This week, ALNA has lead discussions with the newsagency marketing groups Newspaper, nextra, newsXpress and The Lucky Charm to agree a unified approach to shopping centre landlords on challenges resulting from the impact of COVID-19. ALNA sent the following to the Shopping Centre Council of Australia.
2nd of April 2020
Angus Nardi
Executive Director
Shopping Centre Council of AustraliaCc: Kate Carnell, COSBOA
RE: Australian Lottery & Newsagents Association letter to SCCA requesting landlords to immediately play a bigger role in addressing the COVID-19 Pandemic with their Tenants
Dear Angus,
The Australian Lottery and Newsagents’ Association (ALNA) is the national industry body representing Lottery Retailers and Newsagents’ who represents small businesses in almost every rural town, regional centre, urban and metropolitan shopping centre in Australia.
There are over 4000+ Lottery Retailers and Newsagents’ in Australia. They are an important and trusted part of Australian communities and approximately 35% of the Australian population visit these small businesses at least once a week (source – Retail Doctor Group Insights study).
The current COVID-19 Pandemic is impacting our small retailer’s businesses in a significant way. Newsagents and Lottery Agents are not businesses with huge financial capacity or large margins, they are generally mum’s and dad’s, family enterprises, who are having a go, being their own boss and working hard to make a success of their business.
Their biggest immediate concern now to surviving this crisis, is their financial capacity to continue to pay rent to their landlords during the crisis. Many are reporting that they will have limited capacity to continue to pay rent over the several months it may now take before any recovery in customer visitation occurs after social restrictions are lifted.
When they have reached out to landlords and their representatives as almost all have, and as the Prime Minister has suggested they do, to have a conversation about sensible rent relief and abatement to meet the requirements of their business surviving this crisis that is no fault of their own, they are consistently and overwhelmingly met with delay and obfuscation.
Examples include:
- Landlords and their representatives who simply point to government or bank support as the only solution.
- Landlords and their representatives who ask tenants to sign a confidentiality agreement before any discussions can occur.
- Landlords who have asked retailers to dip into reserves (assuming they have them) and pay up, saying every business should have sufficient funds to operate with a downturn in business for at least a few months. We expect our April invoice to be paid.
- Landlords and their representatives who use delaying tactics like requiring evidence that tenants have accessed every single state and federal support scheme announced and who require detailed P&L’s and projections in a fluid global crisis that no one can realistically predict.
We are relying on each other to get to the other side of this crisis, and many businesses have stepped up in this crisis, banks have for example stepped up to assist individuals, businesses and landlords alike, providing short-term solutions to get each other through and governments across the board have as well.
But when it comes to landlords being asked to step up, they roll out the good work of others as solutions to the predicament of their small retailers, and ask for unrealistic bureaucracy to delay outcomes or conversations actually occurring, rather than contributing consistently to shoulder the load they abrogate all responsibility.
This behaviour puts the mental wellbeing of many small business owners and their staff at risk in a crisis, and this is un-Australian and disrespectful to your members business partners and our community more broadly, who are all in this crisis together with you.
Consequently, we are writing to ask your industry to step up, to show some leadership and to genuinely partner with your commercial tenants, to help see them through the crisis through immediate dialogue and delivering rapid outcomes.
—-
In conjunction with the four major Franchise and Marketing groups in our sector, which include; The nextra Group, Newspower, newsXpress and the Lucky Charm Group, who collectively represent approximately 1000 retailers, along with the rest of our members who are not part of these groups, we are asking you and your members to do this without delay.
Many many of these businesses are tenants in your members businesses, we ask that your organisation and your members do significantly more to address this consistently objectionable behaviour.
We believe arrangements between landlords and our retailers’ that properly acknowledge the significant reductions in turnover occurring, are immediately put in place without delay, as the Federal Government have done. Then as a result, reduce commercial rent payments immediately and in the case of those tenants who have already paid for April rents, refund them.
For these effected businesses, rent payments will need to be reduced to close to zero in most cases for six-months as this will be critical to their survival, as it will be for the long-term survival of your members businesses. For shopping centre and CBD newsagency businesses, we seek an immediate measure to suspend all rent related obligations for three months with no change to rental period and no requirement to catch up rent that would have been paid in the suspended period and a commitment to review an extension of this six weeks into the three months.
Re-starting rental payments after the crisis will deliver small retailers the capacity to continue in business and landlords will still have tenants able to pay reasonable rents as a result. The alternative is broken lives, empty shops and having to offer six-month or more rent holidays to attract new tenants
We implore you to work with us on this to find a sensible solution now. This remains the big piece of the puzzle that is still unresolved and urgently required to make it possible for small businesses to go int a semi-hibernation state during the crisis and to not lose the capacity to come out the other side.
We thank you for your time, consideration and support.
Yours sincerely
Ben Kearney
Chief Executive Officer
Australian Lottery & Newsagents Association
We are very fortunate that our landlord has come to us and is bending over backwards to help us and other tenants in the centre stay open.
The community response to this generous offer has been fantastic.
Without the landlord help we would certainly like many others be in serious trouble. We are providing weekly sales reports to the landlord so they can see quickly the impact the virus is having.
I find it interesting that ALNA can claim such a broad industry representation when all of the leases are independently signed by the newsagent. stating they represent Groups would seem to be false and misleading of which only the Landlords would know. The exception here may be the Luck Charm Group (W.A. based) as they are a full Franchise which sometimes take a “Heads of Lease Agreement” with the Franchisee as a fall back position.
I won’t speak on behalf of the others and maybe I got this wrong and the “Groups mentioned have collectively or individually as a Group given ALNA permission to represent them.
If they have, it’s an Industry first and I wish them all the best for getting this tremendous representation and all the very best if they can negotiate anthing on their individual or collective Group’s needs. Anyway I do hope I am wrong here and ALNA have this authority. We’ll have to wait and see.
Or, cheer the initiative as the most unified the channel has been in decades.
Whilst we are not a member of of one of the referred to Franchise and Marketing groups we are members of ALNA. I applaud them for this stance and wish all of the channel members well in their negotiations. We ourselves have been able to negotiate a 50 per cent rental reduction for at least the next 3 months and we thank our landlord for sharing the burden of this crisis.
Thanks Mark,
I qualified that very response in my post.
True representation is very important for we must build trust and honesty in all our doings and its great to see you supporting that as well.
More than supporting Graeme, actively engaged, as have been some others.
Hopefully the SCCA has more influence over its members than any newsagency association or newsagency marketing/franchise group.
Good Luck
Ex newsagents are tiresome.
Appreciate int for that.
Roger, That will be interesting to see as it is a very powerful body that has always supported the landlord. Powerful money and powerful politics behind the scene as you know.
The point here I believe is to achieve a form of industry representaion which as you point out has yet to consolidate.
Warm and fuzzy is spirit which I totally support except results are what I seek and if one does not have the authority to do what they are saying I support them in the former however it cannot achieve results. it’s a pity that ALNA did not include the State Members of Vana and Nana as they too are Newsagents. Solidarity is important it’s appealing.
We cannot afford to be selectively divided in this we must act as a whole body of retail newsagents when it comnes to rent.
Whilst I appluad the initiative I feel that NSW and VIC were not included in that there was no reference to them however the reference to all other segments was focused and deliberate.
The statement could have been ALL inclusive yet it wasn’t.
We, the industry is slowly getting there, to understand it is ALL and not secular that will win this War.
NANA and VANA are fringe and out of touch organisations without collective bargaining authority. The sooner they realise that and support one national body the better.
No reason in these times as they still represent newsagents they have paid up members and to leave them out goes against what you said about unity.
I am not understanding this selective unity when as an industry in this battle we shoud be one.
Graeme, the submissions are thorough and appropriate. No one has been left out … other than NANA and VANA being able to say they have done stuff. They are irrelevant organisations in my view.
The two largest Newsagents Associations whose combined membership is probably bigger than that of ALNA at in fully paid up membership – surely this is about newsagents the very people that are at the coal face -it’s their choice of membership of which Association they deem fit to represent them – you decide that these newsagents are irrelevant when they too have Landlords some of which own centres only existing within NSW and VIC. so when addressing The Shopping Centre Council of Australia that they too are irrelevant
they have their money on the line as newsagents and a lot of them use Tower Systems, many would be members of newsXpress etc. etc.
Mark it’s not about which group or which Association newsagents belong to its about them the individual newsagent
Their acknowledge representative body therefore is NOT irrelevant.
After this is over you can fight about which Group should be where and what meanwhile it is what it is.
Graeme, you’ve made it about disunity. My post is about a unified position for newsagents, the most significant unified position in years. It’s appropriate ALNA has lead it because of their authorisation and cross border reach. I get that you’re buddies with the NANA folk. They can make their own case.
Leave this post for the terrific news that it is. Stay on topic.
I get it that you are buddies with the NANA folk-
don’t do that Mark throw up rubbish like that I don’t even have access to Nana’s members website -no favours from Nanna for me I assure you.
My concern is, its tghe members of whom, as well as all other newsagents, I deal with especially in NSW I made my point and will leave and believe me there are many shadows surrounding this support behind ALNA that have may need some light thrown on them.
Your rumours and innuendo Graeme are pathetic. ALNA has done good here. Cheer it, or go play somewhere else.
Your personal insults show the purity of your argument. I did applaud the move -read the blog except the ponits I made re leaving out some however pretend to represent all.
Spitting the dummy when you can’t answer openely is your problem and I refusee to make it mine.
Goo Day to you Mark just be a bit fairer in the future It’s one whole industry not selective to suit some people.
I agree with Mark, ALNA should be applauded for their stance here.
The importance of a strong unified national voice is clear with regards to matters effecting us all nationally. As our industry numbers dwindle, as they no doubt will before the end of this crisis, the state based bodies will become less and less relevant.
As a member of ALNA I am particular hoping that they continue to lobby Tabcorp nationally for some franchisee concessions.
Todate I only see Tabcorp profiteering from the worst economic crisis in nearly 90 years. Unless some tangible concessions come soon Tabcorp’s board and executive should hang their heads in shame. Our industry leaders and ALNA in particular need to hold Tabcorp to account for their lack of concessions so far. Doing so will go a long way to ending the rumours and innuendo and will unify our industry immensely.
Graeme you have not asked me any question in this thread. I have not spat any dummy.
Facts matter. ALNA has done good. That dopes not fit your preferred narrative. Okay, that’s on you.
Back to the letter. Issues ?
I l speak as I see it in Adelaide.
Newsagents have not closed, unlike many other stores selling non essential items. Diversified newsagents continue to sell fashion, homewares gifts, cards etc whilst their more defined competitors close their doors.
Shops close when daily revenues do not cover daily costs, ie there is no gross margin towards fixed costs. Newsagents are open and therefore privileged compared to others.
There is an impending announcement on commercial tenants and the PM has already indicated that tenants not qualifying for jobkeeper support should not be expecting relief from rental obligations.
Asking for special treatment for an ill defined sector that largely remains open, that has seen an upside in core products such papers, magazines, lottery, scratches, stationery, “puzzles” Really ?
Asking for special consideration for a sector that is seen to be in decline with a significant proportion of members who have failed to respond to peer advice they must embrace change .. Really ?
Newsagents are not at either extreme. Not benefitting from the crisis like essential stores or closed like many unfortunate.
They should be grateful for small mercies and hold their fire whilst the crisis pans out. The 6 month rule on evicting tenants gives them this luxury of choice that others more affected do not have.
Tiresome Colin
Colin,
Refreshing reality. When we accept that there are no news-agents in the future yet there is a future we will achieve some thing special. The whole of Sydney metro area does not have a contract with the publisher of agency agreement.
The time has come to embrace real risk with dollars and get stuck into real Retail -some will some won’t survive howvere it’s there if they want to.
Colin not cure why you label yourself as tiresome. It related to Roger as he harked back to a time when he was involved and filed at any push in unity.
ALNA walks a challenging line, representing a large channel filled with many different types of businesses.
It is situations like this when compromises have to be made when lobbying government.
Outside of that work, my own pitch to newsagents has not changed in years – chase new traffic opportunities, valuable traffic opportunities, get out of agency lines as there is no viable and safe future there, preference items through which you can differentiate your business and above all else, be flexible.
There are ‘newsagency’ businesses that have transitioned that are well placed. These typically have an average business GP% of 42%+ from a diverse range of wanted products in this COVID-19 world.
The most challenged businesses today are those in major centres that have not transitioned away from agency lines.
Mark,
It was a little dig to highlight you appeared to have labelled all ex newsagents as tiresome. Nothing more, I knew you intended it for Roger.
I fully agree and support your advocacy on change. I would say however that everybody should have an open mind and not rush to change at this point. We cannot be sure how this crisis will pan out.
For sure many laggards to change will be exposed and lost, it was always inevitable for many of them. But the transitioned will also need to be wary. There is no room for complacency, the rules of yesterday have been challenged and changes are afoot.
What did Rumsfeld say about known unknowns and unknown unknowns. Applies now.
Colin, I think people contemplating change now, for the first time, need to be very careful.
Retail has fundamentally changed. What newsagents offer and can offer has fundamentally changed.
For some of us talking about these thing internally, there are some interesting models about what could emerge on the other side. The truth is, we don’t know as it is too soon.