Edgar Adams' Editorial

This month we bring you a disturbing article by John Farrell, Federal President of the National Federation of Independent Business.

It’s about Big Business in Australia and how it is destroying small business operators.

The major culprits are the big shopping centre owners and the supermarket chains plus other big companies who have a market share way beyond what is reasonable.

In the United States they would be made to break their businesses up but in Australia they have developed a cosy relationship with governments of all persuasions that ensures that their market power continues unchecked.

John Farrell is talking about Erina Fair where a reported seventy traders have gone under over the past two years since it was expanded.

The centre managers will say these people are poor retailers and the sad fact is that in some cases that is true. However, there are many cases where the centre owner has decided that a particular business is “overtrading” and therefore they add another competitor.

If a business is “overtrading” it is simply because they are very, very good operators and are achieving a higher turnover factor per square metre than the average.

And then there are the major supermarkets who engage in predatory pricing so as to drive out competition. That competition is always aimed at the little guy who is paying a hugely inflated rental than the chains.

Of course this is nothing new. It’s been going on for donkey’s years.

The most amazing thing however, is that in the case of small retailers, these people have been queuing up for years to set up a business in one of these giant malls. Most have some idea that all they have to do is open their doors and the dollars walk in.

Well, not only is this not the case but they never seem to take into account the cost of setting up, occupancy costs and all the other costs associated with running a business, let alone one in a highly competitive and unfair environment.

These little guys put every thing they own on the line to get into a shopping centre. It gets worse, because not only do they sign up to the harsh lease conditions imposed by centre owners but they go and borrow large sums to finance the cost of getting in.

Then of course many people have been sold the carrot that buying a franchise and moving into a shopping centre recommended by the franchisor will be the answer to all their dreams.

In the real world the sad fact is that the small business operator is the little fish that the sharks feed on.

I suppose the moral of all this is avoid doing business with the sharks if you possibly can and above all remember that there are plenty of opportunities in the market place for small businesses away from the big shopping centres.

Generally speaking the smaller shopping centre owners and landlords in shopping strips are much more reasonable with their tenants.

There is just one thing to remember – there is no government protection for small business.

As we go to press Gosford Council has conveniently deferred the $80 million Terrigal Rapedo development using a last minute letter from the Minister for Planning as an excuse.

The DA that Rapedo had before Council was a vast improvement on what they already have approval for.

Terrigal and Gosford Council will get what they deserve.

Edgar Adams

Editor

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