I have been sent tenancy data for a regional shopping centre which shows that one of the two largest supermarkets in Australia pays $292 per square metre while an independent newsagent is expected to pay three times that in rent.
The situation is even worse once you factor in that the major supermarket makes no contribution to outgoings – these are all covered in the small independent retailers.
The major supermarket has generous rent review provisions which small business retailers are all on anything from CPI + 1% through to a flat 5% annually.
The final kick in the guts to independent retailers at this regional shopping centre is in the area of lease term. The major supermarket has a 20 year lease with two ten year options. Independent retailers are given a five year lease and no option.
While I appreciate that there is a considerable difference between Coles and Woolworths and an independently owned newsagency, it is clear to me that we independents are funding the supermarkets.
You may be shocked or not, but the reality is that 4-5 x more is the go (depending on how good the centre is).
It is is any consolation, jewelers will pay another 1-2x more yet again.