Retailers are demanding more transparency in retail tenancy, according to the Australian Retailers Association (ARA) who met with retailers and associations to discuss the need to level the tenancy playing field for landlords and retailers.
Currently, lease negotiations are adding unnecessary pressure, which in their current state are leaving many retailers struggling to survive.
ARA executive director Russell Zimmerman said the main theme coming out of the discussion was around the pressure retailers in shopping centres faced from rental costs, which were not determined based on real market valuations, retail turnover or current economic conditions.
“Reforms such as a code of conduct and third party reporting of turnovers would go some way towards making the process fairer and more transparent, as well as ensure retailers are able to balance the cost of doing business with keeping their doors open,” he said.
“One of the major hurdles for retailers is a retail tenancy framework which skews lease negotiations in favour of landlords and drives up rental costs for retailers who ultimately have to pass these on to the consumer.
“In some cases, smaller retailers have only escaped unnecessary and inflated costs because they have questioned their invoices.
“Tenancy needs to be an issue for the Federal Government if retailers are to remain operational and compete in a global environment.”
Chair of the Franchise Council of Australia Stephen Giles said retail tenancy was a federal issue and highlighted the need for a leasing code of conduct to achieve more transparency and give smaller retailers a level playing field in negotiations with landlords.