Retail struggle in January 2020

These are truly extraordinary times. The worst health pandemic in 100 years, governments across the world being forced to implement stringent community lockdowns and many people feeling more anxious than at any other time in their lives.

A key issue directly affecting the retail sector at present is the issue of retail leasing. Following a meeting of National Cabinet on 3 April 2020, Prime Minister Scott Morrison has asked all Parties to formulate and agree on a Code of Conduct to deal with retail leasing arrangements in response to the impact of the COVID-19 pandemic, to facilitate appropriate and proportionate rental waivers and other relief for SME retailers in good faith.

The NRA is currently working with the committee – comprising the Australian Retailers Association (ARA), the Pharmacy Guild of Australia (PGA) and the Shopping Centre Council of Australia (SCCA) – to ensure a better outcome for retailers. On Sunday, a draft code was sent to the Prime Minister’s office for his consideration. We anticipate that the Prime Minister will be making an announcement on the coming days and we will keep you all posted as soon as that occurs.

The proposed Code applies to small, medium and family retailers, including franchisees and licensees that are suffering financial stress or hardship as a result of the COVID-19 pandemic. It has been developed to enable both a consistent national approach and timely, efficient application given the rapid and severe commercial impact of official responses to the current crisis. While retail leases are generally governed by state and territory legislation, the Code is not intended to supersede such legislation, but aims to complement it during the COVID-19 crisis period.

Meanwhile, last week in the Australian Government announced a comprehensive wage subsidy package. We believe that the scheme is proportional and sensible. It will deliver help to businesses who need it the most, and it will ensure workers can continue providing for themselves and their dependents.

As we said when we released our 10-Point Retail Recovery Plan, getting the right solution is important, but taking action quickly is also important.  This measure meets both of those tests.

We applaud the decision to make this available also to sole traders, who make up a large proportion of the modern Australian retail landscape. We thank the Federal Government for hearing the concerns brought to them by so many business groups, including the NRA.

Efforts have also been made over recent weeks to accommodate the needs of businesses during the COVID-19 crisis through emergency award variations. The NRA, alongside other industry stakeholders, have drafted a proposed variation to the General Retail Industry Award and remain in discussion with the SDA about achieving a consensus on terms.

If employer groups can reach agreement with the union, then any proposed variation will be expedited through the Fair Work Commission (as we have seen with respect to the Hospitality Industry (General) Award 2010, the Clerks – Private Sector Award 2010 and the Restaurant Industry Award 2010). Our aim is to temporarily vary the award to allow for greater flexibility and less adverse rigidity within the award, at least for a time.

Finally, on the health front there are some positive signs that Australia is outperforming other nations and beginning to flatten the curve. There is still a long way to go, but the sooner we get on top of the spread of this virus, the sooner restrictions can begin to be lifted.

All the best for the week and keep well.