Sunday 13 July 2014

Trader Questions Rental Philosophy

This trader submission goes to the heart of the current rents debate in the Deli Hall but has wider implications. It raises questions about the role of a Public Market and addresses some important principles as we move forward into renewal. Every trader should read the content.

"I understand the Board of the Queen Victoria Market and MCC will be discussing policy on rental at QVM.
Deciding the bases for rent goes to a fundamental ideological decision about the future of the market: On the one hand one can take the view that rental should be based on what can feasibly be obtained for the property and anything less is simply a business subsidy. This approach reflects the perspective that the only legitimate measure of the success of the market is the revenue raised for council.
On the other hand, one can decide that Melbourne deserves a vibrant, interesting and affordable market and if that requires reduced or reasonable rent it can be justified as a direct investment in the health and well being of the people.
If the board chooses the path of maximum rental that money disappears into council revenue. Eventually only businesses of a certain size and income will be able to afford space at the market. The size of the tenancies, even with the best of management, limit what can be achieved. To service a larger rent, businesses will have to be of a larger scale have multiple outlets. This will make it harder to find owner-occupiers and eventually result in the mall izationof the market. If rents skyrocket, something will have to be sacrificed. Will it be staff our biggest expense? Will it be product quality? Will it be low prices? Will it be our ability to sell a wide variety of merchandise, including products that are not easily obtained elsewhere, restricting our investment to ideas with a proven track record? That doesnt sound like a market.
We market traders have made a conscious decision to do what we do, be where we are. We are not in the market because that was all we could come up with. We are in the market because small business is what we love. We dont want to grow to the point where our customers are strangers and our staff managed by HR. That would be a huge detriment to the popularity of the market. A lot of lip service is paid to the iconic nature of the QVM, but that nature is us, the traders. We are the local colourfeatured on Facebook and Instagram pages the world over. We are the businesses who call our customers friends, just as communities have for centuries. If high rent forces a change in business ethos at the market then that change will be reflected in declining patronage and a loss of enthusiasm for the market from, customers, investors, media, business, everyone.
Large cities are really just a collection of villages. The QVM is our market square and has multiple functions. Primarily, it should be a source of affordable, fresh food for the people of Melbourne. That is the traditional function of markets the world over. Most food markets (not malls and shopping centres) offer reasonable rent in the expectation that those savings will be passed on to the consumer. This is what makes the market viable and popular as an alternative to mainstream outlets.
A secondary but vital function is to provide a place for start-ups. People who have a business idea they want to try but not the huge financial resources necessary to gain access to a shopping strip or mall.
When setting policy for the market it is tempting to assume the correct thing to do is get a couple of valuations, set and forget. The market is a much more complex organism and deserves thought and care."
Catherine Underhill

McIvers Coffee & Tea Merchants - Queen Victoria Market

13/07/2014 21:50:19 rental philosophy "Very well said, Catherine..
Its quite simple really. If you want a good market, if you want a busy successful market, it must offer products and goods cheaper than your fancy shopping centres. The only way traders can offer this, is by having a place to trade at a discounted overhead.  If the council want to have an iconic market, then be like the traders, offer your goods (rent) cheaper  than market make enough  profit as it is." Andy