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Pop-ups hurting shopping centre retailers

 

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The Australian Retailers Association (ARA) says the code governing pop-up shops in shopping centres is hurting permanent retailers and needs to change.

The voluntary Casual Mall Licensing Code of Practice regulates the terms on which participating shopping centres will grant casual licences to temporary retailers.

ARA executive director Russell Zimmerman said ineffective administration and maintenance of the code has led to problems, including adjacency and line of sight issues, where permanent retailers have been impacted by temporary pop-up shops, discount traders and designer markets.

For example, a discount bookseller popping up outside a permanent book retailer at Christmas, or a Valentine’s Day chocolate pop-up operating outside a chocolate store.

“While retailers understand the use of pop-up shops for temporary promotions, those in direct competition with existing tenants should not be operating directly outside permanent retailers,” Zimmerman said.

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“The code must be reviewed and amended, as any interference with sightlines to a permanent lessee should be at least avoided, if not prohibited, as it impacts unfairly on access, customer flow, and competition.”

In October the Australian Competition and Consumer Commission proposed to grant re-authorisation of the code to the Shopping Centre Council of Australia (SCCA), which represents the country’s major shopping centre landlords, for a period of three years, rather than the five years sought by the SCCA.

In a statement, the ACCC said the draft determination highlighted concerns from a number of retailers that the code was not working as effectively as it could.

“The ACCC’s preliminary view is that the code provides public benefits by giving a degree of certainty and transparency for permanent retail tenants about how casual mall leasing will operate near them,” ACCC Deputy Chair Dr Michael Schaper said.

“…However, we have heard strong concerns on behalf of some retailers that the code isn’t serving all retailers well in practice, and this is reducing the benefits from the code.”

To address some of these concerns, the SCCA recently proposed to invite more retailer groups to join the code, a move that the ACCC and the ARA support.

Zimmerman said while the ARA believes a diverse representation of parties on the code is crucial to its success, it is important for parties that are primarily affected by the code to have ownership of it.

The ARA has been working on the issue with the Australian Sporting Goods Association, Franchise Council of Australia and the Pharmacy Guild of Australia, all of which will not support re-authorisation of the code until the current issues are addressed. Until then, the ARA will continue to seek regulatory intervention by the ACCC.

To view the ARA’s full submission to the ACCC please click here.

 

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