Deregulation of trading hours in Western Australia

According to Dibbs Abbot Stillman ’s Franchising Report for November 2005 a referendum was held in conjunction with the State election in Western Australia on 26 February 2005. The purpose of the referendum was to determine whether the Western Australian voters supported the introduction of longer trading hours in Western Australia.

The referendum simply asked voters two questions:

1. Extended week night shopping. Do you believe that the Western Australian community would benefit if trading hours in the Perth metropolitan area were extended to allow general retail shops to trade until 9.00pm Monday to Friday? Answer yes or no.

2. Extended trading hours. Do you believe that the Western Australian community would benefit if trading hours in the Perth metropolitan area were extended to allow general retail shops to trade for 6 hours on Sunday? Answer yes or no.

Both proposals were rejected by voters.

Effect of the referendum in Western Australia

Many exempted and special retail shops (i.e. small business owners) were concerned about the increased level of competition in the marketplace if general retail shops were able to extend their retail trading hours. The exempted and special retail shops benefit from the protection afforded by the Retail Trading Hours Act 1987 because trading hours are restricted in general retail shops. As a result, during the hours that general retail shops are closed, exempted and special retail shops enjoy less competition.

Conclusion

Retail trading hours affect the ability of both franchisors and franchisees to compete in the marketplace. Longer trading hours provide the opportunity to sell more goods, resulting in a higher turnover and increased competition, but at a cost of employing more staff or working longer hours. Restricted trading hours, especially in areas where special exemptions (such as Perth and Fremantle’s “tourist precincts”) do not apply, can reduce a retailer’s competitive edge, by reducing their choice of when to trade, and when to close.

The result of the referendum in Western Australia means that a franchisee or franchisor must choose their location and the nature of the business they propose to operate very carefully, or if they are already currently in business, they should ensure that the requirements of the Retail Trading Hours Act 1987 are strictly complied with.

With Christmas just around the corner, the W.A. Retail Advisory Committee has extended trading hours from Sunday 11 December 2005 until 27 December 2005 to apply to all shops in the Perth Metropolitan area, a practice that has applied for some years.