The Australian Retailers Association (ARA) has urged the Rudd Government to look at steps to help contain spiraling occupancy costs for retailers rather than promoting a website that does nothing to reduce grocery prices.

ARA’s executive director Richard Evans said the release of the Productivity Commission’s report on retail leasing, originally due in March and now pushed back to August, is well overdue.

“Labour rates and occupancy costs are the two significant overheads for retailers. Currently the cost of occupancy is well above what the retail sector should be paying as a percentage of direct costs to bring goods to market while maintaining a sustainable profit margin.

Evans says that if the government really wants to reduce grocery prices it actually needs to do something about it instead of introducing a website that does nothing for the retailer.

“If the Government really wants to reduce grocery prices they should be showing some leadership on the issue of retail leasing. While the ACCC’s inquiry into grocery prices has confirmed the cost of production and domestic weather conditions are affecting the cost of goods going to market, retailers are still struggling with escalating occupancy costs. This is retail economics 101 – to reduce retail price we need to reduce costs not add a compliance burden as recommended in the government’s announcement on unit pricing.

“We need to start finding real solutions to reduce grocery prices rather than the smoke and mirrors approach the Rudd Government has taken so far with unit pricing and the Grocerychoice website," said Evans.

“With the mooted labour reform, award modernisation and the introduction of Emissions Trading Scheme (ETS) there is a lot of uncertainty for retailers at the moment. We urge the government to provide certainty in the tenancy issue by taking a national approach and by releasing the Productivity Commission’s report on retail leasing. 

"Over the years no consensus was reached on certain issues including end of lease issues, management fees, the introduction of competition changing the tenant mix, the inability of the small retailer to run a case against the might of the landlord and remedies relating to non-disclosure. This has to change and this is something very tangible the Rudd Government can do to ease the cost of business for retailers and therefore impact prices," said Evans.