Where Australian regulations fail

As I stepped off a night flight from a balmy spring evening in San Francisco and into a very chilly Sydney autumn morning, I became enthralled in the Kenneally-Brumby “my state’s better than yours” exchange that was being reported.

I’d just spent three weeks hearing how fast US retailers are able to roll out new stores, with new formats that shoppers usually like, that usually trade profitably, and that create jobs in those communities as they build and operate the new stores.

Publix Supermarkets trades though around 1,000 high-end grocery stores across the four south-east US states including Florida and Georgia, employing 140,000 staff. It is the largest private company in the US, are thus patient and risk averse, and takes a maximum of 40 months from start of study to opening doors on a new site. In other words, the company takes its time to get it right.

Along the way staff work closely with state and city level planning and government. They also work with the utility companies – and need to given the company is the largest single energy user in the state of Florida. (Just to put it in perspective, Florida is the home to the largest concentration of theme parks on the planet, with accompanying accommodation).

When you up the ante and have access to considerable public company funding, like Walmart or Costco, things are a lot faster. There are many stories of 12-month builds, from the time of sticking a pin into a map, through to first day trading in 100,000 to 140,000 sq ft stores.

The new Costco in Melbourne fits into that size range. It doesn’t fit into the 12 month pin to trade time range though. And there’s the thing.

Costco could’ve, should’ve and perhaps wanted to open its first store in Sydney – after all, it is the largest and most business-focussed city in the country, isn’t it?

But Costco couldn’t because it was just too hard. So, well done to Victoria for working with the retail giant to create a huge store that creates new jobs, albeit not as fast as we all would’ve liked.

Two years after Costco’s Australia CEO Patrick Noone started the journey, we do have a new store location in Sydney for Costco, but I wonder just how long it’s going to take to wind its way through the state and local council planning laws.

In Australia we don’t have big factories employing lots of people. We have the two “book ends” of the product cycle that employ lots of people. We employ lots of people in big holes in the ground from which we remove the raw material to export to factories overseas that make finished product. And we employ lots of people in lots of retail stores to sell the finished product that we import back from those factories overseas.

This might be unpopular in both Melbourne and Sydney, but our state and local council level politicians aren’t helping to create jobs in one of our largest industries. These retailers aren’t asking for handouts. They use their shareholder’s money to build and operate the stores, and our money as shoppers to operate them, so long as we shoppers like what and how they’re selling in those stores. They’re just asking for more business – and job-friendly regulations. Not a lot to ask for really.

Sorry to say but both state governments get an “A” for media management, with Victoria getting a “D” and NSW getting an “F” for tangible support to create jobs. But don’t worry, there is time. I eventually graduated school, even if many of my school reports used to read: “Moore sets low standards and fails to maintain them”.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.

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