Government giving a hand to landlords and retailers?

Mar 9th, 2012Comments Off

Australia is still facing a retail recession, and at least one government is trying to help.

The Victorian government is trying to relax the zoning rules governing bulky goods, enabling an extended list of retail categories to operate, and also reducing the store size limit.

This begs the question, why are there bulky goods zones and bulky goods centres in the first place? Would it not be a more sensible approach to zone all retail equally and allow retailers to lease any retail space anywhere in Australia as the market governs? This works fine in countries like the US, allowing all centres and all retail space to be zoned the same.

One country serving its consumers the worst, with typically poor quality shopping centres, is India, where foreign direct investment (FDI) laws restrict retailers from setting up. Multi-brand foreign retailers are not allowed at all.

As in Australia, government interference restricts competition and limits the pool of available retailers. Removing these constraints, much like those set by our bulky goods zonings, would likely raise the quality of retailing therefore the consumer experience.

Something to aim for.

Drawn from “Australia and India have more in common than you think” by Michael Baker.

Full article at Michael’s excellent blog: