995, before deregulation occurred in 1996.

And, when compared with other States, Victoria is no stand-out.

The comparable figures for WA reflect stronger retail employment growth for the same period at 51.7 per cent between 1995 and 2002.

Queensland had 57.8 per cent retail employment growth during the same period, which incorporates only three months of partial deregulation.

NCC insiders argue that economic and population growth factors impacted on retail growth in those States.

Statistics from the poorly performing economies of Tasmania and South Australia may support that theory but buoyant NSW recorded only 36.7 per cent growth during this time.

What the statistics also show, however, is that the retail grocery market share held by Woolworths and Coles rose significantly in recent years in the States to deregulate first, according AC Nielsen data.

For example, in NSW and the ACT the two supermarket chains had 66 per cent of the retail grocery market in 2000. By 2002 it was a staggering 79 per cent. In Victoria, the supermarket giants grew 8 per cent to a total market share of 80 per cent in the same period.

But in WA the growth of Coles and Woolworths has been held at bay, with their combined share of the retail grocery market static at 61 per cent.

But spokespeople for Coles and Woolworths claim the need for deregulation is not about market share, but rather about consumer choice.

It is an argument also put forward by the NCC.

“A main driver of change is changing social and work patterns, such as an increasing number of dual income households, more flexible and longer work hours and an increase in single parent households,” the NCC’s 2000 report says.

“These changes are influencing how and when people like to shop.”

Certainly, WA consumers have indicated they favour deregulation.

A recent WA Chamber of Commerce and Industry survey of 700 consumers found that two thirds would like more hours to shop, including later opening hours and Sunday trading. About 55 per cent wanted full deregulation.

But WA Retailers Association chief executive officer Martin Dempsey said those consumers will end up paying more as small businesses are forced to shut up shop.

Mr Dempsey said big supermarket chains already enjoyed significant trade concessions and deregulation would only add to the hardships faced by small business operators.

“How can you deregulate trading hours and have a regulated labour market,” he said.

Mr Dempsey said Coles and Woolworths were able to operate on more flexible Australian Workplace Agreements, whereas many smaller retailers were bound by awards that would force them to pay staff upwards of $30 an hour to work on a Sunday.

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