User:Bennas

Deregulation of Retail Trading Hours in Australia

Rationale

For the average consumer, little thought goes into the effects of deregulation on local businesses and enterprise. There is a desperate need for the Australian community to address a very controversial issue surrounding fair competitiveness, government intervention and legal ethics, specifically, the retail trading hours. Moreover, it is the lack of knowledge of the effects of de-regulation and retail trading hours that is synonymously destructive to small enterprise businesses in Australia. In contrast, other states such as South Australia and Victoria have adopted deregulated trading hours since 1992 and have experienced positive attributes such as a gradual increase in retail sales, employment and lower prices. This therefore presents a highly debatable and ethically challenging dilemma given there are many factors for and against deregulation, however, which is ethically correct for the broader community? Consumers need to be aware of the effects that deregulation presents to small business when considering voting on the matter. Furthermore, this article’s secondary objective is to inform the Australian public, who are seemingly oblivious, to the increasing dominance of retail giants Coles and Woolworths over independent and privatized organizations.

Currently, according to The Age Business Week (2007), Coles and Woolworths have 79 per cent of the market, up from 35 per cent in 1975, whilst independents account for only 32 per cent. This continuously rising market share of Coles and Woolworths is benevolent to some consumers. The effect of inaction by the community will result in deregulation being voted forward, causing a vast reduction in independent business within the Australian grocery market. In addition, the federal government and the general public, seemingly overlook the need for fair competitiveness in supporting and accommodating for Australia’s “entrepreneurial” business environment. This has become obvious because of the lack of government and community support for small to medium sized, local retail businesses such as IGA (independent grocers associations), Eziway, and other family operated businesses.

This article does not argue against deregulation of trading hours, it merely states the point that both the federal government and the general community have underestimated the effect upon small retailers and our entrepreneurial environment. Furthermore, this article makes the point that as a nation we do not want to engage in “mega mart” behavior, which is prominent in American retail culture. In reading this article consumers should become aware that in “disbarring” regulations on the duopoly of Coles and Woolworths, there is a profound cause and affect on small business. In contrast, there is also an ethical dilemma that posts a challenge against regulated trading hours, in recognizing economic, social and technological benefits of a more competitive environment. Ultimately, this articles rationale is to inform Australian consumers that unless there are some regulations put upon larger enterprises, then small businesses often run by families will falter in their wake.

Perspective In it said that deregulation of trading hours will ultimately hurt small (family) businesses and independent retailers, whilst empowering chain stores to take further market share. In support of this notion, Henderson, (2007) asserts that it would be almost a "mathematical certainty" that deregulation of shopping hours would hurt small retailers which would not be in the community's interest. Moreover, as Henderson (2007) suggests, deregulation would cause a serious disruption in the community as local businesses perish in an overly unlimited, competitive environment. This comment is attributed to the fact that Sunday trading is apart of the only strategic advantage small retailers currently have over corporate giants such as Coles, Woolworths, Bunnings, David Jones and Myer. Additionally, Henderson, (2007), states that governments should only pass laws which have the potential if it is clearly in the interests of the vast majority of the community, at the end of the day there are more important human activities than shopping.

In contrast, a report released by ACIL Tasman Pty Ltd, (2005.) suggests that small retailers in Western Australia have been operating under a protected environment, and that in a competitive market where all retailers operate with no restrictions, each retailer would have been competing vigorously with each other, competing on price, product, location and service. This is very true in the sense that if small retailers had not operated in a “protected” environment, then today they may be able to compete with larger retailers more effectively. Furthermore, ACIL Tasman Pty Ltd, (2005.) assert that the ability of small retailers to respond and adapt to competition is often underestimated, certain small businesses may indeed close down due to competition but other small businesses may actually thrive under stronger competition.

The issue of deregulation of trading hours becomes highly debatable on an ethical level when comparing the arguments of Henderson (2007) and ACIL Tasman Pty Ltd, (2005.) On one side of the argument Henderson (2007) asserts that deregulation will cause a serious, negative, affect on the community and small business, where as, a highly regarded report released by ACIL Tasman Pty Ltd, (2005) suggests that small retailers have been favored considerably, and that it is time for a competitive change. The fact is how can small businesses perpetuate in an environment where there is little strategic point of difference between themselves and corporate duopolies, namely Coles and Woolworth’s? Clearly, both Henderson (2007) and ACIL Tasman Pty Ltd, (2005.) prove there is many factors at stake in an ethical and social perspective regarding deregulated trading hours and its relative effect on independent business across Australia.

In perspective, economic benefits surround total deregulation of retail trading hours in that it would essentially mean increasing sales, more jobs and tourism. Supportively, ACIL Tasman Pty Ltd, (2005) asserts that there are a number of economic factors that will continue to strengthen the Australian retail sector given total deregulation occur. In addition, ACIL Tasman Pty Ltd, (2005.) suggests that, longer trading hours will increase the opportunities for families and consumers to make more shopping purchases, which increases total spending on goods and services in the economy. This creates considerable debate, in that, is the sacrifice of small independent retailers a necessity for sustainable economic growth? John Brownsea, executive director of the State Retailers Association, which represents small business, said the push for extended hours was the "creed of greed and that this is all about transferring business from small retailers to large ones," Similarly, Salmons, (2000) argues that pressure for change has arisen because of changing social, work patterns and the concern of small businesses. Furthermore, Salmons, (2000) states that small retailers face pressure from the competition of larger businesses, regardless of hours. On a social level, will Australian families be happier spending their Sundays in mega-centers around Australia shopping or spending quality time together in an active environment such as the beach or the park? It is my firm belief that the people of this nation are better off without trading hours affecting what is already a busy society focused on work, rather than family time and activities. Furthermore, although it is convenient for consumers, deregulation poses a serious ethical threat to families of today’s contemporary Australian society.

Grace and Cohen (2005), assert that a code of ethics can specify the social responsibilities of the business, that is, responsibilities that are assumed towards society in general, not only from a business’s stakeholders and customers. This statement outlined by Grace and Cohen (2005), best describes the kind of social responsibilities overlooked by the Australian government in pushing the bid for extended trading hours in order to merely increase the nation’s gross domestic product (GDP.) Furthermore, the over development or domination of Australia’s retail duopoly will only continue to prosper given society does nothing to regulated it. Moreover, although there are underlying benefits surrounding the perception of deregulation, we must not forget that this is the small retailer’s only strategic advantage against the duopoly of Coles and Woolworths.

Concurrently, it is unethical for the ACCC and the government to overlook not only the social responsibility of deregulation, but the lack of regulatory effects that have major economic effects upon small retailers. Moreover, if deregulation occurs throughout Australia to include Western Australia, the effects upon our social environment could be cataclysmic in that we may revert to a “retail culture” similar to the United States. Australia needs to protect small, entrepreneurial businesses if we are to progress into an innovative nation with a sustainable economy and social environment.

References

ACIL Tasman Pty Ltd, (2005.) Extension of Retail Trading Hours in Western Australia: An assessment of the economic and social benefits of extended trading hours

Grace and Cohen (2005), 3rd Edition, Business Ethics: Problems and Cases, Oxford University Press, pp 188.

Henderson, N (2007). Balanced' shop hours will remain, Political Reporter: The Advertiser. Pg. 8 (Retrieved Proquest, September 2007)

Salmons, R. (2000), Shop Trading Hours under Pressure, The Age. Pg. 4 (Retrieved Proquest, September 2007)

Business Day (2007): Independent Grocers seek stricter rules to limit big chains, http://www.theage.com.au/news/business/independent-grocers-seek-stricter-rules-to-limit-big-chains/2007/07/02/1183351124265.html

--Bennas 13:52, 17 October 2007 (UTC)