Traders will be aware that the QVM have increased rents on licences by approximately 3.8% despite a growing realisation in retailing that rents need to come down. The increases commenced this week. The increase is particularly galling because it comes at a time when incomes are seemingly declining and even the majors like David Jones are expecting a 20% fall in sales over last year in the lead up to Christmas.
The difficulty for General Merchandise Traders is that, in recent years, the QVM has dropped the ball on our key customer group – tourists. Approximately 70% of General Merchandise business comes from tourists. The QVM is well entrenched in a push to attract locals to the market supported by TV campaigns and a glossy MarketLife magazine. In Saturday’s “Shabby Third World Queen” newspaper article, Melbourne City Councillor, Ken Ong, said there should be more fresh produce, reflecting the city’s multicultural diversity. “The Victoria Market is an iconic part of Melbourne. It’s an attraction to visitors. We want to make it an attraction to locals as well.”
Concentrating on just one aspect of our complex customer mix is a big mistake and neglecting tourists means that General Merchandise Traders are paying the price. Sure, the market has appointed a Marketing Assistant to look after General Merchandise Traders and we are featuring in a more balanced way in local promotion but the appropriate focus on tourists is missing.
If you read the online comments that followed the Herald Sun article you would have seen a number of remarks criticising the “$2 junk stalls” at the market. That is the locals talking. Don’t get it wrong! Locals are wonderful people and an important, if less significant, component of our customer mix. They are just not our core customer group. Locals see cheap junk, where tourists see desirable souvenirs. Ultimately the product mix in our stalls is determined by the laws of supply and demand. In other words the product mix is determined by our most important customers.
When management advised your trader representatives that the rent increase would not be withdrawn, they did offer to engage in ongoing discussions about issues concerning traders. Your trader representatives are currently considering the format and content of those discussions. One thing is clear. QVM Management must be held accountable for getting paying customers (predominantly tourists) to our stalls before any rent increase can be justified.
Like we said - there is a battle ahead.