Heard Under The Sheds – 14/10/2018

And There Was Light…..The reaction to a very dim J Shed following works on the roof was pretty swift with an SMS going out to traders on Tuesday and new temporary lighting installed on Wednesday. We have had a couple of favourable reactions but what did you think? – comment on Have Your Say.

The new Visitor Hub has arrived in String Bean Alley with at least one trader saying. “ A 40ft container! – that is what I want for my business.”

A Trader told us the story of his customer who was so overwhelmed with their purchase that they picked up their parcel and started to leave without paying. We’ve all experienced something similar and when the customer was politely told that they hadn’t paid, they were extremely embarrassed and apologetic. They completed payment, thanked the trader for their service, and left – without their purchase. The trader was last seen trying to track them down a couple of aisles away.

The latest Trader Bulletin asked for stories of great deeds done by traders causing one to say “I get up at 4:30 each trading day – most of my friends think that is pretty amazing”. Maybe not quite what our promotions people had in mind.

We are receiving reports from the Upper Market of incredible volatility in sales patterns. A good trading day followed by a complete disaster is a common complaint. Maybe a sign of consumer confidence in turmoil?

One trader was intrigued by a conversation with a couple of shoppers who were walking a dog. They said they used to shop elsewhere on Saturdays but wanted a way to integrate dog time with their normal weekend activities. They now shop weekly at QVM with their dog and love the experience.

Trading Hours – a few traders were caught out as bollards were put in place in the Upper Market right on 8:00 am following a letter to all traders from CEO, Stan Liacos. The general view seemed to be that tightening up on trading times, and sticking with advertised opening and closing times is the right move. What did you think?

What Rally? A trader showed us a leaflet calling “Stallholders and Traders” to a “Change The Rules Rally” on Tuesday 23^rd October. Turns out it is a generally advertised rally for union members from many industries across Australia to protest at the power of big business.

Good Advice – many traders will recognise Leon in the white shirt in this photo. Leon has been advising traders on insurance matters for a long time. Trader Mino asked us to take this photo because he felt traders should know about one of Leon’s many services. Mino suffered a burglary at his Dandenong showroom and was having trouble organising the insurance claim. Leon has stepped in to offer his advice on how to fill out a claim. If Leon reads this article perhaps he can let us know his contact details so we can pass on to traders.

Rent Debate – one of our traders has pointed out that some groups in our market have a much greater capacity to pay than our struggling Specialty Merchandise Traders. Business For Sale advertisements reveal incomes in Fruit & Vegetable, Meat & Fish, and the deli, many times higher than Specialty Merchandise. Rent/Revenue Ratios have been recorded at 1.9% in the deli, and 4.7% in Fruit & Vegetables (including outgoings) while this trader’s Rent/Revenue Ratio is around 13%. As this trader says, nobody begrudges these businesses for making money – it is just about proportioning costs.

Have Your Say – click here.

COMMENTS:

15/10/2018 08:55:42       Rent Debate "Rent is just one expense.  It is divisive and illustrates a lack of financial knowledge to discuss the rent expense in terms of revenue percentages.  A more accurate measure would be to look at the Profit and Loss report as a whole.  High revenues do not equal profitability.  The composition of fixed expenses will vary with the type of business. 

For example using the same logic - as a fruit and vegetable business I pay more than $5000 in wages each week.  My wages to revenue percentage would be higher than General Merchandise.  Using the percentage of revenue logic I should be able to pay a lower rate of wages than General Merchandise because of the higher percentage.  Is this something I can debate about to lobby for lowering my wages expense - no - I have to pay according to the Award including penalty rates for working on a Public Holiday.

We are all hurting at the moment with a significant decline in customer numbers over the last 6 months.  I am struggling to make a profit even though my takings are a high amount.  I have to cut staff, I'm being told I need to stay open until 5pm on Fridays even though it is not profitable, the rent has just gone up, I've bills in the to pay pile are mounting faster than the paid pile. I get up at 1:45am most mornings, I don't get to do much with the kids, I don't have social events with friends, etc etc. So don't look at my revenue and tell me I should pay more rent. By the way the shiny new truck is still being paid off - they cost more than $75,000 just so I can haul the stock from the other end of Melbourne each morning.

I invite any retailer to sit down with a fruiterer to look at their Profit and Loss Report and compare expenses as a whole rather than just picking out one single item." Tired and overworked       
A great response. Thanks for the insight. Business is very tough. We all have that in common. - Ed

15/10/2018 12:03:42       Rents "Rent may be ""just one expense"" but it is rents we are talking about here. And as much as I can feel empathy for fellow traders in other areas, for their workload and personal sacrifices etc. the general issue of rents is a mathematical question not an emotional one.

The issue here is that the Gen Merch traders are bearing a significantly larger share of the costs than they generate. I don't believe it is unfair to suggest that if you don't generate the expense you shouldn't bear the cost.  

I would also suggest that whether you chose to determine rents by revenue, profitability or cost generation to QVM Pty Ltd, Gen Merch Traders as a group would be always end up paying much lower rents than they currently are. "  
Another considered response. Thank you for adding to the discussion - Ed