3 October 2006

Bill Stefaniak decides the market is rubbish

| johnboy
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We all knew that when Westfield took over the Woden Shopping Centre it would be bad news for the tenants.

The rent rises and compulsory shop fit outs are forcing “The Pampered Pavlova” and it’s owner, Kerry Monahan, out of the complex and the always not much of a liberal, Bill Stefaniak, has put out a media release decrying this “market failure” (Note to Bill: the Westfield model is a facist one, not much at all to do with the free market) and warning, I kid you not, of the dire consequences that will follow:

“The forcing out of ‘The Pampered Pavlova’ also has important social and health aspects”

Maybe Bill should have made some noise when Westfield took over the Mall rather than now when it’s far too late?

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Only they frequently waive the requirement for big tennants they can’t afford to lose (cinemas, supermarkets major chains).

One has some sympathy for the small business owner. Westfield is an easy target too. They play it pretty hard (but straight). However, no doubt the small bsuiness owner entered into a contract with Westfield (via a lease). Leases contain all the agreenment conditions. This fit out should not have come as a surprise to the small business owner in question and should have been factored into operating revenues/income over the lease period. It is standard business practice at shopping centres to require businesses to invest in a fit out.

Large shopping centre complexes (such as Westfield) do in effect hold a pseudo-monopoly over retail within the geographic region of its location.

Because of their size and obviously their volume of different types of retail (clothes, food, footwear, sporting, etc) they naturally attract the largest number of foot traffic and as such can charge what ever they want.

However like all markets, if they charge way too much they will end up with empty shops and will reduce their prices accordingly. If their analysis suggests that they can charge more and still keep floor space rented of course they will do it. They’re a business and businesses are ultimately interested in one thing one – money.

If anyone else is having trouble finding John Humphreys – for his views on pavlovas and free market economics – then you’re bound to find him here:

“The Liberal Democratic Party has booked a booth at Summernats 2007, to be held in Canberra from 4-7 January 2007. The main purpose of the presence at Summernats will be to launch a number of pro-motorist policies, as well as sign up new members.”

its not an example of a free market at work – its an example of abuse of monopoly power.

only a naive would say that the various rules and regulations and bizarre deals surrounding commercial property resembled in any way a free market.

Hi John, I’ve been meaning to ask Peter B what’s been happening with Liberal Democrats recently. I hear Duncan S will be back in town soon as well. Good time to get the ball rolling again I think.

I’m in too, John. It’s about time we got the Party together in a meaningful way. I’ll take Foreign Affairs if that’s OK.
And we can actually fill a front bench from the ranks of RA; just for starters:
Attorney-Gen: johnboy.
Environment & Heritage: Thumper.
Media & Comms: Kerces.
Education: nyssa76.
Deputy Education: Crazy Chester.
Transport: VYBerlina.
Tax & Finance: Maelinar.
Indigenous Affairs: bonfire.
Health: Che.
Arts & Recreation: Big Al.
Police & Security: vg
– and so on.

Hi john, it’s good to have you back.

I’m saddened you group me with stefaniak’s infantile economic views.

My issue is that for the trans-national mall-chain westfield the idea of economy will always be skewed against a local business.

Hungry Jacks offers certainty across hundreds of locations and can, as such, get concessions on their rent, in addition the per/store cost of designing a refit is vastly lower than what an owner operator will face.

But I hope you noted my derision for stefaniak’s bollocks arguments.

Back in town or just visiting? Mail me if you’re thinking of getting the liberal democrats back together.

Cheers

Oops, a double portion, sorry!

Clone towns are one of the results of the alleged “free” market (that’s where the big guys are free to squeeze/bust the little guys). This consequence has been around for a while (eg see here: http://news.bbc.co.uk/1/hi/business/3582704.stm). Show your appreciation for your local takeaway’s hamburgers and chippies and the local milk bar coffee house with your actual custom, folks.

Clone towns are one of the results of the alleged “free” market (that’s where the big guys are free to squeeze/bust the little guys). This consequence has been around for a while (eg see here: http://news.bbc.co.uk/1/hi/business/3582704.stm). Show your appreciation for your local takeaway’s hamburgers and chippies and the local milk bar coffee house with your actual custom, folks.

john_humphreys10:25 pm 03 Oct 06

There is no problem here. The pavlova place will be replaced by a store that makes more money and can pay it’s bills. It makes more money because it gives people more of what they want. Yay for the market.

There is no monopoly here. There are plenty of other shops and floor space in Canberra.

There is no market failure here. It is not a market failure for a pavlova shop to move or fail. The implication otherwise should be a point for embarassment. Should I laugh or cry?

The common thread here… from big stef-boy to ol’ john-boy is a proud and loud lack of knowledge about economics. All too common, but all too dangerous. And sad.

I’m pretty sure the pavlova place was the one which also sold several kinds of salads, fruit salad, yoghurt and various kinds of pies, pasties, quiches and so on (from my very limited experience looking for lunches in Woden). I’d say quite a bit of what they sold counts as healthy food.

Too right the Pavlova has gone down hill since they began selling reheated stodge pies. I’d be blowed if I have seen a Pav there for many a year.

Kerry, subway was better than your shop.

(Says he who frequents GamesWorkshop on Saturdays. I only do so for the models. Honest.)

Stefaniak thinks Pavlova’s a health food? No wonder he’s so fat.

Pampered Pavlova has been operating for 28yrs. It’s a bloody disgrace.

If you’re reading this Kerry, there’s room at Erindale.

A feudal lord had obligations to his peasants Caf.

So pavlovas are healthier than Hungry Jacks, are they? Bit of a toss-up, I would have thought.

fascist or feudal, jb?

So the liberal policies are to support pavlova shops, and allow cars into Garema place.
do they have any others?

Maybe Canberra Cabs should form a pact with Mr Lowy?

perfect example of a monopoly abusing its power.

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