Call for ‘strong regulation’ on retail sites

Published 01 September 2008

SupermarketRecommendations in a report by the Australian Competition and Consumer Commission (ACCC) could lead to more “shop cemeteries” in the main streets of towns, according to two academics at the University of New England.

The report – on the competitiveness of grocery retail prices – was released in July after being commissioned by the Federal Government at the beginning of the year. Among the measures it recommends is a further deregulation of retail sites as part of an attempt to increase competition.

Associate Professor Robert Baker and Dr Stephen Wood from UNE’s discipline of Geography and Planning say this recommendation could lead to a proliferation of “greenfield” retail development on the outskirts of towns. “Such a policy would further exacerbate the problems facing struggling main streets,” Dr Baker said, “and see the increasing invasion of pawnbrokers, $2 shops, tattooists, op shops, local MPs, and ‘adult’ shops into what is becoming the ‘dead heart’ of towns. The ACCC seems intent on creating retail deserts in town centres in the name of competition.”

“What Australia needs is strong regulation, not motherhood statements on competition,” he continued. “Competition policies like this are based on the economic ideology that ‘the market always gets it right’, but in fact the market usually gets it wrong. The ACCC needs to take on the hard decisions against the big players.”

It is those “big players”, the academics say, who could exploit any further deregulation of retail development by building more out-of-town supermarkets – still classified as “general stores” in out-dated government regulations.

Dr Baker and Dr Wood advocate a system similar to that in the UK, where the emphasis in supermarket development is on “what’s good for the community” and not “what’s good for the supermarket company”. “In Britain, priority is given to developments in town centres,” Dr Wood said, “and developments have to be sustainable in terms of the town’s population.”

“In Australia we’re continuing to operate in a policy vacuum in terms of retail planning, and it’s undermining main-street viability and vitality. What we need is a retail policy that has definitions, guidelines, and enforceability.”