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Normal rules of competition don’t apply in Canberra?

By vekta 6 April 2008 32

Something strange is happening here.

The normal rules of competition and commerce don’t seem to apply to doing business in Canberra.

For example, a well-known, central, long-running supermarket close to my home has, since I’ve been here (about 2 years), routinely sold goods that are overpriced and often past their use-by dates, and sometimes just plain off.  When I went out for breakfast this morning in Kingston, I found popular cafes closed on a busy morning when it was hard to get a table anywhere.  Late at night, even major fast food chains are closed, whereas in any other city in this country they would be open.

And most amusingly, food is bad and overpriced, and service is often terrible.  Yet businesses that consistently open “when they feel like it” as opposed to when there are customers, or charge silly prices, or treat customers badly, continue to thrive and prosper for many years in Canberra, whereas in any other city they would fail immediately.  Elsewhere, it seems, businesses are subject to normal laws of competition, and if service is poor or prices laughable, a competitor starts up.  Here, nothing happens.  Business as usual in Canberra.  Nobody even seems to notice.

You can’t vote with your feet if there are limited or non-existent alternatives.

Now I know this city has unique challenges, but doesn’t the ACT government have people who are paid to ensure that local commerce is lively, and that a market, particularly for services, operates and thrives?  An important part of this is regulation and licensing, and maybe these well paid ACT public servants should pay attention to striking the right balance, to allow competition to thrive, and to encourage new businesses

Perhaps it’s time to go back to the drawing board with business regulation and licensing laws in the ACT, to bring this city into line with the rest of the modern world.


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32 Responses to
Normal rules of competition don’t apply in Canberra?
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Observing 12:43 pm 07 Apr 08

Reading all the comments, I do see where vekta is coming from and where other people are coming from too. Rules of economy and competition do apply even in Canberra because you have SOME cafes, restaurants or other shops that do a lot better than others due to word of mouth. For whatever reason (service, quality products, whatever), people go back to them and I’m sure they get more than a 2% return on their finances because you see hordes of people in their shop whenever you walk past. They provide something better than their competition, therefore their profits are higher.

But on the other hand, there are lots of other stores and cafes who do think its ok to serve you with an attitude like “If you don’t like it, leave!” or “I’m not your slave, so enjoy what I give you!”. No, they are not their slave, but the result (and law of competition) would be that if you think what you paid for is not worth it, you go elsewhere. Unfortunately, the way it is in Canberra compared to most big cities is that if you go to another store/cafe, you would more than likely get the same treatment.

As was pointed out above, I think Canberra is still a country town sleepily waking up from a dream that its really a big city. Lots of people want it to be on par with Sydney, Melbourne and other big cities, but its not(which may be good in many ways). You don’t get the glut of new stores opening up in a small location where out of the hundreds, one might catch on that good service does get results.

Regulation would only stifle competition. If people think that they have a niche market (they can do better through better service, better opening hours), then you will get a decent business running. Maybe not a goldmine, but you will do better than average!

In the meantime, find out who does give you value for money and spread the word around. People do listen. Or otherwise ask around for what businesses people think provide good service and try it yourself. Word of mouth works both ways.

mutley...again 12:00 pm 07 Apr 08

I’m intrigued as to why you’ve got so much sand in your vadge over a business owner’s decision.

If I had a choice between running a business 7 days a week or running it 4 days a week and still get acceptable returns, I know what I’d do, and it wouldn’t be pandering to someone who thinks that I should be at his beck and call just because I opened a business.

Hiring a manager to cover the extra days is an added expense, particularly as the owners probably don’t draw a salary themselves, so why do that?

If you don’t like it, don’t go there on the days they are open. Boycott, tell your friends.

ant 10:36 am 07 Apr 08

Thanks for the voice of reason, jimbocool! It IS annoying when you get poor service, or you see a business seeming to squander possible profits (and we all see this all over the town). And it is oK to voice frustration about things like this. But realising that cafes etc aren’t goldmines is important, too.

When you see some busineses trying, and giving great service, and others that aren’t, then the best thing to do is to make sure the good businesses get all your custom, and spread the word! Put a review up on Riot Act, and reward teh good business by putting more custom their way.

S4anta 10:35 am 07 Apr 08

@ Vekta
“Imagine being posted here from a place like Rio de Janeiro or New York.”

I am relatively sure that the fact that you can walk down the street in Canberra, have a backyard (or what is left of them), let your kids play in the street, not get kidnapped or have planes smashing into sky scrapers overhead would more than compensate for the lack of activity from small businesses on a freaking Sunday.

Ecomnomics lesson: As soon as a small business opens the front door, they are behind the eight ball for that day. If there is not enough demand, they wont open. Makes sense to me. Dont like it? Go to a pub, have a steak and beer for fcuks sake.

jimbocool 10:19 am 07 Apr 08

Having spent a bit of time working in both Chief Minister’s Dept and Urban Services (now called TAMS) which are the two main depts involved in cafes I’d say that there is nothing happening there that is causing this ‘problem’ – Cafe regulation is almost non-existent and pretty much anyone can have a licence. There was a bit of stink when the fee for outdoor dining went up, but that’s about the worst of it. The main problem is that the median return on a cafe/restaurant is 2% – people are much better off putting their money in an online savings account at 8% getting a better return without the heartache. If the cafe owners in Kingston were making huge profits others would enter the market – the fact that they don’t means that they are scraping by on their 2% and not opening on Sundays in order to save money. You porbably need to look at this from an accounting or finance perspective rather than an economics one to understand why it’s happening.

CanberraResident 10:14 am 07 Apr 08

damnintellectuals said :

For people who put up the “If you don’t like it, then leave” argument: If you don’t like a citizen voicing a complaint then take your own advice and move to China. Community members have a right to voice their opinion. Public discourse makes a better community.

I’m guilty of that! BUT … hang on a minute … my comment is my opinion, and that is how I choose to voice my opinion. Tut tut damnintellectuals … Let me express my opinion one more time, just so you get the message this time … if Vekta doesn’t like it here, choose a highway and byzeez! (Maybe Vekta could go live in one of the poorer countries in South America or Africa; that way he might get a bit of an idea of how good he has it living in Canberra …

Nemo 9:07 am 07 Apr 08

“But Canberra can get better”

They said that about the schnitzels at the Tradies too.

Thumper 8:58 am 07 Apr 08

Shop workers also like to have some time off. Why the fcku should they be on beckon call 24 hours a day, seven days a week?

damnintellectuals 3:57 am 07 Apr 08

For people who put up the “If you don’t like it, then leave” argument: If you don’t like a citizen voicing a complaint then take your own advice and move to China. Community members have a right to voice their opinion. Public discourse makes a better community.

Vekta: What you have to remember is that Canberra is still in many ways a big country town. Although population numbers qualifies it as a city, the mindset hasn’t fully grasped the concept.

vekta 12:10 am 07 Apr 08

If small businesses need all the business they can get, why are Canberra businesses different?

If there are a number of businesses that are able to service a demand, but choose not to, and nobody steps into the breach (or isn’t permitted to?), then you have market failure, or you have something suspicious.

For example, and bear with me here, say I run a great cafe in Kingston. I’m so successful I decide to close for 3 days a week (including Sunday, one of the 2 busiest days for a cafe anywhere else in the world). In a functioning market, firstly, I would never be so successful that I could afford to do this, because there would be competitors keeping my prices down, so my margins would be lower, and I would have to open whenever there was demand, to get the business and to make a profit.

Let’s assume that despite competition from other superb cafes, I could still keep my prices stupidly high, and I could afford to close for 3 days per week. Then, in a functioning market, another cafe would quickly ensure it was open for those 3 days along with the rest of the week. It would leverage this advantage, and take loyal customers from me. In a functioning market, this competing cafe would also provide excellent service, good food and low prices, copying the high quality of my cafe. So, if I as a business owner chose to close for 3 days per week, I would quickly lose customers. These customers would go to my competitor when I was closed, they would be impressed, and they would continue going there when we were both open, out of loyalty, habit or convenience.

Not so in Canberra.

I don’t believe it’s possible to half run a business when you have serious competition. Try running a successful cafe on Brunswick St in Fitzroy, or in Boston, for example, and closing on Sunday for breakfast, and watch how quickly your business disappears.

As for an owner not wanting to work 7 days a week, then get someone else in, someone other than the owner. Give someone else a go at running a cafe, that way they will learn (and maybe one day open a cafe, if the government lets them). Imagine Richard Branson saying he’s not going to let anything happen at Virgin unless he does it himself.

I wouldn’t want to tell anyone how to run their business, all I can say is that when a popular, busy cafe closes on a Sunday, something’s gone awry. All I’m asking for is a vaguely normal market – it doesn’t have to be perfect.

It’s not the government’s fault if I get poor service in one cafe. It is the government’s fault if everybody gets poor service almost all of the time everywhere.

And while we’re at it, I was excited when all the new businesses opened in Civic recently when they finished the extensions. My friend went to one of the new cafes (a well known chain), and ordered a chocolate milkshake (couldn’t be a thickshake because they didn’t know how to make a thickshake). The chocolate milkshake had no chocolate in it. It was just foamy milk. They were surprised and confused when we asked them to put chocolate in it.

People need to realise that this is not normal!

Nemo 9:46 pm 06 Apr 08

Vekta – I suggest you open your own business if you think there is competition lacking.

Illyria – absolutely agree. My parents own a retail business and literally have two days off a year – xmas day and good friday.
We were cleaning at the shop on Good Friday and customers were still knocking on the door to come in, despite a closed sign.

Most small businesses need all the business they can get. Good luck to them if they dont need it and can afford to close.

illyria 9:21 pm 06 Apr 08

I have a friend who owns a retail business in Canberra. They are open 8am until 8pm every day of the year except Christmas Day and Good Friday. One year, they also closed on Boxing Day because the staff and owners all wanted the day off with their friends and families. They had a sign up for a month before christmas to let all their regular customers know they would be closed that day.

As per regulations, the owners name was on the front window and some idiot called them at home to say “where are you, we are at the shop and we need to buy something urgently”……

Just because people are in the service industry does not make them your servant.

sepi 9:11 pm 06 Apr 08

It isn’t really the govt’s fault if you get poor service in a cafe.
In Canberra at the moment there are so many good jobs going in the public service, most wait staff are very young and new. The capable career waitresses are few and far between these days.

Likewise – the govt can’t legislate that cafes open all the time. What if they can’t get staff to work?

The Jas 9:07 pm 06 Apr 08

I assume you are possibly talking about Silo closing in Kingston on Sundays? They also close Mondays and for about 4 weeks over the xmas period. While I personally find this a bit arrogant considering they have so much demand and are always packed, I believe from what I have heard that it is a lifestyle choice of the owners.

I’m happy to put up with it, mainly because the food is excellent, fresh and one of the best bakeries in Canberra and on the days they are closed, I go to kingston grind or Zest which are open and equally busy (well I did when I lived in Kingston), but I still go to Silo once a week for take away brioches and croissants as I haven’t found better.

Talking of Zest, if you are eating out in Tuggeranong, do not go to Z brasserie, this place has the most rubbish food and service I have ever come accross. Astonishingly, it is owned by the ex owner of Zest, who you would think should know better.

I would think that the owners aren’t stupid enough to know they are losing money on these days, but if they can afford to do it, who are you to tell them how to run thier business? It’s not like they are in malls who run on set hours. I mean I’d love NIB to stay open till 6.30 so I can go after work to claim health insurance stuff, but it aint gonna happen is it?

bigred 8:43 pm 06 Apr 08

…but I like Woolies at Dickson! The check out system is exemplary, the shelves never run out, you never see any ferals and your car is always safe in the car park. Top experience.

Mælinar 8:34 pm 06 Apr 08

Hmm, like if Belconnen Woolworths is crap, I can’t go along to Tuggeranong Woolies, Lanyon Woolies, Kippax Woolies, Kambah Woolis, Dickson Woolies etc ?

I think you are an argument short of a story.

vekta 8:18 pm 06 Apr 08

I like living in Canberra, or yes, I would have left.

But Canberra can get better, and when you’ve lived elsewhere and you move here, this is one of the first things you notice. I don’t think it does Canberra as our capital, or the country, any favours, given that for many foreign diplomats, officials and ANU students, this is the only part of Australia they see. Imagine being posted here from a place like Rio de Janeiro or New York.

I’m not sure how anyone can like a malfunctioning local economy just “how it is”. Seems to me, and I’m not an economic genius, that there are certain basic uncontested benefits to be gained from a modicum of competition in a marketplace.

There is no will to change it because there are incumbents profiting handsomely from the problems here, and who knows how they are connected to ACT government and administration. It feels like someone has their foot on the brake all the time, and I don’t know if that is an effect of deliberate maladministration or incompetent regulation.

The comment on “no shortage of people” simply refers to Canberra’s housing crisis, which is yet another embarrassing Canberra market failure.

And I don’t think my expectations have changed, in fact since moving here I have deliberately lowered them to account for Canberra’s understandable limitations, being a small market with unique difficulties etc.

RandomGit 7:51 pm 06 Apr 08

You’ll probably find the times they are open are very lucrative so they can actually afford to be laid back about it.

Plus, are your expectations of service in excess of what they are used to? If the public sets a standard they will play to it.

Can you provide any more detail?

lumnock 7:36 pm 06 Apr 08

If you don’t like it, move elsewhere. There will be no shortage of people ready to take the keys to your house off your hands….

CanberraResident 7:18 pm 06 Apr 08

Naaah, I like it how it is. Some places in Australia don’t even have Sunday trading!

Have you heard of the expression “There’s the door?” Take your pick: Federal, Barton or Kings Highway.

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