ARA's Executive Director Richard Evans said the Rudd Government must step in and take long overdue action on the Productivity Commission's (PC) Market for Retail Tenancy Leases final report (August 2008) to help curb robust behaviour from landlords.

"The ARA will be calling on the Rudd Government to bring retailers and landlords together at a Retail Tenancy Crisis roundtable to address long outstanding issues from the PC report and other inquiries," Evans said.  

"Our research indicates, almost 40 percent of retailers are paying occupancy costs greater than 15 percent of their turnover, which is never sustainable for a small business, but is particularly crippling during a time of economic downturn.

"In the past six months, over 31 percent of retailers suffered rent increases greater than 10 percent when they renewed their leases. Some of these retailers have reported annual rent increases of up to 25 percent at a time when many of them are struggling with 12 months of reduced demand.

"The Rudd Government - with its policy of reducing the cost burden of differing state legislations - must take immediate action on retail leasing by:

·         Separating legislation for major shopping centres from suburban high street retail outlets;

·         Simplifying retail leasing legislation nationally through harmonisation of state laws;

·         Applying a code of conduct to major shopping centre landlords regulated by the ACCC;

·         Disclosure of turnover figures to an independent third party to be reported at category level (supported by over 56 percent of retailers)

·         Introduction of gross leases - where rent payable is inclusive of all charges (supported by over 82 percent of retailers)

·         National register detailing all commercial lease terms including inducements (supported by 80 percent of retailers)

 "Retailers suffering from the effects of low consumer confidence have been hurting for over 12 months and the Government must help alleviate spiralling occupancy costs adding further pressure to retailers who are already struggling," Evans said.   

For over 104 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia's $292 billion retail sector which employs over 1.5 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia. Visit http://www.retail.org.au/ or call 1300 368 041.