Retailers caught in Sydney lockout crossfire

Retailers within Sydney's "lockout laws" zone, even ones that are not directly targeted by the regulations, have become the silent victims of the situation, insiders have said.

 Retailers within Sydney's "lockout laws" zone, even ones that are not directly targeted by the regulations, have become the silent victims of the situation, insiders have said.

While public debate has been raging about the need for and effectiveness of the laws, which were introduced with the aim of curbing alcohol-related violence, Malcolm Gunning, principal of Surry Hills-based real estate agency Gunning, said the situation has become dire for many small retailers within the lockout zone as they grapple with reduced foot traffic.

“We recently conducted a rent review on a pharmacy, a thriving business until a few years go, which determined rent needed to be dropped by half,” Mr Gunning said.  

“The result is not necessarily a windfall for the tenant, because it reflects the poor trading conditions on Darlinghurst Road. The lockout laws have depreciated the value of the premises by half."

According to Mr Gunning, this is not an isolated incident, with it becoming the norm for tenants all over the Kings Cross precinct to be falling behind on their rental commitments.

However, Mr Gunning said landlords are afraid of terminating these leases for fear of not being able to secure a new tenant.

Russell Zimmerman, executive director of the Australian Retailers Association, told My Business that it was not something he had been made aware of; however, he said it would not suprise him to see reduced foot traffic affecting retailers within this zone.

"Our members have not said anything to us about it. Generally, retailers don't open that late at night," he said, although he highlighted convenience stores as the most obvious potential victims of the laws.

"Yes, they will feel it. Have we had any actual examples of it? No. But in all fairness, it is more than possible for retailers to be feeling that pinch."

Mr Zimmerman also questioned the motivations of the City of Sydney in its recent crackdown on trading hours of convenience stores and food outlets in Newtown, saying this would have a material impact on retail businesses in the busy nightlife hub.

"Quite honestly, we are in an age where quite a few people have said [...] trading hours should be deregulated. I don't think councils really understand when premium trading times would be for a retailer," he said.

"Business would have to pay staff a penalty rate for that late trading, and so they would have to do a lot of evaluation as to whether they would have the turnover to support those penalty rates."

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