Property Reporter

THE stir caused by retail activist Marcel Joubert over the plight of small retailers, at the eighth African Congress of Shopping Centres in Cape Town last week, has led a small retailer to call for government to appoint a commission to investigate practices at large shopping centres.

Last week Joubert, who is chairman of the South African Council of Retailers and chairman of Platinum Holdings, which houses upmarket brands Jenni Button, Hilton Weiner and Aca Joe among others, lashed out at the landlords of SA's shopping malls for the poor treatment of small retailers.

Joubert said "acts of abuse" and "atrocities" against small tenants were committed regularly in the South African retail industry.

The retail market was "excessively concentrated" and monopolised by large landlords. He said small retailers cross-subsidised large retailers' rentals in shopping centres.

However, Brian Kantor, an Investec Securities investment strategist, disagreed at the conference, saying that no single player dominated. Without large tenants, the smaller retailers would not be able to operate, Kantor said.

Now Helene Langley, a small retailer in Pretoria, says there should be a government commission to investigate the monopoly created by big conglomerates.

Langley agrees with Joubert that big retailers get discounted rentals. Some of the big retailers pay as little as R15/m², she says.

"Another small retailer trying to make a business can pay from R250/m² to R350/m². The rentals increase by 10% to 14% a year. Smaller retailers cross-subsidise the large retailers."

Langley says many small retailers went out of business because they could not afford the rentals. "Government should set up a commission to investigate this whole matter and compare us with other countries to find out if there are similar disparities. If government is serious about creating job opportunities and keeping the little guys in business, then something must be done about this."

Joubert says he "absolutely agrees" with Langley. "We support the idea wholeheartedly of government actually getting involved and investigating shopping centres and comparing them with their counterparts in Australia, the US and Europe in terms of benchmarks as well as trade practice," he says.

Referring to his speech at the conference in Cape Town, Joubert says many landlords at the conference "broke ranks" and told him afterwards that, although they could not openly support him, they agreed with him.

Surprisingly, at the conference Joubert was appointed as a member of the South African Council of Shopping Centres, which represents many of his opponents. He says his appointment was "very positive".

"Now, they are taking us seriously and the next process would be to thrash out a meaningful vision together. There are certain members (of the South African Council of Shopping Centres) who are progressive in their thinking and who are committed to embracing us (small traders)," Joubert says.

Joubert says if and when a commission is appointed by government to investigate shopping centres it would find "something is wrong".

"We are all in favour of free-market forces, but there is no free market because there is nationally an oligopoly," Joubert says.

He says ombudsman procedures should be put in place. "Then everyone could commit themselves to that," he says.

Joubert warns that if the industry does not regulate itself, government could be forced to legislate. The industry then could end up with an "inflexible, rigorous set of legislation" which may not be in anyone's interest.

Mickey Radowsky, MD of Canal Walk Shopping Centre, however, believes that there is a middle ground. "Tenants have their points of view and landlords have their points of view too. There is a need, as was discussed at the conference, for discussions to take place and for the parties to understand and recognise the need of the other so that they can find a middle road.

"If that can happen, both parties can get can get what they need," Radowsky says.

Small traders lack understanding about how shopping centres work and they need to be educated, he says. "A lot of what they (small traders) say is just not true. It's incumbent on landlords to give them the understanding. Landlords also need to have a better understanding of what goes into a small business."

Oct 22 2003 07:28:20:000AM Nick Wilson Business Day 1st Edition