Wednesday 28 March 2018

A Call To Traders

A Call To Traders

Heritage Victoria has flexed its muscles, ignored a State Government backed business case, and refused approval for a key aspect of QVM Renewal. Acting Lord Mayor, Arron Wood, has called on traders who support renewal to speak out, but is that likely to happen?

Policy and design decisions made at State Government and City Hall Level are directed at the long term. And certainly the QVM Renewal Project has all the hallmarks of a professionally developed project that attempts to make a real difference (not just patch some holes) and set the market up for the next 140 years. Melbourne has a great record of achievement in its design process.

Traders on the other hand look more short term, perhaps to the end of a 6 year lease, and their main focus is the level of business over that 6 years. There is an argument that says that there will be no short term improvement without long term structural change. Traders who get that seem to be increasing in number and certainly the naysayers, and those who want no change are looking more and more detached from the steady decline in business activity under the sheds.

We need organisations like Heritage Victoria to protect the wonderful aspects of Melbourne’s history and few are more important than the Queen Victoria Market. But the market was built on the less glamorous aspect of supply and demand business activity and that is in real danger of collapsing without significant structural change. Our market simply has to be relevant to modern consumerism.

Councillor Wood is right, traders do need to speak up. If somebody doesn’t bring some commercial reality to this decision the only activity we will get is from the bulldozers levelling the whole site for some completely different purpose. Let’s get it straight, it is vibrant business activity over a sustained period that will save QVM, nothing else. Traders need to make up their minds whether that can be done under current conditions or whether Renewal will give us the best chance of success. 

If you decide the Renewal path is the best one, then speak out loud and strong now. We may not get another chance.

By Greg Smith

28/03/2018 14:17:22      Heritage Victoria Decision           "Am I correct in saying that two years back it was QVM Management that sought a World Heritage listing to protect the Markets long term future .
Now that same strategy and decision may have the opposite long term effect on the Markets future and that Heritage Victoria are just following that exact sentiment?"
I'm not sure were you draw the conclusion that the strategy for a World Heritage listing could have an opposite long term effect on the Market's future. Perhaps you can explain that. The CoM view and the view of many traders is that the long term future of the market will require a better way of operation. Separating loading and unloading facilities from public areas, providing water, electricity and modern rubbish disposal, and making the market more convenient for customers are all seen as necessary for the future viability of the market. O.H.&S can only look the other way for so long. As I understand it, it is the dismantling of heritage sheds that has Heritage Victoria upset. That is despite assurances that the sheds can be returned to their original purpose and appearance. Thanks for your input - Ed.

28/03/2018 21:26:00      Call to arms  "Some traders do recognize the need for some form of renewal or refresh to stay relevant in todays market place ( no pun intended) however one fundamental question keeps popping up.
Are these people the right people to achieve the desired outcome we all need.
We have our 4th CEO in 5 years and countless senior management leave so we loose much consistency,direction and stability and all having a negative impact on market performance which we can ill afford.
The A,B,C&D shed design has changed over the years and the empty ness of these sheds have been management curated in the lead up to the renew ,the Marque design has changed three times & running over budget ,are traders in the effected sheds are able to go back there when it's all finished and what will it look like,the weather proofing of the sheds seems to be overlooked on current plans,the Victoria St shops were going now staying ,same story with the Queen St toilets and S/L traders have no leases or any security to suggest we are still required after trading through and supporting the market over the renewal uncertainty .
Thats just some of  the concerns of traders who may have a further15/20 of working like ahead of them .
While i'm not opposed to some form of a refresh I am hoping the new Lord Mayor conducts a review into how this process has got to this point to date and what needs to happen going forward."
Wow! Thanks for going into so much detail. Let's cover some points you raise -
1.  Are these the right people? Renewal and refresh is the expertise of the CoM designers. They are acknowledged as experts in their field.
2. The CEO swinging door is most unfortunate and maybe the structure of QVM Management/Board/CoM needs a good look. 
3. But, that is not why QVM performance is suffering. Retail performance is compromised by a global retail revolution with a complete change in consumer actions that is impacting across every retail entity on the planet. Just ask Mr Umbers of Myers.
4. Management have not curated the emptiness of A Shed. That has been caused by the same retail revolution. With the greatest of respect to our Fruit & Vegetable traders, many of them lost relevance with modern consumerism.
5. The NMP changes? My understanding is that process is "par for the course" in development projects. Coming up with the best design is an ongoing process.
6. Will traders go back? Personally I wouldn't want that determined right now. We may find that a full and vibrant J-M Shed with a NMP is a much better way of operating our market, meeting customer needs, and trading profitably.
7. Weatherproofing? I agree, we need to nail the weather protection with some form of roofing between sheds.
8. Leases or security? We do actually have the 5 year guarantee and SL licenses are being renewed.
9. Lord Mayor review? Seriously, we need another outside review like a hole in the head. We have a new CEO who is more than capable of reviewing. Let's just get on with this process.

And finally, with the greatest of respect, complaining like you have done is easy. Coming up with possible solutions is much harder, and many of the things tried in global retailing over recent times have not worked. That might explain some of the scenarios you describe. While retailers and managers continue to strive for the best way we may just succeed in getting QVM through this challenge. I'll back someone who strove for success and got some things right against someone who just picked fault. Telling us you support "some form of a refresh" was a great opportunity to put some alternative ideas under scrutiny but you only complained. Am I being too hard on you? Maybe - but I'm sure every trader will agree this is too serious to play it soft. Thanks - Ed.

30/03/2018 23:37:00      A call to traders      "A couple of your points I feel warrant greater attention.

""4. Management have not curated the emptiness of A Shed. That has been caused by the same retail revolution. With the greatest of respect to our Fruit & Vegetable traders, many of them lost relevance with modern consumerism.""

Management have been neglectful in not being able to provide a vibrant A shed. While many traders could no doubt lift their game managements solution of filling out the space with upcycled pallets etc is farcical.  The current environment in A shed deters new traders from applying to be part of QVM.  If we accept your oversimplification of the A shed dilemma being due to the retail revolution and losing touch with modern consumers then it is fair to say that the A Shed paints a picture of the future for specialty traders at QVM.

""8. Leases or security? We do actually have the 5 year guarantee and SL licenses are being renewed.""

We all well know the 5 year guarantee is borderline meaningless. Even if we assume the renewal only takes 5 years that only guarantees time where trade will have a swift downturn due to the disturbances of works at QVM. That gives traders no assurances post renewal works.  Is it too much to ask that after suffering through multiple years of disturbed trade at QVM you should actually still be around to see the benefits of the renewal?  For a deal to be fair there has to be benefit to both parties. I am yet to hear a proper explanation of what will happen post the 5 year period. The lack of any form of acknowledgement of that of course leads traders to believe that they will be replaced after the 5 years.  I think it would be only fair for CoM to acknowledge the support of traders who braved trading through the renewal by offering a dedicated lease guarantee - even if it's only a one year lease, as a way of not only saying thanks to existing traders but also letting them have a chance to start afresh and prove themselves in a fresh QVM environment". 
Thank you for an in depth examination. Let me make some points.
1. I don't think the retail revolution argument is an over simplification. I think it accurately states what is happening here. And while Fruit & Veg and Specialty Merchandise are quite different categories I don't think we can rule out a smaller Specialty Merchandise precinct, perhaps not with the same dramatic decline as F&V. 
2. A five year guarantee is not meaningless. And good luck getting any guarantees out in the wider retail world. Yes, we are brave and we are going through tough times but in my 40 years as an independent retailer I don't remember any landlord giving carte blanche guarantees.
3. I have made the argument many times that it is crazy to suggest there is some conspiracy against traders. QVM earn their income from trader rents. It is in the interests of the Company and essential to their financial strength that they maximise the number of rent paying traders at the market. 
4. SL Licenses are being renewed. They have not all been completed yet but they are being progressively renewed.
5. Nobody is doubting the hardship for traders. This is not a good time to be in retailing. And that is why we need to make positive constructive steps, not just to protect trade over the next 5 or 6 years but to set a foundation for future traders. That will simply not come from a lick of paint or any similar temporary fix. That, sir or madam, is why I believe passionately in supporting renewal. A renewal will almost certainly not ease our short term pain but it will hopefully protect our future and it deserves our full support. 
6. In the meantime there are positive business steps we can take while renewal is going on and that no doubt will be a focus for CEO Stan Liacos as he works through many trader meetings over coming weeks. 
Thanks again for your contribution - Ed.

01/04/2018 09:41:52      Call to traders          "I appreciate your prompt response and discussion, however you are oversimplifying the retail revolution argument to A (and B) shed.  The prime factor here was the F&V wholesale markets relocation to Epping.  Talking to traders many had plans to leave when the change happen. And many of them did leave within a relatively short time frame of that change.
Talking to QVM employees over this time frame they knew this change would be coming. As a group they failed to map out a plan to salvage the area. "                                                          
2. 5 Year Guarantee - No different to a 5 year lease. If you are familiar with the situation food hall traders face it was a scenario of readjusted increased rent despite the downturn of interrupted trading coming.  All they are guaranteeing is that current traders are around so that someone is paying rent during the unenticing period of renewal. It is not unreasonable to ask for some accommodation for braving a known downturn. 
Fit out assistance, rent free periods (not rent reductions) lease terms with options are all widely available outside of the QVM bubble. A term even if it a short one post renewal is not unreasonable to ask for
3. QVM Income - It is equally as crazy to suggest that the only way that the QVM site will only earn their income from trader rents
4. License Renewals - Many  food traders leases were not formalised for over a year after they commenced. Progressive renewal of leases/licences is just another way of saying they are behind. Which in any professional environment I'm sure you will agree is completely unacceptable. 
In terms of how this affected food traders who also had their rents increased it forced a lump sum payment of the difference in rent when they did finally receive their lease documents. Surely you agree we should expect better than this?
5. To set a foundation for future traders - Who in their right mind would put their own business through pain to set a better foundation for the next wave of traders.
I support renewal. QVM desperately needs it.  What I cannot support is the argument that we should be accepting of the terms that are handed to us.  For renewal to be successful terms need to be negotiated that support existing traders as well as QVM/CoM plans.  Smart negotiation of terms is necessary.  There is plenty of evidence in times of upheaval that there are many benefits traders can negotiate, even with notoriously tight shopping centre managements.”
Thank you for another comprehensive response - Ed.