Sunday 17 July 2016

Tenancy Guarantees - What Can Traders Expect?

As renewal implementation plans start to be explained, the big question from traders at QVM is what guarantee do I have that there will be a position for me? This comes from a background discussion about some categories of traders that are currently over represented and a push to raise the general level of excellence in retailing at QVM so that our market truly meets the needs of 21st century customers.

Traders have been told that there will be a position for all willing traders in the lead up to the first stage of construction and during the construction stage itself. With the digging of the first hole not expected to commence before the end of 2017 (Munro's might start earlier), and construction expected to take 18 months - 2 years, that gives a time frame of a few years. But it is after that time that the guarantees are less clear. Will traders have a stall to return to, and will it be the same size and the same position that they currently occupy? Should traders be expected to go through the hell of a renewal only to find that there is no role for them at the end. These are emotion charged questions that deserve attention.

Of course, in retailing, and small business entrepreneurship generally, there are not many guarantees. Shop leases are often short term and retailers know they are taking on something of a gamble when they sign up. Ironically, PE Traders at QVM with their common law tenancy rights are in a stronger position than most retailers around the globe. Similar rights have existed in the UK although we know of at least one case where the owners and traders agreed that succession rights would apply to just one more generation before reverting to a more common tenancy arrangement.

Whilst there is always uncertainty surrounding entrepreneurial activities, there must be a reasonable expectation that modern businesses require some stability. The current situation at QVM with leases and licences that have come to an end, and essentially operating on a monthly basis, is anti-business. Traders cannot get bank loans without a lease. Even the smallest of traders are forced to consider making bulk purchases (in some cases two years supply) in order to get the price benefits that make them competitive. Would you buy 2 years stock whilst on a monthly tenancy? Would you invest in new plant and equipment on a monthly tenancy?

These are real issues for traders and therefore real issues for QVM management if implementation is to proceed in an orderly fashion. These issues will need to be thrashed out over coming months and next week's information sessions followed by precinct meetings and finally one to ones, will hopefully give traders the guidance and assurances they can reasonably expect.