I have been provided current financial data for a newsagent in a major regional centre on the eastern seaboard of Australia with an occupancy cost of 24.76% – double a reasonable benchmark. I bet that for a similar size tenancy in the same centre a national retailer is paying half or less per square metre. Despite excellent sales by any measure – for a newsagency or on a per square metre basis in a major centre, the exorbitant and ever increasing rent condemns this business to losing money.
If it were me, I’d be asking the ACCC or any state authority which may be interested whether an occupancy cost of 24.76% for a newsagency – where around half of what you sell has a GP of 25% – would be considered unconscionable.