Ethics

Tabcorp contacted retailers a week ago advising (requiring) that they, retailers, put up a Tabcorp poster about Covid and social distancing.

What makes this hilarious and frustrating is that engaged retailers did this in March, three months ago. Better still, they used federal government issued signs and followed the federal government outlined guidelines and protocols.

Now, here is Tabcorp, late to the party, telling retailers what to do and doing do in the usual heavy-handed Tabcorp approach that left retailers wondering if they would be breached it they did not do what Tabcorp did and, instead, followed the approach recommended by the federal government. While the company did eventually clarify this was not a requirement, their useless communication left people wondering for a few days.

That Tabcorp would even think they should write to retailers about this in June is nuts, stupid and time wasting for retailers. But, hey, it’s Tabcorp.

While I get there will be some petals in Tabcorp who think this post is unfair. The facts are the facts. This is an own-goal by the company, something they could have easily avoided.

It is lottery retailers who have delivered the best commercial outcomes for Tabcorp over the course of Covid. Maybe some respect and appreciation is in order, instead of their usual big stick

The AFR had a crack at Facebook today about their tax paid in Australia.

Facebook Australia was paid nearly $674 million by local advertisers using its platform in 2019, but it trimmed its income tax bill to a little under $17 million through a reselling arrangement that minimised its profits to $22.7 million.

Tax is 2.5% of Facebook revenue whereas tax is 1.76% of revenue for News Corp according to ATO data reported by Michael West: News Australia Holdings revenue over 5 years = $13.9B, taxable income = $246M, tax = zero. Source ATO corporate tax data, as reported by @MichaelWestBiz.

Yes, I get the AFR story is because of the Facebook data being just released. For me, the broader context is interesting.

Our tax system is broken. Tax systems around the world are broken. These massive companies that have the ear of politicians fail to be social responsible tax citizens.

By all means the Nine papers can report about tax paid. However, good journalism would see them report more completely and accurately.

While I am no economist, I wonder about a mechanism of capturing a small percentage of money leaving any Australian bank account. That way, businesses paying Facebook, Google, Twitter and others  for ads make the tax contribution they fail to make. Likewise, people paying News Corp. for a subscription make a small tax contribution covering what their structure facilitates them minimises.

Our economy needs tax dollars to fund healthcare, education and infrastructure. tax is another area where small business does heavy lifting.

Australian shoppers are keen for Australian made – more so now than at any time I can recall.

Suppliers of Australian made products to newsagents, and all retailers, need to ensure that their products pitch this and that they support this with in-store collateral like shelf talkers.

Since COVID hit and more so in recent weeks as tensions with China have escalated in Australia and even in the last week as democracy in Hong Kong has come under attack from Beijing, Australian shoppers and retailers are more wary of China sourced product.

Will this be a long term concern? It’s hard to say. It is, however, enough of a concern in my view that I expect some suppliers are actively working on adjustments to their supply chain so as to not be impacted by anti China sentiments.

I have been discussing the situation with several newsagents and some suppliers and feel that it is Beijing’s moves against Hong Kong that represent the most significant risk to the commercial viability of China sourced products.

Does this mean newsagents don’t want to source products from China? No. However, it does mean that it is of concern and that means it should be on the minds of suppliers.

In my view, what is happening in Hong Kong showcases suppression of long-standing, well established democracy. If Beijing continues on its current path, I expect to see the world respond. This is why I hope suppliers of products sourced from China have alternatives in development so that supply is not impacted.

Marketing is an expensive part of outgoings charged by major centre landlords to its tenants.

Imaging how small business retailers feel about being charged through this COVID-19 situation with no marketing services being delivered.

What a scam! But, they will get away with it as they always do. They have deep pockets and good lawyers.

So yes, there are major landlords charging marketing fees with no services being provided whatsoever while at the same time not charging anything to big name retailers who closed their doors to sit out the lockdown.

It sucks and provides yet another example of the awfulness of being an indie retailer in an Australian shopping mall.

Check out what Tabcorp sent their retailers this week. Yep, they sent this to retailers who are feeling ripped off by this company that absolutely does push online over in-store and pays retailers an offensively small sum for support growing Tabcorp’s online revenue.

Retailers won’t complain publicly because they fear Tabcorp. I don’t care as I don’t have lotteries in my shop.

Here’s the Tabcorp ‘fantasy fiction’ note in full:

Retailer Fast Update – The importance that retail plays within broader marketing channels

COVID-19 has impacted us all in many ways, and as we navigate our way through this uncertain time, rest assured the initiatives we have implemented, support all our channels, including retail.

You may be hearing a lot of talk about customers going online; however, retail sales during these uncertain times have been strong and steady. It is also important to remember the Lott’s omni-channel marketing strategy focuses on the customer and their experience so they can engage with our brand regardless of the channel. Customers, therefore, value their experience rather than a particular single channel, such as online.

Initiatives retailers have taken, such as driving loyalty through our Membership Program and supporting Pay In-store payments (excluding SA) reduce barriers. These initiatives also create the foundation so we can continue to interact with customers, and they can continue to engage with our brand. This helps ensure customers remain connected and have a consistent experience even if they move between channels during this pandemic or during a retailer’s temporary closure.

Retail is core to our omni-channel strategy and will continue to be into the future. Testament to this are the initiatives listed below which continue to support our retail channel. So, while you may hear a lot of talk about a customer going online, rest-assured the efforts you have made to support the Lott’s omni-channel strategy during these times are of benefit. While you might be seeing fewer customers around, those omni-customers will continue to have fun engaging with our brand, looking forward to returning when their favourite retailer reopens.

Actions speak louder than words.

Tabcorp is not fair or transparent with retailers on their much-hyped omnichannel bonus. It’s a flawed approach offering a disrespectful amount to retailers to compensate for then Tabcorp demand that retailers actively promote online.

The Tabcorp TV advertising does mention retail, however, it does not promote it. Listen to the ads carefully, they have been cleverly produced to punch online and the app with retail mentioned briefly as a lead in.

In my opinion, Tabcorp has failed its retailers through COVID-19 but they will not speak up because of threats from the company that come with financial penalty.

The handling by News Corp of the Dean Laidley story over the last 24 hours has been dreadful. Even now, this afternoon, they have run this story about a police office being stood down and above the headline they have one of the images that resulted in the standing down of the officer.

This is disgusting gutter stuff from a publisher that has made publishing such stuff an art.

Is there anyone with power at News Corp who understands mental health challenges and how to respect those facing such? It appears not.

Here are examples of small business landlords supporting small business retailers, including newsagents, with rent relief.

1. 2 months rent free, April and May, without being asked.
2. 1 month rent free and 50% off for May and June, without being asked.
3. 75% off for six months, after one request for help.
4. 50% off for 3 months, after one request.
5. A 100% credit for March, 50% off April and 25% off May, after one request.
6. 50% off for 3 months, after one request.
7. 2 months rent free, after visiting the shop a week ago and seeing it and the street empty.
8. No rent increase, which was due as per the lease from May, and a discount of 33% for the next for months, after one request.
9. 25% off for April, with no request, and then 50% off for the next 3 months after being given the revenue figures for the business.
10. 2 months rent free, 2 months half price and 2 months 25% off, after one request and a phone call to discuss.

In each case, the landlords and tenants have acted respectfully and cooperatively. Indeed, most landlords have gone beyond what has been sought through the mandatory national code as put in place by the national cabinet.

This is great news.

Well done small business landlords. They have come through for small business retailers in timely and genuinely helpful ways.

The 10 stories above are only some I have heard of. They are representative though. There are small business high street retailers happy today to have the landlord they have, appreciating their support and the relief it provides.

Many landlords of small business retail tenancies are small business owners themselves with only 1, 2 or a few commercial properties in their portfolio. Many acted before state or territory governments moved on taxes and other costs. This is small business helping small business.

We talk about heroes these days, the health front line team members, cleaners, teachers, drivers and others keeping the economy running. I’d attach that label to the landlords who are supporting small business retailers, especially those in essential businesses. The landlord actions through rent reductions and other help is wonderful to see, and appreciated.

There are wonderful people in Australia who are helping in everyday ways, often beyond their capacity.  Some of these small business landlords are in that group. Thank you!

If you are selling face masks or hand sanitiser, my suggestions are that you ensure product quality and that you charge a price reflective of public service.

Basic face masks at $5.50 each and 60ml of hand sanitiser for $12.99, which was available in one newsagency yesterday, reflect price gouging given that the masks can be bought wholesale for under a dollar and 60ml of hand sanitiser for $2.50.

Price gouging is a bad look for the retailer and the channel of which they are part.

It is disappointing seeing some landlords ignoring the code of conduct agreed by the national cabinet. I have seen information requests from individual landlords and big business landlords asking retail tenants for all manner of information outside what is covered in then national code.

• One claimed that the tenant was not a small business, even though it clearly is.
• One asked for accountant certified P&L.
• Another asked for details of all state and federal support received by the business before they would even enhtertain a discussion.
• One asked for personal financial details.
• One asked for the details of every employee and the JobKeeper amount the business would receive by employee.

These are some examples of what landlords are asking for.

The code: NATIONAL CABINET MANDATORY CODE OF CONDUCT – SME COMMERCIAL LEASING PRINCIPLES DURING COVID-19 is very simple. The obligation on tenants and landlords straightforward.

It is frustrating seeing landlords abuse the process by seeking information that is not relevant, not any of their business.

The massive Armaguard organisation, owned by Linfox, has written to small business retailers demanding they not pay rent for ATMs they have installed in shopfronts for April through September this year. Here is the first page of a letter they sent:

In my opinion, this letter misrepresents the position of state and federal governments.

The federal cabinet’s retail tenancy code of conduct is for SMEs, small to medium enterprises. Linfox does not qualify.

Further, they offer no justification for their claim, there is no evidence of a slow down of use or traffic. The federal cabinet’s code specifically lays out what is needed to support a claim. For example, a claimant needs to qualify for JobKeeper.

I wonder what Lindsey Fox thinks about this attack from his business on small business newsagents.