Saturday, October 04, 2008

Case is overwhelming to extend shop hours

Already retail trading is troubling the new Barnett Government.  Big supermarket chains have been quick to press for reform, arguing the current restrictions mean shoppers are paying more for their groceries.

Their opponents, independent supermarkets, convenience stores and service stations like the current arrangements -- they can open while others must close and naturally this suits them.

Today, arguments for and against deregulation of shop trading hours are seen as a battle between big and small business -- the big, bad Coles and Woolies versus the small, struggling independent.  But this is not the full picture.  The data shows small business is also hurt by restrictions on shop trading hours.

It is no accident that the States with the greatest growth in small retailer numbers are those with the most liberal shop trading hours.  The chart, right, shows while Victorian small retailer numbers grew 30 per cent in the past decade, WA growth was only 2 per cent.

And this lack of new small shops is not surprising because the most successful shopping areas elsewhere are open at times consumers want to shop -- the weekend -- and combine big anchor tenants such as department stores with all the funky and individual boutiques and specialty shops that exemplify small business.

Far from the big guys swamping the small, the evidence from everywhere else is that they are complementary.  As the WA Chamber of Commerce and Industry notes, the biggest drop in small businesses as a proportion of total retailers happened in WA and South Australia, where trading-hour restrictions still exist.

Traditionally, trade unions and churches have opposed Sunday retail trade, based on the idea that nobody should be forced to work on a Sunday.  Twenty years ago, this argument had some merit because most employees were full-time workers.  These days, with many more part-time workers who fit employment around study, child care and other responsibilities, the pool of people choosing to work on Sunday is much greater.  Interestingly, both Coles and Woolworths make Sunday work voluntary while most smaller retailers have less flexibility and offer no choice over Sunday working hours.

The silent losers from all this argy-bargy between vested interests are consumers.  In every place shop trading hours have been liberalised there would be an outcry and electoral oblivion if major restrictions were reintroduced.  People get used to the freedom to shop on Sunday.

They weave it into their lives, so that Sunday trading becomes an ordinary thing, as commonplace as football on a Sunday.

Since shopping is so mundane, so much a habit, it is easy to believe that since we manage to survive now without Sunday trading we won't personally benefit from it if it were introduced.  Like most outmoded practices, once they're gone nobody misses them but until then we put up with the way it is now, pretty much without thinking about it a lot.

Freedom and flexibility are not the only benefits for consumers.  As a Choice survey proved, the supermarkets currently allowed to trade on Sundays charge significantly higher prices than Coles and Woolworths.  The fact that these otherwise uncompetitive stores do so well on Sunday, to the extent it is their biggest day of trade, tells us two things.  First, consumers want and need to shop for food on a Sunday, the demand is clearly there.  Second, consumers are losing from the trading hours restrictions -- they are forced to pay more for the "privilege" of shopping on a Sunday.

But some consumer apathy and confusion over the benefits is no excuse for Government apathy -- the broader economic effects are too important to ignore.  Places with deregulated shop trading, not just phoney tourist areas, have more shops, employ more people in retail trade and generate greater economic activity from retail.  The economy-wide benefits are significant.

And the economic benefits are not just from retail trade itself.  A growing and increasingly diversified population creates demand for greater variety, whether this is in retail, restaurants, entertainment or work.  Great cities cater to all sorts and increasingly the kinds of young, highly skilled workers WA needs are demanding more lifestyle options than the State is permitting.  The result is an outflow of young people to other States and to overseas, exactly the people WA is desperate to attract.

Eventually WA will totally deregulate shop trading hours.  Eventually somebody will be brave enough to take on the vested interests and act for the benefit of consumers and the State economy.  Once it happens the issue will go away:  nobody ever agitates for re-regulation.

Until then the pressure will keep mounting because the current situation is unsupportable, a gross distortion that benefits a tiny minority of food retailers against the interests of the whole community.  A new Liberal Government not beholden to vested interests is the obvious place to make this important change.


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